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 1 2 3 
 
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^>y- 
 
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 mi 
 
 BANKS AND BANKING 
 
 CONTAININCf 
 
 A FULL ANNOTATION OF 
 
 " The Bank Act" 
 
 53 VIC. (D.) CHAPTKR 3«, ('890). 
 
 TOGFTHKR WITH 
 
 PHOSE SECTIONS OF THE CRIMINAL CODE, 
 
 1892, WHICH ARE OF SPECIAL 
 
 IMPORTANCE TO BANKERS. 
 
 /3p. 
 
 SECOND EDITION. 
 
 IIY 
 
 J. J. G ORMULL Y, Kdq. 
 
 OiK' ol Her Majesty's Couiisul, 
 
 AND 
 
 k. V. SINCLAIR, Ksi].^ 
 
 <it().stroo<l(.' H;\1I. li.irristcr .it law. 
 
 OTTAWA : 
 I'KIXTEI) HY A. S. WOuDHUKN 
 
18 4 5 4 8 
 
 HG- ^^03 
 
 Kntsretl according to Act of the Parliament of Canada, in the year 1892. 
 I>y J. J. Gormully and R. V. Sinclair at the DepartmciU uf 
 Agriculture. 
 
TABLE OF CASES 
 
 11 
 
 A. 
 
 Allan V. First National Bank of Xenia. 
 
 Alma Spinning Co., in re 
 
 Athill, in re Athill v. Athill 
 
 Ayers v. South Australian Banking Co . 
 
 ■74 
 .16 
 
 97 
 73 
 
 B. 
 
 Bailey v. Finch J26 
 
 Baincs' Case ,n ^r nr ,^^ 
 
 „ . , ^ . 29, 35, 75, 139 
 
 Baird v. Bank of Washington ^q g, 
 
 Brulk ofB. N. A. v. Ciarkson .......98 
 
 Bank of Hamilton V. Noye 98, lor, 112, 1,3, ,,5 
 
 Bank of Liverpool v. Bigelow -q 
 
 Bank of Ontario, in re 28 t8 
 
 Bank of Montreal v. McWhirter ge 
 
 Bank of Montreal v. Sweeney 
 
 Bank of New South Wales v. Campbell . 74, 88 
 
 Bank of 'i oronto V. Perkins 71 7^ Si ,,n 
 
 hank of I oronto v. Lambe 
 
 Bank of Toronto v. Wilmot , 
 
 Bank of U. C v. Covert 
 
 Bank of U. C. v. Killaly gl 
 
 Bank of U. C. v. Scott ..." 
 
 Bank of U. C. v. Widmer 
 
 Barrs v. Hank of Nova Scotia ' 28 
 
 Becher v. W^oods 
 
 Bottomley's Case 
 
 Brooke v. Bank of Upper Canada 
 
 Brown v. MacNab 
 
 Biirland v. Moffatt 
 
 Bush v. Fry 
 
 88 
 14 
 
 '33, 
 
 .90 
 
 30 
 137 
 .90 
 
 85 
 '05 
 
 c. 
 
 Cameron v. Kerr.. 
 Carver v. Braintree . 
 
 «3 
 83 
 
IV. 
 
 Hanks nnd ISankinc 
 
 flentral Bank, re, IJaines' Case 29, 35, 75, 139 
 
 ('entral Bank, re, Nasn>illi's Case 29, 35, 75 
 
 Central Bank, re, J. I). Henderson's Case 75, 139 
 
 Central Bank, re. Home Savings iV L. C'o's Case. ■ • . 35, «34 
 
 Central Bank, re, Hogg's Case 35 
 
 (."entral Bank v. (Jarland 86 
 
 ('entral Bank, re, Morion (,\: Blocks Claims 123 
 
 Chaudiere Cold Mining Co. v. Uesbarets 89 
 
 City Bank v. Barrow 104 
 
 Clench v. Consolidated Bank 127 
 
 Cockburn v. Sylvester 113 
 
 Coffee V. Quebec Bank 101,115 
 
 Cole V. North Western Bank 104, 105 
 
 Coleinan, in re i o i , 113, 115 
 
 Colonial Bank v. Whinney 28 
 
 Commercial Bank v. Bank of U|)per Canarla 74, 80 
 
 Commercial Bank v. Cotton 120 
 
 Cook v. Royal Canadian Bank 36, 38, 76 
 
 D. 
 
 Dominion Bank v. Davidson 99 
 
 Dominion liank v. Oliver 84, 1 1 2 
 
 Duggan V. London & Canadian Loan & Agency Co . . . . 44 
 Dupuy v. Cushing 94 
 
 E. 
 
 Earl of Sheffield v. London Joint Stock Bank 44 
 
 Early v. Early 97 
 
 Exchange Bank v. Barnes 19. 46 
 
 Exchange Bank v. Fletcher 70, 7 1, 89. 
 
 Exchange Bank v. M. C. & D. S. Bank 134 
 
 Exchange Bank v. Regina 53 
 
 Exchange Bank v. Springer i9> 46 
 
 F. 
 
 Foley V. Hill 126 
 
 Foster v. Bowes 1 1 1 
 
'I' Mill-. OK Casks 
 
 V. 
 
 Q. 
 
 Clanlcn (lully, I'fer., Co. v. MrMstcr 30 
 
 (i(}()(lfall()w, re Traders Hank v. (loodtallnw 101 
 
 Cioodwin v. Robarts 126 
 
 (Irani v. La Hamiiic Nationalc 74i ^5 
 
 Croat Western Ry. Co. v. Hodgson 101 
 
 drey v. Johnson ...126 
 
 Hallork v. Wilson 90 
 
 Harben v. Phillips 21 
 
 Henderson's rase 75. ' .V^ 
 
 Heynian v. Flewker 104, 105 
 
 Hogg's case 35 
 
 Home Savings iV Loan Co's Case -SSi '34 
 
 Hopkins v. .Abbott 1 24 
 
 Husband v. Davis ... 1 26 
 
 Hutton V. Federal Bank 120 
 
 I 
 
 Imperial Hy. Hotel Co. Blackpool v. Hampson 21 
 
 Innes v. Stephenson 126 
 
 J. 
 
 Jackson v. Munster Bank 14 
 
 Johnson v. Credit Lyonnaise 104 
 
 Jones v. Inii)erial Bank 67 
 
 K. 
 
 Kansas Valley National Bank v. Powell 74 
 
 Kecne v. Robarts 126 
 
 Kingston, Ex parte 1 26 
 
 L. 
 
 Llado V. Morgan 10 1 
 
 London t\: Canada Loan, itc, Co. v. Graham 89 
 
 London Joint Stork Bank v. Simmons 44 
 
 Leazure v. Hillegas go 
 
VI. 
 
 I'.WKS \Nli IIVNKINC 
 
 M. 
 
 McCrac v. Molstni's IJank 
 
 McD.'iirmid v. Huj^hcs 
 
 McDonall v. Hank of Ui)per Canada . 
 
 Maritime IJank v. (^uccn 
 
 Maritime iJaiik v. 'I'rot)]) . . 
 
 Mason V. (Ircal Western Ky. Co .. . . loi, 102 
 
 Merchant's liank of Canada v. Hoslwu k 
 
 Merchant's Hank of Canada v. Moffat t 
 
 Merchant's Hank of Canada v. Smith 1,9 
 
 9S, 99, 101 
 
 Milloy V. Kerr 
 
 Molleur v. I,oupret 
 
 Molson's Hank v. Hrockville 
 
 Molson's Hank v. Janes 
 
 Molson's Hank v. Kennedy 
 
 Molson's Hank v. McDonald . . 
 
 Monteith in re 
 
 Muir V. City of Clasgow Bank 
 
 S,) 
 
 «5 
 54 
 134 
 "5 
 •«5 
 .84 
 
 3. 94. 
 102 
 
 94 
 141 
 127 
 .98 
 .69 
 ■85 
 
 95 
 •45 
 
 N. 
 
 Nasmith's Case 29, ,^5, 75' '39 
 
 National Hank of Australasia v. Cherry 72, 74 
 
 P. 
 
 I'etry v. La Caisse d'Economie 44 
 
 Portalis V. Tetley 106 
 
 Horteous v. Reynar 85 
 
 Q. 
 
 Quinlan v. Gordon 1 20 
 
 Quirt V. Queen i, 68 
 
 Radford v. Merchant's Hank of Canada 69 
 
 Rainy Lake Lumber Co. in re 85 
 
 Raphael v. McFarlane 44 
 
 Regina v. Hank of Upper Canada 22 
 
'r.Mii.i: (II Casks 
 
 VII. 
 
 Retina v. Hank of Nova Scotia 
 
 Kf,i;ina v. liiintin. . . 
 
 Rcgiiia V. Ilincks 
 
 Kccsc V. M.ink of (■ommcrcc. . . . 
 
 Richer V. \'oyer 
 
 Robertson v. I, a l!an(|iic (i'llochela^ia 
 
 Rohinson v. Cook 
 
 Royal (lanadian I5aiik v. Carriithers. 
 Royal Canadian iJank v. (aniinicr. .. 
 Royal Canadian l;ank V. Miller. 
 Royal Canadian ilank v. Ross .... 
 Royal Canadian J'>ank v. .Shaw. . . . 
 Royal Canadian liank v. Vales. . . 
 Ryan v. McConnell 
 
 s. 
 
 T. 
 
 54 
 
 1 40 
 
 I »i 
 
 77 
 
 I -'4 
 
 3". .?,^ i.U 
 .^5 
 
 «;« 
 
 . .Si, S.^ 
 
 «;<^ 
 
 ..112 
 
 ... 1 20 
 I 'J 
 
 ^5 
 
 9 
 124 
 
 Sackett's Head Dank v. I.ewis" Hank c, 
 
 Sadercjuist v. Ontario liank 
 
 Scottish Petroleum Co. in re 
 
 Sibree v. Tripp 
 
 Smith V. |}ank of Nova Scotia 
 
 Societe (Jenerale dc Paris v. Walker 
 
 Stockton v. Malleable lion Co 
 
 Suter v. .Merchants Pank of Canada 
 
 124 
 
 •27 
 .42 
 
 •77 
 "3 
 
 Tennar.t v. Union Bank .S5, 94, 95, yS, ,,0, 106, ,,, 
 
 Thompson v. Molson's Ijank g , 
 
 Tomiinson v. Cilby . . 
 
 Trader's IJank V. Prow n .Manu(a( turiny Co 
 
 Trueman v. Appleyard 
 
 102 
 
 V. 
 
 Vigcrs V. St. I'auls 
 
 97 
 
 iJO 
 
 w. 
 
 Wilmot V. Maiiland 
 
 101 
 
VIM 
 
 Hanks a\i» ISANKisti 
 
 HOOKS KKIKKKKD IC). 
 
 Al)l>i)t's Dij;. Corporations. 
 
 Ann- -11 iV Ames on (lorporations. 
 
 Hrict on Ultra Vires. 
 
 (livil ( 'ode of Lower Canada. 
 
 (Irant ^n Hanking. 
 
 \[or.;e on Hanking. 
 
 I'othicr. 
 
 Rohinson \- Joseph's Digests. 
 
 Sheldon on Mortmain. 
 
53 VlCTohl.x] (C.HM' ^i. 
 
 AN ACT IJESPECTLNG BANKS AND 
 HANKING. 
 
 [^sstn/tJ to i6th Max, /li'yo.] 
 
 HER M;ij«'!st\ . hv nnd v.ilh the itdvicf mid 
 eoni-eiit of the SousUl' jiiid Hou.se of 
 Coiiiiiioiis ct Caii;ida, eniif.'t?* as li.ll(»w.>< : — 
 
 SHORT TITLE. 
 
 I. This Act iiiny he citi-d as '• Tiic- Bank ^s,„„, ^,1,,, 
 Act," (R.S.C. oai). 120, sec. I.) 
 
 The power to incorporate Hanks and i(j legislate 
 j^cncrally in respect oi them is expressly conftrretl 
 on the Parliament of Canada by section oi of the H. X, .A. 
 Act. There have been several cases in \ hich the extent 
 of this power has been considered. .See Quirt v. Queen. 19 
 S. C. R. 510, (1S71). Merchants v. Smith, 8, S. C. R. 512, 
 (.S84). 
 
 .As to the power of the Provincial Legislatures to nnpose 
 taxes on iJanks. See Hank of Toronto v. Lambe, i2.\p|)- 
 Cas. 575, (18S7). 
 
 INTERPRETATION 
 
 3. In this Act, unless the context otherwise i"toiiMititwn. 
 requires, — 
 
 ((f) The expression " the hank " means any ..T,...,uu.k.■• 
 hank to which this Act applies: (R.S.C. cap. 
 120, sec. 2, ss. e.) 
 
"■Trftasury 
 lioird." 
 
 wares and 
 inerehaiulise 
 
 2 Banks and Banking 
 
 {b] The expression " Treasury Board '* 
 means the board provided for by section 
 nine of chapter twenty-eight of the Re- 
 vised Statutes of Canada, or any Act in 
 amendment thereof or substitution therefor. 
 (New.) 
 
 (c.) The expression " goods, wares and mer- 
 chandise " incUides, in addition to the things 
 usually understood thereby, timber, deals, 
 boards, staves, saw-logs and other lumber, 
 petroleum, crude oil, and all agricultural 
 produce, and other articles of commerce. (R.S. 
 C. cap. 120, sec. 2, ss. a.) 
 
 For further notes on this subsection see Sec. 73. 
 
 " Wart'lioiLse 
 receipt." 
 
 {<!.) The expression "warehouse receipt'' 
 means any receipt given by any person for any 
 goods, wares, or merchandise, in his actual, 
 visible and continued possession, as bailee 
 thereof, in good faith, and not as of his own 
 property, and includes receipts given by any 
 person who is the owner or keeper of a harbor, 
 cove, pond, wharf, yard, warehouse, shed, store- 
 house or other place for the storage of goods, 
 wares or merchandise, for goods, wares and mer- 
 chandise delivered to him as bailee and actually 
 in the place, or in one or more of the places 
 owned or kept by him, whether such person is 
 engaged in other business or not. 
 
 The corresponding subsection in the Repealed Act is 
 R. S. C. Cap. 120, Sec. 2, ss. b. The present subsection 
 
Interpretation 3 
 
 omits words from and adds words to the repealed subsection. 
 For notes on the meaning of the expression " warehouse 
 receipt " see Sec. 73. 
 
 (e.) The expression "bill of lading " includes ..Bin of 
 all receipts fcr goods, wares or merchandise, ''"'"'*■' 
 accompanied by an undertaking to transport the 
 same from the place where they were received 
 to some other place, whether by land or water, 
 or partly by land and partly by water, and by 
 any mode of carriage whatever. (RS.C. cap. 
 120, sec. 2, ss. c. slightly changed). 
 
 For further notes on this subsection see sec. 73. 
 
 (/.) The word ''manufacturer" includes Mnmifuc 
 malt.^ters, distillers, brewers refiners and pro- 
 ducers of petroleum, tanners, curriers, packers, 
 canners of meat, pork, fish, fruit or vegetables, 
 and any person who produces by hand, art, 
 process or mechanical means any goods, wares 
 or merchandise. (New.) 
 
 For notes on this subsection see sec. 74. 
 
 APPLICATION OF ACT. 
 
 ». Tlie provisions of this Act apply to the,, 
 several banks enumerated in Schedule A t() '•'' '^^''•'I'l'ii'^**^ 
 this Act, and to every bank incorporated after 
 the first day of January, in the year one 
 thousand eight hundred and ninety, whether 
 this Act is specially mentioned in its Act of in- 
 corporation or not, but not to any other bank, 
 except as hereinafter specially provided. 
 
1 
 
 ('liarti.T.'i ton- 
 tiiiii(!il t) 1st 
 July, l!"a. 
 
 As to otlic'V 
 p;irtiriil.ir<. 
 
 forl'eitiiri'. 
 
 4 Banks and Bankinc 
 
 The corresponding section of the old Act is R. S. C. Cap. 
 120, Sec. 3. The language of the present section is slightly 
 changed to meet the new circumstances. 
 
 4. The charters or Acts of incorporation, and 
 any Acts in amendment thereof, of tjiciieveral 
 ])ank.s enumerated in Sp]ipf ]ule A/to this Act 
 are continued in force, so far as regards incor- 
 poration and corpov;ate name, the amount of 
 <-a})ital stock, the amount of ea\^h share of such 
 stock and the chief phice of business of each 
 bank, until the first day of July, in the yei^r 
 (mo t|^^iiiRfti4d-.w4jn Imndrpd and one, siil.ject to 
 the riirht of each ])ank to increase or reduce its 
 capital stock in the manner hereinafter provided ; 
 and as to all other particulars this Act shall 
 form and be the charter of each of the 
 said banks until the said first day of July, in the 
 year one thousand nine hundred and one, — 
 subject in the case of La Banque du Peuple to 
 the provisions hereinafter made in respect to 
 that bank : Provided always, that the said 
 charters or Acts of incorporation are hereby con- 
 tinued in force only in so far as they, or any of 
 them, are not forfeited or rendered void under 
 the terms thereof, or of this Act, or of any 
 other Act passed or to be passed, by reason of 
 the non-performance of the conditions thereof, 
 or by insolvency or otherwise. 
 
 The corresponding section of the old Act is R. S. C. Cap. 
 1 20, Sec. 4. The language of the present section is changed 
 to meet the new circumstances, and a reference is made to 
 the power to reduce the capital stock which is given for the 
 first time by this Act. (See Sec. 28). 
 
 I 
 
 -/ /^ l^ 
 
lat provi- 
 
 Al'i'LICVllJN- OV Aci 2 
 
 .». All the provisions of this Act, except those xyi, 
 contained in sections three, six to seventeen aS Si 
 (l)oth inclusive), nineteen to twenty-seveii i'^'"i'^^^^^^^ 
 mcl 1 ('H^th inclusive), thirty-three, forty-five, and 
 
 Jral / ,. i I '''?^''ty-"ine to ninety-six (both inclusive), apply 
 
 AcTT^^ ^^ I ^^ ^''^ Banque du Peuple : Provided that wher- i'-omho: as 
 
 ever the word " directors " is used in un./ of the 
 sections which apply to the said bank, it shall 
 be read and construed as meaning the principal 
 partners or members of the corporation of the 
 said bank ; and so much of the Act incorporatinfr 
 the said b.-ink, or of any Act amendin.ii: or eon- \''"''f'"''>t*^ 
 tinning it, as is inconsistent with any section of ' 
 this Act applying to the said bank, or which 
 makes any provision in any matter provided for 
 by such sections other than is hereby made, is 
 hereby repealed ; otherwise the said Acts are 
 continued in force, subject to the proviso con- 
 tained in section four of this Act. 
 
 This is a special section applying to the Banijue In 
 Peuple. The corresponding section of the old Act is K. 
 S. C. Cap. 12 3, S c. 88. 
 
 «. The provisions contained in sections two, ^\.,,.^j ,,.,^^j 
 seven, thirty-seven, forty -seven tc eighty -eight g^VlP''''' 
 (both inclusive), and ninety-seven to one liruM.N .,t!, 
 hundred and four (both inclusive), apply to the '''"i* '<'•''"' 
 Bank of British North America and the Bank of 
 British Columbia respectively ; and the 
 provisions contained in the other sections of 
 this Act do not apply to the said banks. 
 
 This and the following section are applicable specially to 
 the Bank of British North America and the Bank of British 
 
6 
 
 Ban'ks and Banking 
 
 • 'liicf seat of 
 bunincss of tin 
 sail] hanks. 
 
 Columbia, both of which possess English Charters. The 
 corresponding sections are R. S. C. Cap, 120, Sees. 87 and 89 
 
 7. For the purposes of the several sections of 
 tliis Act made applicable to the Bank of British 
 North America and the Bank of British Colum- 
 bia, the chief office of the Bank of British North 
 America shall be the office of the Bank of Mon- 
 t»'eal, in the Province of Quebec, and the chief 
 oilice of the Bank of British Colunil)ia shall be 
 the office of the Bank at Victoria, in the 
 Province of British Columl)i;i. 
 
 How Mer- 
 cliiiiits' Hank 
 of IV K.I may 
 roniL- iiiuliT 
 this Act. 
 
 .S. The provisions of this Act may be extended 
 to the Merchants' Bank of Prince Edward Island 
 by the Treasury Board, upon the application of 
 the directors of the said bink before the expira- 
 tion of the present charter of the said bank ; 
 and upon publication in the Quiwht G<izette of 
 the resolution t)f the directors applying here- 
 under, and of the minute of the Treasury Board 
 thereon allowing such application, the provisions 
 of this Act shall, from the time nanied in such 
 minute, or if theie is no time named therein, 
 from the date of the publication thereof in the 
 Cnnndii Gdzttte, apply to the said bank ; and its 
 charter and Act of incorporation, and any Acts 
 in amendment thereof, shall thereupon be ex- 
 tended for the same time and to the extent as 
 if the name of the said bank hjid been includ- 
 ed in Schedule A to this Act. (New). 
 
 The provisions of this Act were extended to the Merchants 
 Bank of Prince Edward Island on the ist of February 1892. 
 
T 
 
 Incorpokaiion and C)kgani/?ai ion- 
 
 incorporation 
 
 AND ORGANIZATION 
 BANKS. 
 
 OF 
 
 tt. The capital stock of every bank hereafter Mattes to »«> 
 incorporated, the name ol" the bank, the ph>ce sP'i^^^^^^^^ "' 
 where its chief office is to be situate, and the 
 name of the provisional directors shall be de- 
 clared in tlie Act of incorporation of every such 
 bank. (R.S.C. cap. 120, sec. 0, slightly changed.) 
 
 2. An Act of incorporation of a bank in the t '"■'""'' a*' «« 
 
 '■ iiuiir|ii«ration. 
 
 form set forth in Schedule B to this Act shall 
 be construed to confer upon the bank thereby 
 incorporated all the powers, privileges and 
 immunities, and to subject it to all the liabil- 
 ities and provisions set forth in this Act. (New). 
 
 10. The capital stock of any bank hereafter cpuni .tock 
 incorporated shall be not less than five hundred '""'"'""^ 
 thousand dollars, and shall be divided into shares 
 
 of one hundred dollars each. (New.) 
 
 11. The number of provisional directors shall 
 
 not be less than five nor more than ten, and '''''''^''s"' 
 they shall hold office until directors are elected 
 by the subscribers to the stock, as hereinafter 
 provided. (New.) 
 
 12. For the purpose of organizing the bank. ^ . , 
 the provisional directors may cause stock books *'"^'' ''**°'^ 
 to be opened, after giving public notice thereof, 
 —upon which stock books shall be recorded the 
 
8 
 
 r>\NKS ASM; nANKINC. 
 
 FiiNt mertiii-' 
 of sulwiTibii •». 
 
 Notiie. 
 
 Elcvtiuii of 
 (lirecti'is. 
 
 !subsci'iption!j ot such per.sons as desire to become 
 fcihareholc'errf in the bank ; and such bo >ks shall 
 be opened at the place where the chief ollice of 
 the bank is to be situate, and elsewhere, in the 
 discretion of the provisional directors, and may 
 be kept open for such time as they deem 
 necessary. (New). 
 
 i:i. So soon as a sura not less than five 
 hundred thousand dollars of the capital stock of 
 the bank has been hona ji<Je subscribed, and a 
 sum not less than two hundred and fifty thou- 
 sand dollars thereof has been paid to the 
 Minister of Finance and Receiver General, the 
 provisional directors may, by public notice, pub- 
 lished, for at least four weeks, call a n.eeting of 
 the subscribers to the said stock, to be held in 
 the place named in the Act of incorporation as 
 the chief place of business of the bank, at such 
 time and at such place therein as set forth in the 
 said notice ; at which meetini? the subscribers 
 shall determine the day upon which the annual 
 general meeting of the bank is to be held, and 
 shall elect such number of directors, duly quali- 
 fied under this Act. not less than five nor more 
 than ten, as they think necessary, who shall hold 
 olHce until the annual general meeting ^v- t?..>j 
 year next succeeding their election ; a;j * .>n 
 the election of directors as aforesaid X\n: ' k> 
 
 tions of the provisional directors shall cesise. 
 (New), 
 
 This section provides for the first meeting of shareholders 
 and for fixing the day of the annual meeting and for the 
 election of the first board of directors. 
 
 
Incorporation \nii Orcanizaiion 
 
 l-l. The b.iiik shiill not issue iK)tes nor con:- ' "'"'''''^ « 
 
 previous to 
 
 mence the business of banking until it litis ob- 1;;;^5~^'.'' 
 tained from the Treasury Board a certilicate '""'""'' 
 permitting it to do so, and no application for 
 such certificate shall be made until directors 
 have been elected by the subscribers to the 
 stock in the manner hereinbefore provided ; 
 and every director, provisi(jnal director, or 
 other person, issuing or authorizing the issue of 
 the notes of such bank or transacting or author- 
 izing the transaction of any business in connec- 
 tion with such bank, except such as is herein- 
 before provided, before the obtaining of the 
 certificate from the Treasury Board, shall be 
 guilty of an offence against the Act. (New). 
 
 This section prohibits the commencement of business by 
 the bank until it has obtained a certificate of permission to 
 do so from the Treasury Board. 
 
 nay 
 
 irranti'd. 
 
 15. No certificate shall be given by the \\''i" "^rtiri- 
 
 _, o ./ j.,,t^, may l,j; 
 
 ireasury Board until it has been shown to the 
 satisfaction of the Board, by affidavit or other- 
 wise, that all the requirements of this A.ct and 
 of the special Act of incorporation of the bank, 
 as to the payment required to be made to the 
 Minister of Finance and Receiver General, the 
 election of directors, deposit for secui-ity for note 
 issue, or otherwise, have been complied, with, 
 and that the sum so paid was then held by the 
 Minister of Financi^ and Receiver General •, and 
 no certificate as aforesaid shall be given except 
 within one year from the passing of the Act of 
 incorporation of the bank applyinu- for the sjiid 
 certificate. (New). 
 
10 
 
 Banks and Banking 
 
 If certiHi-atc is 
 not (rraiitiMl. 
 
 Disjjosal of 
 amount rteiK) 
 sited with 
 Minister of 
 Finani'c. 
 
 This section prescribes the conditions upon which the 
 Certificate of the Treasury Board referred to in Section 14 
 will issue. It is important to note that this certificate must 
 be obtained within one year from the passing of the Act of 
 incoporation of the bank, and if not so obtained that the 
 Charter of the bank lapses. (See Section 16). 
 
 1ft. In the event of the bank not obtaining 
 ii certificate from the Treasury BoHrd within 
 one year from the time of the passing of its Act 
 of incorporation, all rights, powers and privi- 
 leges conferred upon such bank by its Act ol" 
 incorporation shall thereupon cease and deter- 
 mine and be of no force and effect whatever. 
 (New). 
 
 17. Upon the issue of the certificate in 
 manner hereinbefore provided, the Minister of 
 Finance and Iikeceiver General shall forthwith 
 pay to the bank the amonnt of money so de- 
 posited ^ith him as aforesaid, without interest, 
 after deducting therefrom the amount required 
 to be deposited under section fifty-tour of this 
 Act ; and in case no certificate is issued by the 
 Treasury Board within the time limited for the 
 issue thereof, the amount so deposited shall be 
 returned to the person depositing the same ; 
 but in no case shall the Minister of Finance and 
 Receiver General be under any obligation to 
 see to the proper application of the same in any 
 way. (New). 
 
Internal Rkgii.ations 
 
 11 
 
 INTERNAL RECIULATIONS 
 
 IH. The sharehoUlerH of ilie Ijiink (or, in the lu iaw«mnj 
 case of La Banque du Peuple, Uie princi^:.! '"' """'" 
 partners or nieinbers of thecorimration thereof.) 
 mav rejjuhite bv bv-hiw. the foUowhig matters 
 incident to the nianageinent and administration 
 of the affiiirs of the bank, that is to say : The 
 day upon which the annual general meeting of 
 the shareholders for the election of directors 
 shall be held ; the record to be kept of proxies, 
 and the time, not exceeding thirty days, within 
 which proxies must be produced and recorded 
 prior to a meeting in order to entitle the holder 
 to vote thereon ; the number of the directors, 
 which shall not be less than five and not more 
 than ten, and the quorum thereof, which shall 
 not be less than three; their qualification, sub- 
 ject to the provisions hereinafter made ; the 
 method of tilling vacancies in the board of 
 directors whenever the same occur during each 
 year, and the time and proceedings for the elec- 
 tion of directors, in case of failure of any elec- 
 tion on the day appointed for it ; the remunera- 
 tion of the president, vice-president and other 
 directors ; and the amount of discounts or loans 
 which may be made to directors, either jointly 
 or severally, or to any one firm or person, or to 
 uny shareholder, or to corporations. 
 
12 
 
 B\NKS \M) UanKIXC. 
 
 SHARhHOiiitks' Powers. 
 
 This section is a coinbin.itiun of several sertions of the old 
 Act with some change^ .'in.i additions. (See R. S. C. Caj). 
 I JO. Sec. 9, is, I tV 3, and Sees. 14 A: 16). Hy it the share- 
 huklers are enii)Owered to regulate by by-law certain specified 
 matters, viz ; 
 
 (i) The day upon which the annual general meeting of 
 shareholders tor the election of directors shall be held. 
 (See also Sees. 13 iS: 19, ss. 4). 
 
 (2) The record to be kept of proxies. 
 
 (3) The time, not exceeding 30 days prior to a meeting, 
 within which proxies must be produced and recorded. (See 
 also Sec. 25. ss. 4 & 5), 
 
 (4) The number of directors, which shall not be less than 
 five nor more than ten. 
 
 (5) The riuorum, of directors which shall not be less than 
 three. 
 
 (6) The (jualification of the dire'^tors, which must also 
 conform to certain statutory requirements. (See ss. 3, 
 hereof and Sec. 19, ss. 2). 
 
 (7) The filling of vacancies in the Board during each year. 
 (See Sec. 19, ss. 7). 
 
 (8) The time and proceedings for the election of directors 
 in case of failure of election on the proper day. (See Sec. 20) 
 
 (9) The remuneration of the President, Vice-President 
 and other directors. 
 
 (10) The amount of discounts or loans to directors and 
 others. (The aggregate of these have to be shewn in the 
 monthly statement to the government see schedule D.) 
 
 The next sub-section empowers the shareholders to estab- 
 lish guarantee and pension funds for bank officials. 
 
 Sec. 24, ss. I, empowers a certain proportion of the share- 
 holders to call a special general meeting. 
 
 Sec. 24, ss. 2, by implication empowers the shareholders 
 to remove the President, Vice-President or Directors fo 
 misconduct. 
 
 Sec. 26 empowers the shareholders to increase the capital 
 stock. 
 
 Sec. 28 empowers the shareholders to reduce the capital 
 stock under certain conditions and restrictions. 
 
ISIKRNAI. F^KdlLAllONS 
 
 13 
 
 'J. The hliureholders mjiy aiitliori/.e the direc- o,,,, ..n... >.n.i 
 tora to e>*tal)liHli guu-iintee and pension tunds 
 for the olHeer.s and employees of the Ijunk and 
 tlieir families, and to contribute tlierero out of 
 the funds of the bank. (New). 
 
 The power to create guarantee and pensiun funds is here 
 ex|)ressl) conferred and contribution thereto authorized out 
 of the funds of the bank. The i.rior practice of creating a guar 
 antce fund was however recognised and impliedly legalized 
 by the old Act. (See R. S C. Cap 120, Sec. 17) and the 
 prior practice of creating a pension fund is recognized and 
 impliedly legalized b) this Act by Sec. 22. 
 
 3. Until it is otherwise prescribed bv bv-law c.itiii.hy. 
 
 , * ' ^n^■.•* coil 
 
 nuder this section, the bv-hiws of the bank on ''""'• 
 any matter which may be regulated by by-law 
 under this section shall remain in foue, except 
 as to any provision fixing the qualification of 
 directors at an amount le.ssthan that prescribed 
 by this Act ; and no person shall be elected or 
 continue to be a director unle.ss he holds stock 
 paid up to the amount required by this Act, or 
 such greater amount as i.s required by any by- 
 law in that behalf. (R.S.C. cap. 120, sec. 4). 
 
 By this clause it is provided that no person shall be elected 
 a director unless at the time of his election he possesses the 
 necessary stock qualification and also that no director shall 
 continue as such unless he continues to possess such stock 
 qualification. 
 
 4. The lbre<T;oiut>; provisions of this section, Banmf ,iu 
 
 ° ° ^ ' Pfiiiiif ex- 
 
 touching directors, shall not ajjply to La Banque fi't'''- 
 
 du Penple, which shall in these matters be 
 
 governed by the provisions of its charter. (R. 
 
 S.C. cap. 120, sec. 9. ss. 2, slightly changed}. 
 
14 
 
 Hanks ani» Ban kino 
 
 Bofinl of 
 ijirei'turit. 
 
 lO. The stock, property, nHairs and conceriia 
 ot* the bank shall be managed by a board of 
 directors who shall be elected annually in 
 manner hereinafter provided, and shall be 
 eligil)le for re-election. (R.S.C. cap. TJO, sec. 
 9, »s. 2 and wc. TJ). 
 
 This clause places the property and business of the bank 
 under the management of the board of directors subject to 
 the control of the shareholders in certain specified matters. 
 
 For the powers of the shareholders, see notes to sec. iJ^, 
 
 As to the powers of the directors to make by laws, calls, 
 convene meetings, allot stock, and sue \'c., see Section 19, 
 ss. 7, and Sections 22, 23, 24, 27, 29, 30, 31, ^2, ^s, 39, 46, 
 47, 58 and 92. 
 
 As to the (lualifications required by, and the duties and 
 liabilities expressly inijjosed on directors, sec sec. 18, ss. 2, 
 Sec. 19, ss. 2, 4, 6 and 7, and Sections 45, 48, 52, 92, 97 
 and 99. 
 
 .•\s to the quorum of directors, see Section. iS. 
 
 A bond may be given up to be cancelled by the president 
 and directors of a banking c<?rporation without their assent 
 being signified under the corporate seal. The Hank of 
 Upper Canada vs. Widmer 2 O. S. 222 (1829). 
 
 A director of a company from the time he becomes aware 
 of breaches of trust by his co-directors, incurs liability even 
 though he did not directly sanction them, and may be held 
 personally answerable for any losses sustained thereby, if he 
 remains passive and omits to take proper steins to prevent 
 such misconduct, and to institute if necessary proceedings 
 against his colleagues in default. Jackson vs. The Munster 
 Bank 15 L. R. Ir. 356(1885). 
 
 QuaiiHcati'.ii. 2. Each director shall hold capital stock of 
 the bank as tollows : — When the paid-up capital 
 stock is one million dollars or less, each director 
 shall hold stock on which not less than three 
 
Internal Rhculaiions 
 
 15 
 
 thuiiHand dollars has been paid up ; when the 
 paid-up capital atock is over one million ''ollara, 
 and does not exceed tliree million dollars, 
 each director shall hold stock on wiiich not less 
 than four thousand dollars has been paid up ; 
 and when the paid-up capital stock exceeds 
 tiiree million dollars, each director shall hold 
 stock on which not less than five thoasand 
 dollars has been paid up: (R.S.C. cap. 120, sec. '.), 
 ,*<H, 2, changed). 
 
 Hy the above sub-section the minimum share <iualification 
 of a director is fixed. (See also Section iS). 
 
 •\ A majority of the directors shall he ^|;{','ii|'^,Ii; '" 
 natural-born or naturalized subjects of Her'"'"* 
 Majesty: (R.S.C. cap. 120, sec. 12). 
 
 4. The directors shall be elected by the Ki.ition 
 shareholders on such day in each year as is 
 appointed by the charter or by any by-law of 
 
 the bank, and such election shall take place at 
 the head office of the bank at such time of the 
 day as the directors appoint ; and public notice ^'"<'^'' 
 thereof shall be given by the directors, by pul)- 
 lishing the same lor at least four weeks i)re- 
 vious to the time of holding such election, in a 
 newspaper published at the place where tlie 
 said head office is situate: (R.S.C cap. J 20, sec. 
 12, part, slightly changed). 
 
 5. The persons, to the number authorized to \yiio simii bu 
 be elected, who have the greatest number of' 
 
 votes at any election, shall be directors: (R.S. 
 C. cap. 120, sec. 12, ss. 3, slightly changed). 
 
16 
 
 Banks and Banking 
 
 
 I'rovisioM ill 
 <-:iscof'c'|ii;ilit.y 
 of vaU-a 
 
 Ehatiou of 
 (Iresideni. &c'. 
 
 G If it happens at any election that two or 
 more persons have an equal number of votes 
 and the election or non-election of one or more 
 such persons as a director or directors depends 
 on such equalit}', then the directors who have 
 a greater number, or the majority of them, 
 shnll determine which of the said persons so 
 having an equal number of votes shall be the 
 din.'ctor or directors, so as to complete the full 
 number ; and the said directors, as soon as may 
 be, after the said election, shall proceed U 
 elect, by ballot, two of their number to be presi 
 dent and vice-president respectively : (R-S.C 
 cap. 120, sec. 12, ss. 4, slightly changed). 
 
 o 
 
 
 Vacancies, 
 how tilled. 
 
 7 If a vacancy occurs in the board of direc- 
 tors, .such vacancy shall be filled in the manner 
 provided by the by-laws ; but the non filling of 
 the vacancy shall not vitiate the acts of a 
 quorum of the remaining directors; and if the 
 vacancy so created is in the office of the presi- 
 dent or vice-president, the directors shall, from 
 among themselves, elect a president or vice- 
 president, who shall continue in office for the 
 remainder of the year. (R.S,C. cap. 120, sec. 
 12, ss. 5, slightly changed). 
 
 Section i8 provides that the directors shall not be less 
 than five nor more than ten, and that the quorum shall not 
 be less than three. Where there is a maximum and mini 
 mum number of directors fixed by law, then directors can- 
 not act if the number falls belov,- the minimum. Alma 
 Spinning Co. L. R. i6 Chy. Div. 68i (iSSo), unless as in 
 this sub-section, there is power given to act notwithstanding 
 
Internal Regulations 
 
 17 
 
 :o 
 
 'i 
 
 vacancies, Scottish Petroleum Co. L R. 23 Chy. Dlv. 431 
 (1883). Here the power to act continued as long as there 
 is a (juorum present at a meeting of the hoard. 
 
 20. If an election of directors is not made on ,^,';7'ot'fkirure 
 the day appointed for that purpose, such elec- "* '''''*'°"' 
 tion of directors may take phice on any other 
 
 day according to the by-hiws made by the 
 shareholders in that behalf; and the directors 
 then in office shall remain in office until a new 
 election is made. (R.S.C. cap 120, sec. 15, 
 changed). 
 
 21. At all meetin<Ts of the directors, the Mivtintrs of 
 
 •^* "- ^ / (lirc'ftors. 
 
 president, or in his absence the vice-president, 
 or in the absence of both of them, one of the 
 directors present, chosen to act pro tempore. 
 shiill preside ; and the president, \dce-pretident ;;n'^;^;^i'''"^' 
 or president pro tempore so presiding shall vote 
 as a director, and if there is an equal division 
 on any ([uestion shall also have a casting vc.te. 
 (R.S.C. cnp. 120, sec. 10, part). 
 
 It may be noted that this section gives to the ])residing 
 otificer of a directors' meeting in addition to his own vote a 
 casting vote in case of an c(|uaiity of votes. 
 
 2a. The directors ni;»y make by-bnvs and ,^;,.„,,rai 
 regulations (not re})ugiiant to tho provisions ()f .yhvi'torl 
 this Act o)' the laws of Canada) toiicliing the 
 management and disposition of the stock, 
 property, afi'airs and concerns of the bank, and 
 touching the duties and conduct of the officers, 
 clerks and servants employed therein, and all 
 
 ote 
 
18 
 
 Banks and Banking 
 
 force. 
 
 such other matters as appertain to the business 
 by^uw8iD*'° of a bank: Provided ahvays, that all by-laws 
 of the bank heretofore lawfully made and now 
 in force, in regard to any matter respecting which 
 the directors mav make bv-laws under this 
 section (including any by-laws for establishing 
 guarantee and pension funds for the employees 
 of the bank), shall remain in Ibrce until they 
 are repealed or altered b\' others made under 
 this Act. (R.'S.C. cap. 120, sec. 17, changed). 
 
 The power to authorize the crea'tion of pension and guar- 
 antee funds is now expressly conferred on the shareholders 
 by Sec. i8, ss. 2 of this Act. 
 
 As to the shareholders' powers to make by-laws see notes 
 to Sec. 18. 
 
 As to the shareholders' power of repealing or changing 
 existing by-laws that under this Act can only be made by 
 shareholders, see Sec. 18, ss. 3. 
 
 Aj)i)ointment 
 or officers, &c. 
 
 Security to be 
 given. 
 
 2». The directors may appoint as many 
 officers, clerks and servants for carrying on the 
 business of the bank, and with such salaries and 
 allowances, as they consider necessary, and 
 they may also appoint a director or directors 
 for any branch of the bank : (R.S.C. cap. 120, 
 sec. 18). 
 
 2. Before permitting any cashier, officer, 
 clerk or servant of the bank to enter upon the 
 duties of his office, the directors shall require 
 him to give bond, guarantee, or other security 
 to the siitisfaction of the directors, for the due 
 and faithful peribnuance of his duties ; R.S.C. 
 cap. 120, sec. IS. ss. 2 slightly changed). 
 
Intkrnal Regulations 
 
 19 
 
 business 
 by-laws 
 and now 
 ig which 
 der this 
 Wishing 
 iployees 
 til they 
 le under 
 LUged). 
 
 and guar- 
 areholders 
 
 see notes 
 
 chansinq 
 made by- 
 
 many 
 on the 
 lies and 
 'V, and 
 irectors 
 ip. 120, 
 
 officer, 
 )on the 
 require 
 acurity 
 he due 
 R.S.C. 
 
 A surety by bond for the due performance of the ofifice of 
 a bank agent is not responsible for losses occurring after the 
 nature of the agency has been changed and the agent 
 appointed a cashier. Bank of Upper Canada v. Covert, 5 
 
 O.S. 541 (1834). 
 
 In an action on a bond. Plea, that the mode of paying 
 the clerk's salary had been changed from the manner stipu- 
 lated in the bond. Held, no defence. Bank of Toronto v. 
 Wilmot, 19 U. C. Q. B. 73 (1859). 
 
 Where the bond was for due performance of duties as 
 ■clerk, or in any other capacity inhat soever, and it was pleaded 
 that the clerk was, without the defendant's consent, made 
 teller, which was another and more responsible office, and 
 that the defendant was thereby discharged, it was held 
 that this defence was bad. Royal Canadian Bank v. Yates, 
 19 U. C. C. P. 439 (1869). 
 
 In an action against the sureties on a bond guaranteeing 
 the honesty of one M. as cashier, a defence was pleaded 
 by the sureties of neglect of the directors of the bank in 
 not ins[)ecting the books so as to detect any malversation on 
 the part of M. Held, that io sustain this defence the 
 sureties must show connivance or such gross negligence as 
 to warrant the inference of fraud or connivance between 
 the bank and M. A further defence was raised that the 
 cashier had lieen employed by the directors in unlawful 
 speculalif)ns in the stock of the bank and other stocks in 
 the course of which he appropriated to his own use certain 
 funds of the bank kept at special accounts in connection 
 with such speculations. 
 
 Held, no defence — as the claim of the bank against the 
 
 sureties was for moneys so misappropriated and not for 
 
 losses occasioned by such unlawful speculations. 
 
 „ , ,, , „ ( 7 O.R., ^,09 (1884) affirmed. 
 
 Kxchange lank vs Barnes, ; , .vR . ^9° ( .886) -,4 
 hxchange Bank vs. Springer, | 3- ^. ,^ -,6-(,887). 
 
 •>4. The directors of the bank, or nnv four of >^,i"'ifii. l-oirt 
 them, — or any number not less than twenty- 
 five of the shareholders of the bunk, who jire 
 
20 
 
 Banks and Banking 
 
 together proprietors of at least one-tenth of the 
 paid-up capital stock of the bank, by themselves 
 or by their proxies, — may, at any time, call a 
 special general meeting of the shareholders, to 
 be held at their usual place of meeting, upon 
 giving six weeks' previous public notice, speci- 
 fying in such notice the object of such meeting: 
 (R.S.C. cap, 120, sec. 11). 
 
 It is a general principle of corporation law that the notice 
 convening a meeting should specify in a general way the 
 business intended to be transacted thereat. 
 
 3 
 I 
 
 Removal of 
 president, 
 airector, &c. 
 
 New election. 
 
 2. If the object of any such special general 
 meeting is to consider the proposed removal of 
 the president or vice-president, or of a director 
 of the bunk, for maladministration or other 
 specified and apparently just cause, and if a 
 majority of the votes of the shareholders at 
 such meeting is iriven for such removal, a direc- 
 tor to replace him shall be elected or appointed 
 in the manner provided by the by-laws of the 
 bank, or if there are no by-laws providing 
 therefor, then by the shareholders at, such meet- 
 ing; and if it is the president or vice-president 
 who is removed, his office shall be filled by the 
 directors in the manner provided in caya of 
 a vacancy occurring in the office of president or 
 vice-president. (R.8.C. cap. 120. sec. 11, ss. 2). 
 
