Another suggested reason for denying relief is that in consequence of the drawee's payment of the bill, the holder loses the right of recourse against prior indorsers which the dishonor of the bill would have given him. That is, as a result of the drawee's mistake the holder's position is so altered that to permit a recovery from him would be to cause him a loss which but for the drawee's mistake he would not have suffered.1
This theory may provide an adequate reason for denying a recovery where it appears that there were prior indorsers and that recourse against them is lost. But as an explanation of the general rule it encounters a number of cases in which a recovery is denied even though there were no prior indorsers,1 and it overlooks the fact that an acceptance alone, which of course does not release indorsers, precludes the drawee from setting up the forgery of the drawer's signature.2
1 See Ames, "The Doctrine of Price v. Neal," 4 Harv. Law Rev. 297, 299.