The Standard Bank of Canada v. Finucane

The Standard Bank of Canada v. Finucane

The bank's approval of the Rainy River Company's arrangement effected either an equitable assignment or, at minimum, an equitable charge over $10 per ton of the proceeds; when those proceeds were deposited the bank received them subject to that interest and therefore was liable to account for $10 per ton on the pulp proceeds actually received.

Citation
(1921) 62 SCR 110
Parties
Defendant Appellant: The Standard Bank of Canada; Plaintiff Respondent: Francis J. Finucane
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
7 June 1921
Procedural Posture
Contract (banking/security) / Appeal — Supreme Court of Canada
Outcome
Appeal dismissed with costs; judgment of the Court of Appeal affirmed
Legal Topics
Equitable Assignment, Equitable Charge, Bank Liability to Third Party, Hypothecation, Approval/waiver of Bank Security, Priority of Security Interests
Source Language
English
Contract Banking Equity Trusts Secured Transactions Equitable Assignment Equitable Charge Bank Liability to Third Party +3 more

Case Brief

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Parties

The Standard Bank of Canada

Defendant Appellant

Francis J. Finucane

Plaintiff Respondent

Procedural Posture

Contract (banking/security) / Appeal — Supreme Court of Canada

Legal Issues

  1. 1 Whether the bank's approval of the agreement created an equitable assignment or, alternatively, an equitable charge in favour of the third party
  2. 2 Whether proceeds of hypothecated output deposited with the bank were received subject to that assignment or charge and thus required the bank to account
  3. 3 Whether the bank's conduct in honouring cheques and permitting diversion of proceeds defeated the third party's security

Ratio Decidendi

The bank's approval of the Rainy River Company's arrangement effected either an equitable assignment or, at minimum, an equitable charge over $10 per ton of the proceeds; when those proceeds were deposited the bank received them subject to that interest and therefore was liable to account for $10 per ton on the pulp proceeds actually received.

Court Disposition

Appeal dismissed with costs; judgment of the Court of Appeal affirmed

Orders

  • Bank ordered to pay respondent $10 per ton on 724 tons (total $7,240)
  • Appeal dismissed with costs