 As to shareholders' jjowers generally see notes to See. i8. 
 
 This sub-section gives the shareholders power to remove 
 directors for cause. Without this statutory power it would 
 appear that a company whose directors are aj)pointed for a 
 definite period has no inherent power to remove them before 
 
Internal Regulations 
 
 21 
 
 the expiration of that period. Imperial Hy. Hotel Co. 
 Blackpool vs. Hampson, L. R. 23 Ch. Div. i (1882). See 
 also Harben vs Phillips, L. R. 23 Ch. Div. 14 (1S83). 
 
 25. Every shareholder shall, on all occasions votesonsharcs 
 on which the votes of the shareholders are 
 taken, have one vote for each share held by 
 him for at least thirty days before the time of 
 meetino- (see also ss. 6 hereof) ; and in all cases Ballot. 
 when the votes of the shareholders are taken, 
 the voting shall be by ballot : (R S.C. cap. 120, 
 sec. 10, ss. 1 part, ss. 4). 
 
 2 All (luestions proposed for the con sid era- Majority to 
 tion of the .l...reholders shall be determined by 
 the majority of the votes of the shareholders 
 present in person or represented by proxy ; and 
 the chairman elected to preside at any such meet- 
 ing of the shareholders shall vote as a share- 
 holder only, unless there is a tie, —in which case, 
 except as to the election of a director, he shall casting vote, 
 have a casting vote : (R.S.C, cap. 120, sec. 10, ss. 
 2, slightly changed.) 
 
 It is inii)urtaiit to observe that this clause in case ot an 
 equality ot votes gives the chairman of a shareholders 
 meeting a casting vote on all (juestions except that of the 
 election of a "irector, which is otherwise provided for, see sec. 
 19 ss. 6. 
 
 3. If two or more i)'*rsons are joint holders A>tM.i,,iiit 
 
 "^ _ _ liolilurs lit 
 
 of shares, any one such joint holder may he *'''="'^'^- 
 empowered, by letter of attorney from the 
 other joint holder or holders, or a majority of 
 them, to represent the said shares, and vote 
 accordingly : (R.S.C. cap. 120, sec. 10 ss. 3). 
 
90! 
 
 Banks and Bankinc; 
 
 Proxies. 
 
 Renewal of 
 proxitis. 
 
 In certain 
 canes calls 
 must l)c paid 
 betbro votins,'. 
 
 4. Shareholders may vote by proxy, but no 
 person other than a shareholder eligible to vote> 
 shall be permitted to vote or act as such proxy* 
 and no manager, cashier, clerk or other subor- 
 dinate officer of the bank shall vote either in 
 person or by proxy, or hold a proxy for that 
 purpose : (R.S.C. cap. 120, sec, 10, ss. 1 part, 
 slightly changed). 
 
 It must be noted that by this sub-section the proxy must 
 not only be a shareholder, but a shareholder eligible to vote- 
 (see ss. I, 3 & 6 hereof). 
 
 As to the proxies see next subsection and section i8 
 hereof. 
 
 The president of a bank is not prohibited from voting on 
 proxies handed to him by other shareholders. Kegina vs. 
 The Bank of Upper Canada, 5 U. C. Q. B., 338 (1849). 
 
 5. No appointment of a proxy to vote at any 
 meeting of the shareholders of the bank shall 
 be valid for that purpose unless it hns been 
 made or renewed in writing within the two 
 years next preceding the time of such meeting: 
 (R.S.C. cap. 120, sec. 4, changed). 
 
 Under this Act proxies must bo renewed every two years 
 instead of three years as prescribed by the repealed Act. 
 As to the recording of proxies see .Sec. iS. 
 
 6. No shareholder shall vote, either in person 
 or by proxy, on any question proposed for the 
 consideration of the shareholders of" the bank at 
 any meeting of such shareholders, or in any 
 case in which the votes of the shareholders of 
 the bank are taken, unless he has paid all calls 
 made by the directors which are then due and 
 
Internal Regulations. 
 
 23 
 
 payable: (R.S.C. cap. 120, sec. 13, i^liglitly 
 changed). 
 
 As to what shareholders are entitled to vote see Sec. 25, 
 
 ss. I and 3. 
 
 ,r?>,^Z^-^>-^^'"^-"*"^ 
 
 iection 18 
 
 CAPITAL STOCK. (^^ 
 
 3CJ. The capital stock of the bank may be capftai^^ ° 
 increased from time to time, by such percentage 
 or by such amount, as is determined upon by 
 by-law passed by the shareholders, at the 
 annual general meeting, or at any special 
 general meeting called for the purpose: Pr< > xi'lasury *'^ 
 vided always, that no such by-law shall come 
 into operation, or be of any force or effect, 
 unless and until a certificate approving thereof 
 has been issued by the Treasury Board : (R.S.C. 
 cap. I'iO. sec. 7 part, changed). 
 
 The proviso at the end of the above section reijuiring the 
 approval of the Treasury Eoard is new. For the meaning 
 of the expression " Treasujy Board " see sec. 2 ss (b). 
 
 As to the powers of shareholders generally, see notes to 
 section iS. 
 
 2. No such certificate shall be issued by the *^-'>",'l'''''."3»| 
 
 J :i)iplK'iition for 
 
 Treasury Board unless application therefor is '^■'i"'^''^' 
 made within three months from the time of 
 the passing of such by-law, nor unless it appears 
 to the satisfaction of the Treasury Board that a 
 copy of such by-law, together with notice of in- 
 tention to apply for such certificate, has been 
 published for at least four weeks in the Caitmla 
 
 r- 
 
 ^70 
 
24 
 
 Banks anu Bankinc. 
 
 i^ 
 
 Gazetfe, and in one or more newspapers pu)j- 
 lislied in the place where the chief otfice or 
 place of business of the bank is situate ; nothinj^ 
 herein contained, however, shall be construed 
 to prevent the Treasury Board from refusing to 
 issue such certificate if it thinks best so to do. 
 (New). 
 
 How stock 27. Any of the original unsubscribed capital 
 
 ted. " stock, or of the increased stock of the bank, 
 
 shall, when the directors so determine, be 
 allotted to the then shareholders of the bank 
 pro rata, and at such rate as is fixed by the 
 directors, but no fraction of a share shall be so 
 allotted ; provided that in no case shall a rate 
 be fixed by the directors, which will make the 
 premium (if any) paid or payable on such 
 stock so allotted exceed the percentage which 
 the reserve fund of the bank then bears to the 
 paid-up capital stock thereof ; and any of such 
 alloted stock which is not taken up by the 
 shareholder to whom such allotment has been 
 made, within six mouths from the time when 
 notice of the allotment was mailed to his 
 address, or which ho d'/clines to accei)t, may be 
 offered for subscription to the public,, in such 
 manner and on such terms as the directors pre- 
 scribe. (R.S.C. cap. 120. sec. 8, added to 
 and changed). 
 
 The proviso which limits the Directors in tlxinu the 
 premium price of the stocks to be allotted hereunder i'. new. 
 
 Cai)ital stuck 
 tna.v lie re- 
 duced. 
 
 as. The capital stock of the bank may be 
 reduced by by-hiw pas.sed by the shareholders 
 
C'aI'hai. Siucis 
 
 ira pub- 
 office or 
 not hill <>■ 
 )nstrued 
 using to 
 to do. 
 
 capital 
 J bank, 
 ne. be 
 le bank 
 by the 
 II be 80 
 i a rate 
 ike the 
 1 such 
 
 which 
 
 to the 
 )!' such 
 )y the 
 s been 
 
 when 
 to his 
 lav be 
 I such 
 's pre- 
 ?d to 
 
 'ig the 
 i*^ new. 
 
 ay be 
 >hlers 
 
 'si 
 
 ;it the ;miiiiil u\MU'ral meeting, or at a special 
 geiiernl uiecting called for the i)urp()sc ; but no 
 such bv-liiw sliall coMie into oi)eration or bo of 
 fvrcf or I'lfcct until a certificate approving 
 thereof h.is b en issued by the Treasurx' Board : 
 (New). 
 
 Until ihc l),ls^,||l:^ of this Act tlic capital Nto( k of a hank 
 could (jtily i). icdiiccd by Act of Parliament. l!y this sec- 
 tion, Iiowi'vi r, jioucr to reduce the capital stock is ^iven to 
 the sh.iri'liol(lt.is to he exercised as provided herein. (See 
 sections 4 and 48). 
 
 2. No such certificate slndl be issued bv the crrtiHeauof 
 Iretisury iJoaid unless ai)plication therefor isHoam. 
 in;ide within three mi)nths from the time of 
 tlie ])assing of the by-law, nor unless it appears 
 to the siiti.sfaction of the Board that the .share- 
 hohleis voting for such by-law represent a 
 mnjority in value ol all the shares then issued 
 by the bank, and that a copy of the by-la iv, 
 together witii notice of intention to apply to 
 the Treasury Board for the issue of a certificate 
 approving thereof, has been published for at 
 least four weeks in the Qniadx Gazdte, and in 
 one or more newspai)ers published in the place 
 where the chief office or place of business of the 
 bank is situate; nothing herein contained, how- 
 ever, shall be construed to i)revent the Treasury 
 iioard fi'oui rel'using to issue sucli ccriiticate if 
 it thinks l)est so to d'>: (New), 
 
 3. In addition to evidence of the passing oi stat..ment.sto 
 
 the by-law and the publication thereof in the 
 mannei' above provided, statements sh(jwin<i- 
 
 It; ^iiliiiiittt'd. 
 
26 
 
 ]^\NK.-i AMI l'»ANKlN(i 
 
 Rt'duftion not 
 toattVctlia 
 
 the amount of stock isHiied and the munijcr of 
 sliareliolderw, with the amount of .stock held hy 
 each, ropre.sented at such mcetinj;, and the 
 nuniher of sharehohlers, with the amount of 
 stock hehl by each, wlio voted for such hy-hiw, 
 and also full statements of the assets and liabili- 
 ties of the bank, tojiether with a statement of 
 the reasons and causes why such reduction is 
 sought, shall be laid before the Treasury Board 
 at the time of the application for the issue of a 
 certificate approving such by-hvw : (New). 
 
 4. The passing of such by-law, and any 
 
 lloldiTS. 
 
 aj 
 
 If Icyisliitioii 
 i.s askiil to 
 saiictidu ru- 
 cUiction. 
 
 WHu'ofihare reduction of the capital stock of the bank there- 
 under, shall not, in any way, diminish or inter- 
 fere with the liability of the shareholders of the 
 bank to the creditors thereof at ihe time of the 
 issue of the certificate approving such by-law : 
 (New). 
 
 5. If, in anv cuse, leiiislation is souiiht to 
 sanction any reduction of the ca[)ital stock of 
 any bank, a copy of the by-law or resolution 
 passed by the sliiireholders in regard thereto, 
 together with statements similar to those above 
 provided to be laid before the Treasury Bjard, 
 shall be filed with the Minister of Finance and 
 lieceiver-General, at least one month prior to 
 the introduction into Parliament of the Bill 
 relating to such reduction : (New). 
 
 6. The capital shall not be reduced below the 
 amount of two hundred and fifty thousand 
 doll ars of paid-up stock. (New). 
 
 Limit to re- 
 duction. 
 
 '■■fi 
 
SllAUI.S AM) C.\I.L.>. 
 
 27 
 
 SHARES AND CALLS. 
 
 ail. Tlic shares of the capital stock of the shar.-, an.i 
 hank shall he personal estate, and shall he or.'"" "^ 
 assignal>le and transferahle at the chief place 
 of business of the bank, or at such of its 
 branches, or at such other place or places in the 
 United Kinj/doni, or in anv of the British 
 colonies or possessions, and according to such 
 form, and subject to such rules and regulations. 
 a>> the directors prescribe : and books of suii- "'!"'<'' "f 
 scription may be opened, and the dividends 
 accruing on any sh.-.res of such stock may be 
 uiade payable at any of the places aforesaid; 
 and the directors may appoint such agents in 
 the United Kingdom, or in any of the British 
 colonies or possessions, for the purposes of this 
 section, as they deem necessary. (R. S. C. cap. 
 120, sees. 11) in part and 20 in part, with addi- 
 tions ; see also sees, oo to 4 i of this Act). 
 
 ptioii. 
 
 SHARKS AkK V.\ THIS CLArSK I lECI.AKEI . TK ANSI' KKAKLE. 
 
 In Smitli V. The Hank of Xm-a .Scoti.i, 8 S.C.R. 558 (18S3) 
 It was held, ihai share> are, by the ex|)ress provisions of the 
 Banic Act (then 34 V., c. 5, s. 19) transferable at the will of 
 the holder, and that the directors are bound to register the 
 transfer unless there are debts or liabilities owing by the 
 shareholder to the bank, and that to justify the directors in 
 refusing to register transfers of shares they must bring them- 
 selves strictly within the terms of the section, and that a 
 resolution passed at a meeting of directors and shareholders, 
 
28 
 
 HaNKm and H.\NKIN<i 
 
 purporting to restrain for a certain tiuK- the transfer of shares, 
 was ultra rins, and ronstipiently not hindin^ on dissenting 
 or absent sharehoider-i. Sue also Har^s v. IJank of Nova 
 Scotia, 6 C.l./r. 44,^ (i'S85). 
 
 Opinions have hcen recently expressed in ttic Hou-^e of 
 Lords in ICngland, that where the stock certificale issued by 
 a l).ink contains a note that the certificate nuist be sur- 
 rendered with the in^^trunlent ot or at th(; time of transfer, it 
 would be wrong for the l)aiik to register a transfer until the 
 certificate was produced, or its non-i)roduction satisfactorily 
 accounted for. This was decided in the case of a company 
 to which the Companies Clauses Consolidation (Scotland) 
 Acts ajjplied (S i*c 9 \'ic. ch. 17) the language of section 21 
 of which is almost identical with section 43 of this Act, it 
 was argued that the directors had no right to haini)er the 
 transfer of shares by such a condition or regulation, but Lord 
 Blackburn said he thought they had. See Colonial Hank v. 
 Whinney, L R. 11 Apr. Cas. 426(1886). 
 
 Payment of 
 sbcircs. 
 
 WHERE SHAKES CAN UE SOLD IN E.\ECUTION. 
 
 Jit re The Bank of Ontario, 44 U.C.Q.B., 247 (1879). 
 
 It did not appear in this case that the Ontario Bank had a 
 share register in Montreil, but it was decided that a sale in 
 execution in the Province of Quebec might be made of 
 shares of this bank whose head otitice was in Ontario, it 
 appearing that by the law of the Province of Quebec service 
 of process could be legally effected at the bran( h of such 
 bank in Montreal, and that the Consolidated Statute of 
 Canada, c. 70, is in Icrce in that province, tiy which 
 statute (section 2) ii is provided that where service of process 
 can be legally made on the com [-any, there the shares may 
 be seized and notice given. 
 
 ao. The share.s of the Ciipital f^tock sliall be 
 paid in by such instalments and at .such times 
 and places as tlie directors appoint : Provided 
 
Sharks \ni> Calls. 
 
 39 
 
 always, that the diroctorH may cancel any huI- i'rf)vuo : tei 
 
 ^ '' ^ '' ♦' per cent. Ill 
 
 scription for any share unlesH a sum equal tc>"/4Vption.'' 
 ten per cent, at least on the amount subscribed 
 tor is actually |)aid at the time of, or within 
 thirty days nfter, the time of subscribing; but 
 such cancellaliun shall not relieve the subscriber 
 from his liability to creditors in the event of 
 insolvency as hereinafter provided. (R. S. C. 
 cap. lUO, sec. 20 changed). 
 
 The lan,miaL:c (jf the proviso to sec. 20 of the previous 
 Bank .\rt was as follows : " I'rovided always that no share 
 shall [)e held to he lawfully subscribed for unless a sum 
 efjual to at least ten per centum on the amount sul)scribed 
 for is actually paid at the time of or within thirty days after 
 the time of subscribing.'' Its meaning was discussed in the 
 winding u|. proceedings of the Central I^ank. Some of the 
 contribuiorits contended, though unsuccessfully, that if the 
 ten per cent, on the anM)unt subscribed was not paid at the 
 timeof theoriginalsubscriiHionfor bank shares or within thirty 
 days thereafter as re(iuired by the above proviso—although 
 afterwards paid to and accepted by the bank before the first 
 traii>fer of ihe shares took place, subsetiuent transferees of 
 the shares could not be placed on the list of contributories 
 in the winding up. In Haines A: Nasmuh's case (16 Ont. R. 
 39;,, 1S8.S, affd. 1 6 Ai)p. K. 237. 1S89, iS A.R. 209, ^889), the 
 Chancellor held that the provision as to jjaynient of the ten 
 per cent, is for the protection of the public, and till i)ayment 
 is n-.ade the [icrsfju subscribing may not be able to deal with 
 the slock, l)ut he is at least etjuitable owner, and may 
 beconu' legally entitled oti making the jjrescribed payment. 
 The contention thus put forward by the contributories in 
 liaines case would not be possible as the law now stands. The 
 language of the old proviso " no share shall be held to be law- 
 fully subscribed, kc" has been changed, and instead thereof a 
 power is given to the directors to cancel the subscription, the 
 subscriber still, however, remaining liable to creditors in the 
 event of the insolvency of the bank. (See sec. 89 et seq.) 
 
 ay- 
 
30 
 
 IJ.VNKS AND LJaNKING 
 
 Calls on Shares, jjf^ Tlie directors may make such calls of 
 money from the several shareholders for the 
 time being, upon the shares subscribed for by 
 them respectively, as they find necessary : (R. 
 S.C. cap. 120, sec. 21). 
 
 A call was iiiade by four directors, one of whom was 
 not legally appointed. It was held that though on; of the 
 directors who joined in making the call was not legally 
 appointed, the call was valid, three of the directors who 
 made it being duly qualified, and that number being 
 sufficient under section 1 6. Bank of Liverpool v. Bigelow, 
 3 R. & C. 23*3, Nova Scotia (187S). The facts on which 
 this dtcisio;) i'^ founded do not appear very clearly in the 
 report. In Brice on Ultra Vires, 2nd edition, page 362, it 
 is laid down that where the power to make calls is vested in 
 the directors, a call made b) those who are actually directors 
 and not yet removed, even though illegally elected, will be 
 good. It would ajjpear, however, from the decision of the 
 Privy Council in The Garden Gully United Quartz Mining 
 Company v. McLister, L.R., i App. Cases, 39 (1875), ^'"'^^ 
 to justify a forfeiture for non-payment of calls, the calls must 
 have been regularly made by a board oi directors who had 
 been duly elected, and this case seems to throw doubt on 
 the validity of calls made by a (k fact,i board of directors. 
 See also Bottomley's Case, 16 Ch. Div. 68 1 (1S80). As to 
 the powers and duties of directors to make calls when the 
 bank is insolvent, see section 92. 
 
 Time of calls 
 and notice. 
 
 Limitation. 
 
 2. Such calls shall be made at intervals of not 
 less than thirtv davs. and ui)on notice to be 
 given at least thirty days prior to the day on 
 which such calls shall be payable ; and no such 
 call shall exceed ten per cent, of each share 
 subscribed. (R.S.C. cap. 120. sec. 21, ss. 2). 
 
 There must be an interval of not less than thirty days 
 between the makint; of two successive calls as well as an 
 
Shares and Calls. 
 
 31 
 
 interval of at least thiity days between the time of making 
 a call and the time fixed for payment thereof. Robertbon v. 
 La Banque d'Hochehiga, 4 L.N. 314(1881). 
 
 aa. The directors may, in case of the non- R,.eoveryof 
 pnyrueiit c)i" any call, ill the corporate name of'""^ 
 the bank, sue for, recover, collect and get in all 
 such calls, or may cause and declare such shares 
 to be forfeited to the bank. (R,S.C. cap. 120, 
 sec. 22, slightly changed). 
 
 See also sections ^^ and 34. 
 
 This section gives power to the directors to forfeit shares 
 for non-payment of calls. 
 
 See Robertson v. Ban.jue d'Hochelaga, 4 L.N. 314 
 (i88i). The plaintiff in this action sought to have restored to 
 him certain shares in the defendant bank, which had been 
 forfeited by the directors for non-payment of calls. The 
 directors on three .several occasions notified the plaintiff that 
 unless the calls were paid they would sue him for the 
 amount. Without any further or other notification than this 
 they ijassed a resolution confiscating the shares. The court 
 decided that the directors having elected to sue could not 
 alter iheir election and proceed to confiscate the shares 
 without first giving the plaintiff a notice of their intention so to 
 do. 
 
 It has been decided that where the holder of stock dies 
 intestate and a call is made thereon after his death, admin- 
 istration will be grant, d to the nominee of the comjjany as a 
 creditor of the estate of the deceased. Totnlinson v. Gilby, 
 54 L J., 80(1885). 
 
 »» If any shareholder refuses or neglects to ForiVituro of 
 pay any instalment upon his shares^ of the Svi'mmor'" 
 c:»pital stock at the time a[)p<)inted therefor/'' 
 sucli shareholder shall incur a i)enaltv to the 
 use (){ the bank of a sum of money equal to ten 
 
;^2 
 
 Banks and Banking 
 
 case. 
 
 And traiist'er. 
 
 Sale in such per CGiit. of the aipount of such shares; and if 
 the directors declare any sh-ires to be forfeited 
 to the bank they shall within six months there- 
 after, without any previous formality other than 
 thirty days' public notice of their intention so 
 to do, sell at public auction the said share ', or 
 so many of the said siiares ai. sluill, after deduct- 
 ing the reasonable expenses of the sale, yieM a 
 sura of m(>ney sufficient to pay the unpaid 
 instalments due on the remjiinder of the said 
 shares and tne amount of penalties incurred 
 upon the whole ; and the president or vice- 
 president, manager or cashier of the bank shall 
 execute the transfer to the pi;rcliaser of the 
 shares so sold ; and such transfvr shall be as 
 valid and effect u;il in law as if it had been 
 executed by the original holder of the shares 
 thereby transferred ; but the directors, or the 
 shareholders at a general meeting, mav, notwith- 
 standing anything in this section contained, 
 remit, either in whole or in part, and condi- 
 tionally or unconditionally, any forfeiture or 
 penalty incurred by the nun-payment of 
 instalments as aforesaid, or the bank may 
 entbrce the [)ayment of any call or calls by suit, 
 instead of declaring the shares forteited. (R.S. 
 C. cap. 120, sec. 23, slightly changed). 
 
 Under section t,2 the dircct(jrs are empowered to 
 forfeit shares absolutely in case of nor.-jiaynient of calls. 
 
 Under this section the shareholder by nej.;lect to pay 
 calls incurs a forfeiture to the use of the bank of a sum of 
 money equal to ten per cent, on the amount of his shares ; 
 and the directors are empowered to sell— at public auction 
 
 Proviso. 
 
Internal Regulations. 
 
 33 
 
 on giving thirty days' jirior public notice of sa'e — the said 
 shares or so many of them as shall, after deducting reasonable 
 expenses of sale, yield sufficient to pay the unpaid instalments 
 due on the remainder thereof and the amount of forfeitures 
 incurred on the whole. 
 
 Section ^t, would, therefore, seem to limit to the extent 
 therein provided tlie apparently larger right of forfeiture 
 given by section 32. 
 
 As to forfeiture for non-payment when bank is insolvent. 
 (See sees. 92 to 94). 
 
 Under this and also the preceding section the directors 
 are empowered to sue the shareholders for the amount due 
 on any call. 
 
 It would seem, however, that the directors have no ])ower 
 to forfeit and to sue. I'he jjower is apparently conferred in 
 the alternative— either to forfeit or sue. See Robertson v. 
 La Banque d'Hochelaga (1881), cited in note to section 32- 
 
 34. In any action brought to recover any 
 money due on any such call it shall not be -^"'t- 
 necessary to set forth the special matter in the 
 declaration or statement of claim, but it shall 
 be sufhcient to allege that the defendant is 
 holder of one share or more, as the c.ise may 
 be, in the capital stock of the bank, and is n I'ab.'prnv. d. 
 indebted lo the bank for a call or calls upon 
 such share or shares, in the sura to which the 
 call or calls amount, as the case may be, stating 
 the amount and number of such calls, whereby 
 an action has accrued to the bank to recover the 
 same from such defendant by virtue of this Act ; 
 and it shall not be necessary to prove the 
 appointment of the directors. (R.S.C. cap. 120, 
 sec. 22, ss. 2, changed)- 
 
84 
 
 Banks and Banking 
 
 Conditimis m' 
 transfer dt' 
 shares. 
 
 Fraction of 
 sliarc not 
 transforablc 
 
 TRANSFER AND TRANSMISSION OF SHARES. 
 
 J$5. No assignment or transfer of the shares 
 of the capital st^ck of the bank shall be valid 
 unless it is made and registered and accepted 
 bj the person to whom tlie transfer is made, in 
 a book or books ke})t for that purpose, nor unless 
 the person making the same has, if required by 
 the bank, previously discharged all his debts 
 or liabilities to the bank which exceed in 
 amount the remaining stock, if :iny, belonging 
 to such person, valued at the then current rate : 
 and no I'ractional part of a share, or less than a 
 whole share, shall he assignable or transferable. 
 (R.S.C. cap. 120, sec. 20, in part). 
 
 In the liquidation of the Central Bank (a bank having its 
 head office in the Province of Ontario) the evidence showed 
 that the bank had adoj^ted the practice of dealing with its 
 shares by way of marginal transfer, that the first transferor 
 executed a transfer in blank, subject as by marginal note, 
 initialed by him, to the order of a broker, and that the 
 ultimate purcha'ser signed an accei)tance in the transfer 
 book immediately under the transfer so signed in blank by 
 the first transferor, the intermediate dealing of the broker 
 being omitted from extended record in the bank books, and 
 the ultimate purchaser being duly entered as a shareholder 
 in the stock ledger of the bank :— Held, that this amounted 
 substantially to an acceptance of shares transferred in blank, 
 which was lawful where transfer by deed was not prescribed, 
 and the entry in the stock ledger amounted to registration 
 within the meaning of the Act. 
 
 Where it api)eared that in one such case the transferee 
 did not sign the acceptance, but that he subsequently dealt 
 
Transfer and Transmission of Shares. 
 
 35 
 
 with the shares by selling and transferring them : — 
 
 Held, that the transferees from him were properly placed 
 upon the list of contributories, notwithstanding anything in 
 the corresponding section of the Act then in force :— In re- 
 Central Bank-Baines& Nasmithscase i6 Ont. R. 293 (1888) 
 affirmed in App. 16 Apj). R. 237 (1889); 18 App. R. 209 
 (1891). 
 
 After a winding up order has been made it is too late for 
 holders of shares entered as such in the books of the bank, 
 to escape liability by showing irregularities in transfers to more 
 or less remote i)redecessors in title. A loan company which 
 advances money on the security of shares, which are trans- 
 ferred to and accepted by it in the ordinary absolute 
 form cannot escape liability on the ground that it is merely 
 a trustee for the borrower. — In re Central Bank of Canada- 
 Home Savings and Loan Company's case 18 Ont. Appeal 
 Reports 489 (1891). 
 
 An infant, however, may repudiate his liability as a con- 
 tributory. — thus when the infant's father signed her name 
 to a stock subscription book of a bank, paid the calls, and 
 received the dividend cheques, which were endorsed by 
 her at her father's request, the moneys being received by 
 him, and the bank was put into liquidation by winding up 
 proceedings, and the order for call against contributories 
 was made three months before she came of age ; and a 
 year after the liijuidation commenced she took proceedings 
 to have her name removed from the list of contributories : — 
 Held, that she was not liable as a contributory and that 
 her name must be removed from the list. In re Central 
 Bank-Hoggs case 19 Ont. R. 7 (1S90). 
 
 Where an intending purchaser of stock enquired of the 
 bank officers what claims the bank held against such stock, 
 and certain information was given, but before the arrange- 
 ment for the transfer of the slock was completed another 
 claim, which was then current in one of the other agencies 
 of the bank, was returned unpaid :— Held, that the bank had 
 a right to retain its lien on the slock for the additional sum 
 before allowing the transfer of the stock in its books :— Cook 
 
wm 
 
 36 
 
 Banks and Banking 
 
 V. Royal Canadian Bank, 20 Chy., i (1873). See also sec- 
 tions 29, 37, 38 and 65. 
 
 'I'ransterors of' shares whose transfers have been registered 
 within sixty days of the suspension of payment by the bank, 
 remain liable for calls. See sections 89 and 96. 
 
 By the combined effect of this section and section 65 the 
 bank is entitled to a lien upon the shares of any shareholder 
 for any debt or liability for any debt to the bank and 
 wh».ther matured or only maturing — and may decline to 
 l)erinit any transfer of such shareholder's shares until pay- 
 ment of such debt. 
 
 ;?f? \ list of all transfers of shares registered 
 f<!rsuf/"koi'.t CM .' in the books of the bank, showing the 
 piu.ioj. u, such transfers and the number of 
 sliM'es transferred in each case, shall^be made 
 up at tii en.i oi e.ncb day and kept at the chief 
 place of business oi' the bank, for the inspection 
 of its shareholders. (R.S.C. cap. 120, sec. 30). 
 
 *S7. AH sales or transfers of shares, and all 
 j.iiar(smii8t 1)0 contracts and agreements in respect thereof, 
 
 rt'Kisfert'd " , *■ ' 
 
 owner. hereafter made or purporting to be made, shall 
 
 be null and void (saving however, as to a pur- 
 chaser not having knowledge of the defect, his 
 rights and remedies under the contract of sale), 
 unless the person making such sale or transfer, 
 or in whose name or on whose behalf the same 
 is made, is at the time thereof the registered 
 owner in the books of the bank of the share or 
 shares so sold or transferred, or intended or 
 purported so to be, or has the registered owner's 
 assent to the sale, and the distinguishing 
 number or numbers of such share or shares, if 
 
Transfer and 'l'kANs.\ii>,sio\ oi Shark-. 37 
 
 any, shall be de.Mgiiated in the contvaot or 
 agreement of sale or traiislcr ; and any i)ei'son, 
 whether principal, broker or agent, who violates 
 the provisions of this section bv wilRillv sellin"' 
 or transferring, or attempting to sell or trans- 
 fer, any share or shares by a false nnmber, or 
 of which the principal is not, at tlie time of 
 such sale or attempted sale, tlie regist(!red 
 owner, or acting with the registered owner's 
 assent to the sale, shall be ouiltv of an oifence 
 against this Act. (New). 
 
 This is a new section and is intended to prevent as much 
 as possible the rigging of the marl^ct and the traffuking in 
 bank shares. 
 
 ;\H. When any share of the capital stock has 
 been sold under a writ of execution, the ollicer [?'''' ""^ "'""""^ 
 by whom the writ was executed shall, within 
 thirty days after the stile, leave with the bank 
 an attested copy of the w^it, Avith the certificate 
 of such officer endorsed thereon, certifying to 
 whom the sale has been made ; and thereupon 
 (but not until after all debts and liabilities of 
 the holder of the share to the baidc, and all 
 liens existing in favor of tin; bank thereon, 
 have been discharged, as herein provided), the 
 president, vice-president, manager or cashier of 
 the bank shall execute the transfer of the share 
 so sold to the purchaser; and such transfer 
 shall be, to all intents and purposes, as valid 
 and eflectual in law as if it had Ijcen executed 
 by the holder of tlie said share. (R.S.C. cap. 
 120, sec ol, slightlv changed). 
 
 S.ile (It 
 !ii(i. r I'Xfi'U- 
 
 tioJI. 
 
38 
 
 Banks and Banking 
 
 ! 
 
 
 ! 
 
 
 
 . 
 
 1*V 
 
 t- 
 
 ejttnl. 
 
 By 34 Vic, c. 5, s. 19, the sheriff was the officer 
 empowered to sell shares under a writ of execution. But it 
 was, notwithstanding, held in /// ;r The Bank of Ontario, 
 44 U.C.Q.B., 250 (1879), that an execution from the Sui^orior 
 Court of ^^ontreal niij^ht be validly executed by a sworn 
 bailiff of the court instead of by the sheriff, and the bailiff 
 might fulfil the duties imposed on the sheriff by that section, 
 it appearing that under the law of the Province of Quebec 
 the bailiff is authorized to act and sell in the same way as 
 the sheriff This last point would not arise under this section 
 as now worded. 
 
 Cook V. Royal Canadian Bank, 20 Chy., (1873), "'"^^ 
 notes to section 35 and section 65. 
 
 30. If the interest in any share in the capital 
 
 Transmission ^ ' _ ' 
 
 otiirnvNMb.nn ^^^^^ becomcs transmitted in consequence of 
 ilow'airtin'nti. tlie death, bankruptcy, or insolvency of 
 any shareholder, or in consequence of the 
 marriage of a feniale shareholder, or by any 
 other lawful means than by a transfer according 
 to the provisions of this Act, such transmission 
 shall be authenticated by a declaration in 
 writing, as hereinafter mentioned, or in such 
 other manner as the directors of the bank 
 require ; and every such declaration shall 
 distinctlv slate the manner in which and the 
 person to whom such shares have been trans- 
 mitted, and shall be made and signed by such 
 person ; and the person making and signing 
 such declaration sijall acknowledge the s:\nie 
 before a judge of a court of record, or before 
 the mayor, provost or chief magistrate of a city, 
 town, borough or other place, or belore a notary 
 public, where the same is made and signed; 
 and every declaration so signed and acknowl- 
 
Transfer and Transmission of Shares, 
 
 39 
 
 edged shall be left with the cashier, inannger or 
 other oflicer or agent of the hunk, who shall 
 thereupon enter the nnn.e of the person entitled 
 under such transmission in the register of share- 
 holders; and until sucli transmission has been 
 so authenticated, no person churning by virtue 
 of any such transmission shall be entitled to 
 participate in the profits of the bank, or to vote 
 in respect of any such share of the capital 
 stock: Provided always, that every such 
 
 ;is t(j 
 
 declaration and instrument as, by this and the i ,'i"''ii<'>'. 
 next following section of this Act, are required '''''''''"^^ 
 to perfect the transmission of a share in the 
 bank which is made in any country other than 
 Canada, or any other British colony, or the 
 United Kingdom, shall be further autiienticated 
 by the clerk of a court of record and under the 
 seal of such court, or by the British consul or 
 vice-consul, or other accredited representative 
 of the British Government in the country 
 where the declaration is made, or shall be made 
 directly before such British consul or vice- 
 consul or other accredited representative ; and 
 provider^ also, that the directors, cashier oi r.^isonp- 
 other ollicer or agmt of the bank may require ^S' ^'.l' n^lln- 
 corroborativo evidence of an\' fact afloized in "'' 
 any such declaration. ( R S.d cap. 120, sec. 32, 
 slightly changed). 
 
 40. If the transmission of any share of the 
 capital stock has taken place b^^' virtue of the Karrinti^'l.f 
 marriage of a female shareholder, the declara- ''''''''' '""" 
 tion shall be accompanied by a copy of the 
 
TP" 
 
 40 
 
 Banks and Dwkim; 
 
 Trnnsinissioii 
 by diiccnsi;. 
 
 register ol' siicli marriage, or other purticular.s 
 of tlie celehrntioi! thereof, and shall deehire the 
 identity of the wiie witli tlie hohler ot snch 
 share, and sliall \h' made and signed by such 
 female shaieholder and her husband ; and thev 
 may inolude therein a (h'claration to the elVect 
 that the' share transmitted is the separate 
 |)ro[)('rty and innler the sole control of the wife, 
 and tliat she may receive and grant receipts for 
 the dividends and profits acciuing in respect 
 thereof, and dispose of and transfer the share 
 itseU, Avithont reipiiring the consent or authority 
 of her hns!)and : ajid such declaration shall be 
 binding u[)on the br.idc and persons making 
 the same, until the said persons see lit to 
 revoke it by a written notice to that eiVect to 
 the bank ; but the omission of a statement in 
 any such declaration that the wife making the 
 same is (hdy authorized by her husband to 
 make the same shall not invalidate the declara- 
 tion. (R.S.C. cap. 120, sec. oo). 
 
 II. If the transmission has taken place by 
 virtue of any testamentary instrument, or by 
 intestacy, the probate of the will, or the 
 letters of administration, or act oi curatorship 
 or tutorship, or an ollicial extract therefrom, 
 shall, together Avith such declaration, be pro- 
 duced and left with the cashier or other ollicor 
 or agent of the bank, w^ho shall, thereupon, 
 enter in the reiiister of shareholders the name 
 of the person entitled under such transmission. 
 (R.S.C. cap. 120, sec. o4). 
 
: 
 
 TRANSri.R AM) rRANS.\ri.SM()\ OF SlIAKKS. 
 
 41 
 
 A'i. ir tbu triiiismisHioii oi' any sliare of the I'nitiMii.n. 
 capital .stock lias taken place hy virtue of the ^"'■ 
 decease of any shareholder, the [jrodnciion to 
 the directors and the deposit with theui of an 
 authentic notarial copy of the will of the 
 drceased shareholder, if sueh will is in notarial 
 form accordin,!;' to the law of the Province of 
 Quebec, or of any authenticated copy of the 
 prohate of the will of the deceased shareholder, 
 or of letters of Mdniiuistration of his estate, 
 or of letters of verifieation of heirship, or of the 
 act of curatorship or tutorshii), uranted hv iinv 
 court 111 Canada having power to grant the 
 same, or by any court or authority in Kngland, 
 WmIcs, Ireland, or any iJritish colony, or of any 
 testament testamentary or testament dative 
 expcde in Scotland, or, if the deceased share- 
 holder died out ol Her Majesty's dominions, 
 the i)roduction to and deposit with the directors 
 of any authenticated copy of the prol)ate of his 
 will or letters of administration of his property, 
 or other document of like import, granted by 
 any court or authority having the requisite 
 power in such matters, .vhall be sulficient justi- 
 fication and authority to the directors for paviiiir 
 any (lividend, or for transferring or authorizing 
 the transfer of any sliar.', in pursuance of and 
 ill conformity to such probate, letters of adniin- 
 istnition, or other such document as aforesaid. 
 (R.S.C. cap. 120, sec. 34, changed). 
 
 'I'his section gives more specific directions than its [prede- 
 cessors as to the proofs to be produced hereunder. 
 
w 
 
 43 
 
 Banks and I^vnkino 
 
 lliiiik not 
 hoilllil to Mc'c to 
 truHtsrpf itt 
 Mhiin-x. 
 
 't:t. The biUik hIuiU not ho bound to .see to the 
 oxocution of any trust, whether oxih'osh, iin[)Ue(l 
 or constiMuUivo, to which any sliare of its stock 
 is suhje(!t ; and the recei[)t of the person in 
 wliose name any such sliare stands in the hooks 
 of the bank, or, if it stands in tiie name of uiore 
 persons tlian one, tlie receipt of 'jneof such pi-r- 
 sons sliall he a sulficient discharge to the hunk 
 for any (Uvidend or any other sum of money 
 payable in respect of such shiire, unless express 
 notice to the contrary has been given to the 
 hank; and the hank shall not be bound to see 
 t') the ap[)lication of the money paid upon such 
 receipt, whether given by one of such persons 
 or all of them. (ll.SC. cap. 120, sec. 37.) 
 
 This scclion deals wiili trusts to which shares may be 
 subject — see also sections 29, 35 it 30. As to trusts to which 
 deposits may be subject, see section 84, ss. 3. 
 
 Under 25 and 26 \'ic., (-ap. cSq, sec. 30 (imp.) " 'I'he Com- 
 pany's Act, 1862" which is as follow^ : " No notice of any 
 trust, e.\[)ressed, implied, or coiihtructive, shall be entered on 
 the register, or be receivable by the registrar, in the case of 
 Companies under this Act," it was decided that where the 
 owner of shares at different limes makes in fa\or of each of 
 two persons, an cfpiilable assignment of such shares, such 
 assignments rank according to their resj.ective dates, and the 
 second transferee by giving notice of his assignment to the 
 bank, before the first transferee does so, does not thereby 
 acquire any priority over the first transferee because to hold 
 otherwise would be to convert the bank into a trustee and to 
 bind it with the notice of a trust. Societe Gcnerale de Paris 
 vs. Walker, L.R. 11 App. Cases, 20 (18S5) affirming S.C. in 
 L.R. 14 Q.H.D. 426. 
 
 From the opinions expressed by the Lord Justices in the 
 above case it would seem that section 43 of this Act on this 
 
Transfer and Transmission ok Sharks. 
 
 4M 
 
 point would probably receive a similar interpretation to that 
 placed upon section 30 of the ("uni|)atiies Act, i86j. ll 
 will of course be observed that section 44 of this Act evid- 
 ently contemplates the entry of trusts to some extent t)n the 
 book^ of the bank. 
 
 Now if a slinre stands on the books of the b.uik, earmarked 
 with a tru >t — or, if stands on its books, not so earmarkiil but 
 the b.ink has in f.u l received actual notice that such share is 
 affected by a trust, is it Liwlul for the bank to allow a transttr 
 of the same, without the concurrence of any one except the 
 person in whose name the share stands in the books of the 
 bank? This is a very nni)ortant (piestion. It is cjnceived 
 that the bank will he safe, if the transfer is executed by the 
 person who is the registered shareholder. It has been the 
 universal practice and rightly so, as we think, to act u])on 
 transfers so executed. But Mr. Justice Lindley in the case 
 cited in his judgment says : " I have no doubt that if direct- 
 ors allow a transferor to make a transfer which they know to 
 be fraudulent they could be made liable for ihe value of the 
 shares transferred ; they would make themselves parties to 
 his fraud. Moreover, a refusal by directors, or an omission 
 on their part, to pay attention to a notice given to them by a 
 person having an equitable interest in shares, and requiring 
 the directors not to register a transfer for such time as may 
 be necessary to allow him time to apply for a proper restrain- 
 ing order, would \)c prima facie improper. Such conduct on 
 the part of directors, unless explained, would be strong evi- 
 dence of fraud on their part, liut this is quite consistent 
 with holding comjianies not bound to take notice of etpiitable 
 interests in shares, not followed \\\^ by jiroccedings to restrain 
 a transfer." 
 
 Though a bank is not bound to see to the execution of 
 any trust in regard to its own shares — it, like all other persons, 
 is bound by notices of trust in resiiecl of shares which may 
 be accepted by it as collateral security for advances. 
 
 There have been several important cases decided on this 
 point quite recently, — In the bank of Montreal vs. Sweeny, 
 L.R. 12 App. Cases 617 (1887), where shares of a Rolling 
 
w 
 
 44 
 
 Banks and Banking 
 
 i|: 
 
 Mill Co. stood in the name of one Rose, in trust, and he 
 transferred the same to the bank as security for a debt which 
 he owed to it, the Privy Council decided that the bank 
 had express notice tliat, as regards the shares transferred to 
 it, Rose stood to some person in the reiucion expressed by 
 the words " in trust," and it was the duty of the bank to de- 
 cline to take tlie shares until it had ascertained that Rose's 
 transfer was authorized by the nature of the trust, and as 
 Rose had no authoritv to make such a transfer, the bank 
 could not retain the shares against the person proved to be 
 beneficially entitled to them and for whoui Rose held them 
 intrust; see also Rai)hael vs. McFarlane, i8 S.C.R. 183 
 (189c); Petry vs. La Caisse D'Economie, 19 S.C.R. 713 
 (1891). Duggan vs. London & Canadian Loan & Agency 
 Co. 19O.R. 272 (1890); 18A.R. 305(1891); 20 S.C.R. 
 481 (1892) ; Earl of Sheffield vs. London Joint S:ock I5ank, 
 13 App. Cas. 333 (1S88) ; London Joint Stock Bank vs. 
 Simmons, 1892, App. Cas. 201. 
 
 
 
 Executors .111(1 
 tnistciis not 
 iifisoiially 
 lialdu. ' 
 
 Kxciiiilio 1. 
 
 41. No person holding stock in the bank as 
 executor, administrator, guardian or trustee, of 
 or for any person named in the books of the 
 bank as being so represented by him, shall be 
 personally subject to any liability as a share- 
 holder, but the estate and funds in his hands 
 shall be liable in like manner and to the same 
 extent as the testator, intestate, ward or person 
 interested in such trust fund would be, if living 
 and competent to hold the stock in his own 
 name; and if the trust is lor a living person, 
 such person shall also himself be liable as a 
 shareholder; but if such testator, intestate, 
 ward or person so represented is not so named 
 in the books of the bank, the executor, admin- 
 istrator, guardian or trustee shall be personally 
 
Transfer axd Transmission of Shakes. 45 
 
 liable in respect of such stock as if he held it in 
 his own name as owner thereof. 
 
 In order to exempt the executor, administrator, guardian 
 or trustee from personal liability under this section, the name 
 of the testator, intestate, ward or person oeneficially interest- 
 ed must appear on the books of the bank. After the City of 
 Glasgow Bank faWure the personal liability of Trustee Share- 
 holders was brought prominently before the public and led 
 It ir, believed, to the adding of this clause to the Bank Act' 
 See .\ruir vs. City of Glasgow Bank, L R. 4 App. Cas. 427 
 (1879), 
 
 ANNUAL STATEMENT AND INSPECTION. 
 
