Townsend v. Northern Crown Bank

Townsend v. Northern Crown Bank

A purchaser who buys lumber by the carload, holds large stocks (e.g. 200,000–300,000 feet) and either uses it in business or resells portions qualifies as a 'wholesale purchaser' under s.88 of the Bank Act; sawn lumber is a 'product of the forest' for the purposes of s.88; therefore the bank's security taken under...

Source-derived case information.

Citation
(1914) 49 SCR 394
Parties
Plaintiff/appellant: Sherman E. Townsend, Assignee of the Estate and Effects of Joseph E. Brethour; Defendant/respondent: The Northern Crown Bank
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
23 February 1914
Procedural Posture
Appeal / On Appeal to the Supreme Court of Canada From the Appellate Division of the Supreme Court of Ontario
Outcome
Appeal dismissed with costs; judgment of Appellate Division of the Supreme Court of Ontario affirmed
Legal Topics
Bank Act S.88, Products of the Forest, Wholesale Purchaser, Registration of Chattel Mortgages, Validity of Security for Advances
Source Language
english
Banks and Banking Commercial Law Secured Transactions Insolvency/assignments Bank Act S.88 Products of the Forest Wholesale Purchaser Registration of Chattel Mortgages +1 more

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Parties

Sherman E. Townsend, Assignee of the Estate and Effects of Joseph E. Brethour

Plaintiff/appellant

The Northern Crown Bank

Defendant/respondent

Procedural Posture

Appeal / On Appeal to the Supreme Court of Canada From the Appellate Division of the Supreme Court of Ontario

Legal Issues

  1. 1 Whether a purchaser who buys lumber by the carload, holds large stock and sells retail or uses it in business qualifies as a 'wholesale purchaser' under s.88 of the Bank Act
  2. 2 Whether sawn lumber (planks, boards) is a 'product of the forest' within s.88 of the Bank Act
  3. 3 Whether Bank Act security can override provincial registration requirements for chattel mortgages or bills of sale

Ratio Decidendi

A purchaser who buys lumber by the carload, holds large stocks (e.g. 200,000–300,000 feet) and either uses it in business or resells portions qualifies as a 'wholesale purchaser' under s.88 of the Bank Act; sawn lumber is a 'product of the forest' for the purposes of s.88; therefore the bank's security taken under s.88 was valid and the appeal is dismissed. Molsons Bank v. Beaudry is overruled on this point. Two judges limited the grammatical scope of the phrase 'and the products thereof' to livestock products, but that did not alter the main holding regarding lumber.

Court Disposition

Appeal dismissed with costs; judgment of Appellate Division of the Supreme Court of Ontario affirmed

Orders

  • Appeal dismissed with costs
  • Judgment of the Appellate Division of the Supreme Court of Ontario affirmed