This section of the book is from the "Canadian Banking Practice" book, by John T. P. Knight.
Question 608.— A private banker acquires security on wheat in the owner's possession, by a warehouse receipt which is valid under the Ontario Mercantile Amendment Act. The private banker thereupon endorses the receipt to a chartered bank as security for an advance. Is the bank's security good, and, if not, how can it be made good ?
Answer.—The bank would not, in such a case, acquire any rights in the wheat. It can only get security on goods in the owner's possession in the manner authorized by the Bank Act. If the owner in the case mentioned were a person authorized to give security under section 74, the bank could make him a direct advance, on the endorsement or guarantee of the private banker, and take direct security under section 74.