 45. At every annual meeting of the «hare- sHt.,,,. t 
 holders for the election of directors, the out- SHlH? 
 going directors shall submit a clear and full ""' 
 statement of the affairs of the bank, containing 
 on the one part,— 
 
 The amount of the capital .stock paid in, the 
 amount of notes of the bank in circulation, the '''^•'"i"'^« 
 net profits made, the balances due to other 
 banks, and the cash deposited in the bank, dis- 
 tinguishing deposits bearing interest from those 
 not bearing interest; and on the other part,— 
 
 The amount of the current coin, the gold and 
 silver bullion, and the Dominion notes held by '''"''• 
 the bank, the balances duo to the bank fr..ni 
 other banks, the value of the real and otlier 
 property of the bank, and the amount of debts 
 
M 
 
 Uanks and Banking 
 
 What state- 
 iTioiit shall 
 
 show 
 
 II f<i 'i 
 
 Ins|)(!C'tioii 
 liooks, &c. 
 
 of 
 
 II >' 
 
 ■s 
 
 III 
 
 owing to the bank, including and particulariz- 
 ing the amounts so owing upon bills of ex- 
 change, discounted notes, mortgages and other 
 securities, — 
 
 Exhibiting, on the one hand, the liabilities 
 of, or the debts due by the bank, and on the 
 other hand the assets and resources thereof; 
 and the said statement shall also exhibit the 
 rate and amount of the last dividend declared by 
 the directors, the amount ol reserved profits at 
 the date of such statement, and the amount of 
 debts due to the bank, over-due and not paid, 
 with an estimate of the loss which will probably 
 accrue thereon. (R.S.C. cap. 120, sec. 24, 
 changed.) 
 
 40. The books, correspondence and funds of 
 the biink shidl. at all times, be subject to the 
 inspection of the directors ; but no person, who 
 is not a director, shall be jiUowed to inspect the 
 account of any person dealing with the bank. 
 (RS.C. cap. 120, sec. 25). 
 
 In an action against tlie sureties on a bond guarantee- 
 ing the honesty of one M. as cashier, a defence was pleaded 
 by the sureties of neglect of the directors of the bank in not 
 inspecting the books so as to detect any nalversation on the 
 ])art of M. Held, that to sustain this defence the sureties 
 must show connivance or such gross negligence as to warrant 
 the inference of fraud or connivance b<^tween the bank and M. 
 
 Exchange Bank vs. Barnes, I ;,^^^:^;,^3,^j;f8^i);'^^ '^• 
 Exchange Bank vs. Springer, | ^;^ ^^.R 716 (1887). 
 
Dividends. 
 
 47 
 
 DIVIDENDS. 
 
 4T. The directors of the bank shall, subject 
 to the provisions of this Act, defi^re quarterly ^- ''''''■'"'8- 
 or halfyearly dividends of so much of the profits 
 of the bank ns to the nuijority of them seems 
 advisable ; and they shall give at least thirty 
 days' public notice of the payment of such divi- 
 dends previously to the date fixed for such pay- 
 ment ; and they may close the transfer books 
 during a certain time, not exceeding fifteen 
 days, before the payment of each dividend. 
 (R.S.C. cap. 120, sec. 9 part, sec, 26 part, slight- 
 ly changed). 
 
 The restrictions imposed on directors in connection with 
 the declaration of dividends are contained in the next two 
 sections, viz :— Sections 48 and 49. 
 
 •4'*<. No dividend cr bonus shall ever be de- 
 clared so as to impair the paid-up capital; aiul pii'Si' "''' 
 if any dividend or bonus is so declared or made """" 
 payable, the directors who knowingly and wil- 
 fully concur therein shall be jointly and sever- 
 ally liable for the amount thereof as a debt due 
 by them to the bank ; and if any part of the 
 paid-up capital is lost, the directors shall, if all 
 
 j.K^ 1 •! 1 , , . . , Cai)ital lost tn 
 
 the subscribed stock is not paid up, forthwith ''''"'*'"'''"•' 
 make calls upon the shareholders to an amount 
 equivalent to such loss ; and such loss and the 
 calls, if any, snail be mentioned in the next re- 
 
 
 ;( 
 
48 
 
 Banks and Ban.cing 
 
 Proviso 
 
 turn raade by the bank to the Minister of 
 Finance and Receiver-General : Provided that, 
 in any case in which the capital has been im- 
 paired tis aforesaid, all net profits shall be 
 applied to make good such loss. (R.S.C. cap. 
 120, sec. 27). 
 
 When a bank has impaired its paid-up capital hy losses it 
 is expressly forbidden by the proviso at the end of ti.e above 
 section to pay any dividend until such impairment has been 
 made good. Consequently, heretofore the bank has generally 
 made application to Parliament to reduce its capital so as to 
 enable it to go on paying dividends. By this Act, however, 
 power is given to the shareholders to reduce the capital of 
 the bank by bylaw. See sections ^ ..nd 28. 
 
 4«. No division of profits, either by way of 
 P'uS ti^re dividends or bonus, or both combined, or in any 
 IS a cortainn.- q^^qj. ^.^^^ exceeding the rate of eight per cent 
 per annum, shall be raade by the hank, unless, 
 after making the same, it has a rest or reserve 
 fund equal to at least thirty per cent of its paid- 
 up capital ; and all bad and doubtful debts shall 
 be deducted before the amount of such rest is 
 calculated. (R.S-C. cap, 120, sec. 28, slightly 
 changed). 
 
 serve 
 
Reserves. 
 
 49 
 
 RESERVES. 
 
 50. The bank shall hold not less than forty 
 per cent of its cash reserves in Dominion notes ;£SF'' 
 and every bank holding at any time a less 
 amuiint of its cash reserves in Dominion notes 
 than IS prescribed by this section shall incur a 
 penalty of five hundred dollars for each and 
 eve. y violation of the provisions of this section • P^^^'tv for 
 (R.S.C. cap. 120, sec. 39 part, slightly changed)' "-•"''''' 
 
 •^. The Minister of Finance and Receiver 
 General shall make such arrangements as aresu,.p,vo, 
 necessary for insuring the delivery of Dominion not':4'""" 
 notes to any bank, in exchange for an equival- 
 ent amount of specie, at the several offices at 
 Avhich Dominion notes are redeemable, in the 
 cities of Toronto, Montreal, Halifax, St. John 
 N.l>., Winnipeg, Charlottetown and Victoria, 
 respectively; and such notes shall be redeeni- 
 able at the office for redemi)tion of Dominion 
 notes in the place where such specie is o-iven in 
 exchange. (R.S.C. cap. 120, sec. 31?, ss 2 
 added to). 
 
 As to issue and payment of Dominion notes generally se 
 Kc vised Statutes of Canada, cap. 31. 
 
 see 
 
60 
 
 Banks and Banking 
 
 Amount and 
 (It'iioniination 
 (>( bank notes. 
 
 Note issue of 
 Han(|iie uu 
 INui)le and 
 Hank of B.I - 
 tis<h North 
 America. 
 
 NOTE ISSUE. 
 
 iSl. The bank may issue and re-issue notes 
 payable to bearer on demand and intended lor 
 circulation ; but no such note shall be for a sura 
 less than five dollars, or for any sum which is 
 not a multiple of five dollars, and the total 
 amount of such notes, in circulation at any time, 
 shall not exceed tne amount of the unimpaired 
 paid-up capital of the bank : (R.S.C, cap. 120, 
 sec. 40, changed). 
 
 2. Notwithstanding anything contained in 
 the next preceding sub-section, the total 
 amount of such notes in circulation at any time 
 of La Banque du Peuple and the Bank of !5rit- 
 ish North America respectively shall not exceed 
 seventy-five per cent of the unimpaired paid-up 
 capital of such banks respectively, but each of 
 such banks may issue such notes in excess of the 
 said seventy-five per cent upon depositing, with 
 respect to such excess, with the Minister of 
 Finance and Receiver General, in cash or bonds 
 of the Dominion of Canada, an amount equal to 
 the excess ; provided always that in no case 
 shall the total amount of the notes of either of 
 the said banks in circulation at any time exceed 
 the unimpaired paid-up capital of such bank ; 
 and the cash or bonds so deposited shall be 
 available by the Minister of Finance and 
 Receiver General for the redemption of notes 
 issued in excess as aforesaid, in the event ot the 
 
Note Issuk. 
 
 51 
 
 suspension of the said banks respectively 
 (New). ^ ^' 
 
 3. If the total amount of the notes of the 
 bank in circulation at any time exceeds the i^si':;.-^';;': 
 
 auiount authorized by this section, the bank "'"'' ' 
 
 shall incur penalties as follows: If the amount 
 of such excess is not over one thousand dollars, 
 a penalty equal to the amount of such excess • 
 if the amount of such excess is over one tlious- 
 and dollars and is not over twenty thousand 
 dollars, a pe.ialty of one thousaiKf dollars; if 
 the amount of such excess is over twenty thous- 
 and dollars and is not over one hundred thous- 
 and dollars, a penalty of ten thousand dollars ; 
 if the amount of such excess is over one hun- 
 dred thousand dollars and not ovei- two hundred 
 thousand dollars, a penalty of fifty thousand 
 dollars; and if the amount of such excess is 
 over two hundred thousand dollars, a penalty of 
 one hundred thousand dollars: (R S.C. cap. 
 120, sec. 40, ss. 2, changed ) 
 
 Xotes under |5 
 to In- fiill.il in. 
 
 4. All notes heretofore issued or re-issued by 
 the bank, and now in circulation, which are for 
 a sum less than five dollars, or for a sum whicu 
 is not a multiple of live dollars, shall be called 
 in and cancelled as soon as practicable. (R.S.C. 
 cap, 120, part of sec. 40.) 
 
 53. The bank shall not pledge, assign, or , 
 hypothecate its notes; and no advance or loan J!^^'''-^^^^^^^^^^^ 
 made on the security of the notes of a bank 
 
Penalty (or 
 plcd^iinu--. 
 
 52 Banks and Banking 
 
 ahnll be recoverable from the bank or its assets : 
 (New). 
 
 This sub-section strikes at and prohibits the creation of 
 preferences by the transfer of blocks of bank notes by the 
 bank ofificers by way of pledge or assignment or hypotheca- 
 tion. 
 
 2. Every person who, being the president, 
 vice-president, director, principal partner en 
 commandite, general manager, manager, cashier, 
 or other officer of the bank, pledges, assigns, or 
 hypothecates, or authorizes, or is concerned in 
 the pledge, assignment or hypothecation of the 
 notes of the bank, and every person who accepts, 
 receives or takes, or authorizes or is concerned 
 in the acceptance or receipt or taking of such 
 notes as a pledge, assignment or hypothecation, 
 shall be liable to a fine of not less than four 
 hundred dollars and not more than two thous- 
 and dollars, or to imprisonment for not more 
 than two years, or to both: (New). 
 
 3. Every person who, being the president, 
 ini|'ivl|;y.r'isMK; vloc-president, director, principal partner en 
 
 conimaudite, general manager, manager, cashier, 
 or other officer of a bank, with intent to de- 
 fraud, issues or delivers, or authorizes or is con- 
 cerned in the issue or delivery of notes of the 
 bank intended for circulation and not then in 
 circulation, — and every person who, with know- 
 ledge of such intent, accepts, receives or takes, 
 or authorizes or is concerned in the accept- 
 ance, receiptor taking of such notes, — shall be 
 guilty of a mis-demeanor, and liable to im- 
 
 Peiialtv lor 
 
 or takiiii;' ol 
 
 IlOtL'S. 
 
Note Issue. 
 
 53 
 
 prisonnient for a term nut exceeding seven 
 years, or to a fine not exceeding two thousand 
 dollars, or to both. (New.) 
 
 The currency of this country consisting substantially of 
 the notes of chartered banks, this act contains several provi- 
 sions for increasing the circulating power thereof and in the 
 event of the insolvency of the bank for ensuring the payment 
 of the same. (See sees. 53, 54, 55, 56.) These provisions 
 it is believed will prove sufficient for the purpose, but they 
 were only designed to ensure payment of notes bond fide in 
 circulation and performing the functions of currency or 
 money. 
 
 5a. The payment of the notes issued or re- 
 issued by the bank and intended for circulation. Notes to iiotirst 
 and then mcirculation, together with any interest ''^^*'''-- 
 paid or payable thereon as hereinafter provided, 
 shall be the first charge upon the assets of the 
 bank in case of its insolvency; and the payment 
 of any amount due to the Government of Canada, 
 in trust or otherwise, shall be the second 
 charge upon such assets; and the payment of 
 any amount due to the Government of any 
 of the Provinces, in trust or otherwise, shall be 
 the third charge upon such assets: (R.S C. 
 cap. 120, sec. 79, added to.) 
 
 In cases of insolvency of the bank this section makes the 
 " notes in circulation " a first charge upon its assets and 
 then declares that the Dominion Cloverninent's indebtedness 
 shall be the second charge and the Provincial Government's 
 indebtedness the third charge. 'I'he priority of Ciown 
 debts on the bank's assets now depends on this legislation. 
 See cases on this question decided prior hereto — Exchange 
 Bank vs. Queen (Quebec) L.R., 1 1. Ai>p. Cas. 157 (18S6) 
 
54 
 
 Banks and Bankinc. 
 
 Queen vs. Bank of Nova Scotia (P.E.I.) ii S.C.R. i (1885), 
 I-iciuidators Maritime Bank vs. Queen (N.H.) 17 "^.C.R. 657 
 (18S9). (This last case deals with moneys held in trust by 
 the Crown as represented by the Dominion Government.) 
 Liquidators Maritime Bank vs. Queen (N.l?.) App. Cas., 
 
 (:;;.;.). 
 
 2. The uinount of any peiinlties for which tl)e 
 p.'n!.1''/^s ill' bank is liable shall not form a charge upon the 
 veney.. "*' as.scts ot" sucli bauk, in case of its insolvency, 
 until all other liabilities are paid. (New.) 
 
 to live per 
 cent 111' Mot<' 
 I'irciiliilioii. 
 
 ill. Every bank to which this Act a])plies, 
 
 E.\i>tiii^'- banks i i • i • • "i. i • i. j.i j.* 
 
 toiMiik,. (!-■ and wliicli is carrying on its business at the tune 
 
 i)c)sit with llio i"» • • 111 -i" 
 
 ijinisi,!- .,1 when this Act comes into Jorce, sliall, within 
 fifteen days thereafter, pay to the Minister of 
 Finance and Receiver General, a sum ol money 
 ecpial to two and one-lrilf per cent, of the aver- 
 aue amount of its notes in circulation duriiiL^ 
 the twelve uioulhs next ])re{''.'ding the date of 
 the coming into force of this Act, or if such 
 bank has not been in operation foi- twelve 
 numths, a sum of money equal to two and one- 
 half per cent, of the average amount of its notes 
 in cii'culation during the time it has been in 
 operation ; and each bank shall, within fifteen 
 days, fiom and alter the first day of July, in 
 the ye.ir one thousand eight hundred and 
 ninety-two, pay to the Minister of Finance and 
 Receiver General such further sum of money 
 as is necessary to make the total amount so 
 paid by each bank to be a sum equal to five per 
 cent, of the average amount of its notes in cir- 
 
Note Issue. 55 
 
 ciilation during the twelve montliH next pre- 
 ceding the date In.st mentioned, — which huui 
 shall be adjusted annuullv as hereinafter pro- 
 vided : (New.) 
 
 li. Tlie Merch'.ints' IJank of I'riiice Edward 
 
 Am to Mil- 
 
 Lslitud shall, on or betove the dav upon which '''■',','':,' '^"''< 
 it beconu'S subject to the provisions of this Act, 
 pay to tlie Minister of Finance and Receiver 
 General such sum as appears to the satisfaction 
 of the Treasury Board to be equal to two and 
 one-half per cent of the average amount of its 
 notes in circulation during the then preceding 
 twelve monllis; and shall lurther ])My to the 
 Minister ol" Fiiumce and Receiver General, 
 within fifteen days from and after the first day 
 of July in the year then next following, such 
 i'urthci' sum as is necessary to make the total 
 sum paid by the said bank to be a sum ecpial 
 to five per cent, of the average amount of its 
 notes in circulation from the time the said bank 
 became subject to the provisions of this Act to 
 the said first dav of Julv, — whicii sum shall l)e 
 adjusted annuallv as hereinafter provided : 
 (New^) 
 
 3. The Minister of Finance and Receiver 
 General shall, upon the issue of a certificate tuk^ '"''" 
 unc^er this Act authorizing a bank to issue notes 
 and commence the business of banking, retain 
 out of any moneys of such Ijank then in his 
 possession the sum of five thousand dollars, — 
 which sum shall be held for the purposes of this 
 
 t il 
 
 (' I 
 
f 
 
 M 
 
 Banks anh I'.\Msin(. 
 
 Formation of 
 ciroulRtloii 
 rprl<'itiiilion 
 t'linil. 
 
 Hoctioii, until tlie annual ailjustniunt horeundiT 
 takes placo in tho year then next lollowing, 
 at u'liioh timo the amount at tlio credit of tho 
 bank shall be adjusted by payment to or l>y the 
 bank of" such sum as is necessary to make the 
 amount at tlie credit of tiie bani-c to be a sum of 
 money ecjual to fiv<» per cent, of tin; average 
 amount of its notes in circulation from the time 
 it commenced business to the time of such nd- 
 justment, — which sum shall be adjusted an- 
 nually as hereinafter provided : (New.) 
 
 4. The amounts so paid, retained, and 
 kept on deposit as aforesaid shall form a fund to 
 be known as "The Bank Circulation Redemp- 
 tion Fund," — which fund shall be held for the 
 following purpose, and for no other, namely : 
 In the event of the «uspension by the bank of 
 payment in specie or Dominion notes ot any of 
 its liabilities as they accrue, for the payment of 
 the notes then issued or re-issued by such bank, 
 and intended for circulation, and then in circu- 
 lation, and interest thereon ; and the Minister 
 of Finance and Receiver General shall, with 
 respect to all notes paid out of the said fund, 
 have the same rights as any other holder of the 
 notes of the bank : (New.) 
 
 ., ,,i*n. „. '5- Tlie fund shall bear interest at the rate of 
 jiiKiest. three per cent, per annum, and it shall b^ 
 
 justed, as soon as possible after the thin, h 
 day of June in eaeli year, in such a way as to 
 make the amount at the credit of each bank 
 
NoTK Issue. 
 
 at 
 
 X(.t.' 
 tloll, 
 tlTIIl 
 
 cil-Clllll- 
 llOW (If- 
 llll'll. 
 
 contributing tlioroto. uhIchh JuMvin otlicrwiHc 
 Hpeciiilly providL'd, tM[tuil to five per cont.ol'tlu! 
 aveni,s;o note circulation ofnucli bank durin- tiic 
 then next preceding twelve n.ontliH: (New. ) 
 
 b. The average note circulation of a bank 
 during any period .shall be determined tVoni the 
 avenigeoC the amount of it.s notcH in circulation, 
 ah .shown by the monthly return.s for .such period 
 made by the bank to the Mini.ster of Finance 
 and Receiver General ; and where, in any re- 
 turn, the greatest amount of notes in circula- 
 tion at any time during the month is given, 
 such amount shall, for the purposes of this 
 section, be taken to be the amount of the notes 
 of the bank in circulation during the month to 
 which such return relates : (New.) 
 
 7. In the event of the suspension by the ^.„,,,^ ^^^. ,,^j^^ 
 bank of payment in .specie or Dominion notes- fMybilri ' 
 of any of it.*^ liabilities as they accrue, the notes u'',aiimi;.'"c;m..,i. 
 of such bank, i.ssued or re-is.sued and intended 
 for circulation, and then in circulation, .shall 
 bear interest at the rate of .six per cent, per 
 annum, from the day of .such suspension to 
 such day as is named by the directors, or by 
 the liquidator, receiver, assignee or other pro- 
 per oHicial, for the payment Lliereof,— of which 
 day notice shall be given by advertisement for 
 at least three days in a newspaper published in 
 the place in which the head ollice of the Oiink 
 is situate ; but in case any notes presented for 
 payment on or after any day named for pay- 
 
 ' I 
 
w 
 
 58 
 
 Banks and Banking 
 
 out of fiiiid 
 
 ment thereof are not paid, all notes then un- 
 paid and in circulation shall continue to bear 
 interest to such further day as is named for 
 payment thereof, — of which day notice shall be 
 given in manner above provided : Provided 
 If not miccm always, that in case of failure on the part of 
 the directors of the bank, or of the liquidator, 
 receiver, assignee or other proper official, to 
 make .arrangements within two months Irom 
 the day of suspension of payment by the bank 
 as aforesaid for the payment of iill its notes and 
 interest thereon, the Minister of Finance and 
 Receiver General may thereupon, make arrange ■ 
 menls for the payment of the notes remaining 
 unj)aid, and all interest thereon, out of the 
 said iund, and shall give such notice of such 
 l)ayinent as ho thinks expedient, and on the 
 day named by him for such payment all interest 
 on such notes shall cease, anything herein con- 
 tained to the contrary uotwithstauditig ; but 
 nothing herein contained shall be constrii'id to 
 impose any liability on the Government of Can- 
 ada or on the Minister of Finance and Receiver 
 General beyond the amount available from 
 time to time out of the said fnud : (New.) 
 
 I'roviso. 
 
 Piiynu'iils 
 from fmiil in In 
 williiiiil ii'jiri 
 to aiiioiiiil con 
 iriliUtid. 
 
 8. All payments nuule froui the said fund shall 
 be without regard to the amount contributed 
 thereto by the bank in respect of whose notes 
 the payments aie made ; and in case the pay- 
 ments from the fund exceed the amount contri- 
 buted by such bank to the fund, and all 
 interest due or accruiuii; due to such bank there- 
 
Note Issue. 
 
 59 
 
 on, the other banks shall, on demand, make 
 pjcod to the fund the amount of such excess, />yo 
 raid to the amount which each bank has at that 
 time contributed to the fund ; and all amounts 
 recovered and received by the Minister of Fin- 
 ance and Receiver General from the Ixank im 
 whose account such payments were made shall, 
 after the amount of such excess hr.s been made 
 good as aforesaid, be distributed among the 
 banks contributing to make good such excess 
 pro mtt, to the amount contributed by each : 
 Provided always, that each of such oth 'r banks i'' 
 shall (mly be called upon to make good to the 
 said fund its share of such excess, in payments 
 not exceeding' in any one year one per cent of 
 the average amount of its notes in circulition, — 
 such circulation U) be ascertained in such man- 
 ner as the Minister of Finance and Receiver 
 General decides; :iiid hi^ decision shall be 
 final: (New.) 
 
 i'. In the event of tlie winding up the busi- ,.,.,„,,„„„t,„ 
 
 i\i»(). 
 
 ness 
 
 of a hank by ivason of in«suivencv or i- tt'S'''' 
 
 otherwise, tlie Treaniry Board may, on the ap- 
 plication of the director.^, or of the liquidator, 
 receiver, assignee or otiier proper ollicial, and on 
 being satisfied that ])i()i)er arrangements have 
 been made for the payment of tiie notes of the 
 bank and any interest thereon, pay ovei- to such 
 directors, li([uidator, receiver, as.signee (m- other 
 proper ollicial, the amount at the credit of the 
 bank, or such portion thereof as it thinks ex- 
 pedient : (New.) 
 
60 
 
 Daxks ami Hanking 
 
 fund. 
 
 10. The Treasury Board may make all .such 
 MfiariTmay n- I'ulcs and reguhitioiis as it thinks exi)odient 
 
 t:iilatc mail- 'ii »» j. ii . p 
 
 amitidii 01 With reierence to the payment oi any moneys 
 out of the said iund, and the manner, phice and 
 time of such payments, the collection of all 
 amounts due to the said fund, all accounts to be 
 kept in connection therewith, and generally 
 the management of the said fund and all mat- 
 ters relating thereto : (New.) 
 
 Enforcemt'iit 
 of payiiR'iit. 
 
 11. The Minister of Finance and Receiver 
 General may, in his official name, by action in 
 the Exchequer Court of Canada enforce pay- 
 ment (with costs of action) of any sum due 
 and payable by any bank under the provisions 
 of this section. (New.) 
 
 All the provisions of this section are new. They provide 
 for the formation of a safety fund, called "The Bank 
 Circulation Redemption P'und," created for the purpose ot 
 ensuring the speedy redemption of the notes of any insol- 
 vent bank bona fide in circulation at the time of the suspen- 
 sion of payment by such bank. 
 
 Note:* 01' liaiik 
 to lie iiayalili' 
 at iiartliroiifrli- 
 out ("aiiada. 
 
 5,1. The bank shall make such arrangements 
 as are necessary to ensure the circulation at par 
 in any and every part of Canada of all notes 
 issued or re-issued bv it and intended for circu- 
 latitm ; and towards this purpose the bank shall 
 establish agencies for the redemption and pay- 
 ment of its notts at the cities of Halifax, St. 
 John, Charlottetown, Montreal, Toronto, Win- 
 nipeg and Victoria, and at such other places as 
 are. from time to time, designated by the Trea- 
 sury Boaril. (New.) 
 
Note Issuk. 
 
 61 
 
 5«. The bank shall always receive in pay- Rwi'inpnon o 
 ment its own notes at par at any of its offices, 
 and whether they are made payable there or 
 not : (R.S,C. cap. 120, sec. 41, part.) 
 
 2. The chief place of business of the bunk p„,.,,,„ ,, 
 shall alwi.ys be one of the places at which its imSL^i"'' "^ 
 notes are raade payable. (R.S.C. cap. 120, sec. 
 41, ss. 2.) 
 
 ,'57. The bank, when making any payment, 
 shall, on the request of the person to\vhom dSiou "' 
 the payment is to be made, pay the same, or ""''''' 
 such part thereof, not exceeding one hundred 
 dollars, as such person requests, in Dominion 
 notes for one, two or four doll.irs each, at 
 the option of such person : Provided always, 
 that no payment, whether in Dominion notes t,,,,,,,,!, - 
 or bank notes, shall be made in bills that are ""'"'""■'■ 
 torn or partially defaced by excessive handling:-. 
 (R.SC. cap. 120, sec. 42. with proviso added. ) 
 
 as. The bonds, obligations and bills, ol)liga- 
 tory or of credit, of the bank under its corpor- J^r',^,,,;.".;';;,^ 
 ate seal, aiKl signed by the president or vice- ££""''''''' 
 president and countersigned bv a cashier or as- 
 sistant cashier, which are mad(! payable 
 to any person, shall be assignable by endorse- 
 ment thereon ; and bills or notes of the bank 
 signed by the president, vice-president, casl)ier 
 or other officer appointed by the directors ol" 
 the bank to sign the same, promising the pay- 
 
02 
 
 Ranks and Banking 
 
 I'voviso : 
 liinvcr may li 
 lU'iiiitcil to 
 otiK'or. 
 
 ment of money to any person or to his order, or 
 to the be.'irer, though not under the corporate 
 seal of the bank, sliall be binding and obliga- 
 tory on it in like manner and with the like 
 force and effect as they would be upon any 
 private person, if issued by him in his private 
 or natural capacity, and shall be assignable in 
 like manner as if they were no issued by a 
 private person in his natural capacity : Pro- 
 vided always, that the directors of the bank 
 may, from time to time, authorize, or depute any 
 cashier, assistant cashier or oflicer of the bank, 
 or any director other than the president or 
 vice-president, or any cashier, manager or local 
 director of any branch or office of discount and 
 deposit of the bank, to sign the notes of the 
 bank intended for circulation. (R.S.C. cap. 
 120, sec. 43.) 
 
 itrs may be 
 riK'd by 
 u'luiiery. 
 
 5?K All bank notes and bills of the bank 
 whereon the name of any person intrusted or 
 authorized to sign such notes or bills on behalf 
 of the bank is impressed by machinery provided 
 for that purpose, by or with the authority of 
 the bank shall be good and valid to all intents 
 and purposes as if such notes and bills had been 
 subscribed in the proper handwriting of the 
 person intrusted or authorized by the bank to 
 sign the same respectively, and shall be bank 
 notes and bills within the meaning of all laws 
 and statutes whatever, and may be described ns 
 bank notes or bills in all indictments and civil 
 
Note Issue. 
 
 63 
 
 iitiire 
 
 Ibr circulation 
 
 or criminal proceedings whatsoever : Provided 
 always, that, at least one signature to each note **'"^ r'-" 
 or bill must be in the actual handwriting of a "''"'"• 
 person authorized to sign such note or bill. 
 (R.S.C. cap. 120, sec. 1 i, with proviso added.) 
 
 ;>0. Every person, except a bank to which i.„„auv ,•,...„„ 
 this Act applies, who issues or re-issues, makes, istlXlIt,. 
 'h-aws, or indorses any bill, bond, note, cheque 
 or other instrument, intended to circulate as 
 money, or to be used as a substitute for money, 
 for any amount whatsoever, shall incur a peii- 
 alty of four hundred dollars, which shall be re- 
 coverable with costs, in any court of competent 
 jurisdiction, by any person Avho sues for th.' 
 same ; and a moiety of such penalty shall belong 
 to the person suing for same, and the other 
 moiety to Her Majesty for the public uses of 
 Canada. (R.S.C. cap 120, sec. 83, ss. 1.) 
 
 This section is intended to secure to Banks and the Gov- 
 ernment the exclusive privilege of issuing and circulating 
 bank notes as money. '^ 
 
 2. The intention to pass any such instrument 
 as money shall be presumed, if it is made forr,ffi,^|.V" 
 the payment of a less sum than twenty ""'''" 
 dollars, and is payable either in form or in fact 
 to the bearer thereof, or at sight, or on demand, 
 or at less than thirty days thereafter, or is over- 
 due, or is in any way calculated or designed for 
 circulation, or as a substitute for money ; unless 
 such instrument is a cheque on some chartered 
 
M 
 
 fi4 
 
 ! ! 
 
 l; 
 
 Banks and Banking 
 
 bank paid by the maker directly to his im- 
 mediate creditor, or a promissory note, bill of 
 exchange, bond or other undertaking for the 
 payment of money, paid or delivered by the 
 maker thereof to his immediate creditor, and is 
 not designed to circulate as money or as a substi- 
 tute for money. (R.S.C. cap. 120, sec. 83, ss. 2.) 
 
 «1. Every person who in any way defaces 
 
 Defacement of tv** T»"'ii. i-i i. 
 
 notes. any Dominion or Provincial note or bank note, 
 
 whether by writing, printing, drawing or stamp- 
 ing thereon, or by attaching or affixing thereto, 
 anything in the nature or form of an adver 
 
 Penalty. tisemcnt, shall be liable to a pciirJty not exceed- 
 ing twenty dollars. (New.) 
 
 «2. Every officer charged with the receipt 
 couuteif.it or disbursement of public moneys, and every 
 
 aurl tViiudulont re n ^ t i 
 
 notes to lie oihcer 01 any bank, and every person nctinji; as 
 sudi. QY employed by any banker, shall stamp or 
 
 Avrite in plain letters the word '' counterfeit," 
 "altered" or " worthless," upon every counter- 
 feit or fraudulent note issued in the form of a 
 Dominion or bank note, and intended to circu- 
 late as money, which is presented to him at his 
 place of business; and if such officer or person 
 wrongfully stamps any genuine note he shall, 
 upon presentation, redeem it at the fiice value 
 thereof. (New. Taken from the Criminal 
 Law, 50 and 5i Yict., cap. 47, sec. 1.) 
 
M 
 
 Note Issue. 
 
 65 
 
 «». Every peAson who designs, engraves, xoa.iv.nbe- 
 prints or in iiny manner makes, executes, ut- 1"' i^'^n'r'i h? 
 ters, issues, distributes, circulates or uses any "^''^' 
 business or professional card, notice, placard, 
 circular, hand-bill or advertisement in the like- 
 ness or similitude of anv Dominion or bank 
 note, or any obligation or security of any Gov- 
 ernment, or of any bank, is liable to a penalty 
 of one hundred dollars or to three months' im- 
 prisonment, or to botii. (New. — Taken from 
 the Crimiiuil Law, 50 and 51 Yict , cap. 47, sec. 
 2, slightly changed.) 
 
 BUSINESS AND POWERS OF THE BANK. 
 
 «4. (<') The bank ma}- open branches, agencies h,.„iic1ios aiK 
 and offices, and may engage in and carry on '*"="""*-"*• 
 business as a dealer in gold and silver coin apd 
 bullion, and it may deal in, discount, and lend ei'sof ballk?' 
 money and make advances upon the security of, 
 and may take as collateral security for any loan 
 made by it, bills of exchange, promissory notes 
 and other negotiable securities, or the stock, 
 bonds, debentures and obligations of municipal 
 and other corporations, whether secured by 
 mortgage or otherwise, or Dominion, Provincial, 
 British, foreign and other public securities, 
 and it may engage in and carry on such busi- 
 ness generally as appertains to the business of 
 banking; (h) but, except as authorized by this c;;^"^'"ij'^'^|.";,-;;- 
 Act, it shall not, either directly or indirectly,deal brt™bai>k!' 
 
C6 
 
 Banks and H\nkin(; 
 
 in the buying, or selling, or bartering of goods, 
 wares and merchandise, or engage or be 
 engaged in any trade or l)iisiness whatsoever ; 
 and it shall not, either directly or indirectly, 
 purchase, or deal in, or lend money, or make 
 advances U[)on the security or pledge of any 
 share of its own capital stock, or of the capital 
 stock of any bank ; and it shall not, either 
 directly or indirectly, lend money or make ad- 
 vances upon the security, mortgage, or hypothe- 
 cation of any land, tenements, or immovable 
 property, or of any ships or other vessels, or 
 upon the security of any goods, wares and mer- 
 chandise. 
 
 (a.) This section is a combination with some changes erf 
 several sections and parts of sections of the Repealed Act 
 R.S.C. Cap. 1 20, viz: sections 45, 46, 59 and 60. 
 
 POWEKS OF THE BANK. 
 
 The first part of the section, after giving power to open 
 branches, agencies and offices, expressly authorizes the bank 
 (i) to carry on business as a dealer in gold and silver coin 
 and bullion : 
 (2) To deal in /Bills of Exchange and 
 
 (3) To discount 
 
 (4) To lend money and make 
 advances upon the security of 
 
 (5) And to take as collateral 
 security for any loan made by it / 
 
 Promissory Notes and 
 other negotiable securi- 
 ties or the stock, bonds, 
 debentures and obliga- 
 tions of municipal and 
 other Corporations 
 whether secured by mort- 
 gage or otherwise, or 
 Dominion, Provincial, 
 British, Foreign and other 
 \ public securities. 
 
 (6) and to engage in and carry on such business as generally 
 
 appertains to the business of banking. 
 
 I 
 
IIlsinkss and Powkks ok thi: Dank 
 
 67 
 
 Tlic previous acts did not in express and i)asitive terms 
 confer many of ihe above powers on hanks, hut hanks were 
 nevertheless held to have some of them by implica- 
 tion. I'or exam[)le in the case of Jones vs. The Imperial 
 IJank, 23 dr. 269 (1876) an attem|)t was made, by means of 
 an injunction, to prevent the Imperial ]iink from purchasing, 
 from the Water Commissioners of the City of Toronto, cer- 
 tain debentures of the City of Toronto. It was contended, 
 by the applicants for the injunction, that section 60 of R.S.C. 
 c. 120, by implication, gave i)ower to the bank only to lend 
 money on this class of debentures, that there was no ■. xprecs 
 power to purchase such det)cntures and by implication, aris- 
 ing from the provisions of said section 60, the bank was pre- 
 vented from ])urchasing as distinguished from lending money 
 upon the same. Mr. Justice Proudfoot, however, after dis- 
 cussing very fully the meaning of the word " discount," and 
 citing several authorities giving definitions of it, held that the 
 dealing in bonds was covered by the words of exception con- 
 tained in section 45 of the same statute, viz : " except as a 
 " dealer in . . . Bills of Exchange, discounting of Pro- 
 "missory Notes and negotiable securities and in such trade 
 "generally as appertains to the business of banking ; " at page 
 274, he thus summarizes his opinion,--" The con- 
 " elusion which seems to me deducible from these 
 " acts is that the business of banking consists in dealing in 
 " money, the precious metals, and in bonds and negotiable 
 " securities ; that this dealing confers the power of lending on 
 " them or of purchasing them, whichever the bank directors 
 " may deem most for the advantage of the corporation and 
 '' that whether to buy cr lend is a matter of internal manage- 
 " ment which the directors may determine;" and at page 270 
 he says : " To discount a negotiable security is to buy 
 
 " it at a discount or to lend money on 
 
 " its security." 
 
 See also Grant on banking (1884) p. 291, where 
 it is laid down that " where a banker discounts a bill 
 for a customer, giving him credit for the amount of the bill 
 and debiting him with the discount, there is a complete pur- 
 
68 
 
 Banks and Baxkint; 
 
 chase of the bill by the banker in whom the whole property 
 and interest vest as much as in any chattel he possessos. A 
 banker discounting a bill, whether for a customer or a 
 stranger, there being no indorsement by the customer or 
 stranger and the bill not being given in payment of an ante- 
 cedent debt, is a mere purchaser and un the bankruptcy of 
 the acceptor has no recourse against the party from whom he 
 took it." 
 
 By the present act the powers of the bank do not rest on 
 implication but are conferred in express terms. The bank 
 is authorized expressly " to deal in " the securities mentioned 
 in clause C4. This would clearly authorize the bank to buy 
 or sell any of such securities. It must be noticed that power 
 is also given, as well to make advances and lend money upon 
 such securities, as to take them as security for past loans. 
 The bank cannot, however, lend money on the ordinary bank 
 notes, see sec. 52. 
 
 As to what comes within the definition of the business of 
 banking— See Abbott's Dig. Corp. p. 56 and Quirt vs. Queen 
 19 S.C.R. 510 (1891) and the cases there refcned to. 
 
 LIMITATIONS ON THi: I'OWKK OV THE liANK. 
 
 (/-) The second part of section 64 commencing with the 
 words, " but except as authorized by this Act,"— is in restric- 
 tion of the powers of the bank. 
 
 It IS conceived that the words " cxcc/'t (7i ant]icrizcd by this 
 ad" are intended to be read before the words, "it shall not," 
 wherever they subsequently occur in this section. 
 
 Assuming this construction to be correct then : — 
 
 First!}' : — a bank is forbidden, except as aiiiliorizcd by t/iis 
 act " either directly or indirectly to deal in the buying or 
 " selling or bartering of goods, wares and merchandise or en- 
 ""age or be engaged in any trade or business whatsoever.' 
 
 It is to be observed, that by this part of the clause, banks 
 are prohibited only/;w;/ dealing in the buying or selling or 
 bartering of goods, wares or merchandise, it would therefore 
 seem most probable that banks may, owing to special cir- 
 cumstances or for reasons which could not have been fore- 
 seen or anticipated, acquire and sell, or dispose of goods. 
 
li 
 
 Business and Powkrs ok rtiK Bank 
 
 69 
 
 wares or nicrchaiidisc and for that purpose engage to some 
 extent in business otlier than hanking. Thus, if a hank were 
 to acquire a valid security, say on a mill and a stock of lum- 
 ber and logs, and [afterwards, owing to the inability (jf the 
 debtor to pay his indebtedness, were to duly obtain an abso- 
 lute title to the i)roperty, it seems to us that the bank could, 
 under such circumstances, proceed to sell the lumber and to 
 convert the'saw logs into Imnljcr, if that would make them 
 more val;..,l)le for sale, and for this ])urpose to work the mill. 
 This appears to be the result of the English and American 
 authorities on the subject. See Sacketts Mead Bank vs. 
 Lewis I'ank, ii llarb., 43. Ikice on Ultra Vires, p. 210. 
 
 In (Quebec, too, it has been held in the Molson's Hank vs. 
 
 Kennedy, 10 K, L. iio(i6'j(j), that where a bank wishing 
 
 o guarantee a purchase of goods telegraphs to the sellers — 
 
 " If you send to the M. I'.ank, Montreal, goods to the amount 
 
 of ^ purchased by K Ov Co. about July ist, sending 
 
 us the bills of lading and documents in time, we will guaran- 
 tee the collection," — the bank does not thereby violate the 
 provisions of the Banking Act. 
 
 In Radford vs. the Merchant's Bank of Canada, 3 Ont. R. 
 529 (18S3), the facts were as follows : The Agent ot the 
 Merchant's Bank at Kint'ston represented to the plaintiff 
 that the defendants had purchased the business of one A, a 
 manufacturer of horse power machines, and were manufac- 
 turing horse power machines of A's make, and had them foi 
 sale, and that he recommended them highly. 'I"he !)lainlirf 
 purchased a machine, and subsctjuently brought an action 
 against the bank for breach of warranty on the sale of this 
 machine. It appeared in the evidence that A was a debtor 
 of the bank, and having become insolvent, the bank had ac- 
 quired the machines from his assignee. The case was decid- 
 ed on two grounds, but both the judgi,^s who decided it e\ 
 pressed the opinion that the bank, being expressly prohibited 
 from buying and selling goods, could not be bound by any 
 warranty, express or implied on their sale. It is true that in 
 this case the bank had improperly acquired the machines 
 (section 69 not authorizing the purchase) and the decision 
 
Banks and Bankin(; 
 
 may have been hascd on that fart ; hut, if tlio mat liincs had 
 l)cc'n proiiL'ily acqiiircd say, — hy a legal and valid mortgage 
 to the hank and thcrcat'tcr hy th'; exlingiiishinent of the 
 eiiuity of redemption hy release under section 70 — surely the 
 hank could then sell and dispose of the machines, and i( so, 
 why could not it give a warranty on their sale if that would 
 he the most advantageous course to pursue, — see also Ex- 
 change Bank vs. I'"letcher 19, S.C.R. 278, (1S91). 
 
 ScLond/y : — a hank is forhiddcn, excel^t as auiliorbcd hy this 
 act, " either directly or indirectly to purchase, deal in or lend 
 " money or make advances upon the security or pledge of 
 '' any share of its own stock or of the stock of any other 
 " bank." 'Hiis will set at rest all doubt as to the existence 
 of a prohibition in the previous acts against lending money 
 on the stock of other banks [see i)er Patterson J. in ICxchange 
 Bank vs. Fletcher, 19 S.C.R. at p. 284, (1891)]. In the last 
 named case the court held that the jjrohibition to lend money 
 on the shares of other hanks only applied to the hank lend- 
 ing the money — and not to the borrower ot the money who 
 gave the shares as security, so that on payment of tlie loan 
 the bank was hound to return the shares or pay their value 
 to the borrower, and this case would still seem lo he law 
 under the present Act. 
 
 Although a hank is ])rohihited from lending money on its 
 own shares it is given a lien thereon tor all debts owing by 
 a shareholder ; see sections 35, 38 and 65. 
 
 Tliirdly : — a bank is forbidden, except as aiitliflrized by this 
 act, " either directly or indirectly to lend money or make ad- 
 " vances upon the security, mortgage or hypothecation of any 
 " land or tenements or inuuoveahle ])ioperty or of any ships 
 *• or other vessels or of any goods, wares or merchandise." 
 
 For the exceptions to the above prohibitions see the sub- 
 sequent clauses of this act from 68 to 79 inclusive. 
 
 The general policy of clause 64, no doubt, is to compel 
 banks t(,) carry on a pro[)er and legitimate hanking business 
 and to keep llie cai)ital of the hanks flowing in the daily 
 channels of commerce and to deter them from locking up 
 their monev hv lending it or investing it in real estate, or 
 
Business and Powkks of iin I!.\nk 71 
 
 oilier classL'S of i)roi)LTty which arc not easily coiivtjrtihlc into 
 casli. 
 
 I'or an infraction of the jirovisions of this section a iicnalty 
 is iinposcil on the banhs hy section 79. Sn|)i)osing a bank 
 enters into a forbidden transaction, lends money on the se- 
 curity of a mortgage on real estate for example, liow does the 
 statute affect such a transaction ? Does it merely subject the 
 bank to a penalty and perhajjs its charter to possible forfei- 
 ture or does it go further still and also avoid the mortgage 
 security— or further still and also make the contract of loan 
 illegal so as to be irrecoverable by the bank ? 
 
 In a recent case on the subject it has been held, that it not 
 only exposes the bank to the jienalty, but also avoids the 
 transaction. 
 
 "' This prohibition is a law of public policy in the public 
 interest and any transaction in violation thereof is neces- 
 sarily null and void. No court can be called on to give 
 effect to any such transaction, or to enforce any contract or 
 security on which money is lent, or advances, as thus prohi- 
 bited, aie made," per Ritchie, C. J., in IJank of Toronto vs. 
 Perkins, 8 S.C.R., 610 (f.SS;,). 
 
 In the above extract, the Chief Justice, if correctly re- 
 ported, seems to us to go too far. His judgment would 
 seem to imply not only that the mortgage was void, but that 
 the advance which it was given to secure created no valid 
 debt. The other judges who expressed opinions did not go 
 so far. Strong, J., at page 611 of the report says: "All 
 we have to decide is whether a bank making an advance or 
 loan of money on a mortgage of real property in violation 
 of the [jrohibition contained in the section referred to is not- 
 withstanding entitled to the benefit of the security." 
 
