PART VIIIBusiness and Powers (continued)
General Business (continued)
Special Security (continued)
Marginal note:Conditions under which bank may take security
429 (1) A bank shall not acquire or hold any warehouse receipt or bill of lading, or any security under section 427, to secure the payment of any debt, liability, loan or advance unless the debt, liability, loan or advance is contracted or made
(a) at the time of the acquisition thereof by the bank, or
(b) on the written promise or agreement that a warehouse receipt or bill of lading or security under section 427 would be given to the bank, in which case the debt, liability, loan or advance may be contracted or made before or at the time of or after that acquisition,
and such debt, liability, loan or advance may be renewed, or the time for the payment thereof extended, without affecting any security so acquired or held.
Marginal note:Exchange of one security for another
(2) A bank may
(a) on the shipment of any property for which it holds a warehouse receipt or any security under section 427, surrender the receipt or security and receive a bill of lading in exchange therefor;
(b) on the receipt of any property for which it holds a bill of lading, or any security under section 427, surrender the bill of lading or security, store the property and take a warehouse receipt therefor, or ship the property, or part of it, and take another bill of lading therefor;
(c) surrender any bill of lading or warehouse receipt held by it and receive in exchange therefor any security that may be taken under this Act;
(d) when it holds any security under section 427 on grain in any elevator, take a bill of lading covering the same grain or grain of the same grade or kind shipped from that elevator, in lieu of that security, to the extent of the quantity shipped; and
(e) when it holds any security whatever covering grain, take in lieu of that security, to the extent of the quantity covered by the security taken, a bill of lading or warehouse receipt for, or any document entitling it under the Canada Grain Act to the delivery of, the same grain or grain of the same grade or kind.
Marginal note:Loans to receiver, liquidator, etc.
430 A bank may lend money and make advances to a receiver, to a receiver and manager, to a liquidator appointed under any winding-up Act, or to a custodian, an interim receiver or a trustee under the Bankruptcy and Insolvency Act, if the receiver, receiver and manager, liquidator, custodian, interim receiver or trustee has been duly authorized or empowered to borrow, and, in making the loan or advance, and thereafter, the bank may take security, with or without personal liability, from the receiver, receiver and manager, liquidator, custodian, interim receiver or trustee to such an amount and on such property as may be directed or authorized by any court of competent jurisdiction.
- 1991, c. 46, s. 430
- 1992, c. 27, s. 90
Marginal note:Securities may be sold
431 Securities acquired and held by a bank as security may, in case of default in the payment of the loan, advance or debt or in the discharge of the liability for the securing of which they were so acquired and held, be dealt with, sold and conveyed, in like manner as and subject to the restrictions under which a private individual might in like circumstances deal with, sell and convey the same, and the right to deal with and dispose of securities as provided in this section may be waived or varied by any agreement between the bank and the person by whom the security was given.
Marginal note:Rights in respect of personal property
432 The rights, powers and privileges that a bank is by this Act declared to have, or to have had, in respect of real property on which it has taken security, shall be held and possessed by it in respect of any personal property on which it has taken security.
Marginal note:Purchase of realty
433 A bank may purchase any real property offered for sale
(a) under execution, or in insolvency, or under the order or decree of a court, or at a sale for taxes, as belonging to any debtor to the bank,
(b) by a mortgagee or other encumbrancer, having priority over a mortgage or other encumbrance held by the bank, or
(c) by the bank under a power of sale given to it for that purpose, notice of the sale by auction to the highest bidder having been first given by advertisement for four weeks in a newspaper published in the county or electoral district in which the property is situated,
in cases in which, under similar circumstances, an individual could so purchase, without any restriction as to the value of the property that it may so purchase, and may acquire title thereto as any individual, purchasing at a sheriff’s sale or sale for taxes or under a power of sale, in like circumstances could do, and may take, have, hold and dispose of the property so purchased.
Marginal note:Bank may acquire absolute title
434 (1) A bank may acquire and hold an absolute title in or to real property affected by a mortgage or hypothec securing a loan or an advance made by the bank or a debt or liability to the bank, either by the obtaining of a release of the equity of redemption in the mortgaged property, or by procuring a foreclosure, or by other means whereby, as between individuals, an equity of redemption can, by law, be barred, or a transfer of title to real property can, by law, be effected, and may purchase and acquire any prior mortgage or charge on such property.
Marginal note:No act or law to prevent
(2) Nothing in any charter, Act or law shall be construed as ever having been intended to prevent or as preventing a bank from acquiring and holding an absolute title to and in any mortgaged or hypothecated real property, whatever the value thereof, or from exercising or acting on any power of sale contained in any mortgage given to or held by the bank, authorizing or enabling it to sell or convey any property so mortgaged.
Marginal note:Warehouse receipts and bills of lading
435 (1) A bank may acquire and hold any warehouse receipt or bill of lading as security for the payment of any debt incurred in its favour, or as security for any liability incurred by it for any person, in the course of its banking business.
Marginal note:Effect of taking
(2) Any warehouse receipt or bill of lading acquired by a bank under subsection (1) vests in the bank, from the date of the acquisition thereof,
(a) all the right and title to the warehouse receipt or bill of lading and to the goods, wares and merchandise covered thereby of the previous holder or owner thereof; and
(b) all the right and title to the goods, wares and merchandise mentioned therein of the person from whom the goods, wares and merchandise were received or acquired by the bank, if the warehouse receipt or bill of lading is made directly in favour of the bank, instead of to the previous holder or owner of the goods, wares and merchandise.
Marginal note:When previous holder is agent
(a) entrusted with the possession of the goods, wares and merchandise mentioned therein, by or by the authority of the owner thereof,
(b) to whom the goods, wares and merchandise are, by or by the authority of the owner thereof, consigned, or
(c) who, by or by the authority of the owner of the goods, wares and merchandise, is possessed of any bill of lading, receipt, order or other document covering the same, such as is used in the course of business as proof of the possession or control of goods, wares and merchandise, or as authorizing or purporting to authorize, either by endorsement or by delivery, the possessor of such a document to transfer or receive the goods, wares and merchandise thereby represented,
a bank is, on the acquisition of that warehouse receipt or bill of lading, vested with all the right and title of the owner of the goods, wares and merchandise, subject to the right of the owner to have the same re-transferred to the owner if the debt or liability, as security for which the warehouse receipt or bill of lading is held by the bank, is paid.
(2) For the purposes of this section, a person shall be deemed to be the possessor of goods, wares and merchandise, or a bill of lading, receipt, order or other document,
Marginal note:Regulations — aircraft objects
Marginal note:Definition of aircraft objects
(2) In subsection (1), aircraft objects has the same meaning as in subsection 2(1) of the International Interests in Mobile Equipment (aircraft equipment) Act.
- 2005, c. 3, s. 10
- Date modified: