Royal Bank of Canada v. Concrete Column Clamps (1961) Ltd.

Royal Bank of Canada v. Concrete Column Clamps (1961) Ltd.

Majority: Where a cheque names an existing person whom the drawer (or signing officer) intended to be the payee, that person is not a fictitious payee under s.21(5) and the drawee bank that paid on forged endorsements is liable under s.49 absent preclusion or proof to the contrary; therefore the bank was liable for...

Source-derived case information.

Citation
[1977] 2 SCR 456
Parties
Appellant/defendant: Royal Bank of Canada; Respondent/plaintiff: Concrete Column Clamps (1961) Ltd.
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
1 April 1976
Procedural Posture
Civil Appeal / On Appeal to the Supreme Court of Canada From the Court of Appeal for Quebec
Outcome
Appeal dismissed; judgment of the Court of Appeal for Quebec affirmed
Legal Topics
Forged Endorsement, Fictitious Payee, Liability of Drawee Bank, Payroll Padding, Vicarious Liability, Burden of Proof
Source Language
english
Bills of Exchange Banking Law Agency Law Negotiable Instruments Forged Endorsement Fictitious Payee Liability of Drawee Bank Payroll Padding +2 more

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Parties

Royal Bank of Canada

Appellant/defendant

Concrete Column Clamps (1961) Ltd.

Respondent/plaintiff

Procedural Posture

Civil Appeal / On Appeal to the Supreme Court of Canada From the Court of Appeal for Quebec

Legal Issues

  1. 1 Whether cheques payable to former employees are 'fictitious' under s.21(5) of the Bills of Exchange Act
  2. 2 Whether a drawee bank that pays on a forged endorsement is liable under s.49 absent estoppel or preclusion
  3. 3 Whether the knowledge or intention of the drawer/signing officer or of the payroll clerk determines whether a payee is fictitious

Ratio Decidendi

Majority: Where a cheque names an existing person whom the drawer (or signing officer) intended to be the payee, that person is not a fictitious payee under s.21(5) and the drawee bank that paid on forged endorsements is liable under s.49 absent preclusion or proof to the contrary; therefore the bank was liable for cheques payable to former employees.

Court Disposition

Appeal dismissed; judgment of the Court of Appeal for Quebec affirmed

Orders

  • Respondent awarded $67,470.13 against appellant with interest and costs
  • No recovery by respondent for cheques treated as payable to bearer (totalled $26,736.01) — decision as to those cheques not appealed