 In the case of Exchange liank vs. Metcher, 19 SCR. 
 27S, (1891), it was api)arentl)- held that a prohibited trans- 
 action was only avoided as against the bank. That a man 
 who had transferred to the bank shares in another bank as 
 security for a debt could on i)aymenl of the debt come into 
 a Court of Justice and demand the return of the shares or 
 the value thereof. 
 
72 
 
 Banks and Banking 
 
 i i 
 
 . 8 I 
 
 There are two cases in llie I'rivy (,'oun( il both of which 
 are referred to in the Bank of Toronto vs. Perkins, above 
 cited, in which the construction of liank ("barters containii 3 
 similar jjrohibitory clauses was much discussed. In tlie first 
 case, the National Bank of Australasia vs. Cherry, !-. R., 3 
 B.C., 299(1870), Lord Cairns in dcliveruig judgment at p. 307, 
 says : " It appears, therefore, to tlicir lordships that there 
 are considerations of public policy involved in this clause, 
 but it is also true to say, that those considerations of public 
 policy look to and deal with the management of the bank, 
 and have for their object the liniilation of the powers and 
 authority of the bank." 
 
 " 'I'hat being so, and wUhout for the present turning to the 
 facts of this particular case, it would seem to have been the 
 object of the Legislature in this clause, not to make void 
 the contracts f(jr such advances as Ijetween the bank and 
 their customers, in the same way that in former times contracts 
 open to the objections of the usury laws were made void, 
 but rather to make it sometiiing ultra vires the bank to take, 
 u[)on the occasion of contracts for those advances, securi- 
 ties of the kind mentioned in this section. .\nd this con- 
 struction of the section would harmonize with what was very 
 properly, as their lordships think, admitted at the bar on be- 
 half of the respondents — tliat upon a transaction o( the 
 kind described, the contract for the loan of money would be 
 perfectly valid, and the cpiestion would be confined to a 
 question as to whether the bank had the ])ower to take the 
 
 security which it took for the advance 
 
 At the time of the advance, and as part of the 
 contract of advance, the bank was not to be at 
 liberty to stiinilate for, or to obtain, landed or mercantile 
 securit)'. T//a/ /s ilic coiistriui/'on contended for by tlir Rc- 
 spoudcnts^ and their Lordships, at all events for the purpose of 
 argument, •,<.<ill assume that it i.\ the proper construction. On 
 the other hand, if there should be an advance made, and a 
 debt incurred and due fiom the customer to the bank, the 
 bank was to be at liberty to take security for that overdue ad- 
 vance, either in the shape of land or in the shape of 
 merchandise as described in the Act." 
 
 
DrSINF.SS AND POWKRS OF THK B.WK 
 
 73 
 
 In the second case, Ayers vs. The South Australian Bank- 
 ing Co., l,.k. ;, I'.C, 54S, (1S71), Lord Justice 
 Mcllish in the course of dehvcring the judgment of the 
 Privy Council and in answer to the argument 
 founded on a clause in the charter declarmg that it shall 
 not he lawful for the bank to make advances on nicrchandi>e 
 says at p. 559: ''There may he also iiuestion whether, 
 under any circumstaiuxs, the effect of violating such a pro- 
 vision is more than this, the Crown may take advantage of 
 it as a forfeiture of the charter, hut the only ])oint which it 
 appears to their Lordships is necessary to be determined in 
 the present case is this that whatever effect such a clause 
 may have, it d')es not iirevent property i)assing, either in 
 goods or in lands, under a conveyaiice or instrument which, 
 
 under the ordinary cir umslances of law. would pass it 
 
 Their Lordships are of oi)inion, that whatever other effect it 
 has, it cannot have the effect of preventing the property jiass- 
 ing. If that were otiierwise, the consequei'.ces might be 
 most lamentable, because if the i)r(j|)erty never passed to 
 them, they could not themselves convey any ])roperty to 
 thn-d persons. Transactions of the most honest descrii)tion 
 might be set aside. They might do what is a very common 
 thing, make advances and take Bills of Exchange with the 
 Bills of l,ading attached. If it is to l)e said that the proper- 
 ty in the goods mentioned in the Bill of Lading does not 
 pass to them, then any ])urchaser to whom they might sell 
 the goods under the Bill of Lading would get no title, and 
 the original owner who had received the full prof:eeds of the 
 goods, or a large advance up( n th.em, niigiit say, 'Oh, the 
 property never iiassed to the South .\ustralian I'.ank, and there- 
 fore it never passed to you.' Counsel for the ai)i)ellants admitted 
 that he could find no authority for the proposition, that any 
 violation of such a condition of a charter wor'd prevent th.e 
 property in goods passing to the persv^n to whom an instru- 
 ment otherwise valid professed to |)ass it, and their Lordships 
 are of opinion, that whatever effect the violation of such a 
 condition may have, it has not the effect of preventing the 
 property in the goods jiassing, or of preventing an action of 
 Trover being maintained if there is a wrongful conversion.' 
 
w 
 
 74 
 
 Banks and Uankixg 
 
 — Sec also IJaiik of New South Wales vs. CanipljcU L.R. ii 
 A])]). Cases 192 (1S86). 
 
 It has been decided here, and in the United States, that it 
 a mortgage of lands he given to a bank to secure indebted- 
 ness previously,- incurred, and also advances then made on 
 the security of such mortgage, such mortgage is not void in 
 toto, but constitutes a good and valid security to the bank to 
 the extent of the pre-existing indebtedness, if the amount 
 thereof can be clearly shewn. See the following cases — 
 
 Commercial Bank vs. Bank of U. C. 7 Gr. 430 (1S59). 
 
 Kansas Valley National r>ank vs. Powell, 2 Dill. C.C. 371. 
 
 Allen vs. First /Tational Bank of Xenia, 23 Ohio St. R. 97. 
 
 It has also been decided in the National Bank of Australasia 
 vs. Cherry, above cited, and also in the Commercial Bank vs. 
 Bank of Upj^er Canada, above cited, that though the taking 
 by the bank of a mortgrge on real estate, to secure an advance 
 made on such security, would be ultra vires and invalid, the 
 advance itself would create a valid debt and consequently, 
 the bank could acquire a valid charge on the same property, 
 to secure re-payment of the same debt, by a mortgage subse- 
 quently given by the debtor to the bank ; accord also, (Jrant 
 vs. La Banque Nationale, 9 O.K. 411, (1S85). It does not 
 seem to us, that the law is quite settled yet, in regard to the 
 consequences of an infraction by the bank of the provisions 
 of this act in relation to taking securities. At present the 
 law in Canada appears to be, tliat the act not only imposes a 
 penalty on the bank for lending money or making advances 
 upon the security of real estate, ^:c., but also renders invalid 
 the secuiity so taken. \\q do not think any thing further 
 than this has been decided. 
 
 EFFICCT OF TRAFFlCKINt; IN SHARL.S ON TFIi: LIAlULFrV 
 OV A SHAKEHOLDEK. 
 
 In the winding up of the Central Bank, some shareholders 
 objected to be placed on the list of conlributories, on the 
 ground that the bank had been trafficking in its own shares, 
 and that the sliares in (iue>tion had been acquired in the 
 course of such traflic and transferred to the cashier of the 
 bank, in trust for the bank, by and through whom they had 
 
Bur^IXKSS AND POMERfS OF THi: li.WK 
 
 «■) 
 
 been transferred lo or acquired by the contributories. Held, 
 assuming these facts to be irur, tliat th(/ugh this rniuht give 
 the contributories a right to resriiui, during the currency ot" 
 the banking institution, tliey were of no moment after the 
 rights of creditors represented by the hejuidators arose. The 
 matter was not an absolute nullity, but at most, one which 
 the shareholders could waive as voidable, and it became, by 
 the suspension, of unimpeachable validity as between these 
 coitributories and the liquidators. In the matter of the 
 Central Bank of Canada, Maine's case — -Nasmith's case — i6 
 Ontario Reports 293, (1S8S), 16 Ont. App. R. 237, (1889^ 
 iS Ont. App. R. 209 (1891). 
 
 A shareholder having been placed on the list of contril)U- 
 tories, in the winding up [)roceedings of the Central ]]ank, in 
 respect of certain shares owned l)y him at the lime of the 
 suspension of the bank, appealed on the ground that the 
 transfer . f his shares was a fraudulent transaction, since, in 
 violation of the provisions of the liank act R.C.S., cap 120, 
 sec. 45 (now sec. 64), the bank had been trafficking in its own 
 shares, for the pur[iose of keei>ing up the appearance of boia 
 jhic sales and so increasing the market poice of its shares, and 
 had taken ti-ie appellant's promissory notes in payment for 
 his shares, undertaking not to enforce such notes, but to de- 
 liver them up U])on a re-sale of th-^ shares being effected, 
 which transactions were ultra vires of the bank. Held, that 
 this was no defence as against the liiiuidaturs, who represent- 
 ed the creditors as well as the bank, ke Cential liank — J. 
 D. HendersonV rase, 17 O.K. no (1889). 
 
 "Goods, wares and nierc handise '' — for the meaning of 
 these words, see sec j, ss. 3. and the notes to sec. 73. 
 
 «,->. The biuik slitill liave ;i privileged lien, for ,.,„,,, ,„,„„.« 
 tinv debt or liabilitv for aiiv debt to tlie bank. t''r'>'-<i.;i'r.s. 
 on the .sh'ires of its own capital stock and on 
 any ini])aid dividends of tlie debtor or per.son 
 liable, and may decline to allow any trarisfer ot 
 the .shares of sucli d-ditor or ptM'sun until siieh 
 
70 
 
 Banks and Uankinc; 
 
 Ji 
 
 
 ! ' 1 
 
 Sulc oi' 
 
 Noti( 
 
 case <•!' 
 
 r III 
 
 debt is paid ; and the bank shall, within twelve 
 months after snch debt has accrued and become 
 payable, sell such shares, and notice shall be 
 iriven to the holder thereof of the intention of 
 the baiik to sell the same, l)y mailing such no- 
 tice in the post ollicc to the last known address 
 of snch holder, at least thirty days prior to such 
 sale ; and upon such sale being made the presi- 
 dent, vice-pr'isident, manager or cashier shall 
 execute a transfer of such shares to the pur- 
 chaser thereof in the usual transfer book of the 
 bank, which transfer shall vest in such pur- 
 chaser all the rights in or to such shares which 
 were possessed by the holder thereof, with the 
 same obligation of warranty on his part as if he 
 were the vendor thereof, but without any war- 
 ranty from the bank or by the officer of the 
 bank executing such transfer. (R.S.C. cap. 120, 
 sec. 59, changed). 
 
 This section now makes it tlie duty of the bank, to sell the 
 shares on which it is given a lien within 12 months after the 
 debt, secured by such lien, has become payable — otherwise 
 the section is substantially the same as it was in ttie repealed 
 act. 
 
 In the case of Cook vs. Royal Canadian r.ank, 20 Or., 
 I (1S73), it was held under the law as it then stood, that 
 the bank had a lien on tlie stock of any debtor for overdue 
 debts, and could refuse to allow a transfer of such stock un- 
 til such overdue debts were jx^id. At page 12, Vice Chan- 
 cellor Blake uses the following language : " I am of opinion 
 that a statement by the bank of the amount for which stock 
 is held on account of past due liabilities, without any further 
 representation, c; any agreement in respect thereof, does not 
 bind it at a future day to accept such sum where other lia- 
 
 
BrsiNKss Axn Powers of rm: ]!.\xr 
 
 77 
 
 bilities incurred at llic time tb.e inquiry was made, liave 
 rneanwliile matured and remain unpaid." 
 
 Since this judiiment was delivered sections 19 and 51 of 
 34 Vic, c. 5, liave been epealed and new sections, from 
 time to tune, substituted therefor, and a clause has been 
 added to what is now section 45. The sections which now 
 deal with the question of the bank's lien are sections 35, 38 
 and 65 and from their language we think that they give the 
 bank a lien for all debts owi.ig to it, as well those "07^1//^ 
 and payable,''' as those '■'o-inng but not payable:' This pre- 
 sent section now provides that the bank shall have a privi- 
 leged lien for any debt or liability for any debt to the bank, 
 (not saying as the repealed section of 34 \'ict., cap. 5, sec. 
 51, did '• for any overdue debt"), and may decline to allow 
 any transfer of shares till such debt is paid. Having regard 
 therefore to this change of language, we are inclined to think 
 that the bank, under the present act, has a lien on the stock 
 cf a debtor for all current as well as matured debts, See on 
 this point Stockton vs. Malleable Iron Co., L.R. 2 Ch Div. 
 loi (1875). See also Reese vs. The Bank of Commerce, 14 
 Aid. 271. Angell & Amos on Corporations (1SS2) sees. 
 
 57I-574- 
 
 In addition to the above lien the banker, !iy th.u common 
 law, would, it is conceived, have a general lien tor the general 
 balance due by the customer on all bills and negotiable 
 instruments and perhaps other securities handed by the 
 customer to the banker generally ; that is, without siiecific 
 ap))ropriation, for the purpose of being realized or collected 
 and the proceeds carried into the account of the customer. 
 The lien does not extend to securities handed to the banker 
 for safe-keeping or for the [nirpose of being dealt with in a 
 specific manner. See Walker on Banking Law p. 1S5. 
 
 ISO. The stock, bonds, debentures or securi- c.,,iiat,.!ai 
 
 ties, Jicquired and held by the bank as eolbiteral u^slmVuriy 
 security, may, in case of default to pay the debt. 
 for securing which they were so ticquired and 
 held, be dealt with, sold and conveyed either 
 
'W 
 
 7S 
 
 Banks and Baxkinc; 
 
 in like manner and subject to the same restric- 
 tions as are herein provided in res])ect of slock 
 of the bank on which it has acquired a lien under 
 this Act, or in like manner as and subject to 
 the restrictions under which a private in- 
 dividual might in like circiunstances deal with, 
 sell and convey the same, but without obliga- 
 tion to sell the same within twelve months: 
 (R.S.C. cap. 120, sec. (jO, ss. 2, in part with ad- 
 dition.) 
 
 All the words of this section after the words " this Act " 
 are new. They give additional powers of sale to the bank. 
 By the law of iMigland if personal jjropcrty is pledged to 
 secure a debt payable at a fixed time, if the debt is not paid 
 at such time then the pledgee has a right to sell the pro- 
 perty pledged in order to have his debt. If there is no 
 time fixed for the payment of the debt the pledgee has a 
 right upon recjuest to insist upon prompt payment thereof, 
 and in default thereof the pledgee upon reasonable demand 
 and notice to pledgor may sell the property pledged for the 
 purpose of satisfying the debt.C (XA /y- 4aljp ^/ •//?»- <»^ 
 .^C 3, (pS-J " 
 
 2. The right so to deal with and dispose of 
 mfyiUwui'v^S. such stock, bonds, debentures or securities in 
 manner aforesaid may be waived or varied by 
 any agreement between the bank and the 
 owner of such stock, bonds, debentures or se- 
 curities, made at the time at which such debt was 
 incurred, or if the time of payment of such debt 
 has been extended, then by an agreement madf. 
 at <-he time of such extension. (R S.C. cap. 120, 
 sec. 60, ss. 2 part.) 
 
 m\ 
 
Business and Powers oi- thk TIank 
 
 -n 
 
 «7. The bank may acciuire and hold real and ifo >i >-'t,ito ,..i- 
 immovable property for its actual use and occu- 
 pation and the management of its l)usiness, and 
 may sell or dispose of the s ime, iind acquire 
 other property in its stead for the same purpose. 
 (R.S.C. cap. 120, sec. 47.) 
 
 OS.' The baidv may take, hold and dispose of M.Mt-,u:es u 
 mortgages and lnjp()tli('(ines upon real or personal, ^'••niiiy. 
 immovable or movable property, by way of addi- 
 tional security for debts contracted to the bank 
 in the course of its business ; and the rights, 
 powers and privileges which the bank is by this 
 Act declared to have or to have had in respect 
 of real or immovable property mortgaged to it, 
 shall be held and possessed by it in respect of 
 any personal or movable property which is mort- 
 gaged or hypothecated to it. (R.S.C. cap. 120, 
 sec. 48 with slight additions). 
 
 The only change in this section is the addition of the 
 words " immovable and movable " wherever they occur 
 therein. 
 
 Section 64 in substance enacts that the bank shall not 
 " except as authorized by this Act," either directly or 
 indirectly, lend money or make advances upon the security 
 or mortgage of lands, or of goods, wares or merchandize. 
 
 The present section, therefore, is one of the enabhng sec- 
 tions referied to in section 64 and authorizes the bank to 
 acquire security on real and personal property under the 
 limitations herein imposed. 
 
 MORTGAGES MAY BK TAKEN 1 OR " DEBTS CONTRACTED." 
 
 It will be observed that the bank is authorized to take and 
 hold mortgages on real or personal [iroperly only />y rcay of 
 additional siciirity for '■'■dclds contracted to the bank, in the 
 course of its t'ltsiness." 
 
so 
 
 r.ANKS ANIi DaNKING 
 
 Su|)])Osinf^ a bank at^rces to discount a note, can it take 
 security for the debt thereby contracted co-temporaneously 
 witli the discount of tlie note? 0;jini(jns have l)cen e.\- 
 presi^ed that if the bank reaUy advances money on the secur- 
 ity of a note or bill (and this is a (luesiion of fact t'' be 
 determined on a considerati(jn of all the circumstances of 
 each case), it may co-temporaneously with such advance 
 validly take a mortgage as collateral security to secure repay- 
 ment thereof. Whenever this is done, however, it will 
 always be a question of fact, whether the money was not 
 really advanced on the mortgage and the note created merely 
 to give color and lend the appearance of legality to the trans- 
 action. It would, therefore, be extremely dangerous f<jr a 
 bank to make an advance on negotiable paper and at the 
 same time take a mortgage as collateral security for repay- 
 ment thereof. There are numerous cases on this section. 
 Only two will be cited at any length, as they really ap|jear to 
 contain a full exposition of the proper interpretation of the 
 clause. 
 
 In the Commercial ]]ank vs. Bank of U.C., 7 Gr., 430, 
 decided in 1859 (and in the court below, 7 Gr. 250) Chief 
 Justice Robinson, at jjage 430, thus discusses the ([uestion 
 now under consideration : " It is (juite true that whenever 
 tile money is advanced, whether it be just before or at the 
 time of making the mortgage, then there is literally a debt 
 due but not a debt C(jntracted in the course of the 
 business of the bank — that is, of its legitimate and proper 
 business, which the leiuiiih^ jitoih.y upon iiiorfga^^e of real i)ro- 
 perty certainly cannot be, until the statutes are repealed or 
 altered. When it is shewn that the mortgage in any case 
 was taken by a bank ' as an additional security for a debt 
 contracted to it in the course of its business,' then the ques- 
 tion occurs whether that can only be taken to mean a debt 
 that had been prroiously incurred with it in the course of its 
 business, or whether a mortgage may not be taken as addi- 
 tional security tor a debt that had no previous existence, but 
 which the bank were about to allow a jjarty to contract, by 
 advancing him money at that time, in the proper course of 
 their business ; as, for instance, if any merchant haH brought 
 
lilSlNESS AN'I) 1'o\V1:KS (IF I UK 1!\NK 
 
 81 
 
 to the hank, on the -ist of May, 1855, for discount, u ln!l 
 drawn by Mcnry IJiill, jr., on liull Ilrothcrs, and accepted by 
 the latter, could the bank projjerly have taken a mortgai^e 
 from cither party to the bill, or from the i^erson who brought 
 it and got the money, to secure them the money which they 
 advanced upon the bill ? That is not this case, and I shall 
 only therefore say, that, as the words of the statute are not 
 against it, so I think it might, perhaps, be held that the spirit 
 ar,d intention of the Act are not opposed to it ; and that a 
 mortgage so taken might be upheld, when it appears that the 
 moitgage was really and in truth taken to secure the transac- 
 tion upon the bill, and not that the bill was created for the 
 mere purpose of upholding and giving color to the mortgage. 
 That would be a (]ue«tion of fact, upon which the conclusion 
 that a jury might come to would be in general so uncertain 
 that I dare say the banks will not think it [irudent tf) risk 
 their mone\- on a r:al security in any such case, where the 
 nature of the transaction might appear to be at all equivocal 
 —so long, I mean, as the present statutes continue in force." 
 In the case of the Royal Canadian Bank vs. Cummer, 15 
 (Jr., p. 627 (decided in 1869), the late Chief Justice .Spragge 
 (then v'ice-Chancellor) in his judgment said, at p. 631 : 
 "take the simple fact of deposit by way of security by the 
 debtor of a bank, to a bank, there being a debt, and there 
 being further advances contemplated but not yet made, a 
 dejTOsit for the debt due would be lawful ; but a dejiosit by 
 way of security, against which the uank customer might draw, 
 would be against the law ; and the law upon this point is so 
 well known to bankers that they would hardly be likely to 
 transgress it." 
 
 In the linnk of Toronto vs. I'erkins, 8 S.CR, 603 
 (decided in 1883), Chief Justice Ritchie in his opinion uses 
 the following language : " I agree with Chief Justice Dorion 
 that the transfer made to the a|)pel!ants q{ a mortgage to 
 secure an advance on a iM-omissory note discounted at the 
 same time that the transfer was made, was on the part of the 
 bank in violatif)n of the lianking .A.ct, a clumsy attempt at 
 evasion of the 34th Vic, ch. 5, sec. 40, which enacts that 
 ' the bank shall not, either directly or indirectly, lend money 
 
82 
 
 Banks ami I!anki.mi 
 
 or make advances upon the security, mortgage or hyijotheca- 
 tion of any lands and tenements ' " 
 
 Strong, J., in his oijinion in the same case uses the follow- 
 ing language : " We must therefore take the transaction to 
 have been a mortgage given, not to secure a past debt, Init 
 to cover a contemporaneous loan, and therefore void under 
 the statute." 
 
 Owynne, J., after citing Chief Justice Robinson's ojjinion 
 above given in the case of the (Jommercial Bank vs. Bank of 
 Up])er Canada, proceeds as follows : " Now, 1 do not desire 
 to call in question any part of the opinion of the learned 
 Chief lustice as here expressed as to the validity of a mort- 
 gage bona fide given or assigned to a bank by way of collat- 
 eral security for an advance made by the bank upon regular 
 business paper, or in the ordinary course of their business as 
 bankers, concurrently with the giving or assigning to them of 
 a mortgage upon lands as additional security, or to e.\|>ress 
 any opinion upon that point, inasmuch as sitting here as a 
 juror, and having the duty imposed upon me of fmding the 
 facts in the case, I have been unable to bring my mind to 
 the conclusion that this is such a case ; on the contrary, the 
 conviction formed in my mind by the tacts is that the trans- 
 action between Bunnell and the bank, of the T9th January, 
 1876, was primarily based upon the security of the mortgages 
 upon real estate assigned to the bank by the deed of that 
 date. That the note for $26,000 recited in that deed had 
 not then been, if ever it was, in fact, discounted or agreed to 
 be discounted as an ordinary banking transaction. A note 
 made by one payable to his own order twelve months after 
 date; is not ordinary business jiaper ; that the note did not 
 then constitute any debt due from Bunnell to the bank, that 
 it was not made for the purpose of being discounted by ihem 
 in the ordinary course of their business as bankers, but was 
 given existence for the mere ])urpose of uph(jlding and giving 
 color to the assignment of the mortgages, the whole having 
 been assigned, and contrived for the purpose of evading the 
 statute, and the mortgages were not assigned really and in 
 truth to secure an independent banking transaction on the 
 note. . . . Upon the whole, therefore, as I have 
 
lifsiNKss AMI I'dWi.Rs (i|- 1111, Hank 
 
 83 
 
 said, I can conic to no other conclusior. than that the note 
 was Hiven existence f..r the ;;ole purpose of upholding and 
 .Uiving color to the niortgnge and its transfer, which latter 
 contained a false recital of a debt due for the purpose of 
 eluding a discovery of the true nature of the transaction." 
 
 The meaning of the words " dehls contracted " was very 
 nuich considered and discussed by Mr. Justice .Story in the 
 case of Carver v. liraintree, 2 Story, ('.(i, at pag- 44S. He 
 thought it was not a violent construction ot the statute to 
 read these words as equivalent to " liabilities incurred.' In 
 the I'rench law the terms debtor and creditor are applied to 
 the iiarties who contract any species of obligation. IVthier, 
 \'"1. I, p. 74. 
 
 AS To illK I'KIiSUMl'llOX IN I AVOR Of VAIIhllV OF A 
 
 TRANS ACTION. 
 
 ^ In the case of 'I'he Royal Canadian I'.ank v. Cummer, 15 
 ('I., 627 (1869), t'li-ro being a doubt whether the mortgage 
 in (luestion was intended to secure future advances (>;i/y, 
 or to secure all past indebtedness as well as future advances, 
 —the court decided in fav(jr of the bank, on the ground 
 that where there is a doubt the presuiiii)tion should be that 
 the transaction was in conformity with the statute, and so 
 legal, the maxim being omnia prcstimmuntcr rite esse actn. 
 
 -AS TO THK APPMCATION OF I'AVMKNIS WIIKRK MORTCIAOES 
 
 ARFC INTKNDKD AS CONTINUING SICCUKITV, \c., AND AS 
 
 TO VWV. KKFKCT ON THE SKCURITV OF THK R1;NI;\\ AL 
 
 OF THK I'Al'KR REPRKSKNTING THE IN- 
 
 I)i:i;ti;iinkss. 
 
 As to the construction of mortgages given under this 
 section, as a continuing security to secure an indebtedness, 
 where the indebtedness has been changed but not reduced 
 in amount, see Cameron v. Kerr, 3 Ont. App. R. ;,o (1878). 
 In this case, after the mortgage was given the mortgagors' 
 line of discount was increased, but no separate account of 
 the liabilities secured by the mortgage and the further 
 advances was kept, the proceeds of the discounts and cash 
 
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 '/ 
 
 Photographic 
 
 Sdences 
 Corporation 
 
 n WEST MAIN STREET 
 
 WEBSTER, N.Y. 14580 
 
 (716) 872-4503 
 

 
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jm 
 
 [| 
 
 84 
 
 15\NKS AMI llANKINii 
 
 deposits l)oing tarried to ihc mortgagors' credit in unc open 
 current account, against which tliey drew chtciues and retired 
 the notes secured by the mortgage as they matured. The 
 mortgagors became insolvent on the i3th August, 1S75, 
 their indebtedness ni the meantime never having been 
 really reduced below the amount (^t" the mortgage debt. 
 Held, aftirming thj judgment uf Illake, \'.C., that 
 this mode oi keeping the accounts had not operated as 
 a discharge of the mortgage debt. See also Merchants 
 Hank v. Muffatt, 5 Ont. R., 122 (1883) and 11 S.C R., 46 
 (1885). T 1 Dominion Hank v. Oliver, 17 Ont. R., 402 
 (1889) it •,• . iield by Chancellor IJoyd that "Where a bank, 
 holding a mortuoge as additional security for the payment ot 
 eer'.r<;p '.Mtt"; .I'^tioues for these notes renewals from time 
 to tivr.e .'•! however, receiving actual payment, the 
 
 whole series of n 'tes and renewals form links in one and the 
 same chain of liability, which is secured by the mortgage, 
 although, as a matter of book-keeping the bank may have 
 treated the first notes, and the subsequent substituted notes 
 as paid by the api)lication of the proceeds, from time to time, 
 of the renewals." 
 
 n 
 
 I U ' 
 
 m^ 
 
 I 
 
 RIGHl'S AND rOWKKS OI" HANK OVKR I'KRSONAI, I'Kul'KK 1 V 
 
 MORr(;.A.(;i:i) to it. 
 
 By this section the bank is declared to have the same 
 rights, powers and privileges in respect of " personal property 
 mortgaged to it as it possesses in respect of real property 
 mortgaged or hypothecated to it." For the powers which 
 the bank has in resiiect of real proi)erty mortgaged or 
 hypothecated to it, see sections 70 and 71. 
 
 In Thomjjson V. Molsons P»ank, 16 S.C.R., 664 (1889), 
 the Supreme Court of Canada held, that when an advance is 
 made on a warehouse recei|)t, the bank may stipulate that 
 any surplus moneys, arising from a sale by the bank of the 
 goods covered by such warehouse receipt, after payment 
 of such advance, may be ai)plied in payment of other 
 indebtedness owing to the bank and existing at the time of 
 the making of su(-h advance. 
 
.■. Il 
 
 I>rslM.>> AND I'l.WKUS ni I III l;\NK 
 
 85 
 
 Sec also the following cases, and ihc cases therein cited, 
 onthe construction of this section generally : McDonell v. 
 Lank of Upper Canada, 7 U. C i). 15. 25J (1S50). J'.ank 
 of Upper (Canada v. Killaly, 21 LA". (J. 15. 9 (1861). Hank 
 of Montreal v. Mv Whirter. 17 U. C. C. !'. 51;, (11SC7). 
 Molson's Bank v. .McDonnld, 2 Ont. .\. R. 102 (1877), 
 affirming S. C. 40 U. ('. (J. 15. 529. Merchants 15ank v. 
 Bostwick, 3 Oni. A. K 24(1878), and (Jrant v. l.a Banque 
 Nationale, 9 Ont. R. 411 (1S85), which was a case of a 
 pledge of a timber limit in (Quebec, wherein the construc- 
 tion of section 2S of The (Quebec Timber Regulations 
 aro-;c. 
 
 TEC'iiNH Ai, Di.rix r> i.\ >i:ciKri V. 
 
 Can a Licjuidator under the ^\■inding-up Act, (R.S.C., 
 cap. 129,) or an assignee under the Ontario Act resjiecting 
 assignments (R.S.O. 18S7, cap. 124,) object to the 
 want of registration or other formal defects in the security ? 
 See in Re Rainy Lake I-umber Co.. 15 Or.t. Api^. R. 749. 
 (18S8), iSurland vs. Moffat, 11 S.C.R. 76 (18S5), Porteous 
 v>. Reynar, L.R. 13 Ajip. Cas. 120 (1887), Robinson vs. 
 Cook, 6 Ont. R., 590 (1S.S4), Teniiani vs. Union Hank, 19 
 Ont. A].]). R. (1S92). 
 
 HoiM.N(. .\ori:> .\s coi.i.AiKK.M. situkriv. 
 
 A bank holding notes of (jther [tersons as collateral secur- 
 ity for a customer's debt is bound to use reasonable diligence 
 in collecting the same, and if loss ensues the bank is liable 
 to the customer to the extent of the loss occasioned by its 
 want of diligence. Ryan v-. McCcnnell. S Ont. R. 409 
 (1889). 
 
 r.KNKl 1 I (>i SlXL'Kll V. 
 
 The bank sometimes gets the benefit of a security without 
 expressly stipulating for it. Thus in a recent case it ai)pears 
 that a tradesman sold goods to customers, taking promissory 
 notes for the i)rice, and al>(j hire ret eijils. by which the pro- 
 
 
H^ 
 
 86 
 
 Banks and 1]a.nkin(; 
 
 I 
 
 J! I 
 
 ;' ; 
 
 I'liic'liaso oi' 
 
 laiiil iniil<'i' 
 
 t'XITIIli'lll. \c 
 
 l)erty remained in him until full payment thereof was made, 
 and that the notes were discounted throu;;h the medium of 
 u third ])erson by the Central Hank, and it furthe/ appeared 
 that the hank was made aware, when the line of discfjunt was 
 opened, of the course of dealing and of the securities held, 
 but was not put in actual jHjssession of the securities and 
 there was no express contract in regard to them. Neverthe- 
 less, in an action by the bank to recover the securities or 
 their proceeds from the assignee for creditors of the trades- 
 man, it was held, that the securities were accessory .o the 
 debt ; that in equity the transfer of the notes was a transfer of 
 the securities ; that the defendant was in no higher position 
 than his assignor, and could not resist the claim to have 
 the receipts accompany the notes ; and that it was not mater- 
 ial that the relation of assignor and assignee did ncjl immedi- 
 ately exist between the tradesman and the Central I5ank. 
 Central Bank vs. C.arland, 20 Ont. R. 142 (1890), 18 A. 
 R. 438 (1891). 
 
 iHK The bniik inav nm-cliiise niiv laiuls ov 
 real or iTiimovjihU' property oflered tbrKiile under 
 execution, or in iusolvencv, or under the onhr 
 or deciee of u court, as heh)ngintr to ;iny debtor 
 to the bank, orollered lor side by a niortgiiLiee or 
 other encumbrancer ha \' in Li' priority oxer a inoit- 
 gHLie or other <'ncund)raiice hohl b\- the ba,niv or 
 oflered for sale by thi' baid\ under a power of 
 sale tiivi'n to it for that pU!-[)ose, in cases in 
 which, niuler similar circumstances, an indi- 
 vidual coidd so pnichase, without any restric- 
 tion as to the value ol the property which it 
 nuiy so purcliase, and may acquire a title there- 
 to as an\ indivi(hial purchasing atslierifl"'. .-alo. 
 or under a power i)l' sale, in like circumstances, 
 could do, and may take, have, hold and tlispose 
 of the same at pleasm-e (R.S.C. cap. I'lO, sec. 
 49, slightly changed tind added to). 
 
lU-'lM.SS AM) I'OWl-.KS UK Mil IjANK 
 
 S7 
 
 This SL'( lion apparently enables the bank to i)iirchasc 
 " hinds ur real or immovable property," (i) offered for sale 
 under execution or (2) in insolvency or (3) under the order or 
 decree of a court, as belongint; to a debtor of the bank, or 
 (4) offered for sale by a morti^at^ee or other incumbrancer 
 having priority over a mortgage or other encum- 
 brance held by the bank. (This power is an additional one 
 given by this Act). (5) or offered for salel)y the bank under 
 a power of sale given to it for that purpose, in cases when, in 
 similar circumstances, an individual could so purchase (Hy 
 rCnglish law a mortgagee selling cannot purchase — he cannot 
 occupy the antagonistic positions of seller and buyer at the 
 same time.) 
 
 lly the conjoint operation of this section, as it now read-, 
 and sec. 68 the bank, holding an incumbrance on personal or 
 moveable properly, could purchase the same if offered for 
 sale by a mortgagee or other incumbrancer having a prior 
 incumbrance thereon ; the last mentioned ;.eclion declarin:; 
 that the rights, powers and |)rivilcgcs which the bank is by 
 this .\cl declared h.ive or to h.ive had in res[)cct of real 
 property mcjrtgaged to it, shall be hi^ld or possessed by it, in 
 respect of any personal property which is mortgaged or 
 hyi)othecated to ii. 
 
 VO. The hunk ina\' iKMiuirc and hold an \i.-..iut. un,- 
 
 . ■ . in.iy lie ac 
 
 absohitc title in or to real or mnnoxahle 'Hiirr.i. 
 
 propntv niortLi'aLi'i'd to it as s.MMirity tor 1 drht 
 
 (hit or owiiii:' to it. I'ithrr l»y ohtainin;:: a r<'h'a.st' 
 
 of the ('(jiiity ot' rrdenii)tion in ihc inort'jaLr'ed 
 
 propiTty. or hy ])rociii ini:' a lor^'-'losiice. of \)\ 
 
 otlier lilt ans \vh»'iH'i)y. as holweon indiviihials. 
 
 an et|nity ot rt'(h'iiiptioii can. hy \;i\\ . he hai'ro(L 
 
 tind may purchase and arqniro any pi'ior iiioit- 
 
 ,iia,ire or charii'e on snch property: L'roviihd |.,.„vis.,; ,,aie 
 
 always, that no hank .•^liall hold any real or ,c,|iiir.,i. 
 
 inmiovahle property, howsoever acquired, ex- 
 
88 
 
 UaNKs ami liANklM 
 
 cept such MS is r<(jniiH'(i lor its own use, for any 
 pi'iiod e\cc!0(liiiii' scximi vi'iirs IVoni the date of 
 tli«' ;ici(uisiiioii thcrrol. (RS.C.cap. TJe. sec. 
 •"•0. sliirhlly clian.u'cil). 
 
 See also sections 69 and 71. 
 
 Banks are entitled to a decree of foreclosure upon mort- 
 gages held by them as additional security. Bank of Upiicr 
 Canada v. Scott, 6 Chy., 451 (1S5S). 
 
 It will be observed that, under this section, the power of 
 the bank to accpiire an absolute title or to arcjuire a prior 
 '•harge is restricted to "real or inunovable i)ropfrty." The 
 latter part of section 68, however, provides that the hmk 
 shall have t!ie same rights, powcs and privileges in respect 
 of personal property, mortgaged or hypothecated to it, as by 
 the Act it is declared to have over real estate mortgaged to 
 it. 
 
 The c()nstr'.i(ti(jn of a statute of a similar character, 
 though not in identical language, will be four.d in the Bank 
 of \ew South Wales v. Cami)!)ell, L. R. 11, App. Cas., i<):. 
 (1886). 
 
 If 
 I I 
 
 \vii.\r IS nil. irii( r of iiii: i-roviso 10 ai!0\k sixriON:^ 
 
 The proviso is as follows : — 
 
 " Provided always, that no bank shall h(.!d any real or im 
 '• movable property howsoever acquired, except such as is 
 '■ re(]uired for its own use, for any period exceeding seven 
 •• years from the date of the acquisition thereof." 
 
 Under the Enulish Common Law corporations had [)owei 
 to take and hold lands just as natural persons had. By a 
 series of Statutes known as the Mortmain .\(ls, and which 
 have been held to be in force in Ontario, corporations, though 
 not prevented from taking lands, were forl)idtlen from hold- 
 ing the 'iame without a license in mortmain from the Crown 
 under ])ain of forfeiture of the lands (in this country) to the 
 Crown. .As only the power of holding the lands was pro- 
 hibited by these statutes, it followed that grancs of land to 
 
Iii:>INl.-S AM) l'Ci\VtI<> (M nil. liANK 
 
 corporations were uikkI so as to |)ass tlic lands to iht.'in. hul 
 so soon as such lands were taken by the corporations without 
 a license m ninrtniain from the (Town, the lands became 
 liable to be I'urfeiled to the Crown. We do not know 
 exactly what the law of (^uel)ec is as to the h 'din^ of lands 
 m mortmain by corjiorations. The (Quebec !:: . of mortmain 
 was under discussion in tiie Chaudiere (lold Mining Com- 
 pany V. Dcsbarats, L. R. 5, 1'. C. ^"'7, (1873) and it would 
 .i])l)ear Irom that case that the French Law of mortmain is 
 not identical with the iMiglish. 
 
 The construction of this proviso would have to be the 
 same in all the Provinces, for as Mr. Justice I'atterson 
 recently observed in the Enchan<.;e I.ank v. Metchcr, 19 
 S.C.R. 388 (1891). "The Banking Act mii.-.t receive the 
 ■ same construction in all i»arts of the Dominicni, what it 
 ■■ allows or prohibits in Quebec it must allow or proliibit in 
 '• all tlie other jjrovinces. If the article (of the C'ode') 
 " enunciates a rule of law peculiar to one province which 
 '• is to govern in 'hat province the (;iieralion of this Statute. 
 " each provinc ( nay also establisli a rule of interpretation to 
 '• prevail within .'.s borders, and the uniformity o\ the law on 
 " this important branch of trade and commerce, which, was 
 " to be secured by confiding it to the exclusive legislative 
 "jurisdiction of the Dominion Parliament, will be in peril." 
 
 It is submitted that the breach of the proviso would ex- 
 pose the bank U) the penalty prescribed by sec. 79. If the 
 breach were -i<'ilfiil and lon^i continued it might be regarded 
 as an abuse of the corporate powers ot the l^ank, and might 
 form the foundation of proceedings fur a forle.ture of the 
 Charter. 'l"he land mit;ln also become forfeitable to t[;e 
 (>own, this however is doubtful and has not been decided 
 so tar as we know. We have only been able to 
 find two cases in Unta'io in which the effe::t of a 
 I lause of this character has been under di'cussion. 
 Tlie tuNt is, London (S; Canadian Loan iV Agency (Jo., vs. 
 ( Irahani, 16 Onl., R. j;j9 (1888). the second is, .\bl)airmid 
 vs. Hughes, 16 (^)nt., K. 570(1888), in which the clause 
 there in question is somewhat similar in its language to the 
 
no 
 
 Hanks and Hwkim. 
 
 t'M 
 
 above provisu. The statutu in question in the second of these 
 two rases, after ^ivin^ the Williams Mfi;. Co. power to ac(iuire 
 and hold lands, ^ocs on to say, " and thecouii)any may retain 
 the whulc (ir any part thereof, f(jr a [)criod not exceeding five 
 years." 
 
 'I'he Chief Justice in his jud^'inent iii this case says at 
 I)ai;e 576: 
 
 •' It seems that under tliese statutes an alienation in mort- 
 " main is v()idal)le only, and not void, and that in this Pro- 
 •' vince where lands are held in free and common socage, 
 " the lands so aliened can only he forfeited by the Cr(;wn, 
 " and that only after office found. See Crant on Corpora- 
 " tions, p. 98 ; Green's Brice's Ultra Vires, ]). 12 ; Ikcher 
 " vs. Woods, 16 C. P. 29 (1865); Sheldon on .Mortm.iin, p. i ; 
 " Hallockvs. Wilson, 7 C.l'. 28 ( 1S57) ; Brown vs. McNah, 
 " 20 (ir. 179(1873) : Vigf rs V. St. hull's, 14 (^. !!. 909 ( 1849'. 
 " I am of opinion therefore, tliat the defendant cannot 
 " tak advantage of the statutes of inorimain as against the 
 ■' alienation by Dawson to the company ; but th;it the Crown 
 " alone cm take advantage of them." 
 
 Mr. Justice Street in his judgment after reviewing and 
 discussing the statutes of mortmain proceeds as follows 
 at page 580 :-— 
 
 "'I'he l.iw under which the naMon d banks in [he United 
 " Stales are constituted contains a similar provision to this, 
 " but I have been unable lo llnd any express decisions as to 
 " it-effi (••.. A somewhat similar ciuesiion iy discussed in IJaird 
 " vs. The Bank ofWashingtiMi, 1 1 Serg. iN: Rawle, .pi, where 
 " the opinion is expressed that even if the grantees, who had 
 ■' taken a conveyance in satisfaction of a debt, had no right 
 " to hold the property conveyed, it woul 1 not therefore 
 •' follow that the ac(p,iiltance ol the debt would be cancelled, 
 "and the land revert to the grantor, but rather that the 
 '■ rights of the parties to the C(jnveyance, inter se, would be 
 " preserved, leaving to the state the right to take advantage 
 " of the defective title of the grantees. See also Lea/ure vs. 
 " Hillegas, 7 Serg. i"v Rawle, 313. This view of the l.iw is 
 " approved in Morse on Banks and IJanking, 3rd ed. sec. 754, 
 ■' where tlv:se cases are cited and commented upon. In my 
 
 I r 
 
IJUSINKSS AND ToWKKS Ol I HI. 1'aNK 
 
 (•1 
 
 " opinion the same consideration should govern the stipiila- 
 " lions in this statute \vhi( h limits the rii^ht of the rompany 
 " to holii for five years. I'he title of the company became 
 " defeasible by the ("rown alter the land had bcjn retained 
 " beyond that iierind, and may be dcteasiblc still on the 
 
 " f;round of the limitation in the statute : 
 
 " but I can find no authority for the proposition that the 
 " title of the company, ipso fact.i, terminated at the exjiia- 
 " tion of five years from the passim; of the Act, or the com- 
 " mencement of their holding of the property ; and I am, 
 " therefore, of o[)inion that their conveyance to the plaintiff 
 " wis efTectual to pass to him the title which they held, sub- 
 " i';ct to any right of entry or defeasance which the (!ro\\n 
 " might possess.'' 
 
 If the Crown should intervene to forfeit the land, the loss 
 occasioned would have to be borne by the bank alone ; see 
 Morse on Hanking, s. 74, and ISaird vs. I!. ink of Washington, 
 1 1 Serg. it Kawle, 411. 
 
 Tl. Xotliuii; ill any charttT, Act of law shall 
 ho const nu'd as over having provoiitod or as 
 prevontlng' tiio 1)ank IVoiii a(.'([iiiriii!X and hold- 
 ing an ahsoliito title to and in any suohniortgairod 
 I'Oiii or imniovahlo property, whatever the valne 
 thon^ol' is, or from excreisiiiL'' or actiiiii' upon 
 an\' i)ower of silo contained in a!i\' inortirairo 
 U'iveii to it or held h\ it, authorizin<'()r enahlini; 
 it to sell or convey away tmy property ho 
 iiioi'tgMged. iR.S.C. cai). 120 s. 01, changed 
 slightly.) 
 
 See also section 70. 
 
