Royal Bank of Canada v. Port Royal Pulp and Paper Co. Ltd.

Royal Bank of Canada v. Port Royal Pulp and Paper Co. Ltd.

Majority held the s.88 securities and assignments taken from Atkinson were valid because Atkinson had a sufficient proprietary interest in the pulpwood when cut to constitute "owner" for s.88; the bank properly registered its notice and kept the defendant informed; consequently the bank's security covered all pulpwood cut and the bank was entitled to recover its full advances and interest; defendant was not entitled to deduct its expenditures or assert the alleged priorities against the bank. Kerwin J. dissented in part, holding defendant liable for conversion and that damages should be the value at place/time of conversion less costs expended, yielding a lower award.

Citation
[1939] SCR 186
Parties
Plaintiff/appellant: Royal Bank of Canada; Defendant/respondent: Port Royal Pulp & Paper Company Ltd.
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
19 December 1938
Procedural Posture
Appeal to Supreme Court of Canada / On Appeal From Supreme Court of New Brunswick, Appeal Division (judgment Below Reduced Award to $192.02)
Outcome
Appeal allowed; trial judgment restored (majority); costs awarded to appellant throughout
Legal Topics
Section 88 Bank Act, Security Interests, Assignment of Contract Proceeds, Ownership of Timber, Conversion, Measure of Damages, Set Off and Priorities
Source Language
English
Banking Property Contract Tort Section 88 Bank Act Security Interests Assignment of Contract Proceeds Ownership of Timber +3 more

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Parties

Royal Bank of Canada

Plaintiff/appellant

Port Royal Pulp & Paper Company Ltd.

Defendant/respondent

Procedural Posture

Appeal to Supreme Court of Canada / On Appeal From Supreme Court of New Brunswick, Appeal Division (judgment Below Reduced Award to $192.02)

Legal Issues

  1. 1 Whether security taken under s.88 of The Bank Act was valid
  2. 2 Whether Atkinson was the "owner" entitled to grant s.88 security or had sufficient proprietary interest
  3. 3 Whether assignments of contract proceeds to the bank were effective

Ratio Decidendi

Majority held the s.88 securities and assignments taken from Atkinson were valid because Atkinson had a sufficient proprietary interest in the pulpwood when cut to constitute "owner" for s.88; the bank properly registered its notice and kept the defendant informed; consequently the bank's security covered all pulpwood cut and the bank was entitled to recover its full advances and interest; defendant was not entitled to deduct its expenditures or assert the alleged priorities against the bank. Kerwin J. dissented in part, holding defendant liable for conversion and that damages should be the value at place/time of conversion less costs expended, yielding a lower award.

Court Disposition

Appeal allowed; trial judgment restored (majority); costs awarded to appellant throughout

Orders

  • Judgment restored for Royal Bank of Canada for $8,000 principal and interest (total judgment at trial $8,897.53) with costs throughout