Bank of Montreal v. Bloomer

Bank of Montreal v. Bloomer

Bloomer had entrusted payment arrangements to company officers; the draft was used to effect payment to Lewis through the holding company procedure and the bank's credit to Saturn to cover Saturn's cheque did not repudiate Bloomer's rights or amount to an exercise of dominion inconsistent with his ownership, therefore there was no conversion and the bank is not liable.

Citation
[1965] SCR 696
Parties
Defendant, Appellant: Bank of Montreal; Plaintiff, Respondent: Grant Bloomer
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
24 June 1965
Procedural Posture
Civil Appeal (conversion of Negotiable Instrument) / On Appeal to the Supreme Court of Canada From the Court of Appeal for British Columbia
Outcome
Appeal allowed; trial judgment for plaintiff overturned; action dismissed
Legal Topics
Conversion of Negotiable Instrument, Bank Liability for Funds, Share Transfer and Registration, Agency and Authority, Contract Performance
Source Language
English
Banking Tort (conversion) Commercial Law Company Law Conversion of Negotiable Instrument Bank Liability for Funds Share Transfer and Registration Agency and Authority +1 more

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Parties

Bank of Montreal

Defendant, Appellant

Grant Bloomer

Plaintiff, Respondent

Procedural Posture

Civil Appeal (conversion of Negotiable Instrument) / On Appeal to the Supreme Court of Canada From the Court of Appeal for British Columbia

Legal Issues

  1. 1 Whether the bank's crediting of the draft proceeds to a holding company's account and applying them to cover that company's cheque constituted conversion of the purchaser's draft
  2. 2 Whether purchaser (Bloomer) was entitled to insist on delivery of shares registered in the seller's name rather than effecting payment through the holding company
  3. 3 Whether agent/secretary had authority to arrange payment and transfer and whether third parties (bank) could be held liable for dealing with the instrument innocently

Ratio Decidendi

Bloomer had entrusted payment arrangements to company officers; the draft was used to effect payment to Lewis through the holding company procedure and the bank's credit to Saturn to cover Saturn's cheque did not repudiate Bloomer's rights or amount to an exercise of dominion inconsistent with his ownership, therefore there was no conversion and the bank is not liable.

Court Disposition

Appeal allowed; trial judgment for plaintiff overturned; action dismissed

Orders

  • Appeal allowed with costs
  • Respondent's action dismissed