 Section 70 expressly authorizes the bank to get in the title 
 to mortgaged land and immovables by forclosure, or release, 
 or by any f)ther means whereby, as between individuals, an 
 eiiuity of redemption can by law be barred. The present 
 
 Till 
 
 f<( 1 ,'1' 
 
 ' til laiiils 
 i|iiiriil ; 
 ■I- III' .".lie 
 
 m 
 
92 
 
 UaNKS and iJANKINd 
 
 If" 
 
 sertion after a^ain authorizing this to ho done, without any 
 limitation as to the vahio of tlic property, further exfjrcssly 
 authorizes the hank to cxeici.se powers of sale contained in 
 mortgages. 
 
 ahi.i ...ivnnc.s '^*** Kvcrv huiik ;i(lviincin'j; n.oiu'v In aiil of 
 
 lor liiiihliii^' , I'll'* 
 
 "'•'I'N the fjiiilditii;- ol any slii[) or vi.'ssel slial! have 
 
 (he saiMc rijiht ol ae(jiiiriii<:' and lioldiiig security 
 iil)on siieli ship or vessel, while hiiihrmir iuul 
 when completed, either hy uay of niortLM,i:e, 
 ht//K)f/iri/n(; hypethecation, privilejxe, or lien 
 thereon, or pnndiase or transfer theri-ol". as 
 individnals have in the Province wherein snch 
 ship or vessel is hein.ii" hnilt. and I'.r that 
 pnrpose may avail itself of all such ri.irhts and 
 means of ohtaiiunii' and eid'orcitiij: snch secnritv, 
 and shall hesnhject to all snch oMiirations, limit- 
 ations and conditions as ;ir.'. hy the law of such 
 Province, conferred or im[)os('d n|)on individnals 
 inakinu- such advances, .RS.C. cap. lliO, sec. 
 52.) 
 
 This would appear to enable the hank to take security for 
 future, as well as past, advances when made in aid cf the 
 building of any ship or vessel. It is no doubt intended to 
 promote and encourage the ship-building industries ot the 
 Dominion 
 
 Warehouse .V. ^'^' "^^^^ ^'^"^ "^'^^ Jicquire and hold any 
 'i::l!:^u]::t^X warehouse receipt or hill of lading as collateral 
 i.rai srcuri.N j^ycurity for the payment of any deht incurred 
 in its favor in the course of its hanking business ; 
 and the warehouse receipt or bill of lading so 
 acqnired shall vest in the haidv, from the date 
 of the acquisition thereof, all the riirlit and title 
 
HfSlNI-SS AMI I'nU I:K.S 1)1 |||l. DwK 
 
 ;;j 
 
 "I lilt' previous lioldcr or owium' tlieii'nt. (ir of 
 the |)('i".«^()ii IVoii' w lioiii such ^odds. \\ar«'s mid 
 lULTcliiiiidisc ut'ic it'ccivcd or .icijuircd !y tho 
 bimk, il'tlic Wiireliousc rt'ct'ipt or hill <'ri;idiiii:' 
 is iiiiidc dircctlv in fjivor of the l);iiik. iiistral of 
 to the |irevi()UH holder or owiui of siicli -ouds, 
 wares and nierchiindise. (H.S.C ciijt. 121). sec. 
 0:;, ss. 2.) 
 
 'This scclion and ihc five following ones arc generally 
 known as tlie Warclifnisc Receipt Clauses of the Hanlc Act. 
 They were passed, no'douht, for the |)urpose of increasing i!;c 
 purchasing power of the cajjital employed in mercantile 
 business, by enabling merchants and manufacturers to obtain 
 advances on their goods whilst on hand or in transit and 
 awaiting sale. l'"or a short review of the previous legislation 
 on this subject, sec the judgment of Burton, J., in .Smith vs. 
 Merchants Rank, 8 Ont.,A.R. at page 19(1883.) 'I'hrough the 
 instrumentality of warehouse receipts, acquired in the manner 
 prescribed, the hank is, in effect, authorized to make ad' ances 
 or loans on the security of goods, wares and merchandise. 
 
 CONSriTI'TIONAMI V. 
 
 The constitutionality of the warehouse receipt clau'-es has 
 been ([uestioned. By the I!. N. A. .Act the Parliament of 
 C^anada has exclusive legislative jjower over Hanks and 
 Hanking It is contended that these clauses have nothing to 
 do with " Banks and lianking,'' but deal with '' i'ropcrty and 
 Civil Rights," — one of the subject matters which by the B. 
 N. .\. Act are assigned exclusively to the legislative authority 
 of the Provincial Legislatures. The Supreme Court of 
 Canada has, however, decided in t'avor of the constitutional- 
 ity of these clauses, being of opinion that the Dominion 
 Parliament, having power to legislate.on the subject matter of 
 Banking, might, in the legitimate exercise of that power, sa) 
 that banks might take warehouse receipts as collateral ^ecur 
 
!>* 
 
 nANK,> \M> 11\NKIN<. 
 
 r* 
 
 t f 
 
 ity for thi; repay incru (if advarK cs made, even though inci- 
 (Ifntally such k'j^islalidti ini^ht inlerfire with " l'.ti|ifrty aiul 
 Civil Rights in the I'rovinccs." Merchants Hank of Canada 
 vs. Smith, 8 S.Cl.K. 512 (1884) — Sec also on this point 
 Diipiiy vs. CushiriK, I- R. 5 App. Cas. 409 (i8So). In the 
 case of Tennant vs. Union Mank, 19 Out., k. 1. (i.Si;j) 
 now under appeal to the Privy Council, the (juestion (jf run 
 stitutionali'.y was aj^ain formally raised in the (,'ourl below 
 so that it might be liiscussed in the aruuinetil ol the case in 
 the I'rivy Council. 
 
 " \v\iu;iK)r-«K Kixi.ii'i." 
 
 
 The expression warehcjiise re("eipt used in liie above 
 clause is defiiieil in sec'. 2, r;s. (d) as follows : 
 
 ''(d). The expression "warehouse receipt " means any 
 " receiptgiven by any persuii lor any uiods, wares, or nierchan- 
 " dise, in his actual, visible and <'ontinued possession, as 
 " bailee thereof, in good faith, and not as (jf his own properly, 
 " and includes receijjts given by any person who is the cu'/icr 
 '"or keeper of a hai'jor, cove, pond, whait, yard, warehouse, 
 " shed, storehouse (jr other pUu e for the Uora^^e of ^^ooJs, 
 " riuirts or merchciiidise^ for goods, wares and nieichandise 
 " delivered to him as bailee and actually in the place, or in 
 " one or more of the places oioncd or kept by him, whether 
 " such i)erson is engaged in other business or not :" 
 
 The above definition of a warehouse recei|)t differs, to 
 some e.xtenl, \\o\\\ the one in the prec:eeding ac:t, R.S,C., 
 cap. 120, sec. 2, ss. (b). 'I'he words in italics have been 
 added and the words " aho specification of timber " have 
 been omitted from tlie end of the clause. 
 
 The (L'finilion of "warehouse receipt" was first intro- 
 duced into the liank .Act by 43 Vic. Ca[). 22 sec. 7. It is 
 gener.illy supposed that it was frameil to meet the difficulties 
 caused by a series of decisions in Ontario, ending in the 
 cases of the Mercliants Hank v. Smith, .S S.(J. R. 512 (1884). 
 and Milloy v. Kerr, 8 S.(!. R. 474 (iSSo), deciding that 
 under the section c(;rresponding nearly to section 73 of this 
 
IW >IM -> AM> I'liWI.K- (il nil. 1!ank 
 
 :•:• 
 
 
 Art, a warehouse rt'ct-ipt to he valid must be jiivcn liy a person 
 exen isin;; the hii->iiiess()f a warelioiisenian. Il is corK eived that 
 under tlie law asit at present st;iriils, A, adry j,'()ods merchant, 
 can dehver a hale i;( silk into the possession of 15, another 
 dry goods inerrhanl, to l)e deposited and kept in It's store, 
 15 can then is>ue a valid warehouse rereii)t to A for this 
 haleofsilk. This is the opinion of lioyil (,'. in re. Montieth, 
 lo Ont. R, 529 (iSSf)) where the meaning' of the expression 
 "warehouse receipt" as used herein is much discussed. 
 At pa^e 540 of his judgment the Chancellor says : •' the 
 "present ilefmition diseriininales lielwien iwo 'lasses of 
 *' persons who are authorized to i>>-ue receipts. 
 
 " I. .\ny bona fide bailee of goods wIik h are 111 his actuil 
 '• visible and continueil possession may give r • . ipls tlierefor 
 " J. .An" person who is the keeper of a w.irehouse '-r oiher 
 '• i)lace lor goods ran in respect of goods being in th..i wore- 
 •' house or place givesu;:Ii receipts The same son of proof 
 
 is not refpiireil in she case of a warehouseman granting su( h 
 *• documents as in the case of .i bailee of goods, and the v.ilidity 
 " of M-.ch recei|)tsdoes not necessarily depend upon proof that 
 " the warehouseman was actually, visibly, and conti .iiously in 
 " |j(jssession of the goods covereil thereby." 
 
 The meanmg of the expression " warehouse receipt " was 
 again under discussion in 'IVnnant v. Union bank, 19 Ont. 
 App, R. I (1892), anil the opinion is expressed that a ware- 
 house receipt givn by the keeper of a warelunisi', ^Vc., mu.^i 
 cover goods in some particular warehouse or place kept b\ 
 such warehouseman. Macleiinan, J-, at page 15 says "The 
 " next (piestion is whether this pajjer was a good warehouse 
 " receiin under the Hank A<-t so that the bank might lake it 
 "as a security under R.S.C. Cap. 120, sec. 5^, ss. 2, 
 " (now sec. 73), the log-, havin- been at the time in 
 '• transit fr(jin the woods where they weie cut. to llie mill, 
 •'and being as desciibed in the d .cumLiu. in Lakes St. 
 " John and Couchiching en route for Hradford's Mill " 
 
 " I think that even if the logs were confined by a boom or 
 
 " booms in those lakes a warehouse receipt could ncjt l)egi\cn 
 
 ' upon them. What the Statute R S.C. cap. i jo, sec. 2 (b)says 
 
fwm^^^mmt 
 
 W 
 
 1].\M>;> AN!) llANislNt; 
 
 •' is in sub,.tancc this : 'I'hc uxpn'ssioi, ' warchiAi^f receipt ' 
 " means a receipt given by a pcrs.,n lor goods in his ueiual 
 •' possession as bailee .... and includes receipts 
 " from any person who is keeper of a . . • • null 'J^ 
 " other i)lace in Canada, for goods in the place so kept by 
 " him. I am unable to sec how I-akes St. John and Couch- 
 •' iching where these logs were at the date of the receipt, can 
 •' be regarded as- place- /r/Z/M' ///. si^./ns •/ the truipt:' 
 
 'Pennant's case was decided under the I'.ank Act R.S.of C. 
 c. I 20, The change in the language of the definition of" ware- 
 house receipt" in the present Act seems stronger in fivor of 
 the view expressed by Mr. Justice Maclennan. 
 
 1 
 
 l;ll.L Ol- I.AlilNd. 
 
 Section 2 ss. (<■) of the Act defines the expression " bill of 
 la'ling ■' as follows : 
 
 " {£.) The expression "bill of lading ' includes all receipts 
 " for goods, wares or merchandise, accompanied by an under- 
 " taking to transport the same from the i)lace where tliey were 
 "received to some other place, whether by land or water, or 
 " partly l)y land and partly by water, and by any mode of 
 " carriage whatever ;" 
 
 A bill of lading is a memorandum signed by the 
 master acknowledging the receii.t of goods to be 
 carried as therein mentioned. It generally has a twofold 
 character, containing not only a receipt for the goods, but 
 also the contract upon which they are to be carried. By 
 the English law its use is confined to maritime adventures. 
 The above definition however extends its meaning to cover 
 all receipts for goods to be carried by sea or by land. 
 
 GOODS, WARKS AM) M F.KCH AM )ISi:. 
 
 Section 3, ss. (r) defines these words as follows : 
 "(,-) I'lie expression 'goods, wares and merchandise 
 •' includes, in addition to the things usually understood there- 
 " by, timber, deals, boards, staves, saw-logs and other lumber, 
 
Ill-SINI.-S \\|) I'mWI KS III- THi: I'wi 
 
 !t7 
 
 "lietroleuiii, crude oil, and all agricultural produce and (Jlher 
 ■' articles of commerce " ; 
 
 These words " ijoods, wares and merchandise " will be 
 found used only in the al)ove sub-clause, and in Section u \, 
 and in the sections of the Act relatinic to warehouse re- 
 ceipts, vi/ , Sections 75 to ;,S : as so used they would prob- 
 ably include only "snoods, wares [\u(\ merchandise," dealt 
 'vith in a mercantile transaction. Under the I'lnglish I'actors 
 Acts similar words were held not t'l uk lude stuck certificates 
 in a joint stock eompjiiy, ^ee Tniemin vs. .\[iiileyatd, ^2 
 I,. J. 1C\, 175 ; I, N. K 30, (iSOjj. 
 
 (Ml \ I IK \l, ^l:( IkCl'V. 
 
 I:i MulvN- \',.iv', I, K., lO, ('h\- !).. 214 (iS7,S)and in 
 /v ;v .\thill -.\thil! vs. Athill 1 ,. K , 1 r,, Chy., I). 2:2 (1S80) 
 the word "collateral" was much, discussed and its meaninu 
 was held to be "parallel" ur " ad.iitiwp.a! " and not 
 " secondary." 
 
 " DiiMs ivcrkkKo. ' 
 
 Section 73 declares that the bank m.iy acquire and hold 
 any warehouse receipt or bill of lading ascollateial security 
 for the payment of any debts incurred in its favor in the 
 course of its banking business. In order to ascertain the 
 meaning of the words "debts incurred'', as used in this 
 section, reference must be made to sectiin 75. which in effect 
 tleclares that the debts must be incurred at the time when 
 the warehouse receipt or bill of lading is tr.c^ferred or pro- 
 mised in writing to he transferred to the bank. 
 
 rill-: i;\NK m \v AiijriKi ano iioi.m \x\ w \u!iior>K 
 ivi cr.ii'i. \! , 
 
 In a case arising under the ('.S.(.'., ca|). 54, and 2 \ \'ic., c. 
 J3 (Can ), where a i)ank took a warehou:.e receipt fiwin a 
 warehouse-man (^'/v/^/a-Av/^vV/;,' t(^ have received. //ew //u- bank 
 6,000 bales ot wool deposited ;n the warehouse, sul)ject to 
 the order of the b:mk, it was hehi by the Ontario ('ourts, that 
 
98 
 
 liANR- AM) ilWKIXC 
 
 such warehouse receipt being given direclly lo the l)aiik was 
 wholly inoperative, the language of the statutes then in force 
 contemplating and authorizing transfers of warehouse receipts 
 to banks by indorsement only. See Jiank of liritish North 
 America vs. Clarkson, 19 U. C. C. !',, i8j (1868); Royal 
 Canadian Bank vs. Miller, 28 U. C.C. 1'., 593 (1869). 
 (In apijeal) 29 U. C. Q. IJ., 266 (1870). 'I'his war, a very 
 rigid constru'tion of the statutes, and was, it is believed, a 
 su-orise to the mercantile community. An opjjosite view 
 had, moreover, been arrived at by the Courts in (^u<.!)ec. 
 vide Molsons J]ank v.s. Janes, 9 I,. C. Jur., Si (1864), ,ind 
 a less rigid construction had been ai'idied to !)ills of lading 
 in the very same year in the Ontario Court of Appeal, ride 
 Royal Canadian liank vs. Carruthers, 29 U.C.Q.15., 283 
 (1870) ; consei[uently, shorUy after ihe pronouncing of the 
 decision in api)eal in Ontario, above cited, the language of 
 the clauses was clian.ued {vide 34 \"\v., c. 5, s. 46, ei so/.), 
 and subsciiuentl)', doubts having l)een again raised, was agam 
 changed {vide 43 \'ic., c. 22, s. 7). h is now believed that 
 the words used in the present .Act are large enough to enable 
 a bank under this section, lo accjuire title u) a warehouse 
 recci])!, either directly from the warehouseman, or by way ot 
 endorsement from the htjlder thereof, — See Merchants i!ank 
 of Canada vs. Smith, 8 S.C.R., 512 (1884) : 8 Ont. .\pp. R . 
 15 (1SS3): 28 Or. 620 (1881): and see i). <,f Ibmulton v>. 
 Xoye, 9 Ont. R. at ]>. 673 (1885). 
 
 W 
 
 V.\ \\IIC>.M M \V NIK WARl HOLM:, lU.Cl.ll'l UK (..W V.S. ? 
 
 It may undoubtedly be given by the borrower from the 
 bank. Hut may it be given by aiiybod) else? In Tennanl 
 vs. Union liank, 19 Ont., App. R. at p. 6 (1892), Mr. 
 Justice O-ler answers this (piestion "It does noi appear to 
 " l)e essential that the borrower slnnild be the holder or owner 
 *• of a warehouse receipt. 'I'he bank may ac([uire it as collat- 
 " eral security for him from a third party." 
 
 It is now declaretl by this section, that the warehouse 
 receipt or bill of lading, so acquired, shall vest m the l)ank, 
 tVom t!:e date of the ai (piisiiion thereof, all the riiiht and 
 
I]l>INI.-S ANh I'dWI.k.- OK -illl r.ANK 
 
 ;•!! 
 
 title :~-(i ) "OflliL' 1 ircviinis //.'/</,•;• or f'r>7/,v thereof (tlierel)\ 
 implyinu that there must i)C a previous holder or owner ot 
 of the w.irehouse receiin or l)ill of lading) ; or, (2) -'Of the 
 person f nun i.'/io'n s/r/i i^',his, avc/vy, ar nierehinJise u'erere- 
 ceived or acquired by the hank, if t lie i.'tire/ionse receipt or hiH of 
 ladini:: '•< "/'fde directly in faro- of the iuvii^. instead of to th. 
 frerions holder or o^w/er of siicli X'>'>ds, wares or nierchand.s- ." 
 I'hese latter words in italics were added by 4,:; \"\r. c. 22, s. 
 7 (iSSo), probably in anticipation of an ohjertion which was 
 afterwards raised in the Court of .\pi)eal in Ontari.i in 
 Merchant's l!ank of Canada vs. Smith, (1S83), (8 Ont. App. 
 K. 15), that even under the wide lani^uage used in 34 \'ic., 
 c. 5, s. 46, it is still necessary that there shcnild he a previous 
 holder or oroner o{ tlie warehmise receipt or hill of lading 
 before it can be validly transferred to or acquired by the 
 bank. 
 
 Lnder the j-resent law a warehouse receij)! given directly 
 to t'-'^ hank by the bailee or warehousemen, would certainly 
 be g 0(1. 
 
 1-1 1 1 1 I or nil: A( i.pii-i 1 1(,\ ,,|. 1 m, w Aki:iiorsi: ri-ckii'i 
 
 'The section now de<-lares that the w.u-ehou>e receipt oi' 
 bill ,,f lading, a<-(|uiied under the act, >hall v.st in the t)ar.!x 
 troni the dale ot the ac(jui>ition thereof, all the right and 
 title : -~( I ) "O/ th, prerious holder or oK<ner thereof or, {2) 
 ''Or the person J r in :ohoni sneii ^oods, hurres or merchandise 
 were received or ae,/u/r,d by ilie bank, if the warehouse receipt 
 or bill ot ladii/:^- is made directly in favor ,f the bank, instead 
 ot to the pnvious holder or or.'ner if such ^i:;oods, ;oares n 
 merc/iandise." 
 
 A recent ca>.e on the subject is I'he Dominion I'.ank \. 
 Davidson, i .' Ont. Ap|;. K. 90 (1SS6), in which the fact- 
 were as follows :— Tile execution t!ebtor<. Chapman iV Son. 
 bought the oats in (juestion from the owners thereof', wIkj 
 •shipped them to I'oroiUo consigned to their own order or to 
 the order of sijine bank other than the plaintiffs', sending the 
 ship|)ing receij^t, with a draf't f'or the pri( e of the oat- 
 attached, to Chapman \- Son at '{'(jronto. i'he latter then 
 
\^y 
 
 100 
 
 ?)\.\KS AND BaNKINC. 
 
 took the shipping iL'(:ci|it to the plaintiff hank who advanced 
 the money thereon to pay the draft, returning; the shipping 
 receipt to C]hapnian \: Son for the purpose of getting same 
 endorsed by consignee thereof and obtaining the oats from 
 the carriers, first taking from (.'ha|)man & Son a receipt in 
 these words : — 
 
 " Received in trust from the Dominion liank bill of lading 
 for bushels oats, and I hereby undertake to sell the 
 
 ]iroperty specified for said bank and collect the proceeds of 
 sale or sales thereof and deposit the same with the said 
 bank, in Toronto, to the credit of same, I hert;by acknow- 
 ledging myself to be bailee of the said property for the said 
 iiank." 
 
 ( hapman .S: Sun received the oats from the carriers and 
 warehoused them, taking warehouse receipts in their own 
 name, which they endorsed to the iplaintiff bank who gave 
 up the bailee receipt. 
 
 Held, that no property in the oats had passed to Chapman 
 i^ Son when the plaintiffs made the advance, and that the 
 latter were therefore entitled at least as equitable owners, as 
 against execution creditors of Chapman & Son, — and held 
 also that the Chattel Mortgage Act could have no applica- 
 tion, for when the oats first came into the possession of 
 Chapman \- Son, they came charged with or subject to the 
 plaintiffs' title. 
 
 Another recent case is Tennant v. Union Bank, iq Out. 
 A|)p. Is. I ( 1892). 
 
 (iOOD.S Slim in Kf IM'.SCR 1111:11 in KIX KIPI' Willi KK.\SONAl'.l,h 
 
 ( i;k 1 AiN TV Aur. srnsi;^ 1 r 1 md ooods covkrkd? 
 
 l''. If 1(1 111- (.(INi 
 
 ♦sioN Of i'kcu'i:uiA'. 
 
 When taking warehouse receipts, the goods intended to be 
 covered thereby shuuldbc described therein with reasmiable 
 certainty', and the agent of the bank should, if possible, see 
 that the goods themselves are in the warehouse and 
 separated from other goods of a similar class. The receipt 
 only covers the actual gooiis mentioned therein ; it does not 
 onlinarily cover substituted goods. This was exDressly 
 
HrsiM -■< \M) PcWKR^ ol llll llwK 
 
 III 
 
 decided in I.lado v. MovL'aii, 2_:; L'.CM'.l'., 525 (1N74). In 
 that cast.' the rcccijit ( nvcrcd thirty hales of corks, and the 
 C(nirt held that il cmered the specilic hales, and those (jn!\, 
 in the ivarehou^e at the time of the ,L;ivin^' oi the same 
 \\'here, Ii.)\vever, there is a ciisloni or usaij;e of trade, (such 
 as exists in the ^rain trade), not to deliver hack the specifu 
 goods, hut the same i|uanlity of '^oods of a similar kind anti 
 quality (or such as exists in the millinL; husme .i, not to 
 deliver i)ack die wheat at all hut ils equivalent in llour; the 
 ciperation of liie receipt would pmhahl) not he restricted as 
 in Ltado v. Morgan. 
 
 Sl(.- on this p(.)ini Wilinoi v. .\hiilland, _:; ( ir., 107(1 S5 1 ), in 
 whii h a usage in the Hour tracle is mentioned. 
 
 Coffee \. 'i'he <^Hiehec li.iiik, 20 l'.('.(" I'., 1 1 1 and 555 
 (1869). in which the nature and con^LqueCi e> oi the u>age 
 in the grain trade are dis<-ussed. 
 
 .Mason v. (".real Western Ry. C'o., ;,i L'.C(J. I!., 7^ 1 i87-l-i 
 in which the nature and conseipiences of the usage in the 
 milling tratie are iliscussed. 
 
 Where the warehou'^eman improperl)- mixes the goods 
 covered by the warehou-e receipt, with his own goods, esjjeci- 
 all) where in the warehouse recei[)t he ])romises to kee|) the 
 goods separate; the holder of the receipt, as against the ware- 
 houseman himself and as against his assignee in in.-iolvencyt 
 or for the benefit of creditors, is entitled to he satisfied <ju 
 
 ot sii 
 
 -rl 
 
 nuar goods in tlie warelKHHe. to the ([uantuy menti(;nec! 
 in the warehouse receipt. .Merciiants Ilan!; ol Canada v. 
 Smith, jcS, Cir., pp. f)V^f>,Vi 'i.SSi). (ireat Weslerii \\) , 
 ( 'o. v. Hodgson, 44 l'.(' (J 11 , \i)(> • 1S79). 11, ink of llani 
 ilton V. Xoye. 9 Om. K. /.j;i (1885). Re () jodlaliow. 
 Traders Hank v CioudJ.ill .w, 19 ( )iit. Kep, ^'99 (iS90)- 
 Sf ,■ also in ^'' ( ".oiem.m, :;() l'.("(^) Il ;r)4(i;S7 5i. 
 
 i<i;Mi.iiii.> 111 Nil. i;a\k aiii-.k ki.m-m. loiu.inr.K. 
 
 .\fter demand of delivery and refu>al to deliver, the bank, 
 ;t possession of the goods covered h\ die warehouse re( eipl 
 can be obtained witlunit force, (an take po^-session of the 
 same, even though on llie land of the warehouseman, with" 
 
Iu2 
 
 UaNKs ANI) liWKINC, 
 
 I 
 
 I i^ 
 
 kW 
 
 Wluii |iri 
 liolilfi i< 
 
 \ loll 
 III 
 
 out being liable in trespass. Traders Hank v, Drown Mann 
 facturing Company, iJS ( )nt. Rep. 4:;o (18S9). 
 
 i.l.XIJ<AI .\U'J-Ks. 
 
 It has been decided that i>n the reendorscinent of a ware- 
 house receipt by the bank, the i)ledgor is in as ..f hisoriguial 
 title, and that his rights must lie considered as il" the li:ink 
 had never intervened. Mason v. The Creal Western Ky. 
 Co., 31 U.C.(j.n., 73(1X71). 
 
 There is an .\''t in force in Ontaiio relating to wareli'Use 
 rei-eipts, vi/. R>, ot On;. h,SS7) cap. 122, sections i4etse(i. 
 
 ~. ir the pri'vioii.^s liolder of siicli Wiuvhouse 
 reoei[)t oi' bill of lading is the im'eiit of rlir owner 
 of the goods, ware's and iiieivliaiidisu iiK'iitioiici] 
 tlicrein. tlic !)aid< .<1im11 he vested with all tin 
 fight and title of the owner thereol. suhject to 
 liis right to liave the same re-transferred to him, 
 if the deht. as seeiiritv for wlueh the\- ai'e held 
 h_v the i-ank. is [)ai(i : (K.S.(;. cap. 1 20, see. ■)'.), 
 
 s.s. ;; . ) 
 
 It will be noticed th.u th.e lanuuagc U'^ed in ihis siib-scclion 
 ■-till is '' {f f/'ir /^/^'/(ins I/o/dcr u\ siu'h warehouse receij)t " is 
 the agent, .Vc, consecjuently ii may be held that '• an agei t '' 
 must iransfcf an exiitiiv^ ^ihjrduiusc recci[>t to the bank. See 
 on this jMjint notes to section 73 and the remarks of the 
 Ontario Court of .\ppeal in .Merchants Hank of Canada v-,. 
 Smith, 8 Ont. .\\\\\ R. 15 (1S.S3). 
 
 'I'his sub-section enables an agent, in r crtain cases, to cre- 
 ate in favor of a bank, a valid pledge on gtjods fjelonging to 
 his princijjal, even though such pledge may be a wr(;ngfiil 
 and unlawful dealing v.-ith the goods as between the 
 agent and the principal. 
 
 ; Ib; 
 
 Miwivc, 111 1 iir; woRi) "\ia.Nr". 
 'I'he defmition of " ai^ent ", as used in section 73. will be 
 
I'lr-ININS AN' I) I'tiWKRS 01' THK F'.WK 
 
 lit:; 
 
 t')iiiiil in sec. 7,^, ss. 5, and i-, .is follows : '* I'hc expression 
 " ' .i,_'ent ' nuans any person intiu^led wiili the possession > i' 
 "goods, wares and inerrhandise, or to whom the same ai ■ 
 •' consiL;ned, or who is possessed of any bill of lading, receii)!- 
 ■' order, oi oilier document used in the course of business a- 
 '■ proof of the possession or control of goods, wares and 
 •' niercha!idi>e, or authori/in^ or purporting to authori/L. 
 
 either by indorsement (jr by delivery, the possessor of suci. 
 ■' docinnent to transfer or receive the goods, wares and me ■ 
 ■' chanilise lliereby re[)re>ented ; and such [ler-^on shall Ik 
 
 deemed the iMjssessor of such goods, wares and nierchan 
 •' dise, bill of huling, re<-eipt, order, or </ther document as 
 
 aforesaid, as well if the same are IilKI by any person for 
 
 him or subject to his control as if he is in aclua! possession 
 • thereof.'" 
 
 It is no (ioul)t f lundeti on the defmition of Agent givei" 
 in the Consolidated Statutes ot (!aiMda, cha|)ter 59, which i- 
 itself based on the I'nghsh I'artors Acts _| Cc 1. I\'. ca[), S3 ; 
 6 Geo. 1\'. caj). 94 ; and 5 and 6 \'ic. cap. 39 ; see also R.S. 
 of Ontario (1887) cap. 128. The present definition ^1 
 .Agent i-^ not, ho.vuvcr, identical with its del'milion in ti c 
 above SMtutes. In some respects the ] 'resent definition ;- 
 much wider, es|)ecially in regard to the possession n{ do( n 
 nients of title. In the (Consolidated Statutes, chapter 5.;, 
 the ageiu must be ''entrusted with "' tlie i)ussessi(»n of gooti-, 
 or "entrusted with" the posses->ion of the documents 1 ! 
 the title the reto. ]]y section 73, ss. 3, (jf :!iis Act it is dr 
 dared that "Agent •' sh ill me.in ''any person entrust>-d witii 
 the possession of goods .... or who is possessed 
 'not "entrusted with'' the possesion) ui any document ot 
 title. \\ lien this (juestion — Who is an agent within tl.«. 
 meaning of I'lis subsection an<l section 73, ss. 3 comes U' 
 before the ('ourts, fir decision, we think it will be answered, 
 that only those |)ersons who are agents within the meaning of 
 t-he Knglish Factors .Acts ami the Consolidated Statutes ot 
 ('anada, chajt'er 59 and K.S. ot Ontario, cap. i jS, are agents 
 under this .Act. It m.iy, consequeiiti}', be u-^eful to st.ite the 
 
 w 
 
 m 
 
104 
 
 I!ank> .\m> I!\nkin'; 
 
 view-, svliidi have been adi 
 of 
 
 )])i (1 in iMii;iaiul on tlll^ iUK'^tion 
 
 Wlln |> AN .\(,i:\I INDl.k I III r\( KpKs m \> ' 
 
 Nuu it has l)ccn luld m IlcMiian \. I''lc\vkcr, i;, C H \.S. 
 519 (1S63), that iIk' Icni) '•a-cnt," under thr Ivkkhs Acts, 
 does not iiuhide a iiK'ic -tivant (H 1 arctakcr, or oiie wiio 
 has possession of goods for carriage, safj custody or other- 
 wise, as an independent contracting |)art\, hut only "/"(V.svv/v. 
 'i^'hosc tniplnxDhitt concs/'cihh to tliiit of s,o//,- known kind of 
 r.onin.ciciol a;^,nt like tlial riass ( /■'actors ) J/oni 7,'/iir/i ///,• .-/,■/ 
 /ids tak n its nanii-r In Cole v. North We.v.eiii Hank, I, K. 
 10 C. 1'. 369 (1.S75), which contains a most elaborate review 
 ot tile Fact(jrs Acts and the decisions thereon, Mr. justice 
 151ackl)urn says : "If a furnished house he let to one who 
 carries on the business of an auctioneer, he is entrusted a-, 
 tenant with the furniaire, being in tact an auctioneer ; but it 
 nevt:r was the coininon law, and coukl not be intended to be 
 t'huicJ, that, if he carried the furniture to hi.-. aiK tioii rooiu 
 and there sold it, he could confe: any belter title on tiie pur 
 chaser than if he had as auctioneer acted for some othe: 
 tena'i; who committed a similar larceny, as a fraudulent bailee: 
 nor. to come nearer to the present case, that a wareh(juscman 
 or wharfingei, who, as such, is intrusted with d^j custody oi 
 goods, if he hajipens also to pursue the trade of a factor, can 
 give a better title by the sale of the goods than if they had 
 been intrusted to some other warehouseman who emplf)ved 
 hull to sell." See also Johnson v. Credit I-vonnais, I,. R 
 3 C. V. I), JJ (iSj;). 
 
 In the City Hank v. iJairow, I,. R. 5 Aiip Cas. 664 (iS.So), 
 a taimer in Montreal received from a merchant in laigland 
 hides to be tanned and it was agreed that freight was to \n- 
 procured for them l)y the tanner and the hides returned to 
 l-'ngland ; .hey were tanned, and freight was accordinuly 
 l)ro(ured for them, but in the iiieantiiiie the imiier had ob 
 lamed from the Toronto Hank advances on his oaii account 
 on bills, and hyi)i)thecated the hides to the bankers as secur- 
 ity for such advances, engaging to hand over to them the 
 bills of lading if his IiiUs of exchange were not duly honored. 
 
lllMM^^ ANh I'dWl.K- III I Ml. IIXNK 
 
 id.'i 
 
 'I'licv were lint (iu'.v huiiiiiL'd. and thch inkci> (whi) hail actoilin 
 Liitirc u'dnrancc ut' tlif tiaiisai tioii bclwcLH the mcii lianl ami 
 tht tanner, claniu'il u> retam tlic l)ilis (jf hulin- and tlio hides 
 tiiitil their demands were s.iti-lieil. The Umise of l-or-ls. 
 however, decided tliat the tanner was r it a factor or a^eni 
 entitled to [jledue under any law, Canadian (ir i'ln^lish, ami 
 that the Hank ol 'I'Dronto :u quired nn valid lien on the hiiles, 
 either lUider the ('i\il Cnde, the Coii-^olidated Statutes ot 
 Canada, Cap. 51;, or the Hank .\( t. 
 
 l,(iril SelWorne. in the ( our^e i^t hi-. iudi;incnt, at ])a.i;c 67;,, 
 -ays : "Jt is manifest that the (jjjeration of thc-e I'aciurs 
 '.lauses under the Canadian Code (which i- the -^ame as Cun- 
 solidated Statutes of Canada. < . 59. in this respect) is the 
 same as the operation of the I .uti^r- .\( i> m lMv.;l,iml in a 
 -imil.ir case. TheN' are taken alnio-t entirely I'rom the I'.n;.;- 
 li-h factors Act-." .X'j.iin. at ji.i-e 675. he says : •• I do not 
 propose to dwell longer iijton the ca-e. Tlie Hankers .\ct 
 seem- to me to carry it no t'lirther It i- true it reters to the 
 ("onsolidated Statutes and not to the Code : hut the code is 
 >jn this j)oint. on!\ a re|ietiiion of the ( 'oii-olidateil Statutes, 
 and i- a le^i-lative decl.UMtion of the true meanitiL; ni tho-e 
 former statutes which are incorporated in it." 
 
 I.'.rd Hlackhurn, m the c nir-e of hi- judumeiU. at pa-e 
 67S, say- : '' It i- sufticieiU to -.iw hriclly, that the decision 
 in Cole V. the Xorth-\Ve-,iei n Hank 'I'rom which an extrict 
 is ^iven ahove) come- to thi- : tint an a.;ent who iww jiled^^e 
 or sell mu-t he an a.uent of that class which, like factors, 
 (tak:nu almost the word- of Mr. justice Willi- in the ca-e 
 which has alread\' heen referred I > of Ileyman v. llewker) 
 have a business, which, when carri' d to it- le-:;itiinale re-idt, 
 would i)roi)erly end in -.ellim; or in receivin^j; payment lor 
 ^oods. 'i'hat would he .i kind of clas- ; factors, and agents 
 in the cl.is- of factor,-. If ^uch .1 person i- " eiuru-ted " and 
 •' is cii/ni.<frJ ill tfiaf i(jp,ici!\\" then, in the absence of h.id 
 I'aith on the pari of the ]ilediiee, the pledge is L;ood." 
 
 See also Hu-h v. l-r\, i5 0nt. R. p. 122 ( i,SS7), where llu- 
 nie."iidn;4 of the word a^eiit under t'u- H. S. ot <)nt. (1NS7) 
 Call. r::S, was discussed. See also the rem, irks of Hurton J. 
 
lOfJ 
 
 15\.\K> \Mi II\.NKIN(, 
 
 in 
 
 I'lmant v. rni,,n l;,ink. ivOnt. K. at up. jS r.iid -., 
 
 'I'Ih' incaninu uf the Nvonis -'ami surh person shall !r 
 <l^'unM| ihe possessor,,! -oods or documents of title as 
 well II ihc sa.iic arc held l.y any person t\>r h;n, or sill) 
 Jtrt to his .-onlrol a> ifhe is in actual possession thereof," a > 
 used in the ro,;cludin- part of i;,e deliniii.jn <;f a-cnt m s,. 
 "'^"73, ss. 3, will he found discusse.l in the rase of l'urlall^ 
 V. Fetlcy, I, R. 5 |.;,| ,,jo (r.sr,;) where it was held that "a 
 ta'-tor hy jiled.u'in- goods in his pos-jssion or under his eon 
 trol, as a-ent, for an ainoiun wliiri, did not exhaust their 
 value had not thereby parted with his co.Urol uver the -oods, 
 -o as to preclude himself from uiakiiv^ a further pledge 
 f"! the. balance of their value, which should he valid as 
 a-ainst the primipal under the Factors Acts." 
 
 AS IT) xoncr: ok K\t)\\\ i-ah,; mi .\i;k 
 
 .N( V. 
 
 1,1 
 
 i 
 f 
 
 Ill^(■l■lJ(■l ; I 
 '•I "A,I;.-ii!. 
 
 L'nder this Act no ])rovisions are made similar lo th(^se in 
 the hactors Acts as to the effect of notice to the bank of the 
 fact of t!',e person pled^iuL' beinu an anent. 
 
 ll is submitted that the bank's title U> a warehfuise receiiU 
 
 (I) would be invali.l if the baiik had notice diat the a,L;ent 
 pled^iuL; had no power to pledge ; 
 
 (::) Would be valid if the bank had notice that the a^ent 
 lilcdging was an agent but had no notice that such agent. 
 was exceeding his powers as between him and his princij.al : 
 
 (3) Would be valid a fortiori if the bank had no notice 
 that the person pleilging was an a'^ent. 
 
 • ). [11 this scctioii tile ('\i)rcssioii •• ;i;i-eiit " 
 mcuiis ;iiiy piM.<()ii iiitiiisuMl with the [iDs.^essiDii 
 i>l -ooils. w.-iivs ;i!i(l inoivhaiiiliso. or to whom 
 tiu' same arc coiisiuiH'd. or who is possessed of 
 aiiv hill of lading, recunpt, order, or other (hieti- 
 tneiif ii<ed in th(> course of hiisiiioss as proof of 
 the iios.sessioii or coiitiol of u'oods, wares and 
 
Ilrs(\is^ \Mi r..\M,K- oi iin. I'lWk 
 
 HIT 
 
 mi'i'cliimdisc. or aiit liDri/.iiiLi or |Mir|ioiiiii'^' tn 
 authorize, t/itlu'r l>y iiidoi'st'iiiriit oi" liv (leli\iMv. 
 tilt' poj^scf-sor dl' siii'li (IdciiiiK'ii t to traiist'tT di' 
 rc'ci'i \t' t ln' li'ooiIs. \vai<'S and iiu'ri'liaiidisc I licit' 
 l)V i'c|)»t'si'n!('d : and siicli piTsoii >liaU In- dci'iii- 
 I'd flic [)os.>-t's,sor ol' sticli ii'ocds, \\ai'<'s and iiici- 
 cliaiidisc. hill oi' ladiiiu'. rci'c;i;)t, oiv'd'. or oihcf 
 do(Miiiiciil as ;doi'cs;iid, as ^vcli il' the same mc 
 li(dd hv aiiv |)ci'soii toi- liiiii of siiiijcct to his 
 (jontrol as il'hc is in actual possession thefcol", 
 
 (i;.s.r.. cap. I 'JO. sec. •').■;,) 
 
 f i The hank nia\ lend uionc\ toan\' pei'-on i,.i,im>i<> 
 
 * ' . . • • • ' uli(.lr«al.' 
 
 eiiii'aiicd in husiness as a wholesale man niactii rev niMimi.i.iM,. i, 
 ol"ini\' Lioods. Wares ai.d nicrchandi>e. upon the 
 security ol' the lidods. wai'cs and ineK'handise 
 uninid'artnred \)y him or prociircd lor -ueh 
 MKUinlacture : 
 
 'J. The hank may also lend money t<t aiiyi,,,.,,,>ioc.'i- 
 
 , ' . . ' ■ tain wliMlcsali- 
 
 vvliolesale purcliasicr or sinpper o! iirouuct- ol imi.hMs.i- ..r 
 
 auriculture. the lorcst and mine, or the sea. 
 
 hikes and risers, or to ;iny wholesale purchaser 
 
 or shipper of live slock or di ad stock, and the 
 
 pruduets thereof, upon the svcurily ol such pi"- 
 
 ducts, or of si'ch li\e stock "V i\i':\i\ stecj<.,ii;d 
 
 the products thci'eol': 
 
 3. Su(di s(!cui'ity may he ui\e)i hy the owner Konn ..f 
 and niiiy he taken in the loiin set !orth in Sche- 
 dule C to this act. or to the like elleet ; and In 
 virtue ol" such security, the hank shall ac4nire 
 
 * 
 
IDS 
 
 H\NK> \M» IIWKINCi 
 
 tlu' siiiiic ii;;lits iiiid poNNiM's in ri>|)cct to tlio 
 •xoods, wiii'L'.s iiml iiit'i('li!iii(lisi'. stock ni' j»nMliict> 
 t'ovdrd tliurL'l)V, iis il it li.id iii(iiiir»Ml tlu' Siiiii«r 
 Ity \ irhic dl' ;i w iirt'liniisc I't'cfipt (New. Siili- 
 stitiitcd lur II.S.C. call. I'JI). sec. •'>!.) 
 
 M \M \ M I I. KI.K, 
 
 'I'lu' \v(ii(l • \l.ii,iit',i( ;iiri.r ' i*' hy sec . j, ss, (f,) dLlmcd as 
 tbll(j\\> : " I'lic \v(ii(i " iiiamir.ictiiiLi " itK luiki mal^lcis, dis- 
 " ti!lciv, liiiwcrs, rc'liiur^ and luudiict. i>,()t' pilnilciiiii. t.iniKis, 
 " ( utci>, iia( kci^. < ariiKis lit' iiiL- II, iM.ik, ri>li. Iruit Df vcLict 
 " ahk's, and any pirM.n wlm lunduccs liy hand. ail. piiHcss 
 " iir niK lianu al mcaii^ an)' l;(|(hIs. wares nr nicn h. tidijic." 
 
 i;'>(i|i-, w AKl- wn Ml.kCIIANhl.sl,. 
 
 This Lxpixssitjn is by sec 2, .ss. (r, ) dcfMifd as follows : 
 '• The expression ' i^oods, wares and nierclianch'se ' inrludcs 
 " in addiliun lo ihelnings usually understood tlierehy, limber, 
 ■■ deals, hoards, '•laves, sawlof^s and other li.niher, ]ietrolcuin. 
 '• crude oil, and .ill a^ric ullural |)rodu(\.' and other articles o| 
 " coininerce : " 
 
 The iMcvious iiank Acts contained a section, whi( h has 
 been omitted Irom liiis act, ^'ivinj.; ])ower to persons excrcis- 
 mii cjitain trades lo issue warehouse recei]»ts b) way of 
 security to a bank on their own tioods, wares and merchan- 
 ise stf)rcd in their own yards or warehouses.- (Sec R..S.(."., 
 cap. I JO, sec. 54) 
 
 In lieu of this omilled section, the [iroent section has 
 been substiluled. It em])(jwevs a bank to lend money lo 
 wholesale manufacUirers (as above defined) upon the secur- 
 ity of goods, wares and merchandise manuficluretl b)' them 
 or procured for such manufacture. Il further empowers a 
 bank lo lend money to any wholesale purchaser or wholesale 
 shipper of certain products, and live and dead stoi k a^ men 
 tioned in sul)-sec.ti(Hi 2. of the above sei lion upon the 
 security ol such oroducts and \\\v and dead stuck. 
 
 \ 
 
Ill >IM>> Wli I'dWIU^ (i| nil r.WK 
 
 Id!) 
 
 SI ( IKI n i;v will '\l hi l!K i.l\ I.N. 
 
 Sub-section ;, piovitlcs that ihc scnirity hureumicr in.iy he 
 .'wen liy the owner — it seems to us that in most, if nut in .ill 
 eases, the sei iiiity must \)c f^iveii hy him. Ii -.ci'ins iiue-.ii( li- 
 able if it ran he i^iven hy an at;ent. .Action 7_^ seems to 
 imil the power (jf a^nts to the ^ivin;; of warehouse receipts 
 as thereby provided for. No pledge of goods to the bank is 
 valid imli'^-. .Mith.iri/ed by the act, (see -Jei . C>]), .\o express 
 aiuhiirity )■> :;iv(ii, by this or any other sccnun, to agents to 
 ple(l.;e nndir s..( tioii 71, and we (an tind no imi)lied author- 
 ity imle-.s i! i> coiil'erred by that part of sub <(.( lion 3, which 
 declares that the bank shall acfpiire the sam-' rights to the 
 goods covered by tlu' serurity as it' it had at 'piired the -ame 
 by virtue ot a warehouse ici t.ipt. 
 
