This section of the book is from the "Canadian Banking Practice" book, by John T. P. Knight.
Question 312.— With reference to the reply to Question 293, as to the right of a bank that has paid a cheque to a party with a defective title, to recover the amount from him, are not the prior endorsers on the cheque under the same liability to the bank? Suppose the cheque had been paid to another bank which afterwards was wound up, could not the bank that paid the cheque look to the endorser from whom the defunct bank had received it?
Answer.—We think this is doubtful. The prior endorsers had to do with getting the money from the bank on which the cheque was drawn, and we do not see how the latter could have any right of action against them. The courts are, however, giving more and more wright to the essential equities between parties, and there is a possibility that they might order the prior endorser in such a case to be made a defendant.