Rutherford v. Royal Bank of Canada

Rutherford v. Royal Bank of Canada

The release (verification slip) signed by an authorized officer (vice‑president and treasurer Gregg) was prima facie binding on the company and, in the absence of evidence to displace that prima facie defence, the bank was not liable to reimburse the trustee for the cheque paid with an irregular signature; appeal dismissed.

Citation
[1932] SCR 131
Parties
Appellant (trustee in Bankruptcy for Harvie Smith & Company, Ltd.): Rutherford; Respondent (bank/defendant): Royal Bank of Canada
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
22 December 1931
Procedural Posture
Appeal / Final Judgment of the Supreme Court of Canada on Appeal From Court of King’s Bench (quebec)
Outcome
Appeal dismissed with costs.
Legal Topics
Irregular Payment by Bank, Verification Slip / Settlement of Balances and Release, Authority of Corporate Officers, Trustee Recovery in Bankruptcy
Source Language
English
Bills of Exchange Banking Law Cheque Law Bank Liability Irregular Payment by Bank Verification Slip / Settlement of Balances and Release Authority of Corporate Officers Trustee Recovery in Bankruptcy

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Parties

Rutherford

Appellant (trustee in Bankruptcy for Harvie Smith & Company, Ltd.)

Royal Bank of Canada

Respondent (bank/defendant)

Procedural Posture

Appeal / Final Judgment of the Supreme Court of Canada on Appeal From Court of King’s Bench (quebec)

Legal Issues

  1. 1 Whether a bank is liable for paying a cheque signed by a single officer contrary to the company’s internal resolution requiring two signatures
  2. 2 Whether a verification slip/settlement of balances and release signed by an authorized officer of the company bars recovery by the trustee
  3. 3 Whether the bank’s lack of knowledge of the company’s internal signing resolution affects its liability

Ratio Decidendi

The release (verification slip) signed by an authorized officer (vice‑president and treasurer Gregg) was prima facie binding on the company and, in the absence of evidence to displace that prima facie defence, the bank was not liable to reimburse the trustee for the cheque paid with an irregular signature; appeal dismissed.

Court Disposition

Appeal dismissed with costs.

Orders

  • Appeal dismissed with costs.