 -!( fKll\', IN u II \ 1 1 1 ik\l. 
 
 'I'he security may bi.' taken ii. the lorm set loith in Sched 
 ule ('. to this Art, or to the like effect. 
 
 The torm given in Schedule ( '. is as tolh^v.-; : - 
 
 In consideration of an advance of dollars, 
 
 made by the (//irwr of I'lVik) to .A. l!., for which the said bank 
 hokls the following bills or notes {i/tscn'/'i' fully llu hilh or 
 notes, lh\ti, if (111 y), the goods, wares and inert h.mdise men- 
 tioned below are hereby assigned to the said bank as secmity 
 f )r the payment, on or l)efore the day ot 
 
 of the said advance, together with interest thereon at the rate 
 of per cent, per annum from the 
 
 day of (01% of the s.iid bills and notes, or rene.vals 
 
 thereof, or substitutions ilKnt'or. and interest thereon, oros 
 file Ciise may I'c). 
 
 'I'liis security is given under the provision^ of siction 
 sevenl\-lour of "The Hank .\rt," and is subject to all the 
 provisions of the said .Xct. 
 
 The said gocjds, wares and men handise are now wwiicd 
 '~iy and are now in possession, and are free from any 
 
 mortgaue, lien or charLre thereon, (or o^ /,), .,!>,■ i/uiv l>,), and 
 
 A 
 
110 
 
 ]j\.\K- AM) DWKI.^ 
 
 u .\ I ; 
 
 arc in ( phuc or places where ^cuuh are), and arc the fullow- 
 iny : ( parlieiilar desenN/on (/ i^,i,>i/.< assii^neii ). 
 Dated at ,y 
 
 I'-iR \vii.\r i\iii.i:rij)\i.s.> c\.\ Till, ,>LcuKii\- i;k iakmn ^ 
 
 'I'hc section itself provides that the l)ank may lend the 
 uiuney upon the security. The form, Scliedulc C, l)y the use 
 ot the word "advances," indicates that the bank may advance 
 the money upon the security-the 75th section, however, 
 imall\ determines the jjowers of the hank in this res])e(;t. 
 The security must be ij;iven (jr mu^t be promised in writiiy' 
 to bi' u'lven U) the bank cotemporaneously with the advai.ce. 
 
 I.ilTX r 01 IHI'. SIXUKnA- Wlll.N (;|\|;x. ANT) I'oWl KS; 
 
 Kiiwrrs, AM) ki;mi:i)|i> ok riii. i;ams riii:i;i-.i-M)i:R, 
 
 This is declared in sub-section ^5 :- 'i'lie bank shall possess 
 the same rights and powers, under the security over the goods 
 cjvered thereby as it W(.)uld possess under a warehouse 
 receipt, covering such goods, duly acquired under the other 
 se.aions ui the Act. .See sections 73, 75, 70, 77 and 78. 
 
 A doubt has l)een raised whether the se( urity i reated uii 
 der sec. 7.1 wouUl be valid in Ontario withcut registration, as 
 required by the Cliaitel Mortgage .\a. We think that no 
 regi tration of tlie sectirit\- is re(|Uisite to perserve its vabdit\-. 
 U'e think thai the rights of the bank to demand and take 
 "ossession of the gootls cove'ieil by the >ec uiiiy are the same 
 a:, if it held a waiehouse receipt covering such goods. See 
 ori thi^ jjoint notes to seclion 7-,. 
 
 If the debtor, al'ier the maturity of the debt, wilfully with- 
 holds from '.he bar.k possession of the goods upon demand. 
 he is liable to be pimished criminally. See sec. 75, ss. 4. 
 
 (;km;r\i, ri-makks. 
 
 'I'his section li.is not yet been the subject of iudicial deci- 
 sion, the general temlenry ot the courts, however. especialK- 
 in Ontario, has been to re->tri(T rather than enlar^e the Ian- 
 
 
Lr>iM -- AMj ]'m\slk> or iiii. i; 
 
 ANk 
 
 111 
 
 Kuaue of the waiL-hnu.sc clauses of the liank Ad .Sonic of 
 the judi^es seem to entertain strong views ajzam^t tl:e (lolicy 
 ol these clauses and their decisions rellect then views. The 
 prohability is that this section will receive a pretty strict and 
 rigid construction when it is presented to the Courts for inter- 
 pretation. In view, therefore, of this tendeiK-y it would he 
 wise in drawing a security hereunder to give as lull a descrip- 
 tion of the goods and nt their locality as the nature vi the 
 case adiuits of. In 'I'ennant's case, 19 Aiij). R. i (1S9J) 
 referred to m the nc^tes tcj section 7,5, it was 
 intimated that logs lying in rivers and in transit 
 from the timber limits where they uv.c cut, to the mills 
 where they were to he sawn, could not he pledged under the 
 then Bank .\ct, because they could not be -aid to !)e in a place 
 or places kept by the person pledging tlie same. \Ve think 
 that logs so situated can be i-ledged under this section. 
 
 7.1. The i)imk ^^liall not ;u'(|iiiti,' nr hold any v. 
 warelioiise receipt or liiil of ladin^u or secMiritv >'■■ 
 under tlie next precediim' sc-ctioii to .-eciiru the 
 piiynieiit (A' niiy bill, note oi' del.r. uule.ss siich 
 hill. )n)le or debt is m-Mot i;ite(l or eontr.icted ill 
 the time of ihe ;ic(|uisition theieof h\ the h;ink, 
 or npoii the w-^ten promise oi' agreement that 
 .-uch ^varell(ill,se reetdpt or hid of ladinLf or .sec- 
 urity would he ,uiven to the hank: hut .such 
 hill, note or deht may l)e I'eiiewed. or the time 
 tor the payment thereol" extended, wiihout 
 
 alVcctiu,!;' any .such sccurit v : (R.S.C. cau I'll 
 "'.,11 , , ' ^ ■'•■-> 
 
 •l li .I nil 
 
 ■Mi'ily limy 
 .i'|iiii-('(i; 
 
 sec. -J.'*, .ss, 1, changed.) 
 
 To negotiate is to transfer f.^r valuable consideration, per 
 Richards h in i'oster vs. P,owes. 2 Ont. P.R, 2^() (iS;-i 
 \Vhere a bank holds warehouse receii)ts to collaterally secure 
 the i»ayment of notes, and the notes become f)verdue, and an 
 extension of time is agreed on, the delivery u[M,f the receipts 
 
112 
 
 Danks ami liwkixi; 
 
 I 
 
 and Mvcrdui' notes, hcinti ^ surrender of the hank's lien, is a 
 valuable consideration for and therefore a negotiation of the 
 ncw renewal notes, or else it is (jnly a substitution or continu- 
 atioi'i of the serurilies. Bank of Mamilton vs. Xoye. <j (). R. 
 6,:; 7 (18S5). 
 
 liiit u-heii there is a simple renewal of existing papi. r and 
 the taking of warehouse receiuts on such renewal — no new 
 advance l.)eing made and no valuable consideration uiven or 
 surrendered contemporaneously i)y the hank which might 
 re|)resent tiie inception of a new transaction or negotiation of 
 securities, lloyd, ("hancellor, held the warehouse receipts m- 
 vaiid — I )omiiiion Dank \s, ( )liver, 17 Ont. R. 40^ (iSSt)). 
 
 In some of the former statutes the word •• understandmg ' 
 was used. It was afterwards changed to the wonl •• proun-;e."' 
 This a<;t makes a further change ami requires t!iat there 
 must he a ''written promise or agreement." 
 
 'I'his section prohibits the hank froui acijuiring a ware- 
 Ixnise receipt or bill of lading or security under section 74 
 to secure the payment of any bill, note or deljt unless. 
 
 (i) Such hill or n:)te is negotiated or deiit contracted at the 
 time of the ac(iiiisition of such warehouse receipt or bill of 
 lading or security by the bank. 
 
 (2) Or unless such hill or note is negotiated or debt con- 
 tracted upon the written promise or agreement that such 
 warehouse receipt or hill of lading or security will afterwards 
 be given or transferred to the bank. 
 
 Conseciuemly, in I'he Ro)al (."anadian Hank ss, Ross, 40 
 V.C.i) V>.. 466 (1S77), it was hel.l, 
 
 KiKsriA :— that the corresponding sections in 34 \';c. c. z,, 
 sees. 46 and 47. ])ermit the transfer to a bank of a bill o 
 lading or warehouse receijit to secure an antei-edent debt 
 where the " |)romise "' at the tini« of coinracting such debt 
 was that the bill of lading or w.irehouse recLipt should there- 
 after he transferred as collateral security theretor : 
 
 Sf.coniiLV ; — that an agreement made at the lime the debt 
 was incurred to the bank, to give warehouse receipts on good- 
 which the person at the time of the makm..; 1 )f the aureement i-- 
 
U US I. NESS AND Powers of Ti.. Bank 
 
 113 
 
 not possessed of, if followed by the subsequent giving of such 
 warehouse receipt, in pursuance of such agreement, gives to 
 the bank a valid charge thereon under this section (see 
 specially p.p. 467, 475 and 476). About the same time a 
 similar decision was reached by the Court of Chancery in 
 Ontario, reported as Suler vs. The Merchants Bank of 
 Canada, 24 Or. 374, (1877). 
 
 See also McCrae vs. Molson's Bank, 35 Or. 519, (1878). 
 
 Bank of Hamilton vs. Noye, 9 Ont. R. 630 (1885). 
 
 Cockburn vs. Sylvester, i Ont. A. R. 471 (1877), over- 
 ruling in re Coleman, 36, U.C.Q. B. 564, (1875J. 
 
 It was held in the case of Cockburn vs. Sylvester, just re- 
 ferred to, that there is no " debt " contracted, within the 
 meanmg of this section, by a drawer to an accommodation 
 acceptor, at the time of the giving of such accommodation 
 acceptance so as to support a concurrent endorsement, by 
 such drawer to such accommodation acceptor, of a ware- 
 house receipt, although it is quite possible that a debt may 
 arise by reason of the acceptor being subsequently com- 
 pelled to pay the acceptance. 
 
 As to the meaning of the words " debts contracted " see 
 notes to section 68. 
 
 If the warehouse receipt, bill of lading or security is validly 
 aciiuired, the debt or bill or note representing same, may be 
 renewed, from time to time, without affecting the security. 
 
 2. The bank may, on .shipment of any goods, 
 wares and merchandise for which it holds a ^vXUn^l'v,- 
 
 . . . . . , <>'il't 1'"' li'll 
 
 warehouse receipt, or securitv as aloresaid, "" i''i"- »!"» 
 
 ^ ' " ' (■((•( mail. 
 
 surrender such receipt or security and receive 
 a bill of lading in exchange therefor, or, on the 
 receipt of any goods, wares and merchandise 
 for which it holds a bill of lading or security, 
 as aforesaid, it may surrender such bill of lading 
 or security, store such goods, wares and merchan- 
 dise, and take a warehouse receipt therefor, or 
 

 114 
 
 Banks ani' P.ankim 
 
 - :| 
 
 Pi'iialtv tor 
 niakiii.ir false 
 statement. 
 
 I'ciiniiy tnr 
 alii'iiat'in;.' 
 :j(iiicIs so scc'lir 
 
 may ship tlieiii. or \k\v{ of tlu'in. iiiul take 
 another hill of ladiiiLr therefor : 
 
 This subsection was first added to the Bank Act in iSSo. 
 It declares that the goods covered I)y the warehouse receipt 
 or security under Sec. 74, may l)e transported from one 
 place to another without destroying the lien of the bank 
 thereon. Tt thus facilitates the marketing of the goods. 
 
 It would seem to us that without the aid of this section 
 t^e bank, so soon as it had ac(]uired a valid title to a ware- 
 house reccii)t under the act, could demand delivery of the 
 goods according to the tenor of the warehouseman's under- 
 taking and having acquired possession of the goods, could 
 ship them or store them as it pleased. It will be observed 
 that the powers expressly given by this section, are extended 
 to goods assigned to the bank as security under the nev 
 section 74 as well as to goods secured by warehouse receipts. 
 
 o. Everyone is ^u'uilty of a mhsdemeinor and 
 liahle to imprisonment for a term not exceedinii' 
 two years, who wilfully makes any false state- 
 ment in any warehouse receipt, hill of lading ov 
 security, as aforesaid. (R.S.C. cap. 120, sec. Oo. 
 ss. 7.) 
 
 4. Every one is iruilty of a misdemeanor and 
 liahle to imprisonment for a term not exceeding 
 two years, Avho, having possession or control of 
 any goods, wares and merchandise covered l)y 
 any warehouse receipt, hill of lading or secur- 
 ity as aforesaid, and having knowledge of such 
 receipt, hill of lading or security, and without 
 consent oi' the hank, in writint!; and hefore the 
 advance, hill, note or debt thereby secured has 
 been fully paid, wilfully alienates or parts with 
 any such goods, wares, or merchandise, or wil- 
 
mff 
 
 I>i;siNi>s ANii IViwi.Ks (>v riii; 1')\nk 
 
 115 
 
 full V withholds iVoni the bunk possL'ssiuii tlu-rc- 
 of upon (leniiind aftoi- default in j):iyuient of 
 such advance, hill, note or debt. (New.) 
 
 See turther as to criminal offences in connection with 
 wareliouse recei|)ts and as to the jiunishinent theref(jr, sec- 
 tions 376, 377 and 37S of the (Criminal C'ode of 1892, 
 which comes into force on the first day of July 1S93. 
 
 The above sections will be found heroin printed after the 
 Bank Act. 
 
 70. If goods, wares and merchandise are 
 manufactured or produced from the goods, wares 'j; 
 and merchandise, or any of them, included in or ''' 
 covered bv any warehouse recei[)t, or security 
 given under section seventy-four of this Act, 
 while so covered, the bank holding such ware- 
 house receipt or security shall hold or continue to 
 hold such goods, wares and merchandise, during 
 the process and alter the completion of such 
 manufacture or production, v/ith the same right 
 and title and for the same })urposes and upon 
 the same conditions as it held or could have 
 held the original goods, wares and merchan- 
 dise. (R.S.C. ca}). 120, sec. "»('). changed so as 
 to bri}igall clashes of goods within itsoperation ) 
 
 It was said ir. the case of Mason vs. (Ireat \\'estern Ry. 
 Co., 31 U.'".(J.r.. 73 (1S71), that where wheat is delivered 
 to a miller and an ei[uivalent ijuatility of ll )iir delivered in 
 exchange, the llour shtjuld be considered the produce of the 
 wheat by the custom of trade. .See also on this same point 
 Coffee vs. The (Quebec IJank, 20 L'.C'.C.P. iio (1869) and 
 555 (187c); ///;■•• Coleman 36 L'.CC^.IJ. 559 (1875); Dank 
 of Hamilton vs. Noye, 9 Ont. R. 63 (1SS5). 
 
 iiiiit'i turi'd 
 II .'irtic'lt'S 
 
in; 
 
 Banks and ]5anking 
 
 Prior claim oi 
 the bunk over 
 
 77. All advances made on the security of 
 
 IIIC DilDK ovur . 
 
 uni.iii,i V. iHior j^^j^y jjljl ^^,f lading or warehouse receipt, or 
 security given under section seventy-four of 
 this Act, shall give to the bank making such 
 advances a claim for the repayment of such 
 advances on the goods, wares and merchandise 
 therein mentioned, or into which they have 
 been converted, prior to and by preference over 
 the claim of any unpaid vendor ; but such pre- 
 ference shall not be given over the claim of any 
 unpaid vendor who had a lien upon such goods, 
 wares and merchandise at the time of the 
 acquisition by the bank of such warehouse 
 receipt, bill of lading, or security, unless the 
 same was acquired without knowledge on the 
 part of the bank of such lien. (R.S.C. cap. 120, 
 sec. 57, slightly changed.) 
 
 " OR INTO WHICH THEY HAVE P.EEN CONVERTED. 
 
 Where goods covered by a warehouse receipt are manu- 
 factured or converted into something else, this clause recog- 
 nises the right of the holder of the warehouse receipt or 
 security under sec. 7 ; to a lien on such new product : — see 
 also the preceding section. 
 
 It would seem to us that the lien holder would have been 
 entitled to follow the products of the goods covered by this 
 warehouse receipt so long as he could have identified them 
 ([uite apart from any special legislation on the subject. 
 
 " AND I!V l'Ri:i-ERENCE OVER THE CLAIM OF ANY UNPAID 
 
 VENDOR." 
 
 These words probably have reference to the privilege of 
 the unpaid vendor under sections 1998 to 2000 of the 
 Civil Code of Lower Canada. 
 
«w 
 
 IJL.-INI..^.-^ AND PC'Wl.KS dl' IHI. ll.WK 
 
 II' 
 
 7H. Ill the event of the iM)ii-i);ivinent at ma- >^ 'i' "' -^oi'^ 
 
 I •• nil Hull pay- 
 
 turitv of aiiv debt secured hv a warehouse ve- """" "''''*'h'- 
 ceipt or l)ill ol" ladinji', or security given under 
 secvion seventy-fourof this Act, the bank may sell 
 tli«' uoods, wares and merchandise mentioned 
 therein, or so much thereof as will sullice to pay 
 such debt with interest and expenses, returning 
 the over])lus, if any, to the j)erson froni whom 
 such warehouse receipt, or bill of lading, or se- 
 curity, or the goods, wares and merchandise 
 mentioned therein, as the case mav be. were ac- 
 quired; but such power of siile shall l)e subject 
 to the following provisions, namely : — (R.S.C., 
 cap. 120, sec. 55, slightly changed.) 
 
 2. No sale without the consent in writing of 
 
 Nntii-o t'l lie 
 
 the owner of any timber, boards, deals, staves, fu'llf 'j^ol^'is 
 saw logs or other lumber, shall be made under'""'"' 
 this Act until notice of the time and phice of 
 such sale has been given by a registered letter, 
 mailed in the post office to the last known ad- 
 dress of the pledger thereof, at least thirty days 
 prior to the sale thereof; and no goods, wares 
 and merchandise, other tlian timber, boards, 
 deals, staves, saw logs or otlier lumber, shall be 
 sold by the bank under this Act without the 
 consent of the owner, until notice of the time 
 and place ot sale has l)een given by a registered 
 letter, mailed in the post ollice to the last known 
 address of the pledger thereof, at least ten (hiys 
 prior to the sale thereof : (R.S.C., cap. I'JO, sec 
 78, ss. 2.) 
 
118 
 
 IjANKS and 1] NKIM 
 
 Sale 
 tidii 
 tice. 
 
 Iiy iiuc- 
 II Iter no- 
 
 '■\. Every Hiich sale of any article nientioned 
 in this section, without the consent of tlie owner, 
 shall he made hy puhlic auction, alter a notice 
 thereof h_\ advertisement, stating the time and 
 [)lace thereof, in at least two newspapers pnl)- 
 lished in or nearest to the place where the sale 
 is to he made; and if such sale is in the Pro- 
 vince of (^lehec, then at least one of such news- 
 l)apers shall he a news[)aper puhlishcd in the 
 English languiige, and one other such newspajjcr 
 shall he a newspaper puhlishcd in the French 
 language. (R.S.C., cap. J2M, sec. 78, ss. 3.) 
 
 Section 78 and its sul>scctions confer on a bank, on de- 
 fault in payment of its debt, power to sell the goods, wares 
 and merchandise pledged to it under a bill of lading, a ware- 
 house receipt, or a security taken under section 74 of this 
 Act, but such power of sale is made subject to certain con- 
 ditions. 
 
 In the first place. —Without the written consent of the 
 vendor no sale shall be made until the bank has given to the 
 pledger in the manner prescribed, thirty days notice at least 
 in the case of timber, boards, deals, staves, saw logs or other 
 'umber, and ten days notice at least in the case of other 
 goods, wares and merchandise of the time and place of such 
 sale. (See sub-section 2.) 
 
 In I'HK NEXT PLACE. — The sale must be by public auction 
 and must be advertised as prescribed in sub-section 3. 
 
 Suppose the bank disregarded the provisions of sub- 
 sections 2 and 3, would the sale be void, so as to give no 
 title to a h>/i(7 fide i)urchaser of the goods from the bank, or 
 would the sale be good, and the bank liable to an action at 
 the suit of the pledger of the goods? In other words are 
 the provisions directory or imperative. 
 
 Now section 78, sub-section i, which gives the power to 
 sell, declares that such power shall be subject to the follow- 
 
^■P' 
 
 Ili:>INESS AND I'OWKRS OK THK li.Wk 
 
 11!) 
 
 ing provisions; and sub- section 2 declares that no sale shall 
 be made unless notice thereof is ,<^iven as thereby ijrescribed. 
 It would r,cem to us, theref(jre, that the ijivinL; uf this notice 
 in the manner prescribed is imperative, and that the power 
 to sell only arises after this re'|iiirement has been duly ful- 
 filled. 
 
 It would follow therefore that unless the notices were 
 t'iven as i)rescribed by the Act the :sal>^ v.uuM bv_ ii,.ali.!. 
 
 The requirements of sub-section 3 are couched in affirma- 
 tive lauL^uage only. They are requirements regulating the 
 conduct of the sale after the power of sale has arisen and. we 
 are inclined to think, are directory only — consequently, the 
 failure to observe them would not make the sale invalid, so as 
 to enable the owner of the goods to follow them into the hands 
 of a purchasei. Ihe owner liokvevi_i, noulu not be wuIiohl 
 a remedy as the bank would be liable to him for any 
 damages caused by the non-observance of the statutory re- 
 (|uirements. 
 
 7«K Every l);ink whicli violatos any provi.sion 
 coutuiued in any of the sections nninbered .sixty- .'muav.iit'lon. 
 
 four to seventy-uiuiit (both inehisive) .shnll 
 incur for each viohition thereof a penalty not 
 exceedinii: five hundred doUars. iR.S.C. c. 12 K 
 
 SPC 
 
 ss. 
 
 •15, ss. '2.) 
 
 Under the rei)ealed Act penalties were only imposed for 
 breaches of some of the sections which correspond to 
 sections 64 to 78 of this Act. 
 
 According to the Bank of Toronto vs. Perkins, 8 S.C.R. 
 603, (1S83), discussed in the notes to section 64, the above 
 penalties are cumulative. 
 
 cSO. The l)ank shall not be liable to incur any ■>■" i»'i'iity 
 
 •^ t'lr usury. 
 
 penaltv or forfeitiu'e for usury, and uiav sti])u- 
 
 late for, take, reserve or exact anv rate of 
 
 interest or discount not exceeding seven per \vi,,ui,it.ivt.t 
 
 1 • 1 i I • "I'ly 'ji' ai low- 
 
 cent, per annum, and may receive and take in .i. 
 
121) 
 
 liANkS ANMi H.WKtNO 
 
 sidvaiu'c jiiiy such rntt', hut no liii^lun- rate oi' 
 interest shall hr re(;<)venihle hy the hank : and 
 the hank may allow any rate ol interest what- 
 evei ii])on nioiusy deposited with it. (H.S.C. 
 n\\). 1"J(). see. 01.) 
 
 The cicncral cfTcct of this and the succeeding section is to 
 except contracts of a bank from the operation of the laws 
 relating to usury that may be in force in any o( the provinces 
 so that the hank is thereby not only relieved from the 
 pecuniary jjenalty (if any) mentioned in such laws but the 
 contract and security given for the moneys loaiv.d is saved 
 from forfeiture thereunder. Commercial Bank vs. Cotton, 
 17, U.C.C.P. 214 and 447, (1867). It would aj.pear that a 
 bank on making a loan may stipulate for any rate of interest 
 or discount without invalidating the contract— but if com- 
 pelled to sue can only recover from the borrower interest at 
 a rate agreed ujjon not l)eing more than 7 per cent. ]oer 
 annum, and the collection and agency fees, if any, allowed 
 by sections 82 and 83 ; but in the absence of any agreement 
 for the payment of such interest, the bank if compelled to 
 sue can only recover the interest allowed by the general law 
 on the debt sued on. Royal Canadian Bank vs. Shaw, 21 
 U.C.C.P. 455, (187 i), also C.S.C. cap. 127 sec. 2, 
 
 It would appear also that if a bank is actually paid interest 
 in excess of seven per cent, such excess cannot be recovered 
 back by the person who paid the same. See Quinlan vs. 
 Gordon 20 Or. App. i, (1861), and Hutton vs. Federal 
 Bank, 9 Ont. Pr. R. 5 68 (18S3). 
 
 No instmni.Mit «!. No proniissory note, hill of exchanue or 
 
 to be voiil on ,1 , • 1 1 • , T -, , ' . 
 
 mound or other negotiahle securitA" discounted hv or m- 
 dorsed or otherwise assigned t(; the hank, 
 shall he held to l)e void, usui-ious or tainted 
 by usur}-. as reg^irds such hank, or any maker, 
 drawer, acceptor, indorser. or indorsee thereof 
 
r.I>INI.-S \Nli TiiUKKS (II I HI. I'lANK 
 
 rji 
 
 or other party tlicrc'to, or A"//-' ,/''^'' lioUk-r tlu-ri-- 
 ()!'. iiov shall any party thoroto he suhject to any 
 [)uiialty or rorfeitiirc hy reason of any rat^- of 
 intoroHt taken, sti[)nlate(l or received hy siu-h 
 hank, on or with res[)ect to such [)roniissory nite. 
 hill of exchange, or other neoutiahle secmity, 
 or paid or allowed hy any party thereto to 
 another in compensation lor. or in consideralii>n 
 of the rate of interest taken or to he taken 
 thereon hy such hank ; hut no party thereto, 
 other than the hank, shall he entitled to re- 
 cover or liahle to pay more than the lawful rate 
 of interest in the Province where the suit is 
 hrought, nor shall the hank he entitled to re- 
 cover a higher rate than seven per cent. i)er 
 annum ; and no innocent holder of or psn'ty to ^ ^ ^^^^^^^.^^^^ 
 any promissory note, hill of exchange or other ''■'''''^^"*' 
 nesiotiahle securitv, shall, in anv case, he de- 
 prived of any remedy against any part\' there- 
 to, or liahle to any penalty or forfeiture, hy 
 reason of any usury or oilence against the laws 
 of any such Province, respecting interest, com- 
 mitted in respect of such note, hill or negotiable 
 security, without the complicity or consent of 
 such innocent holder or party. (R.S.C. cap. 120 
 sec. 02.) 
 
 See notes to [jreccding secliun. 
 
 StJ. 'i^he hank may. in discouiUing at any oiV 
 its places of business, branches, age-ncies or ol- 
 fices of discount and deposit, any note, bill or 
 other negotiable security or paper p:iyable at 
 
 1.-I10II 
 
VJ'2 
 
 liAXKs ANI) liWKIN*; 
 
 (iny otluT of its own places or scuts of business, 
 l»niii('lius, iigoiicics ())• oHictis of (lisc(uiiit iiiul de- 
 posit ill CiUi;i(I;i. reccisc or retain, in addition to 
 
 tlu; (Jisconnt. anv amount not oxcoodinu' the fol- 
 
 1 • ' 
 
 iowinn' i-ates per cent accordinii' to the time it 
 
 iias to rnn. on tiie amount of such note, hill or 
 
 other neiiotiiihh' sreinatv or [)ai»er. todefruN- th<; 
 
 expenses attendin-' tiie collection theicof, that 
 
 is to ,siv : nniK-r tliirty daj's, une-ci,i:lith of one 
 
 l»er cent ; thirty days or over, hut under sixty 
 
 days, one-foui'th of one percent ; sixtv days and 
 
 over, hut umh'r ninety d;iys. three-ei-hths of 
 
 <>'••' T"!' '"'Mt ; niiiety <lays ;iiid ox'ei-, oiH;dndf 
 
 of one per cent. (IJ.S.C. c:ip. 12(1, sec. ():;). 
 
 This section aulhorizcs a l)ank when discounling paper at 
 any of its hrant hes to thar^'c a coilccticMi fee at the rate prc- 
 scritjcd herein in addition to the discount, for collet tinj,' such 
 pajKT when payable at any other of the branches of such 
 bank. 
 
 The ne.\t section authorizes a bank, when discounting 
 paper, to cliari^e a similar collection or agency (ec at the rate 
 prescribed therein for roUcciing such paper when payable at 
 places other than one of its own branches and other than the 
 l)lace of discount. 
 
 Aj,'(n.y r,.,.s. s;i. The haids; nniv, in discountinii' anv note, 
 bill or other negotiable security (jr paper h'u/r 
 Ihh payable at any place in Canada diileront 
 from that at which it is di.'scounted, and other 
 than one of its own [)laces oi- scnits of business, 
 branches, agencies or ollices of discount and de- 
 posit in Canada, receive and retain, in addition 
 to the discount thereon, a sum not exceeding 
 
'f 
 
 111 >1M.>.> AM) iViWEKS ill nil. l!\NI< 
 
 r.'ij 
 
 oiK'-lialf of Miic piM' ct-Mit <)i) flic iun;)Uiit tlKTcof. 
 to dt'lViiy till' cspt'iicfs ul' iii:t'iiry nnd cliiU'^os in 
 collecting the Siinic. (ll.S,C. (•;![.. 120. src f, |). 
 See notes (jii piLccdiivj: clause 
 
 SI Tln' l);iiik liiiiV receive (lo|)osit,-> tVoli) ;ui\ 
 
 _' "^ DilxmiH limy 
 
 pel'.-^oll \vll(illlSOCVcr. wllilleVt'l- Ills ilJ^'C. ■'^tiit''"^ ^>1' Ivi,!',V',\!).s',',,^ 
 
 I • . • • 1 ■ 1' I I.I I ... I ilii.l'ilr In full- 
 
 coiiditioii III hie., . Hill wlietliei' siieli person is hm,.! 
 (lUiililied by liiw to fiitei" into ordiiiiiry coiiiracts' 
 or not ; anil, IVoin tiine to time, may rep:iy any 
 {)V all of the principal thereof, and may pay the 
 whole oi' any [tart of the interest thereon to 
 .snch ])ers()n, without the authority, aid. assist- 
 ance or intervention of any person orollicial be- 
 ing re([iiired, unless before such repay nnuit the 
 money so deposited in and re^iaid by tlu; baidv 
 is liiwlnlly claimed as the property of some 
 other person, in which case it nniy be [)ai(l to 
 the depositor with ihe consent of the claimant, 
 or to the claimant with the consent of the de- 
 positor : Provided always, that if the iterson ,, . 
 making any such de[)osit could not, under the ;!,'|""""' "'"''■ 
 hiw of the Province where the de[)osit is made, 
 deposit and withdraw money in and from a 
 liank without this section, the total amount to 
 lie received from such ])er,son on deposit shall 
 not, at anv time, exceed the sum of live bun- 
 dred dollars. ( R S.(J. cap, 1 lln, sec. G-V). 
 
 Sec also ss. 45, 58, 60 and Schedule 1)., ss 5 ; and see 
 also the Bills of l-Lxchange .Act, sec. 8, ss. 4. 
 
 In /-('Central IJank— Morton and lilocks claims 17 Ont. 
 R. ^74(1889), boyd, Chancellor (overruling the master) held 
 that under the ilank Act, a bank had power to issue deposit 
 
124 
 
 Banks and liANKiNf. 
 
 
 !cCLij)ts in the fullowin^^ form : — " Received from 
 
 the sum of $ 
 " v.hith this l)ank will repay to the said 
 " ur order, with interest at 4 per cent, per annum on receiv- 
 " inn 15 d^iys' notice. No interest will he allowed unless the 
 " iiKjney remains with this bank six months. This receipt 
 " to be given u|) to the bank when jiaymeiit of either | rinci- 
 " pal 01 interest is required. Si;i;ncd, for the Central Bank 
 " of Canada, A. H. Allen, Cashier." He also stated that he 
 had a very strong opinion that such deposit receipts were 
 negotiable instruments under which the holders were entitled 
 to recover as on a promissory note, but that even if they did 
 not possess all the incidents of promissory notes yet being 
 meant to be transferred by endorsement, they were so far 
 negotiable as to pass a good title to a bona fide purchaser for 
 value, taking without notice of any infirmity of title. 
 
 It will be observed that the deposit receipts above referred 
 to were expressed "which this bank will repay to X or order." 
 Sometimes the expressions used in such receipts are " which 
 will be accounted for by thi'; bank to X," or " which this 
 bank will account for to X." It seems to us that when the 
 question is fairly iiresented for decision, such receipts e>:- 
 pressed in such language will be held to be ])romissory 
 notes ; and it may be that though they are made payable to 
 X simply, and not expressly " to X or order," they may be 
 still held to be negotiable by virtue of the Bills of Exchange 
 Act, sec. rf, ss. 4, which is as follows : — " A bill is payable to 
 " order which is expressed to be so payable or which is ex- 
 " pressed to be payable to a particular person, and does not 
 " contain words prohibiting transfer or indicating an inten- 
 " tion that it should not be transferable ; " so that if it is 
 desired to make deposit receipts " non-negotiable," it is ad- 
 visable to change the present wording of them, so as to indi- 
 cate more clearly the intention that they shall not be trans- 
 ferable. See also Richer v. Voyer L. R. 5 B.C. 461, (1S74) 
 but see also Sibree v. Trijip, 15 M. i\: W., 23 (1S46) and 
 Ho]ikins v. Abbott, L. R. 19 Ecp 222 (1875 ) 
 
 In Sader(}uist v. Ontario Bank, 14 Ont. R. 586, (1875) 15 
 A. R. 609,(1889) it was held that when A left his deposit re- 
 
i^ 
 
 Business and Powers ok ihi; 1!ank 
 
 125 
 
 Hank not 
 lionml Id soo 
 
 ceipt with B for safe keeping and B forged A's name thereto 
 and got the money from the bank and delivered up the 
 receipt, the bank was still liable to A for the amount of the 
 receipt and interest. The bank may allow any rate of 
 interest on deposits. See sec. So. 
 
 2. The Ijiiiik sliall not be bound to see to the 
 execution of any trust, whether expressed, im- lot"•usN'hi''n■■ 
 phed or constructive, to which any deposit made ,i..|K,sits 
 under the authority of this section is subject ; 
 and except only in the case of a hiwful chum, 
 by some other person before repayment, the 
 receipt of the person in whose name any such 
 deposit stands, or if it stands in the name of 
 two persons the receipt of one, or if in the 
 names of more than two persons the receipt of 
 a majority of such persons, shall be a sufficient 
 discharge to all concerned for the payment of 
 an\ money payable in respect of such deposit, 
 notwithstanding any trust to which such de- 
 posit is then subject, and whether or not the 
 bank sought to be charged with such trust (and 
 with whom the deposit has been made) had 
 notice thereof ; and the bank shall not be bound 
 to see to the application of the money paid upon 
 such receipt, i R.S.C. cap. 1 20 sec. 65 ss. 2.) 
 
 The law relating to trusts to which shares may be subject 
 is contained in sections 43 and 4.^. 
 
 This sub-section deals with the ^question of trusts to which 
 deposits made under the authority of this section, may be 
 subject and appears to confer very extraordinary powers on 
 joint depositors, enabling as it does one joint depositor to 
 draw out of the bank money deposited to the credit of him- 
 self and a co-depositor. In England it has been held that 
 
12(5 
 
 r.ANKS AN'l) li.WKlNT. 
 
 if: 
 
 sir 
 
 ; 
 
 when money is iiaid into a bank to the joint account of 
 
 several persons nominatini, it cannot be drawn out by one 
 
 of them alone, and although generally the rule is that ])ay- 
 
 ment of a d"bt to one of several joint creditors is a good 
 
 payment to all, it is otherwise under the Law Merchant in 
 
 cases arising between a banker and his customers making 
 
 joint deposits with him, Innes vs. Stephenson, i M iv Rob. 
 
 145, (1831) Husband vs. Davis, 10 C.li. 645.(1851) beyond 
 
 this the sutvsection does not seem to carry the law further than 
 
 thecar.es in England have carried it. Thus it has been decided 
 
 that the relation between a banker and his customer is that 
 
 of debtor and creditor with the obligation superadded that 
 
 the banker is bound to rei)ay his de!)t when called upon so 
 
 to do by the draft of his customer, l'"oley vs. Hill, 2 H.L.C. 
 
 28, (1848) Goodwin vs. Robarts L.R. 10, Ex. 337, (1875) and 
 
 money i)aid into an account in a man's own name \^ prima 
 facie his money and a loan by him to the banker which the 
 
 banker is bound to repay him. When a man opens an account 
 in his own name with the words " Police account " or " Ex- 
 ecutor of Jones " superadded thereto, this is notice to the 
 banker that the moneys standing to the credit of that account 
 are moneys on which persons other than the customer may 
 have ei|uitable claims. {Ex parte Kingston, L.R. 6 Ch, Ap]). 
 632 ( 1 87 1 ) and Bailey vs. Finch L.R. 7 Q.I]. 34.) ( 1871) Still, 
 notwithstanding this notice, it is the duty of the banker to 
 honor the cheque of the customer drawn on such an account, 
 even though the banker suspects, or even knows that the 
 customer intends to commit a breach of trust, and it is only 
 when the banker makes himself a ])arty to the breach of tru^t 
 c. ^. by designedly reaping some bLuefit from the same, that he 
 renders himse'flial)le to make rcsiiiution. Lord (Jairns inCiroy 
 \z. Johnson L.R. 3 E. iS: L .App. i, (1868) thus sums U[) the 
 law, — " In ortler to hold a banker justified in refusing to pay 
 a demand of his customer, the customer being an executor, 
 and drawing a cheque as an executor, there must, ii. 'he first 
 place, be some misapjilication, honie lireach of trust, intended 
 by the executor, and \.\\>c\- must in the second place, as was 
 said i)y Sir John Leach, in the well known case of Keane vs. 
 Robarts 4 Madd. 357, (1819) be proof that the bankers are 
 
^ 
 
 l!isixi;.-;s AND I'owkrs or thf. Dank 
 
 121 
 
 privy to the intent to make this misapplication of the trust 
 fnnds. And to that I think I may safely add, that if it heshewn 
 that any personal benefit to the bankers themselves is de- 
 signed or stijiulated for, that circumstance, above all others, 
 will most readily establisii fhe fact that the bankers are in 
 privity with the breach of trust which is about to be com- 
 mitted." And Lord Westbury in the same case says: 
 " Supposing, therefore, that the banker becomes incidentally 
 aware that the customer, being in a fiduciary or a reiire- 
 sentative capacity, meditates a breach of trust, and draws a 
 cheque for that puri)ose, the banker, not lieing interested in 
 the transaction, has no right to refuse payment of the chccpie, 
 for if he did so he would be making himsclt a party to an 
 incjuiry as between his customer and a third person. He 
 would be setting up a supposed y>/.v /(////as a reason why he 
 should not ])erforn-i his own distinct obligation to his 
 customer. But then it has been very well settled that if an 
 executor or a trustee who is indebted to a banker, or to 
 another person, having the legal custody of the assets of a 
 trust estate, applies a i)ortion of them in the payment ol his 
 own debt to the individual having that custody, the indi- 
 vidual receiving the debt has at once not only abundant 
 [iroof of the breach of trust, but [)ariicipates in it for his own 
 [)ersonal benefit." 
 
 See als(j. Clench vs. Consolidated liank, ^^i U.C.C.P. 
 1C9 (18S0), and Molson's Bank vs. Corporation (jf Brock- 
 ville, 31 U.C.C.l'. 174 (iSSo). 
 
 RETURNS \\\ TIIH BANK 
 
 H*i. Muiitliiy returns shall ])u made by the .m.^hiIv i-o- 
 biink to the Minister ol" Finanee and Receiver '""""'t. 
 General in the Ibrni set Ibrtli in Schedule L) 
 t(j this Act. and shall be nyade up and sent in 
 within the iirst hfteen davs of each month, and 
 
128 
 
 Banks and 15anki\(; 
 
 shall exhibit the condition of the bank on the 
 last jnri(]ical day of the mon^Ji next preceding ; 
 and such monthly returns shall be signed by 
 the chief accountant and by the president, or 
 vice president, or the director or principal part- 
 ner then acting as president, and by the man- 
 ag!!r, cashier or other principal officer of the 
 bank at its chief place of business: (R.S.C. (^ap. 
 120, sec, GG, slightly changed.) 
 
 Penalty fur 2. Evcry bank which neglects to make up 
 
 iKit makiiiir up , , ". ,. . , , , , 
 
 monthly n- and Send m, as atoresaid, any monthly return 
 
 turns in due _ ' ^ _ . . . 
 
 time. required by this section within the time here- 
 
 by limited, shall incur a penalty of fifty dollars 
 for each and every day after the expiration of 
 such time during which the bank neglects so to 
 make up and send in such return ; and the 
 date upon which it appears by the post office 
 stamp or mark upon the envelope or wrapper 
 enclosinii: such return for transmission to the 
 Minister of Finance and Receiver General, that 
 the same was deposited in the post office, shall 
 be taken in-iind fucie, for the purposes of this sec- 
 tion, to be the date upon which such return was 
 made up and sent in. (R.S.C. cap. 120, sec. 66, 
 slightly changed.) 
 
 for 
 
 Hti. The Minister of Finance and Receiver 
 siKciai returns General may also call for siiecial returns from 
 
 nmy ]k< called '^ ... 
 
 any bank, whenever, in his judgment, they are 
 necessary to allbrd a full and complete know- 
 ledge of its condition : (R.S.C. cap. 120, sec. 67.) 
 
 2. Such special returns shall be made and 
 
Returns i^.v ■nii: liwK 
 
 1J!I 
 
 signed in the miiniier and by the persons speci 
 lied in tiie next preceding section, and every ,7,,'.' 
 bank wliich neirlects to make and send in anv 
 siicli special return within thirty days from the 
 date of tlie demand then^for by the Minister of 
 Finance and Receiver General shall incur ;i [)eii- 
 alty of five hundred dollars lor eacli and every 
 day such neglect continues; and the provisions 
 contained in the last preceding section as to tlie 
 prhiKi /inle evidence of the date upon wliich re- 
 turns are made up and sent in tiiereunder, shall 
 apply to returns made under this section : Pro- 
 vided always, that the Minister of Finance and 
 Receiver General may extend the time for send- 
 ing in such special returns for such further per- 
 iod, not exceeding thirty days, as he thiidcs 
 expedient. (New.) 
 
 .ST. The bank shall, within twenty days after 
 the close of each calendar year, transmit or de- 
 liver to the Minister of Finance and Receive! 
 General, to be by him laid before Parliament, a 
 certified list showing the names of the sl.'au- 
 holders of the bank on the last day of such cal- 
 endar year, Avitli tlieii ;ulditious ami residences, 
 the number of shares then held by them re- 
 spectively, and the value at par of such shares : 
 (R.S.C. cap. 120, sec. (iS, slightly eliangcd.i 
 
 I'liiuliv inr 
 ii'ii iiiiikiiiLi- 
 
 1 return in 
 
 tiiiii' 
 
 1 r.uisimssifni 
 ii' (.'iTtiiieil 
 I -IS oi' sliarc- 
 
 Iiulil,.|-S to 
 
 Minister iif 
 FiMilllce. 
 
 2. Such list shall be delivered at the Depart 
 meiit of Finance, or shall be sent i)y registered 
 letter posted at such time that, in the ordinary 
 course of post, it may be delivered at. tlic said 
 
 M'"l ■ traii.s- 
 
 nil--iipii 
 
l'('ii:ilty fur 
 
 lK'L;lc<-t to 
 traii~iiiit siicli 
 
 lists 
 
 130 
 
 Banks and Banking 
 
 Dopartment within the time above limited : 
 (R.S.C. cap. 120, sec. 68.) 
 
 3. Every bank which neglects to transmit 
 such list in manner aforesaid within the time 
 aforesaid shall incur a penalty of fift}^ dollars 
 for each and every day durini>- which such neii- 
 lect continues. (R.S.C cap. 120, sec 68, ss. 2.) 
 
 Annual stnt 
 nicni; oi'divi 
 flcni'.s vciniiin 
 
 SS. ' ' bank shall, within twenty days after 
 the ci. )' oacli calendar vear, transmit or de- 
 in- iini)niii.\:.v liycr to thc Miuistcr of Finance and Receiver- 
 Geneial, i^^ be lyv" him laid before Parliament, a 
 return of all (livide'.ds which have remained 
 unpaid for more than five years, and also of all 
 amounts or balances in respect to which no 
 transactions have taken place or upon which no 
 interest has been paid during the five years 
 prior to the date of such return : Provided 
 always, that in case of moneys deposited for a 
 fixed peiiod, the period of five years above re- 
 ferred to shall be reckoned from the date of the 
 termination of such fixed period : (New.) 
 
 Proviso 
 
 Potails of 
 1- tiini 
 
 Fiiftluir (ie- 
 tnils. 
 
 2. Such return shall be signed in the manner 
 required lor the monthly returns under section 
 eighty-five of this Act. and shall set forth the 
 name of each shareholder or creditor, his last 
 known address, the amount due, the agency of 
 the bank at which the last transaction took 
 ])lace, and the date thereof; and if such share- 
 holder or creditor is known to the bank to be 
 dead, such return shall show the names and ad- 
 
w^n 
 
 Bktl'rns i;v iHi; Bank 
 
 131 
 
 dresses of his legal representiitives, so far as 
 known to the bank : (New.) 
 
 o 
 
 r.'t'irn 
 
 Every bank which neglects to transmit or 
 deliver to the Minister of Finance and Receiver i''ii'".yi'"r'i'M 
 
 in.'iKiiii: aiiiMi.il 
 
 General the retnrn above referred to, within 
 the time hereinbefore limited, shall incur a pen- 
 alty of fifty dollars for each and every day dur- 
 ing which such neglect continues : (New.) 
 
 lof 
 
 4, If, in the event of the winding up of the 
 business of the bank in insolvency, or under mlcia'hnwi 
 any general winding-up Act, or otherwise, any 
 moneys payable by the liquidator, either to 
 shareholders or depositors, remain unclaimed 
 for the period of three yenrs from the date ol" 
 suspension of payment by Uie bank, or from the 
 commencement of the winding-up of such busi- 
 ness, or until the final winding-up of such busi- 
 ness if such takes place before the expiration of 
 the said thrcii years, such moneys and all inter- 
 e.^t thereon shall, notwithstanding any statute 
 of limitations or other A(!t relating to prescrip- 
 tion, be paid to the Minister of Finance and 
 Receiver General, to be held by him subject to 
 all rightful claims on behalf of any person other 
 tlian the batdv ; and in case a claim to any 
 moneys so paid as aforesaid is thereafter estab- 
 lished to the satisfaction of the Treasurv Board 
 the Governor in Council shall, on the report of 
 the Treasury Board, direct payment thereof to 
 be made to the person entitled thereto, to- 
 gether with interest on the principal sum there- 
 
132 
 
 15.\NKs AND IJankini; 
 
 I'riivisi). 
 
 l'i-()Vi~.i 
 
 Ifciliiircmciits 
 IS to cmtstiiiiil 
 
 illL' llntl'S ill 
 
 ,Msc ol' iiisol- 
 vciii-y. 
 
 of at the rate of three per cent per annum for a 
 period not exceeding six years from the date of 
 payment thereof to the said Minister of Fin nice 
 and Receiver General as aforesaid : Proviih.nl 
 however, that no such interest shall he pnid or 
 payable on sucli principal sum, unhss interest 
 thereon wa.s payable by the bank paying the 
 same to the snid Minister of Finance and 
 Receiver General : Provided also, that on pay- 
 ment to the Minister of Finance and Receiver 
 General as herein provided, the bank and its 
 assets shall be held to be discharged from fur- 
 ther liability for the amounts so paid. (New.) 
 
 5. Upon the winding-up of a bank in insol- 
 vency or under any general winding up Act, or 
 otherwise, the assignees, liquidators, directors 
 or other officials in charge of such winding-up, 
 shall, before the final distribution of the assets, 
 or within three years from the commencement 
 of the suspension of payment by the b:ink, 
 whichever shall first happen, pay over to the 
 Minister of Finance and Receiver General a 
 sum out of the assets of the bank equal to the 
 amount then outstanding of the notes intended 
 for circulation issued by the bank ; and, upon 
 such payment being made, the bank and its 
 assets shall he relieved from all further liability 
 in respect of such outstanding notes. The sum 
 so paid shall be held by the Minister of Finance 
 and Receiver General and applied for the pur- 
 pose of redeeming, whenever presented, such 
 outstanding notes, without interest. (New.) 
 
0^1 
 
 RiiTURNs iiv TiiK Bank 
 
 l.V. 
 
 This section is entirely new. It provides for giving notice 
 to the pubHc, through the ParUanicntary lilue Books, of un- 
 claimed dividends and unclaimed deposits lying in hanks. 
 It also provides, in the case of a winding-uj) of a hank, for 
 the disposition of the unclaimed moneys held l)y it and for 
 the redemption of its outstanding circulation. 
 
 IXS()I.Vi;XCV. 
 
 Sii. Til the event of the property iind assets 
 of the bank being insullicient to pay its (U'bts 
 and liabilities, each shareholder of the bank 
 shall be liable for the deticieiicy to an amount 
 equal to the par value of the shares held by 
 him, in addition to any amount not paid up on 
 such shares. (R.S.C. cap. 120, sec. 70, slightly 
 changed in language.) 
 
 This is known as the double liability clause and renders 
 every shareholder in a bank liable, not only for the amount 
 unpaid upon his shares, but also for a further amount etjual 
 to the nominal value of his shares. To ascertain who are 
 the shareholders thus liable see sees. 30 and 96. 
 
 As to the eftect of irregularities in the acquisition of shares 
 see notes to section 35. 
 
 A bill will lie in ef[uity to enforce the double liability 
 of the shareholders of an insolvent bank. l!ut such bill must 
 be on behalf of all the creditors, lirook vs. Bank of Upper 
 Canada, 6 Chy. 249 (1869) ; 17 Chy. 301 (1S70). 
 
 It was decided in Lower Canada that a savings bank, hold- 
 ing bank shares as pledgee, is not the owner thereof within 
 the meaning of this section, and therefore not subject to the 
 double liability. A bank whose shares are transferred to a 
 savings bank is presumed to know that they are held by the 
 latter as collateral security, inasmuch as under 34 V., c. 7, s. 
 
 iliility iif 
 n-i'liiililcru 
 r;isi' lit' iii- 
 tliCMCIH'V of 
 
134 
 
 Banks and 1>ankin(; 
 
 iS, n savings bank cannot acquire bank shares or hold them 
 except as pledgee. The Exchange I'lank of Canada vs, The 
 Montreal City and District Savings Bank, 2 Mont. Kep 5 
 (.885). 
 
 See also in re Central Bank, Home and Savings ("o. Case 
 18 Ont. A[)|). R, 491 (1891) (where the Moine \: Savings 
 Co, having advanced money on the security of shares of the 
 Central Bank, which were transferred to and accei)ted by it 
 in the ordinary absolute form, were held liable as contribu- 
 tories) and notes to section 35. 
 
 As to the priorities given by this act on the assets of the 
 bank see section 53. 
 
 AS 10 sicr-ori' v,\ con 1 kii;L-ioKiLS. 
 
 A contributory of an insolvent company, who is also a 
 creditor, cannot set off the debt due him by the comj^any 
 against calls made in the course of winding-up proceedings 
 in respect of the double liability imposed by the Bank Act. 
 The obvious reasons for such a conclusion being, as stated 
 by Strong, J. in the Maritime 15ank vs. Troop, 16 S.(^.R. 
 456 (1889), at i)age 458, of his judgment, "that the fund 
 " thus constituted being formed exjiressly to pay debts and 
 " liabilities, it would be in law a fund which the directors 
 " would hold in trust for the creditors of the bank, and there- 
 " fore that mutuality between the cross demands, which is 
 " an essential requisite in all cases of set off, would be want- 
 " ing. The money which the shareholder would be called 
 " on to pay would, in this case, be payable into the hands of 
 " the bank or its directors, but it would be so ])aid to them 
 " as trustees for distribution amongst persons who were 
 " under no cross liability whatever lo the sJK.r'-holders, 
 " namely, the body of creditors of the insolvent bank. . . 
 "As I have already shown the debt due by the shareholders 
 " in respect of a call under the double liability clause is, in 
 " equity and in substance, a debt due, not to the bank. l)ut 
 " to the creditors of the bank — whilst the debt which the 
 " shareholder seeks to set-off is a debt due, not from the 
 '' creditors of the bank — but from the banking corporation 
 
Insoi.vkncv 
 
 i;;.j 
 
 "itself; consequently they are not in any sense " nuitual 
 " deljts " ". 
 
 The court in the above rase held that there is nothin.i^ in 
 the Winding-up Art, R.S.C, rap. 129, which derogates from 
 the principle re(iuiring mutuality between the cross demands 
 in order that they may be the subject of set off. As to set- 
 off generally in winding up proceedings see the Winding-up 
 Act, K.S.C, cap. IJ9, sec. 57, 
 
 «0. As a condition of the rigiits and [)rivi- i-mvisiona- 1.. 
 leges conierred by tins Act or by any Act in 1. 1. stnua.^ t- 
 amendment thereof, the following provision 
 shall have efll'ct : — The litdjility of the bank 
 tuider any law, custom, or agreement to repay 
 moneys deposited with it and iiiterest (if any) 
 and to pay dividends declared and payable on 
 its capital stock, shall continue notwithstanding 
 any statute of limitations or any enactment or 
 law relating to pre?^cri[)tion : 
 
 2. This section a))plies to moneys heretofore urtiouc 
 or hereafter deposited, and to dividends hereto- 
 fore or hereafter declared. (New). 
 
 During the course of the pissing of this .Vet, and the dis- 
 cussion that to(;k place as to the policy of compelling the 
 banks to imblish, ])eriodical!_v, a list of unclaimed dividends, 
 and of unclaimed balances (see section 88), it became 
 generally known that by the laws of most of the Provinces, 
 alter the expiration of a certain prescribed period, a bank 
 could set u}) the statutes of liniiialioii m answer to a demand 
 for payment of a dividend by a shareholder, or of a deposit 
 balance by a custrjmer. 'I'his state of the law was thought 
 to be unfair to the public and the above section was inserted 
 in the Act whereby in effect the banks deprive themselves of 
 the right to avail themselves of the law of limitation in such 
 cases. 
 
 tlO.l. 
 
i;^(; 
 
 Banks anh Hankim; 
 
 
 Sl|S|M'llS|llli 
 l"l l:l.V.-< III ( 
 
 .stiliilf insol 
 valley. 
 
 111. Any HUHpoiision \>y the bank of pnyiiicnt 
 ,,',',;' 'tl' any of its liiibilitics an tliuy accriit', in specie 
 or Dominion notes, .shall, if it continues for 
 nini^ty dayH, consecutively, or at intervals 
 within twelve consecutive months, constitute 
 the bank insolvent and operate a forfeiture of 
 its chartei' or Act of iii('or[)oration, so far as re- 
 gards all further banking o[)erations ; and the 
 charter or Act of incorporation shall remain in 
 force only lor the ])urpose of eiudiliug the 
 directors or other lawlul authority to make and 
 enforce the calls mentioned in the next follow- 
 ing sections of this Act and to wind up its 
 business. (R.S.C, cap. 1 20, sec, 71, changed). 
 
 Ca(l> III Hiiili 
 
 !i 
 
 112. If any suspension of payment in full in 
 specie or Dominion notes of all or any of the 
 notes or other liabilities o( the l)aidv continues 
 for three months after the expiration of the 
 time whic^. under the preceding section, would 
 constitute the bank insolvent, and if no pro- 
 ceedings are taken under any general or special 
 Act for the winding up of the bank, the 
 directors shall make calls on the shareholders 
 thereof, to the amount they deem necessary to 
 pay all the debts and liabilities of the bank, 
 without waiting for the collection of any debts 
 due to it or the sale of any of its assets or 
 property : (R.S.C, cap, 120, sec. 72, slightly 
 changed). 
 
 The time during wh ,ch the suspension of payment con- 
 tinues, is shoitened to three months instead of six months. 
 
Insoi.vi.ncn 
 
 l;;- 
 
 -. Such falls sluill 1)0 iiuitli' at intervals of 
 thirty days, and upon ni)tict' to he given thirty ^{;;,\'| 
 day.s at least i)ri()r to the day on which siu-h 
 call shall he i)!ival)le. ami aiiv nuuiher <>t' 
 such calls may he made hv one resolution : 
 any such call shall not exceed twenty per cent 
 on each share; and payment ol' such calls may 
 he enforci'd in like uiaiiuer as payment of calls 
 on \ni])aid stock may Ix' cnlorced; and the first 
 of such calls may he luade within ten days after 
 the expiration of the said three numths ; 
 
 'I'he words "and any number of svich calls may I)l' made 
 by one resolution " were added b)' the Parliament, iry Coni- 
 mitlee when the revision was going through I'lilianient. As 
 to necessity for these words, sec Robertson v. I?an([ue 
 d'Hochelaga, 4 L. N. 314 (1S81) and notes to section 31. 
 A bill will lie in equity at the suit of a creditor to enforce 
 the double liability of the shareholderN of an insolvent bank. 
 But such bill must be on behalf of all the creditors. Brooke 
 V. ]5ank of Upper Canada, 16 Chy. 249 (icSTk;) ; 17 Clhy. 301 
 (1870). 
 
 III iii'iit, 
 ■nl'iin 111. 
 
 Ix'iliiHal to 
 
 3. Every director who refuses to make or en- 
 force, or to conctu' in uiakinii' or enforciim' any l'';'!'^':';'','; 
 call under this section, is guilty ol a niisde- Lu'im.!'.''"*''' 
 meanor, and liahle to imprisonment tor tmy term 
 not exceeding two vetirs, and siudl ftirther he 
 personally- responsihle for any damages suffered 
 by such default (R S.C. cap. 1 20, sec. 72, ss. o.) 
 
 «>3. In the event of proceedings being taken 
 under any general or special winding-iip Act, [;';,',',|i||!;'.',',|; 
 in conse({uence of the insolvency of the bank, '^" 
 the said calls shait ue made in the manner })re 
 
_. ,.4JUUi.«r.us:ji;p..UX-ULWU 
 
 133 
 
 Uanks an'd Ijam-vI.nc; 
 
 IHPli-p.iyiii.iir. 
 
 scribed for the lUiikiiig of such calls in such 
 genenil or special winding-up Act. 
 
 Sec "The Windinmip Act'' R.S.C, cap. uy, sees. 48 
 and 49, as to niakini; of calls, and sections 42 to 55, thereof 
 inclusive, as to riyhts and liabilities of contributories. See 
 also R.S.C, chapter [29, sections 97 to 104 inclusive, hem- 
 the sections of said Act relating to banks only. 
 
 «U. Any failure on the part of ;iny share- 
 holder liable to any such call to ptiy the same 
 when due, shall oi)erate a forfeiture by such 
 shareholder of all claim m or to any pait of the 
 assets of the bank, — such call and any further 
 ciill thereafter being nevertheles;:, recoverable 
 from him as if no such forieiiure had been in- 
 curred. 
 
 Linliiliry of 
 iliiTi'tfirs nut 
 (linniiislicil 
 
 It 
 
 Lialiiliiv 
 sliarf'lii'l U:ra 
 
 wild llii\r 
 
 tninst'i iTi'il 
 tli.'ir.'^:<..-k. 
 
 «5. Nothing in tlie six sections next pre- 
 ceeding contained shall l)e construed to alter or 
 dimiiii.<h the addilional lial)ilities of the direc- 
 tors as hereinbeiore uientioiied uud declared. 
 
 As u> the additional 
 97 and 99. 
 
 liabilities of directors see sees. 4S, 52, 
 
 «M5. Persons who. having been sli.iieholders 
 of the bank, have only transferred their shares, 
 or an\ of them, to others, or registeretl the 
 transfer thereof within >ixty days before the 
 commencement of the suspension of [lavineiit bv 
 the biuik, and persons whose siib.scriptions to 
 the stock of the bank have been cancelled in 
 mtiuner hereinbetbre provided within the said 
 period of sixty days before the commencement 
 
Insoi.vi;ncv 
 
 ];;!) 
 
 of the suspension of payment by the bank, shall 
 ])e liable to all calls on the shares held or sub- 
 scribed for by them, as if they held such shares 
 at the time of such suspension of payment, sav- 
 ing their recourse against those by whom sucb 
 shares were then actually held. (R.SC. cap. 
 120, sec, DO.) 
 
 This section deals with the liability of past shai-chokkrs. 
 (See also sections 30 and 89.) 
 
 This section has been changed so as to harmonize with 
 the changed language of section 30. The only other inijjor- 
 tant change in the section is that which makes shareholders 
 liable, who have transferred their shares within sixty days 
 (instead of one calendar month) before the commencement 
 of the suspension of the bank. If A transfers shares to B, 
 and B transfers to (], and C transfers to I) — all the above 
 transfers being made within sixty cays ])rior to the suspen- 
 sion — A, 15, C and I) must all be put on the list of contril)u- 
 tories. In re Central I'.ank — liaire's C'ase, 16 Out. R., 293 
 (188S) ; 16 Ont. App, R. 237 (1SS9; : Heiidersnn^s Case. 17 
 Ont, R. 110 (18S9). 
 
 oitt:.\cf.s ax 1 1 pi-XA!.'i]i:s. 
 
 to 
 
 .■iliK 
 L'tlilty 111' :i 
 s(li:iMi>:in'ii-. 
 
 t>7. K\ery(>no is -iiilty of a misdcmeaiioi^ 
 and liable t(j iniprisonnienl for a term not rx- rn-siii.ni -to 
 
 L:i\ iii^ imiliic 
 
 ceediu'..:' two years who, IndiiLf the ijresidcut. i""'''''''",.''" 
 
 '- 'I ' ', 1 ;ll|y Ci.-lllldr. 
 
 vice-president, director, principal partner en <-<>iii- i;,'| 
 iiiiiit(lit(\ manager, cashier or other oHicer of the 
 bank, wilfully gives or concurs in gi\ing any 
 creditor of the bank any fi'audulent, undue or 
 unfair preference over other creditors, by giving 
 
140 
 
 ]].\N"KS AND Il.WKlNG 
 
 .is 
 
 If . " ti 
 
 security to such creditor or by cliunging the 
 nature of his claim or otherwise howsoever, and 
 shall further be responsible for all damages sus- 
 tained by any person in consequence of such 
 preference. (R.S.C. cap. 120. sec. 80.) 
 
 1 lie dL'tfiulanl was a director and also a creditor of the 
 Exclianue Bank to the extent of about $13,000. After a 
 resokition to susi)end paynv^nt had been passed, the defend 
 ant withdrew $10,000 from the bank, with the concurrence 
 of the president thereof. It was held that he had conspired 
 with the president to and had thereby obtained an undue 
 preference over the other creditors. Regina vs. Buntin, 7 
 L. N. 2 28, 395 (1S84). 
 
 (lis|)Or<;ll or 
 
 liriialtit;.^ 
 
 US. The amount of all pemilties imposed 
 upon a bank for any violatiou of this Act shall 
 be recoverable and enforceable with costs, at 
 the suit of Her Majesty, instituted by the 
 Attorney General of Canada, or the Minister of 
 Finance and Receiver General, and such penal- 
 ties shall belong to the Crown lor the public 
 uses of Canada; but the Governor in Council, on 
 the report of the Treasury Board, mav direct 
 that any portion of any pentilty be remitted or 
 paid to any person, or applied in any manner 
 deemed best adapted to attain the objects of 
 this Act and to secure the due administration 
 thereof. (New). 
 
 Mulviiifj: I'alsc 
 
 .•^liUiiiieiit ill 
 rotiiriis, &i'.. ;i 
 inisilfiuoiviior. 
 
 ««. The making of any wilfully false or de- 
 ceptive statement in any account, statement, 
 return, report or other document respecting the 
 affairs of the Ijank is, unless it amounts to a 
 
^m 
 
 OllENCKS AND Pl.XAI.Tl F:S 
 
 Ul 
 
 higher offence, a iiiisdemeiinor punishable hy 
 iiiiprisonmeiit for a term not exceeding live 
 years ; and every president, vice-president, 
 director, principal partner en. ('ommcc^dife, audi- 
 tor, tnannger, cashier or other *)iTicer of the 
 bank, who prepares, signs, approves or concurs 
 in such statement, return, repcn't or document, 
 or uses tlie same with intent to deceive or mis- 
 lead any person, shall 1)e held to have will'ully 
 made such false statement, and sludl further l)e 
 responsible for all damages sustained by any 
 person in consequence thereof. (R.S.C. cap. 
 120, sec. 81..) 
 
 An information under this section may be sworn by a 
 non-shareholder, and even by a citizen, who is a debtor of 
 the bank. See MoUeur vs. Loupret, 8 L.N. 305 (1885.) 
 
 The instruction to the jury " that wilful intent to make 
 a false return may be inferred by the jury from all the cir- 
 cumstances of the case proved to their satisfaction," was held 
 to be correct in Regina vs. Hincks, 2 L.N. 422, 24 L.C.J., 
 116 (1879). 
 
 As to destroying or falsifying books, iSjc, by directors and 
 otticers of a corporation.— See the Criminal Code, 1892, sees. 
 364 and 365. 
 
 As to stealing by officers of a bank. —See the Criminal 
 Code, 1S92, sees. 305 and 319. 
 
 As to fraudulent breaches of trust.— See the Criminal 
 Code, 1S92, sec. 363. 
 
 100. Every person assuming or using the 
 title of "bank," "' Ijanking companv," " bank- '""^^"'','.7;''''''i 
 
 7 O L */ -' ll-^r ( )I I lite 
 
 ins house," '' bankinu' association," or '* bankin:: "'"'' •''"• 
 institution," without being authorized so to do 
 by this Act, or l)y some other A(*t in force in 
 
142 
 
 I'an'KS and BwKixr; 
 
 rtiiialty f'oi' 
 olTciicc aLraiiisI 
 til is Act. 
 
 that Ijelialf, is guilty of an offence against this 
 Act. (R.S.C. cap. 120, sec, 82, changed.) 
 
 This clause was passed to prevent persons doing business 
 as bankers from carrying on such business so as to lead the 
 public to believe them an incorporated bank. 
 
 lOI. Every person, committing an offence 
 (lechire'l to be an oil\3nce against this Act, shall 
 be liable to a line not exceeding one thousand 
 dollars, or to injprisonment lor a term not ex- 
 ceeding five \'ears, or to both, '" the discretion 
 of the court belbre which the conviction is had. 
 (New.) 
 
 See [Jicceding section. 
 
 PUbLIC NOTICES. 
 
 IO*2. The several puljlic notices by this Act 
 How noli,,. s required to be given shall, unless otherwise speci- 
 lied, be given by advertisement in one or more 
 newspapers pul)Iished at the place where the 
 head ollice of the Ijank is situate, and in the 
 CaiKuhi G(i::dte. (R.S.C., cap 120, sec. 84, 
 slightly changed). 
 
 hOMINlOX (iUNERXMl'N r CHK(jUKS. 
 IO:$. The bank shall not charire anv disconnt 
 
 Oovcniincnt . . ,. , . ^^ • i*' i 
 
 cii,>^iiRs to 1.0 (,i> commission lor cashing any oihcial che(iue ot 
 
 IKiid at {» r. o ./ 1 
 
 tlie Gt)vernment of Canada, or of any depart- 
 ment thereof, whether drawn on itself or on 
 another ])ank. (ISew). 
 
"^^ 
 
 COMMFACI-.MKXT Oi' AcT AND RkI'I.AI. 
 
 143 
 
 C0M^^ENCE^[KN^' oi' ac r and repeal. 
 
 lOI. Tliifs Act shall come into force on the '^" •""";'■ 
 
 III. Ill III iiii^ 
 
 iirst day of July, in the year one thou.^and eight '""'"■ 
 
 Imndred and ninety-one ; and from that day 
 
 chapter one hundred and twenty of the Revi.sed 
 
 Statutes of Canada, intituled "^1;/ x\ri Jle.y)('rt-}i''^''\\!!^^\^, 
 
 iiiij B<ii,]:.s (1 11(1 B(i,'l-'ni<i," the Act passed in the ^i-^A^. c" w! ' 
 
 fifty-first year ol' Her Majesty's reign, chapter 
 
 twenty-seven, in amendment thereof, the Act 
 
 passed in the se.^sicm held in the thirty-third 
 
 year of Her Majesty's reign, c)iaj)ter twelve. 
 
 intituled ^' All Actio reinorp ci'itidn n stricfions 
 
 irifli respect io ihe i-^siic of Ixiiil' note^ in Novo 
 
 iScotio,'' the Act passed in the session held in 
 
 tlie lit'tiLdh and lift\ -first years of Her Maiestx's 
 
 reign, cha])ter forty -seven, intituled ".1// Act 
 
 rcsp>rfi/Hf the (IrfnciiHj of coiniti rfcit notes, (Unl 
 
 tlie use o/ iutitfffioiis of /ote--^,'" and chapter our 
 
 hundred and twenty of* the Revised Statutes of 
 
 New Brunswick. " 0/ Jhthl'i/nj." nn.d tlie Act 
 
 passed ))y the Legislature of tlie Pro\'iiice of 
 
 New^ Brunswick in tlie nineteenth year of Her 
 
 Majesty's reign, (•liai)tei' forty-seven, intituled 
 
 '• Av Act to e.r/>t<i!ii chiipter 12U, litlr XXXI.. 
 
 of tlie Revised Stainlcs. 'Of linnkiiiiiy shall l,e ^^'^'"- '■'"'^''■ 
 
 repealed, except as to rights theretofoie 
 
 acquired or liahilities incurred in regard to anv 
 
 matter or thing done or contract or agreement 
 
 made or entered into or offences commit' ed 
 
 under the said chapters or Acts, and nothing in 
 
144 
 
 r.ANKS ANM) BaXKINC, 
 
 tliis Act s 
 
 hall eifect any action or proceedings 
 
 tlieii poiK 
 
 ling under the said chapter or xVcts 
 
 then repe 
 
 aled, but the same shall be decided as 
 
 if wucli c 
 
 aapters and Acts had not been re- 
 
 pealed. 
 
 
 
 sell EDULK .\. 
 
 HANKS WKOSI-; ch.\ri'i;k,s are c:oxi'iNri d i ', mis act. 1 
 
 1. 
 
 The Bank of Mcjnlreal. 
 
 2. 
 
 The Quebec Hank. 
 
 -> 
 
 La Ban(jue du Peuple. 
 
 4- 
 
 The Molsons Bank. 
 
 5- 
 
 The Bank of Toronto. 
 
 6. 
 
 The Ontario Bank. 
 
 7- 
 
 The Eastern Townships liank. 
 
 8. 
 
 La Banque Nationale. 
 
 9- 
 
 La Bancjue Jacques Cartier. 
 
 lO. 
 
 The Merchants' Bank of Canada. 
 
 1 1. 
 
 'I'he Union Bank of Canada. 
 
 12. 
 
 The Canadian Bank of Commerce. 
 
 '3- 
 
 The Dominion Bank, 
 
 14. 
 
 The Merchants' Bank of Halifax. 
 
 15- 
 
 The Bank of Nova Scotia. 
 
 i6. 
 
 'I'he Bank of Yarmouth. 
 
 17- 
 
 La Banc^ue Ville Marie. 
 
 18. 
 
 The Standard Bank of Canada. 
 
 IQ. 
 
 The Bank of Hamilton. 
 
 20. 
 
 The Halifax Banking' Company. 
 
 21. 
 
 La Banque d'Hochelaga. 
 
 2 2. 
 
 The Imi)erial Bank of Canada. 
 
 ■> 1 
 -J' 
 
 La Bancjue de St. Hyacinthe. 
 
 24. 
 
 The Bank of Ottawa. — , 
 
 -\5- 
 
 M1ie ]5ank of New lirunswick. 
 
 26. 
 
 The ExchauL^e Bank of Varmomh. 
 
rORM> 
 
 145 
 
 - / ■ 
 
 2S. 
 
 29. 
 
 35- 
 3(>- 
 
 The Union Bank of Halifax. 
 
 The People's Bank of Halifax. 
 
 La Pniniiue de St. Jean. 
 
 The Commercial ]]ank of Windsor. 
 
 The Western Bank of Canada. 
 
 The Commercial Bank of Manitoba. 
 
 The Traders' Bank of Canada. 
 
 The People's Bank of New Brunswick. 
 
 The St. Stephen's Bank. 
 
 The Summerside liank. 
 
 SCHi:i)LT.E B. 
 
 [■OR.M or ACl OF l.\C»3RP0R.\ IIOX OK MOW HANKS. 
 
 An Act to incorporate the Bank. 
 
 Whereas the persons hereinafter named have, by their 
 petition, prayed that an .Act be passed for the puriiose of 
 establishing a bank in , and it is expedient to 
 
 grant the prayer of the said petition : 
 
 Therefore Her Majesty, by and with the advice and con- 
 sent of the Senate and Hcjuse of Commons of Canada, enacts 
 as follows : — 
 
 1, The persons hereinafter named, together with such 
 others as beconu shareholders in the corporation b)- this 
 Act created, are hereby cftnstituted a corijoration by the 
 name of . hereinafter called " the P.ank." 
 
 .^. 'i'he capital stock of tb.e bank shall be 
 dollars. 
 
 3. The cliicf office of the bank shall be at 
 
 4. s'-.jll beihe ])rovisinnaI 
 directors of the bank. 
 
 5. 'i'his Act shall, subject to the provisions of section six- 
 teen of " The Dank Act,'' remain in force until the fir^-t day 
 of Inly, in the year one thousand nine hundred r.ud one. 
 
"Tm' ■'■--'' 
 
 14(! 
 
 ii\MN> AMI l!.\NKI.\i; 
 
 sciii-.Dn.i': c, 
 
 I xikM i)\ >n:v\<i\\ rxm.K >i-.c iihn >i-.\i.\in iouk. 
 
 In consideration of iin advan'f nf dollars, 
 
 made by the (luniu cj haiik) to A. I!., tor which the ^aid 
 hank holds the following Ijills or notes {Jrsfr/I'c fiilix llw N.'/s 
 or /lotus luid if any), the goods, wares and merchandise men- 
 tioned below arc hereby assigned to the said hank as s.cnr- 
 it)' for the payment, on or before the day ol 
 
 of the said advance, together with interest ihereon at tlie 
 rate of per cent per annum from the 
 
 da) of {or. of the said bills and noi^s, or renewals 
 
 thereof, or substitutions therefor, and interest thereon, ^r as 
 tlic case may iu . i 
 
 This security is given under the provisions of seciiun 
 seventy-four of "The Hank Act." and is ^ul)jecl tn .di the 
 provisions of the said Act. 
 
 The said goods, wares and merchandise are now owned 
 by and are now in possession, and are hee from aii) 
 
 mortgage, lien or charge thereon, {or as //u caM' may /v;, and 
 are in (/i/c/iv or places 'tolicrc y:;(Uiih arc), and are the f )lloui)jg, 
 {parlicnUjr (lcscriplii<u (^f '^ootls assi;e;ncd). 
 
 Dated at jS 
 
 Hi 
 
 sfiii-:i)L'Li; 1). 
 
 Return of the liabililie- and assets of the bank 
 
 on the da> nf , A.i). 
 
 Capital au'dv"i/t-(! ^ 
 
 ('apital subscribed . . . $ 
 
 ("apital paid up $ 
 
 Amount of rest (jr reserve fund $ 
 
 Rate per ( ent of last dividend declared. ]'er i cnt. 
 
 i.iAr.ii.ii'ii;s. 
 
 1 , Ni'tes in ciiculation ....?> 
 
 2. I'-a'ance due to l)o'nin:on ('.oxern- 
 
ii^ 
 
 I'CikM> 
 
 14 
 
 •K 
 
 inciil, alter dcdiictinL; adviiu'ts 
 
 ("(.)!■ cix-dils. pay lists, iVc 
 
 ,V Dalanctj diu; lo I'roxincial (Invcrn- 
 
 uiL-nts 
 
 4- Dt'ijosits tiy the public, jiayablc on 
 
 demand . 
 
 5. Deposits 1)\- the public, payable alter 
 
 notice or on a lixed day 
 
 6. Loans from other bank-, m C'anada, 
 
 secured 
 
 7 Deposits, payable on demand or 
 alter notice or on a lived d,i\-, 
 made by other bank-, in (Canada, 
 
 •S. Halances due to otlur banks in 
 Canada in daily exchanges 
 
 [). balances due to agencies of the 
 bank, or to othtr hank> or agen- 
 cies in lorcign countries 
 
 10. Ualances ihn: to agencies of the 
 
 bank, or to other banks or agen- 
 cies in the L'nited Kingdom .... 
 
 11. i,ial)ilities not included under fore- 
 
 goiiiL: heads 
 
 $ 
 
 ASsl.l.-. 
 
 1. Specie , .-i 
 
 :.. 1 )(Hninion notes 
 
 ^:;. Dei)osits with Dominion (Wjvern- 
 nient for security of note circula- 
 tion 
 
 4. Notes and che(iues on other banks . . 
 
 S Loans to other banks in (Canada. 
 secured 
 
 0. Deposits payable on demand cjr 
 after notice or on a fixed da\-. 
 made with c>ther bank-- ir, Canada. 
 
lO. 
 
 1 1 
 
 1 t8 liANKS AM) I!\NKIN(; 
 
 7. Balances due from other banks in 
 
 Canada in daily exchange-^ 
 
 8. Balancec; due from agencies of the 
 
 bank, or from other banks or 
 agencies in foreign countries . . . 
 
 9. Balances due from agencies of the 
 
 bank, or from other banks or 
 agencies in the United Kingdom. 
 
 Dominion Government debentures 
 or stocks 
 
 Canadian munici[)al securities, and 
 British, Provincial, or foreign, or 
 colonial public securities, (other 
 
 than Dominion) 
 
 i2. Canadian, British and other rail- 
 way securities 
 
 13. Call loans on bonds and stocks 
 
 14. Current loans 
 
 1 5. Loans to the Government of Canada 
 
 16. Loans to Provincial Governments. . . 
 
 17. Overdue debts 
 
 1 8. Real estate, the properly of the bank 
 (other than the bank premises). . . 
 
 19. Mortgages on real estate sold by the 
 bank 
 
 20. Bank premises 
 
 21. Other assets not included under the 
 foregoing heads 
 
 $ 
 
 il|:i 
 
 Aggregate amount of loans to directors, and firms of which 
 they are partners, $ 
 
 Average amount of specie held during the month, $ 
 
 Average amount of Dominion Notes held durmg the 
 month, $ 
 
 Grcaiest amount of notes in circulation at any time during 
 the month, $ 
 
 *i lip 
 
FORM.> 
 
 149 
 
 I dcrlaiX' ihal llic above return has Ijeeii iireparcd ui.dcr 
 my direction and is correct according to the l)0(;ks of the 
 bank. 
 
 i:, I'.. 
 
 Cliiif AiU'iiii/itiit. 
 
 W'e declare that the foreiroinL; return is made up from the 
 b(joks of the bai.k, and thai ti- the Iji.^1 of our kno\vk(i,^e and 
 l)elief it is correct, and shows truly and clearly the financial 
 position of the bank ; and we further derlare that the bank 
 has never, at any time durini: the period to whi( h the said 
 return relates, held less than '"orty per cent of it> ca^h 
 reserves in Dominion notes. 
 (/'W<) this dav of 
 
 A. B., Presidait. 
 
 C. I>., Genenil Manager. 
 
l.').! 
 
 !1.\NK> AMI llWKIMi 
 
 IXIKACIS KKdVl "KIK (:kimi\,\|, (,,1,1.; , ,1- 1892" Willi II 
 C().Ml;S IN Id \ > iK( 1. ( IN 
 
 r//c 1st /)'(v Kj Jii/y, /Ay,', 
 
 AMI Willi II .\\<V. (il Sl'i;(l\l, IMI'()Rr\N(l Id i:\NKS \Nli 
 
 i;\Nki.ks. 
 An ,\( I l\i:si'i;(:riN(; nil. Ckiminai, Law. 
 
 Short ti:li 
 
 C'i;iiiiic'Ui'i 
 11 cut Ml' A( 
 
 Kxiilaiinii' 
 till III-* 
 
 HI 
 
 I'REI.IMIXARY. 
 
 I. This Act may he cited ti^r all inirpuscs as " The 
 Oiminal ('ode of 1892." 
 
 J. This Art shall come into force on the first day of 
 ' July, 1893. 
 
 ,, ,,,. 3. In this Act the followinii; expressions have the mean 
 inij;s assigned to them in this section unless the context 
 rec|uires otherwise. 
 
 (i\) The exjjression "Hanker" includes any director of 
 any incorporated h.ink or liankiuLi; company ; R,S.C., c. 
 
 iC'l, H. 2 (V). 
 
 (,;■.) The expression " Dcjcument of title togoods" includes 
 any bill of lading, India warrant, dock warrant, warehouse- 
 keeper's certificate, warrant or orilcr for the delivery or 
 transfer of any goods or valualile thing, bought and sold note, 
 or any oilier docunieiu used in the ordinary course of busi- 
 ness as prouf of thL possession or control of goods, 
 auth(M-izing or |)urporting to authorize, cither by indorseniei 
 or by delivery, the ])ossessor of such document to transfer 1 
 rei'eive any goods thereby reoresenieii or therein mentioned 
 or referred to ; K.S.C, c. 164, s. 2. [ti). 
 
 (/'/'.) The expression '"trustee" means a trustee on some 
 express trust created by some deed, will or instrument in 
 writing, or by parol, or otherwise, and includes the heir or 
 personal representative of any such trustee, and every other 
 
 I' 
 
V.S I k \i IS I KO\i ( 'kimin \i, Ci .i.K 
 
 i:»i 
 
 person upon or to wlioin the duly ot surh trust has cicvolvcd 
 or roiiK', wht'lher hy apiiointincnt of n court or othorwisf, 
 .111(1 ;>No an cxcrutor and administrator, and an otVicial 
 manager, assignci', li(|iii(lal<>r or otiicr like ofticcr acting 
 under any Act relating to joint stock companies, bankruptcy 
 or insolvency, and any person who is, by the law of the 
 Province of (Quebec, an "' (uiiiiiiustiiitair" or '' fiJfouih 
 hiisMiiti " . anil the expression " trust ' iiv hides whatever 
 is by thai law an '' <niiiiiiiisf/\tti(>i/'" o\''Ji(iL-(>iii>itissioi:. 
 R.S.C, c. lO.;, s. J ((). 
 
 ((V.) The exjjression "valuable security" includes any order, 
 exchetjucr aciiuillance or other se( urity entitling or evi- 
 dencing the title of any person to any share or interest 
 in any ]iublic stock or lund, whether of Canada or of any 
 Province thereof, or of the United Kingdom, or of dreat 
 15ritain or Ireland, or any British colony or possession, or of 
 any foreign stale, or in any fund of any !)ody cor[iorate, 
 coni|)any or society, whether within (Canada or the L'nited 
 Kingdom, or any P)ritish colony or possession, or in any 
 foreign state or country, or to any deposit in any savings' 
 bank or other bank, and also includes any debenture, deed, 
 [)ond, bill, note, warrant, order or other security for money 
 or for ]jayinent of money, whether of Canada or of any 
 Province thereof, or of the United Kingdom or of an) 
 Hritish colony or possession, or ot any foreign state, and 
 any docunienl of title to land:; or goods as hereinbefore de- 
 llned wheresoever such lands or goods are situate, and any 
 stamp or writing which secures or evidences title lo or 
 interest in any chattel personal, (jr an)' release, receipt, dis- 
 charge or other instrument, evidenciriLi payment of money, 
 or the delivery of any chattel |)eisonal : and every such 
 valuable security shall, where value is material, be tleemcd 
 to be of value eipiai to that of such imsatisfied money. 
 chattel personal, share, mterest or deposit, for the securing 
 or payment of which, or delivery or transfer or sale of which, 
 
 for the entitling or evidencing title to which, such valu- 
 able security is ajjplicable, (jr to that of such money or 
 chattel personal, the ])ayment or delivery of which is evi- 
 denced by such valuable security ; 53 V., c. 37, s. 20. 
 
152 
 
 Banks ami 1)\nkin( 
 
 f.ll-"' Ileus. 
 
 rfiiiiiiiiL: ill 
 !-tock-i ■iiifl 
 iiicrcliiiiiilis 
 
 I 26. Every one is guilty of an indictable offence and liable 
 to one year's imprisonment who wilfully and knowingly 
 Ijuijlishes any false news or tale wherebv injury or mischief 
 is or is likely to be occasioned to any jaiblic interest. 
 
 201. livery one is .guilty of an indictable offence and 
 liable to five years' imprisonment, and to a fine of live hun- 
 dred dollars, who, with the intent to make uain or prcjfit by 
 the rise or fall in price of any stock of any incorporated or 
 unincorporated company- or undertaking, either in C Canada or 
 elsewhere, or of any goods, wares or merchniidise, — 
 
 ((/.) Without the /io//(7 fiJc intention of ac{iuiring any such 
 shares, goods, wares or merchandise, or of selling the same, 
 as the case may be, makes or signs, or authv. vises to be made 
 or signed, any contract or agreement, oral or written, pur- 
 porting to be for the sale or [)urchase of any such shares of 
 stock, goods, wares or merchandise ; or 
 
 (/'.) makes or signs, or authorizes to be made or 'igned, 
 any contract or agreement, oral or written, purporting to be 
 for the sale or purchase of any such shares of stock, goods, 
 wares or merchandise in respect of which no delivery of the 
 thing sold or purchased is made or received, and without 
 the botia fide intention to make or receive such delivery. 
 
 2. But it is not an offence if the broker of the purchaser 
 receives delivery, on his behalf, of the article sold, notwith- 
 standing that such broker retains or pledges the same as 
 security for the advance of t^-e purchase money or any part 
 thereof. 
 
 3. Every office or place of business wherein is carried on 
 the business of making or signing, cr procuring to be made 
 or signed, or negotiating or bargaining for the making or 
 signing of such contracts of sale or j)urchase as are prohibit- 
 ed in this section is a common gaming house, and every one 
 who as princi])al or agent occujiies, uses, manages or main- 
 tains the >ame is the keei)er of a comnidn gaming house. 
 51 \'., c. 42, ss. [ eV- 3. 
 
 Tlu'Ci ,k'iino.l. 305' ''"'i'-''^ <-'!■ stealuig is the art ot fraudulently and with- 
 out coli:)ur of right taking, or fraudulently and without colour 
 
l',\ IKAC 
 
 iv I ROM Ckiminai. CCiDI. 
 
 153 
 
 v)f right ctjnveitmg lo ihc use of any person, anything call- 
 able of l)fing stolen, with intent — 
 
 (d) to deprive the owner, or any person having any special 
 pruiierty vr interest therein, temporarily or absolutely of such 
 thing or of such propeity or interest ; or 
 
 (/') to i)letlge the same or dei)osit it as security : or 
 
 ((■; to pan with it iirder a ( ondition as to its return which 
 the person jiarting with it may be unable to jiertorm ; or 
 
 (,/) to deal with it in such a manner that it cannot be re- 
 stored in the c mdition in which it was at the time ot such 
 taking and conversion. 
 
 2. The taking or conversion maybe fraudulent, although 
 etTected wiiliout secrecy (jr attempt at concealment. 
 
 ;,. It is immaterial whether the thing converted was taken 
 for the pur|)0se of ccjiiversion, or whether it was, at the time 
 of the conversion, in the lawful possession of the person 
 convertine. 
 
 4. Theft is committed when the offender moves the thing 
 or causes it to move or to be moved, or begins to cause it to 
 become moveable, with intent to steal it. 
 
 5. Provided, that no factor or agent shall be guilty of 
 theft by pledging or giving a lien on any goods or docu- 
 ment of title to goods intrusted to him for the purpose of 
 >;ale or otherwise, for any sum of money not greaf^r than the 
 amount due to him from his principal at the time of pledg- 
 ing or giving a lien on the same, together with the amount 
 of any bill of exchange accepted by him for or on account of 
 his ])rinciiial. 
 
 6. Provided, that if any servant, contrary lo the orders of 
 his master, tak.es from his i)ossession any food for the pur- 
 pose of giving the same or having ihi,' same given to any 
 horse or other animal belonging to or in the possession of 
 his master, the servant so offending shall not. by reason 
 tiereof, be guilty of theft. R S.T., c. 164, s. 63. 
 
 509. Kvery one commits theft who, being entrusted, either .j ,^ ,., |^^.|,^,,, 
 s ilely or jointly with any other i)erson, with any power uf |';'^'J;;;|;'^^^ 
 af.orney for the sale, mortgage, ])ledge or other disposition "•>• 
 jf any propertv. real or [)ersona!, whether capable of l)eing 
 
 or 
 
i:»[ 
 
 n\NK> \NI) li.WKINf; 
 
 ThcK 
 aiiiin.] 
 
 iiiidiT 
 tioii. 
 
 irialiiiir 
 (lii- (•■ 
 
 sroltn or not, ("raud'.ilently sells, niort^ancs, pledges or utlier- 
 wi->e disposes of the same or any part thereof, i.r t'raudulently 
 r inverts the proceeds of any sale, mortga'iO, I'leds^e or other 
 dispositii)n of surh projierty, or any part (;f sue'n prurecds, 
 to some purpose oilier than thai for which he was intniMed 
 wi;h such p:)wcr of attorni;y. R.S.('., c. 164, s. 62. 
 
 310. i'A-ery (Jiie commits theft wl'io, having receiveil, either 
 s:.)lely or jointly with any other jierson. any UKjney or valu- 
 able security or any power (jf attorney for the sale of ni'.) 
 property, real or jjersonal, >vith a direction that such money, 
 or any j^art thereof, or the proceeds, or any jiart of the ])ro- 
 ceeds of such security, or such property, shall he applied tc> 
 any purjjose or paid to any person specified in such direction, 
 in vi(jlation of good faith and contrary to such direction, 
 fraudulently apj^lies to any other i)urpose or i)ays to any 
 other person such money or proceeds, or any jjart thereof. 
 
 2. Provided, that where the jjerson receiving such money, 
 security or i)ower of attorney, and the person from whom he 
 receives it, deal with each other on such terms that all 
 money paid to the former would, in the absence of any such 
 direction, he i)ro|>erlv treated as an item in a debtor and 
 creditor account between them, this section shall not ajiply 
 unless such tlirection is in wriiiiiLr. 
 
 cloi-k- luil 
 servMits 
 
 _^ 19. I'-vcry one is guilty of an indit'table oflence and liable 
 li) touneen years' 'inprisoiiment who, 
 
 (a.) being a clerk or servant, or being employed for the 
 purpose i)r in the capacity of a clerk or servant, steals any- 
 thing belonging to or in the possession of his master or em- 
 l)l<jyer ; or 
 
 (/'. ) being a ca-,!iier, assistant (fishier, manager, oftuev, 
 clerk 'ir -ervant '>( any bank, or savings bank, steals any 
 bond, obligation, bill obligatoiv or of credit, or other bill m 
 note, or any security for money, or any money or effeci-> of 
 such bank or lodged or deposited with any such bank : 
 
 (,•. ) bein^ emplovcd in the service of Her Majestv. or of 
 the Ci )vcrnnieni of Canada or tlie (Government of any pro- 
 vince of ('anada, or of any municipalitv, steals amihiim ir. 
 
]-A TKACIS FROM C'KIMIXAI (lomZ 
 
 1 .").') 
 
 his i)osscssi(.)ii hv virluc of his civiploynu'iu. R.S.C'.c. \(>[. 
 ss. 51, 52, 53. 54 and 59. 
 
 ;2o. I'lvery one is ^[^\\\.y of an indidahlr offence and liahle 
 to foiu'teen years' iniprisonnienl who steals anyiliinu liy an;, aiMi-nrys. 
 act or oniissirin aniountinL^ to theft under the i^rov -ions ot 
 sections 308, 509 and 310. 
 
 T,C)7,. Every one is yiiilty of an iinlietahie ol'feiue and ,,,.|,,,j„.,, 
 liable to seven years' nnprisonment wlio, i)eini; a trustee o: ii.-.M.-iinrtnist. 
 any i)roperly for the use or henefil, eitlier in wl.wie or in 
 part, of some other perscjn, or for any ].til)li(- or eharilahle 
 purpose, with intent to defraud, and in violation ot his trust, 
 converts anythin,^ of which he is trustee to any use not 
 authorized tiy the trust. 
 
 547 No i)roceeding or ijrosecalion ULjainst a trustee for a .,,^.^^^|,.^, ,.|.,,,„,. 
 criminal breach of trust, as defined in section 363, shall be !;;'^';^|>,J;,^|;;:-;'- 
 commenced without the sanction f)f the Attorney General. 
 R.S.C. , c. 164, s. 65. 
 
 364. I'A-ery one is t;uilty of an indictable offence and liabU' 
 
 i':il-.- ari'oiuil- 
 ilij hv iiHii'i.'ll. 
 
 to seven years' imprisonment who, being a director, nianagei 
 public ot'ficer or member of any liody corporate or public 
 company, with intent to defraud — 
 
 {(J.) destrovs alters, nunilates or taUifies any book, i>ai)er, 
 writing or valuable secuiity belonging !o the boily cor]H,rate 
 or publir company : or 
 
 (/'.) makes, or concurs in making, any false entry, or omits 
 or concurs in omitting to enter any nialeriai parti* iiiar, in 
 any book of account or other doctmicnt, K.S.C. c. 164, s. 
 
 68. 
 
 ^6; i'verv one is uuiliv of an iiKhctable ol'fence and lialil-^ 
 
 Ci J' ■ -- ^ j- i|„. sl;i|c 
 
 to five vears' unpiisonmeiu who, iieing a jiromoter, director, uicin ii\ .>iiiri,ii 
 l)ublic officer or manager of any body cori>orate or jaiblic 
 company, either existinu or intended to be tonned, makes, 
 circulates or publisl-.e->, or concurs in in.ikirg, circulating or 
 publishing, any prospectus, s'.atem nt or account which he 
 knows to be I'aNe in any material particular, with intent to 
 induce persons (whether ascertained (^r not) to become 
 shareholders or partners, or with intent to de<-eivc or detraud 
 the memliers, shareholders or creditors, or any of them 
 
 I. !l 
 
15(J 
 
 Banks anh liANKixc 
 
 Falhc aep( r 
 
 iii.u' hy <■!, rk. 
 
 Warcliiiiisc 
 
 IIICII, ('(('., 
 
 kliO" illi;Iv 
 nsiiiK- lilt ' 
 same. 
 
 (whcthtT ascertained or not) of such body cori-oralc or 
 I'ublic company, or with intent to induce any person to 
 entrust or advance any jjroperty to such body corporate or 
 pubhc company, or to enter into any security for the benefit 
 llii.reof. R.S.C., c. 164, s. ((j. 
 
 :/)6. Every one is j^uilty of an indictable offence and liable 
 10 seven years' imprisonment who, being or acting in the 
 capacity of an oflker, clerk or servant, with intent to 
 defraud — 
 
 (tr.) destroys, alters, mutilates or falsifies any book, paper 
 writmg, valuable security or document which belongs to or 
 IS in the possession of his em|)loyer, or has been received by 
 hnn tor or on behalf of his employer, or concurs in so doing ; 
 
 Ol' 
 
 (/' ) makes, or concurs in making, any false entry in, or 
 omits or alters, or concurs in omitting or altering, any mate- 
 rial particular from, any such book, paper writing, valuable 
 security or document. 
 
 376 Every one is guilty of an indictable offence and liable 
 to three years' im[)risonment who,— 
 
 {</.) being the keeper of any warehouse, or a forwarder, 
 miller, master of a vessel, wharfinger, keeper of a cove, yard, 
 harbour or other place for storing timber, deals, staves, boards, 
 or lumber, curer or packer of pork, or dealer in wood, carrier, 
 factor, agent or other person, or a clerk or other person in 
 his employ, knowingly and wilfully gives to any person a 
 writing purporting to be a receipt for, or an acknowledge- 
 ment of, any goods or other property as having been recei\X'd 
 into his warehouse, vessel, cove, wharf, or other place, or in 
 any such place about which he is employed, or in any other 
 manner re< eived by him, or by the person in or about whose 
 business he is employed before the goods or other proi)erty 
 named in such receiin, acknowledgment or writing have 
 been actually delivered to or received by him as aforesaid, 
 with intent to mislead, deceive, injure or defraud any person,' 
 although such person is then unkiu)wn to him ; or 
 
 (/' ) knowingly and wiltully ac< epts. tran-^mits or uses any 
 
l-AlKAtlS FROM Ckl.MlXAI. (JdDL: 
 
 • )| 
 
 such false receipt or acknowledgment or writing. R.S.T'., c. 
 
 ,i77. Every one is guilty of an indictable offence and linhU' 
 to three years' imprisonment, who — 'in"r!'ii u'n'iis.' 
 
 f/r.) having, in his name, shipped or delivered to the kee,)ei t^?. ','■', Tir'eoii 
 of any \> ..rehouse, or to any other factor, agent or carrier, to 'i,'|','.]i''N'\vmi" ' 
 be shipped or carried, any merchandise upon which the con '„'i'/;^'|^.',v',','^ 
 signee has advanced any money or given any valuable secu I',''"''' "''^■•'""'' 
 rity afterwards, with intent to deceive, defraud or injure such 
 consignee, in violation of good faith, and without the consent 
 of such consignee, makes any disposition of such merchan- 
 dise different from and inconsistent with the agreement made 
 in that behalf l)etweL'n him and such consignee at the lime 
 of or before such money was so advanced ur such negotiable 
 security so given ; or 
 
 {/>.) knowingly and wilfully aids and assists in making 
 such dis]josition for the purpose of deceiving, defrauding or 
 injuring such consignee. 
 
 2. No person comn;its an offence under this section who, 
 before making such dis|)osition of such merchandise, |)ays or 
 tenders to the consignee the full amount of an\ advance 
 made thereon. R.S.C, c. 164, s. 74 
 
 37S. lA'cry jjcrson is guilty of an indictable offence an(' 
 liahU' to three vears' imiirisonment who, — M.ikin- luh.' 
 
 ' ^LiliMllrlltS II 
 
 (a.) wilfully makijs any false statement in any leceiiit. ''''''''i''-"*'';'' 
 
 ' ■' ^ - ' |ini|irrty tli il 
 
 certificate or acknowledgment for j,rain, limber or other '-n' '"' i"i^';'i 
 
 iiiHlc-r " 1 111' 
 
 yoods or property which can be used for anv of the puri)oses '■•"'i'^ ^''^ '• " 
 > ' I J - 1 I riMiiiliili'inlv 
 
 mentioned in T/w l->tvik Act : or d. niinu- uiih 
 
 |irii|,.'i'i V |.j 
 
 (/' ) havmg given, or after atn' clerk or person in his em 'viii. h ^udi 
 liloy has, to liis knowledge, given, as having i)een receivec- 
 by him in any n;ill, warehouse, vessel, cove or othei place^ 
 any such receipt, certillcate or acknowledgment for any such 
 grain, timber or other goods or property, — or having oljtained 
 any such receipt, certificate or acknowledgment, and after 
 having endorsed or assigned it to any bank or person, alter 
 wards, and wiiliout the cr,nsenl of the holder 01 
 endorsee in writing, or the prodmtion and delivery of the 
 
 receipt, certilicate or acknowledLiiieiil, will'ully alienates 
 
 or 
 
158 
 
 li.Wk- AM) liANKIXC 
 
 Imiiiciiil 
 li;irlnn>. 
 
 1(1 lii'lVaii.l. 
 
 IKirth wiLli, 111- (ioe.s nnl dulivt-r icsuili li(;ldcr oi' owner of 
 sucli recciiJl, cxTtificatc or acknowlcd-niL-nt, tlie i^'rain, timber, 
 Ciouds or other property therein nienti( ined. R.S.C, c. 164, 
 ^- 75' 
 
 ,57y. Il all)- oireiue nienlioried in an)- (jf the three se(-tions 
 next j)reie(hn!4 is counnittet! \>y the doin,i^ of anythinu in the 
 name ol any tlrm. comijai-;)- or co-partnership of persons the 
 person h\- wiiom sncli thin- is actual!)- done, or who con- 
 nives at the doin- thereof, is miih)- of the (jffence, aiul not 
 an\- other person. K.S.C., c. 164. s. 76. 
 
 ,i9-h l'Aer\- one is miilt)- of an indietalile offence and. 
 iial)le to -.even years' imprisonment wh'.- co.'ispires with any 
 other ]ierson. I))- tleceit or falsehootl or other fraudulent 
 means, lo delraud the public or any person ascertaiixd or 
 unascertained, or to aflect the public market price of stocks, 
 shares, merchandise or anvt'mn- else publicly sold, whether 
 such deieit or f.d-^ehood or other fraudulent means would 01- 
 would not amount to a false pretence as hereinbefore 
 delnied. 
 
 I (ikOllKN', 
 
 Diicuiilrll! 
 ilrlillcii. 
 
 •■ liilllk ll'il' 
 .-(liil " ■■\rll,' 
 
 iiurr liill 
 
 a.iiiM'ii. 
 
 419, .\ document means in this part an\ paper, paril'i- 
 ment, or other material used U>v writin- or printin-, marked 
 with matter caiiable of being read, but does not include 
 trade marks on articles of comiiierce, or inscripjtions on stone 
 or irietal or oilier like material. 
 
 420. "lianknote" includes all negotiable instruments issued 
 b)- or on behalf of an\- pie. son. body corporate, or compau)- 
 carr\ingon the busines-> ot liankiriL; in any part of the world 
 or issued by the autliority of the Parliament of Canada or of 
 .m\- loieign prince, or state, m- government, or any governcjr 
 or other authority kiwfu'l)- authorized theret(j in any n( Hci 
 Majesty's dominions, and intended to be used as equivalent 
 to money, eillier immediatel)- upon their issue or at some 
 time subseijuent thereto, and all bank bills and bank post 
 bills : 
 
 {<n " I'lxchequer bill" includes Ivxchecpier bonds, r.i^tes, dt 
 
I'ArWACrs l-KdM CklMINAI, CciH, 
 
 loy 
 
 Ix-iuuiX'S and other securities issued under the aullii.rilv nt" 
 the I'arlianient of Caiiatla, or under the authority of an\ 
 Legislature ( f any Province forinin- part (4" Canada, whether 
 bclore or alter ^U(:h Province so became a part of C 'anada, 
 
 4:!i. Tile expres-^ion '" false document " mean> — 
 
 itf) a document the whole or sfjmc material part (;f wliich K,.1m. ,...,(i 
 
 , * n\r]\[ ■U'lilii'l 
 
 purports to he !iiade hy or on behalf of any person who did 
 not make or authorize the making therciit. (T whi( h, th.ouuli 
 made by. or by the authority ..f, the person who purport^ t.. 
 make it is fal>el_\' dated as to time (.r phu e o( making, where 
 either is mateiial : or 
 
 (/') a document the whole or SMme material \,:\n of which 
 purports to he made l)y or (^n behalf of t.ome person wh • 
 did not in I'act exist : or 
 
 ic) a docaniient wliich i> iiuuie iii tlie nauie of an exi^tinj, 
 person, eitiier b\- that ]jerson or by his ;uithorit)-, with th.e 
 fraudulent intenti(jn thai the document should p^ass as being 
 m:\ilc by some person, real or fictiti(jus, either than the 
 l>erson wh(; makes or authorizes it. 
 
 -. It is not necessary that the fraudulent intention should 
 a[)pear un the lace of the docuineiU. but it ma) be jjroveu 
 by external e\ idence. 
 
 4JJ. forgery is the n.aking (.f a false document, knowing 
 it to be false, with the intention tliat it .-hail m an\- way be t 'I-j't.v 
 used or acted upon as genuine, to the ])rejudi<-e of an\- one " 
 whether within Canada or vja, or that some ijerson sh.ould 
 be indured. liy the belief that it is genuine, to do or refraii. 
 iVom doing anything, whether within Canada or not. 
 
 2. .Making a talse document ini:liides altering a uenuine 
 document in any material part, ami makinii ar.} materi.il 
 addition to it or adding to it any false date. attestati<m, seal 
 or other iliui- which is material, or hy making an\ materia! 
 alteration in it. either hy erasure, obliteration, removal (^r 
 otherwise. 
 
 ;.;. l-'orgery is complete as soon as the document is maoe 
 with such knowledge and intent a- alorcsaid, though th.e 
 offender may not have intended that any paiticular per-on. 
 shiTild use or act uj)on it as genuin.e. or lie induced. b\- the 
 
hJO 
 
 Hanks and Hwkinc 
 
 rinii'lDiii'iii 
 (II I'lH'rcrv. 
 
 belief that it is genuine, to do or refrain from doing an\- 
 thing. 
 
 4. I'orgery is complete although the false document ma> 
 l)e incomplete, or may not i)urport to be such a document as 
 would be binding in law, if it be so made as, and is such as 
 to indicate that it was intended, to be acted on as genuine. 
 
 423. I'A-ery one who co nmits forgery of the documents 
 hereinafter mentioned is guilty of an indictable offence and 
 liable to the following punishment : — 
 
 I.I.) to im])risonment for life if the document forged pur- 
 ports to be, or was intended by the offender to be; under'-t(K)(,l 
 to be or to be used as — 
 
 (/>.) any entry in any t)ook or register, or any CLrtiricalc. 
 coupon, share, warrant or other document which by ;m\- law 
 or any recognized jiractice is evidence of the title of any 
 person to any such stock, interest or share, or to any divi- 
 dend or interest jiayable in respect thereof : R.S.C., c. 165, 
 s. 1 1 ; or 
 
 {/■) any !)ank note or bill of exchange, promissory note or 
 cheque, or any acce|)lance, endorsement or assigiimcnt 
 thereof; R.S.C., c. 165, ss. 18, .'5 and 28 ; (jr 
 
 (//.) an)' 'leed, bond, debenture, or writing obligatory, or 
 any warrant, onltr, or other security for money or payment 
 (jf money, whether neuotiable or not, or endorsement or as- 
 signment thereof; R..S.C., c, 165, ss. j6 and 32 : (jr 
 
 (/-'.) any accountable receipt or acknowlcdement of the 
 deposit, receipt, or delivery of nioney or goods, or endorse- 
 ment or assignment thereof; R.S.C"., c. 165, s. 29 : or 
 
 (,\'. ) any bill of lading, charter-party, i)(jlicy of insurance, 
 or any shipping document accompanying a bill of lading, Of 
 any endorsement or assignment thereof ; or 
 
 (A-. ) any warehouse receipt, dock warrant, dock-keeper's 
 certificate, delivery order, or warrant tor the delivery f>f 
 goods, or of any valuable thing, or an\- endorsement < r 
 assignment thereof ; or 
 
 (j.) any other document used in tlie ordinary cotirse of 
 lousiness as proof of the possession or control of goods, or as 
 authorizing, either on endorsement or delivery, the possessor 
 of such document to transfer or receive any g<Jods. 
 
F.NIUArr^ IKiiM rKIMINAI rriiif; 
 
 If) I 
 
 iliiriniii'iii . 
 
 42 \. Iv.ciy DiiL' i^ nuilly ut" .111 iiuliclaMc (iHlih i \\\\>, 
 kiiiiwiii;; a (locuinciU to he forced, ii^cs, deals willi, m aiis |' 
 upon il, or atleinpls to use. ile^il witli, or ai 1 U|ioii il, or 
 causes or alloinpts to cause any person to u^e, deal witli, or 
 act upon it, as if it were i^enuine, and is liable to tlie same 
 punishiii"nl as if he had forL;ed llie chxunieiu. 
 
 2. It is inunatorial where the document was torL;ed. 
 
 -pS. I'lvery one is t^uilty ot an indi( table ofl'ence who, 
 with intent to defraud, causes or procures any leleuram to ^' '"'"'V '''!' , 
 he sent or delivered as hein.n sent by the autiiority of any " ""'•^■ 
 person, knowi/ig that it is not sent by such authority, willi 
 intent that such teleii,rain should be acted on as beini; sent 
 i)y that person's authority, and is liai)le, upon conviction 
 thereof, tcj the same punishment as if he had forced a docu- 
 ment to llie same effect as that ot the leleuram. 
 
 429. Iwery one is L^uiliy of an indictable offence and liable sni.iiML! \A\>r 
 to two yeats' imprisonment who, with intent to injure (,|- ''i' -imih.-. 
 alarm any jjcrson, sends, causes, (;r procures to tje sent, .my 
 telegram or letter or other niessa^'e conlamin^ matter which 
 
 he knows to be false. 
 
 430. ICvery one is guilty of an indictable (jffence and liable 
 
 to fourteen years' imprisonient who, without lawful alhority ro'i'iivinl'mk 
 or excuse (the proof whereof shall lie on him), purchases or ""'"' 
 receives from any person, or has in his custody or possession, 
 any forged bank note, or forged blank bank note, whether 
 complete or not, knowing it to l)e forged. R.S.C., c. 165, s. 
 19. 
 
 431. Every one is guilty of an indictable offence who, with 
 
 intent to defraud and without lawful authority or excuse, iti-.iwiiiLj iiocn 
 makes or executes, draws, signs, accepts or indorses, in the iiiii'i'iiii"ii\.""' 
 name or on the account of another person, l)y procuration 
 or otherwise, any document, or makes use ot or utters any 
 such document knowing it to be so made, executed, signed, 
 accepted or endorsed, and is liable to the same punishment 
 as if he had fcjrged such document. R.S.C, c. 165, s. 30, 
 
 434. KAery one is guilty of an indictable offence and liable 
 
 ... , . , , - , , • rii.slniiiiiiil.s 
 
 to fourteen years imiirisonment who, without lawful authority "f fViriicrv. 
 or excuse (the |)roof whereof shall lie on him) - 
 
m 
 
 l(J2 
 
 Hanks \ni> Hwkinc. 
 
 Milking \'i 
 entries in 
 liook.s rcl 
 topnlilic I 
 
 list: 
 
 atini 
 
 (ti) makes, begins to iiiakt.', uses or knowini'Jy has in liis 
 posscssicjii, any machinery or inslnimciit or material for 
 making l-Acliequer hill paper, revenue paper or paper m- 
 tended to resemhle tlu: hill paper of any firm or iiody cor])('- 
 rate, oi person carrying on the hu'-incss ol hanking ; R.S.C., 
 c. 165, ss. 14, 16, 20 iS; 24 ; or 
 
 {/>) engraves or makes upon any plate or material any- 
 thing pur|)orting tf) he, or apparently intended to resemhle, 
 the whole or any part of any Iv\che(|Uer l)ill or hank note ; 
 iv.S.C, <•. 165, ss. 20, 22 iV 24 ; or 
 
 (.) uses any such ])late or material fnr printing any part 
 of any such JAcheiiuer hill or hank note ; R.S.C., c. 165, 
 ss, 22 (.V 23 ; or 
 
 (d) knowingly has in his possession any sucli plate or 
 material as aforesaid ; K.S.C., c 165, ss. 22 (S: 23 ; or 
 
 ((■) makes, uses or knowingly has in his possession any 
 Kxchefiuer hill i)aper, revenue paper, or any paper in- 
 tended to resemhle any bill pajjer of any firm, body corpo- 
 rate, company, or person, carrying on the business of bank- 
 ing, or any [jajjer upcji; which is written or printed the whole 
 or any part of an FAchecpier mil, or of any bank note ; R. 
 S.C, c. 165, ss 15, 16, 20 i\: 24 ; or 
 
 (/) engraves or makes upon any ]jlate or material any- 
 thing intended to resemble the whole or any distinguishing 
 part of any bond or undertaking for the payment of money 
 used by any dominion, colony or possession of Her Majesty, 
 or by any foreign prince or state, or by any body i t)ri)orate, 
 or other body of the like nature, whether within Her 
 Majesty's dominions or without ; R.S.C., c. 165, s. 25 ; or 
 
 (,{,>•) uses any such plate or other material for printing the 
 whole or any part of such bond or undertaking ; R.S.C., c. 
 165, s 25 ;or 
 
 (//) knowingly ofiers, disposes of or has in his possession 
 any pajier upon which such bond or undertaking, or any 
 ])art thereof, has been printed. R.S.C, c. 165, s. 25. 
 
 440. I'Aery one is guilty of an indictable offence and 
 , liable to fourteen years' imprisomnenl who, with intent to 
 
 '""'■^ defraud,- 
 
Extracts fuom ("kiminai. Coin 
 
 Hi/, 
 
 ((f.) makes an iintru'.- ciilry or any alteration in an) hook 
 of arcoiinl kept l)y the (lovernnieni of ("amda, nr of an) 
 Province of (lanada, or by any l)ank for any siirh (lovern 
 nient, in whicli hooks are kvpl the arrnunls of the owners of 
 any stork, annuity or other puhhr fund transferable for the 
 time heini; in any surh hooks, nr who, in any matter, wilfully 
 (alsifics any of the >ai(l nooks ; or 
 
 (A) makes any transfer of any share or interest of or in 
 any stock, annuity or piihlic fund, transferable for the time 
 bein.f,' at any of the said hanks, in the name f)f any jicrson 
 other than the r)wni'r of such share or interest. R S.C!., c, 
 
 165, S. II. 
 
 441. I'Aery one is L^uilty of .m indictable offence and 
 
 liable to seven years' inii)risonment who, beinu in the em- < icrks u<uiur 
 
 , r 1 ' ^• r;lls,. (livillrM.I 
 
 ploymenl of the (/overnment of f!anada, ot of any Province ".uimiiis. 
 of Canada, or of any bank in which any books of account 
 mentioned in the last preceding' section are kept, with intent 
 to defraud, makes out or delivers any dividend warrant, or 
 any warrant for the i>ayment of any annuity, interest or 
 money payable at any of the said banks, tor an amount 
 i^rcater or less than thai to which the person on whose 
 account sucli warrant is made out is entitled. R.S.C;., c. 
 165, s. 12. 
 
 442. Fu'ery one is guilty of an offence and liable, on siun- 
 
 I ,. ' , , ^ I'riiiliiii;' I'ir- 
 
 mary conviction before two justices of the peace, to a fine f)t ciilurs vur. in 
 
 one hundred dollars or three months' imprisonment, or both, n'oV.'-l' """^ " 
 who designs, engraves, prints or in any manner makes, 
 executes, utters, issues, distributes, circulates or uses anj 
 business or professional card, notice, ])lacai-d, circular, hand- 
 bill or advertisement in the likeness or similitude of an) 
 bank note, or any obligation or security of any (loiernmcnt 
 or any bank. 50 and 31 V'., c. 47, s. 2, ; 53 \'., r. 31, s. 3. 
 
 458. F.very one is L;uilty of an indictable offence and 
 
 . . I'lTSilll.UiMIl uf 
 
 liable to fourteen years imiirisonment who lalselv and de- ''''i^ii" l»r 
 ceitfuUv personates — 
 
 (a.) any owner of any share or interest of or in any stock, 
 annuity, or other i)uhlic fund transferable in any book of 
 account ke])t by the Government of Canada or of any Pro- 
 
KM 
 
 l!\\K- \N|i 11 AN KIM, 
 
 I* ' 
 
 I)- 
 
 vincc llaivol, or hy ,iny bank lor any such Covtrnniciit ; or 
 
 (A) any owner of any shan.' or inliU'st of or in tlu' dchtof 
 any pulilu hod), ur ot or ni tlir (khi or caintal ■.lock ot An\ 
 l)o(ly c(ir|ioralL-, c()in|iany, or society : or 
 
 ic.} any owner ot any dividend, i oii|io!i, i (.ruiKali or mo 
 ncy payal.le \n res|)e(t ol any siicli share or nitt'rest as afore- 
 said : or 
 
 {(/.) any owner of an) share or niieresi \n an) clann lor a 
 urant ot land from ;he (aown, or tor any scrip or other jiay 
 meni or allowance ni hen ol' such ^rant ni land : or 
 
 (-.) an) person dulv authorised by any power of altorney 
 to transfer any such share, or interest, or to re( eive any <Hvi- 
 den(k <()Upon, certilicate or nioiu)', on behalf ot the person 
 entitled iluaeto 
 
 and ihereb) tr.insfers or endeavours lo ir.msler an)' share or 
 intuesl belonging to such ownei', or thereb)- olitains or 
 endeavours to ol)iam. as if he \v<re the true and lawful owner 
 or were the person so authorized by such power of atlorne), 
 any money due to an)' such own.er or ])ayai)le lo the person 
 so aulhori/.ed, or any certilicate, coupon, or share warrant, 
 uraiit of l;ind, or scrip, or allowance in lieu ihereol, or other 
 document winch, by an) law in lorce, or an) usage e.\istin,L; 
 at the lime, is deliveral)le to I lie owner of any such stock or 
 fund, or to the person authon/ed by any such power of 
 altorney. R.S.C., c. 165, s. y. 
 
« 
 
 I 3Sr D JiJ X.. 
 
 ■ ,1 
 
 • 7 
 
 7. '15 
 
 • • '43 
 
 A( IS RKlM.AIJili I 1^ 
 
 Aci- Ki.si'ixiiNo Hanks — 
 
 Application dI 
 
 Act of Incorporation, whal to loiilain ......... 
 
 i'"orni of 
 
 Coinnicnccmciil of 
 
 .\l>-MI\ISI'KA roK — 
 
 iVhcn mA pcr.sonally liabic as a shaiL-hoklcr ^4, 45 
 
 When so liable ^4 
 
 .\(.I.\CV I'KKS 123 
 
 .Aci-N I- - 
 
 i-fleci of notice tluil per>on [iledL^int; is an 106 
 
 Who is an, under llank .\cl loj toio; 
 
 Ai,i,crr.\ii-;Ni- of Stock 24 
 
 Annual MiiniNo — 
 
 Date of, when determined S 
 
 Statement to be laid f)ehjre j:^ 
 
 What il nuiHl show IS, K) 
 
 .Vn.nl'AI, Si-.\rL..Mi.\ I to be prepared 
 
 .Assists — 
 
 i )ebts due to Donunion, second charue on 
 
 1 >ebts due to Provinces, ihirel cliari^e on 
 
 Notes, a fust ch.i!;.^!; mi 
 
 I'enalties, not a ( Iiarj^e in case of insolvemy until 
 
 (Jliier liabilities |>aid 54 
 
 b A 1.1.0 r — 
 
 Voting lu be by _2 j 
 
 Danks — 
 
 Advances by, for IjuiKlmg shi[i.s ,j^ 
 
 .-\L;ency *"ees may be charL^ed by 132 
 
 Agencies may be opened by (,^ 
 
 lienefit of a security accrues to 8^ 
 
 53 
 
 - -» 
 
 53 
 
li ilik:. ■ ( 'iHltllltti d. 
 
 I'liils (;t ladiii:.' may l)L' l.ik^. H li\ , ii.'i ciill.iiri.il mi ni iI\. ()^, ijfi 
 
 ' 'laiin uii(Kr, \'\')\ in iiti|)ai(l WmkIui i i A 
 
 lidW l;i)U(1s hliMiilii lie ilcscnhcd in i i i 
 
 May lie cNcliaiincd t'-r warcliDU^u ilixi|iI i i ., 
 
 Iluiuls of, hy wliDiii to lie siLincd 6i 
 
 i low assi^nal)lc 6 1 
 
 ( XficiTs may he denuiLcl lo ;-ii^n (\: 
 
 lliai idles may lie opened by 6;; 
 
 llii.iness oT, delnied 65 
 
 Certain, not to he transacted liy 65 
 
 Charters of certain, continued 1 1 
 
 ( 'ollatera! security, hill of ladini; as, 92, 9C1 
 
 I) minion, iVc.. and r)reiL:;n puhiic sectnities, 
 
 stock, lionds rnul di'lientures as 65 t(j (i~, 
 
 1 low, may he dealt with, hy ;; 
 
 MoilL;;;L;es as yi; 
 
 Waiver of rights as to, hy 78 
 
 W'aiebouse receipt as yj, ^y\ to i)U 
 
 Collection lees, may he cliainc'd hy 121 
 
 Comiitions previous to commencement of husincss 
 
 hy new . 9 
 
 Deposits, mti. rest allowah.le on 120 
 
 J'linl 125, 127 
 
 Not hound to see to trusts as to 1 25 
 
 l\.ecei\al)le from persons nnahle lo contract 1 23 
 
 And payable lo such de])osit(jrs 12^^ 
 
 i'roviso as to amoniv to h'' received h-om such 
 
 depositors 12,^ 
 
 Ki^lit to repa\'meiu ot, not liarred l)y prescription. . 135 
 
 Deposit liy, Willi Mmisier ot finance 54, 55 
 
 Amount 1 it, iiow delermmed 54, 55 
 
 huidends of, iiMi to impair paid uji capital 47 
 
 fffecl oil. It hu--iness powers e.Meeded by. 71 
 
 Insolvency ot, wliat couslilules 136 
 
 I 'alls m such, case 1 36 
 
 I )ispo .al of unci am led iii' iiieys on 131 
 
 Inlerost at not more ;ban 7 per cent. ma\ be 
 
 |cC'i\eled h) I H; 
 
India. 
 
 Iti 
 
 1 1 
 
 I'nnks —G'// //;///,•,/. 
 
 On deposit-^ 1 20 
 
 Ijcii iif, iiiigoiiils Ccivciim' by wairlMusc ic{'ei|<t, wIrmi 
 
 prinr t.) t!;at >)t unpaid vendor 116 
 
 On shares and unpaid divitlcnds, tor drills and 
 
 ''■■'''''''■^-•'^ ;.4. 35- 36, 75 
 
 I, nans 11(11 til hr mack' !))■, on S!cuiit\ of thrir own 
 
 stix k '^r tliat of other l).,nks 66.70 
 
 Mortg,ii;us may he taken hy, as additional security 
 
 lor debts comractcd -i) 
 
 Loans to wholesale lu.inutacliirers 107 
 
 l,oaiis to wholesale pur(diasers or shi|)pers 107 
 
 I'orm ol security ni such case . 107. 10c;, 1 |6 
 
 J^ffecl ot '-v.cw ity I 10 to I 1^ 
 
 I'.ffect of lonversion 11^ 
 
 Notes as collateral security, ohlija'ions resjiectini,' . . . .H:; 
 
 \()ie> for circuLition, to be iss'.ed only !jy () ^ 
 
 Payable at jiir 60, (.1 
 
 Penalty on, lor exciedini; bu-iness |)owers 71 
 
 HoldiuL; land longer than se\-en year>, S7 toQi 
 
 I'owers 0} 5- 
 
 I.inutations or. 03 O.S to 74 
 
 Personal tiroptaty. riL^iits over when inortgaged to .S.j 
 
 keil estate may b.; held by. tor acind ocr n],i,'i;'on ....-](.) 
 It mortgaged to, may be acquired absolutely .. S7 to yi 
 May only be held ! >r 7 years unless in actual 
 
 •H-cup.ilion S7. (ji 
 
 May Ijc sm1(! by, inider power of sale 91 
 
 .Mortgaged to, ]uncha-eable under e.xecuiioii, iVc . . ,86 
 
 I'le turns to ( lover ntiient 1 J7, i j(), 1 ^o 
 
 I' ""11 of y 2-,, I p, 146 to 149 
 
 Penalty for not making ij8, 1 :;i 
 
 Special nui)- lie ri.!j'iired 128 
 
 Rights of, over good> tnaniil.uaured from articles 
 
 ]iledgiil 115 
 
 Sale of goods by, on non payment of debt 116 
 
 Notice to be L;iven 116 
 
 Ships, iSrc, advaii<.\ s by, fa' building 92 
 
: c.s 
 
 \XK^- \Mi I.WKINi, 
 
 I):nikN--- Coil till inul. 
 
 Slock, not In Il'IkI o\ (lisc(juiu on •.t'ciiiity ot' llirit 
 
 own or llial of ollici lianks 66, 70 
 
 Not to deal in their own (jr otiier liai'.ks' 66. 70 
 
 lixccpt when necesscUy to rcali/.c for advuncis ... 76 
 lyien on for debts and liabilities for debts. .34, ,^5, ,^6 
 
 Trusts, not bound t(; sec to |2, 4_^, 1 25 
 
 Unauthorized use of title a nnsdeineanor 141 
 
 Usury, not liable ',. petuilty for . 1 h^ 
 
 Warehouse receipt may be taken bv, as roliaieral 
 
 securny 'y-. ')7 
 
 C'laini under, prior to unpaid vendoi 116 
 
 May be exrhan^ed for bill of ladinj^ 11^ 
 
 How j^ood.. should be described in in 
 
 Warranty whether liable on 6(; 
 
 Hank Circulaikjn Rkdkmim idn 1'"ijni> 54 to 60 
 
 Notes not redeemed on insolvency to be payal)le out of 5S 
 Payment fron), to be made without re,L;ar(i to amount 
 
 contributed .... 58 
 
 Repayment of amount coniribuled <jn uisoKency . . . . 5<> 
 Kules n)ay l)e made by Treasury IJoard as tc; payment 
 
 out of 60 
 
 To bear interest 56 
 
 Sums due by bank to, ma) be collected by action . . 60 
 Hank. o\ IIrimsii Commijh — 
 
 I 'hief ]ilace ol business of 6 
 
 Sections ajiplicable to 5 
 
 liA.NK Ol- BkiriSlI XORTH A.Ml.KICA — 
 
 (Jhief place ci business of 6 
 
 N(jle issiic ot :^o 
 
 Sections applicable to 5 
 
 HaN(ju1'. 1)l' 1'kupi.k — 
 
 Note issue (jf 50 
 
 Seiuions applicable to 5 
 
 SectKMis not ajiplicable lo 13 
 
 Hank Notes — 
 
 .Amount and denomination of 30 
 
 Average circulation ot, how determined 57 
 
 t 
 
I» 
 
 h 
 
 t 
 
 l\ hi \. 
 
 Il;iilk N'olcs i'fiitiuH'tl. 
 
 ("ountrrk'it 
 
 I >t.-l.i< iii.l:, j'c'ialtv for. 
 !■ list (hill Lit' on ;issctN 
 
 "1 
 5.1 
 
 .1 - 
 
 Howai.u hy whom to hl ^1:.;ik <i 
 
 Ill ra-i' uf insolvL'ticN . lo li^-.n mii rcsi m CLrlaiii <aM 
 
 until rc(lc(;iiufl 
 
 W hen ^iich iiilLTijst to cca.sc 
 
 .M.i\ l)c signed hv machinery 
 
 Not III (.'Vired unimpairfd i„])itai 50 
 
 \o. for Ic^.s ih.in $5.00 to Ik- is-^iird (;r rc-isMued ;o 
 
 < >ML' signature at least to he written U\ 
 
 i'avahic at par Oo, ') 1 
 
 I'cnait)' it" i^sue e.\(:ee(!i unimpaired < apitai 51 
 
 i'enalt\' for Linautliori/ed l-,sue of 6.; 
 
 I'enahx' t(ir picdi^in^ ;_' 
 
 i'en iltv toi' iin])roper issue, vVr , ^j 
 
 i'leil;.:inL; ot". prohihited . . ^ 1 
 
 • 
 
 I'ower to siyn may be deputed 6j 
 
 Kedt'wiptioi! of i,\ 
 
 L'ncler $5.00 ;o he < alleiJ in . ■ ■ S' 
 
 What shall he deemed n<jtes . . 0^ 
 W'lieie i)ayahie 61 
 
 HcNH-, l'i(ivisi()n> tur sale oi. held as collateral .security 
 
 for ndvanci's . ;; 
 
 l:>i:.\Ni liKs ina\ he opened . . . 65 
 
 t'.v Laws 
 
 ('enain continued in force . Lv '•'^ 
 
 Matters that may he re.Liulated iiy . . . 1 1 . 1 .• 
 
 .\hay he made hy sharehcjlders m 
 
 May he made hy direi:tors 17 
 
 ("aij.s — 
 
 .\niount and intervals of .... .... ^(j 
 
 Mow enforced hy action i'- .11 
 
 By forfeiture ; 1 
 
 i'nrfeiture may be remitted ;i 
 
 In case 01 insolvency 
 
 \\o\s made and enforced 
 
 ' ,^/' 
 
 I V 
 
 '#; 
 
no 
 
 l.-ANKs AMI 1;a.nkin(; 
 
 (]alls -CcufiiiiirJ. 
 
 Refusal lo make, a misdemeanor 1,^7 
 
 Under winding u|) act '37 
 
 Who (lualified to make 3° 
 
 Cai'Iiai. Siock — 
 
 Allotment of 24 
 
 Amount of 7 
 
 How increased -,i 
 
 Ht)vv reduced 24, 25 
 
 Conditions to be complied with it legislation 
 
 sought for reduction 26 
 
 Limit of reduction 26 
 
 Reduction not to affect liability of shareholders .... 26 
 
 If any lost, calls to be made 47 
 
 Loss of, t(; be mentioned in next return 47 
 
 Profits to be applied to make good loss of 48 
 
 Must he taken up within a certain lime 24 
 
 What amount t(; be paid up <S 
 
 CEKTIFCArK — 
 
 Treasury Board must grant, before con".mencing 
 
 business 9 
 
 ('nAikA4A\ to have casting vote '7, 21 
 
 CllAkrEKS — 
 
 Certain continued [ 
 
 Lapse of . . 10 
 
 CiRCULAlION — 
 
 Penalty for excessive . . , 51 
 
 Redemption of 61 
 
 COLLAl'Kl^AL SkCUKII V — 
 
 Bills of lading as 92,9^' 
 
 I^ominion, iS:c and foreign securities; stock, bunds 
 
 and debentures as 65, 67 
 
 How may be dealt with 77 
 
 Mortgages as 79 
 
 Waiver of rights as to 78 
 
 Warchotise receipts as 92, 94 to 96 
 
 CoiJ.KcnoN 1'"1':k.s ..121 
 
 k, 
 
In I U.K. 
 
 171 
 
 ii 
 
 Dkiimtions — 
 
 " Agent" 102 to I 
 
 " liank " 
 
 " iJaiikcr" I 
 
 '' Hank note" i 
 
 '• 1!:11 (if kuling" ^, 
 
 " Culkucral " 
 
 " I )t*lits coiuracicd " ^S, 
 
 " Discount " 
 
 " DocuMicnl <it litlu to goods" 
 
 " I)o< unicnt " 
 
 " Exchequer hill " 
 
 " False (iocuuient '...., ' ' 
 
 " Forgery " • 
 
 " Goods, wares and nierclKUidise '' 2 
 
 " Manutac'.urer " 3, 
 
 " Negotiate " 
 
 "Then" 
 
 " Treasury Board '' 
 
 "Trustee" 
 
 " \'alual)le security '' 
 
 •' Warehouse receipt " 2 
 
 Df.I'osi IS — 
 
 How and to whom joint payable 125 to 
 
 Interest allowable on 
 
 Not bound to see to trusts as to 
 
 Receivable from persons unable to contract 
 
 And payable to such depositors 
 
 Pr(.)viso as to amount receiveable from such 
 
 depositors 
 
 Right to repayment ot, not barretl by prc'^criplion . . . . 
 
 DiKKcroRS Provision Ai 
 
 Number of 
 
 May open stock iiooks 
 
 WhwU i)owers cease 
 
 ] )iKi:c'roRs — 
 
 Annual election of 
 
 Hoard ot 
 
 07 
 I 
 
 50 
 
 5« 
 96 
 
 97 
 97 
 67 
 
 50 
 
 59 
 
 59 
 96 
 08 
 1 I 
 
 5^ 
 . 2 
 
 50 
 
 5' 
 
 94 
 
 27 
 20 
 
 -5 
 
 1 ; 
 
 - ,1 
 
 .>5 
 
 '4 
 14 
 
'< 
 
 IT2 
 
 II WK- .\\|i I; WKI \i. 
 
 I )irc'(t()rs — t'ontiiiiiiii. 
 
 Nacancies in, how lillcd iC 
 
 (.IhainiKui nt mccliii^s of 17 
 
 o have ca^iinL! ndIc 
 
 Disfounis lo II 
 
 I'llection of, by haliot 21 
 
 N'oiic L- ot I :^ 
 
 I'rcjvision in cisu of failure in clectiun of 17 
 
 lv|iiaHt)' of votes tor lO 
 
 When and where lo lake place cS, 15 
 
 ( leneial p iwcrs o|" 1 4. 1 7 
 
 To appoiiu officers, clerks, tvc is 
 
 'I'o call spe( lal geiieial lnel■tint^.■^ of shareliolder-^ . . . . 1 1; 
 
 I'o close transfer hook.^ 47 
 
 'I'o declare dividends 47 
 
 '1 o declare stfick forfeited for non-payment o; calls . },\ 
 
 ■|'o elect president and vice-president 16 
 
 'I'o enlorce calls hv action p 
 
 To inspect liook'^, iVm 46 
 
 To make hv laws . 1 - 
 
 ■ ' i 
 
 To make calls 20 
 
 To res^iil.Ue affairs of hank 1 - 
 
 I'o rci|iiire se( iirit\- from cashiers, \-c. |S 
 
 (iiviiig undue prefereni e, guilty t;f mixlemoanor 1 ?,(^ 
 
 i.ialiility of, for hreaches ol' truNl hv co directors i.| 
 
 Loans to II 
 
 .\lakitiu ial'f siatemetUs in returns, ^uiiltv of misde 
 
 meanor | ^^o 
 
 Notii'e of holdiim of election of' 1 - 
 
 Number of S, 11 
 
 I'resident and vice-president, when to he elected by. , id 
 runishmetu of, tor makiiiL; lal-^e statemetU in returns. 1 pj 
 
 < Jualilicaiioii of I _j 
 
 Mu>t he natural horn or naturalized sulijects iq 
 
 .\lii->t continue 1 ^ 
 
 (^)uoruin of II 
 
 Relii^m^ to make (alls on insoKency, guiltv of nnsde 
 
 meanor 1 <- 
 
 \ 
 
IVIil' \. 
 
 it;; 
 
 f 
 
 I )i recti )is Cent III Ui'd. 
 
 RfiDoviiig and rcphiciiiti, at m)C( ial j;eiietal nietiii^i; . . . zo 
 
 Remuneration of 1 1 
 
 Vacancies m fxiard how lilled 16 
 
 Who shall he 15 
 
 Divini-NMs — 
 
 Declared l,\ directors 47 
 
 I Jen on toi any debt or liabihly tor ah\' debt 75 
 
 Notice of \i 
 
 Not to in)|)air paid iiji capital ^7 
 
 (\lapital lost by, to be made ii|> by call-, nn iirip.iid 
 
 stock 17 
 
 Net profits to be a|)plied to niai<t i;ood siuji l(,ss.., 48 
 Not to exceed S p. c, unless a certain reserve tund 
 
 exists 4S 
 
 May be made payable in L'niled i\in,L;doin . 37 
 
 DoMIN ION (IhkQUKS — 
 
 To be cashed at i>ar 1 4^ 
 
 Dominion Notes — 
 
 Arrangements for supplying 49 
 
 Payments in 1 
 
 Election -See Directors. 
 
 I'-XKctt'oK- See Administrator. 
 
 Kalsk Statements in returns 
 
 .A misdemeanor 1 4.> 
 
 FOKMS — 
 
 Act of incorporation 7, ' 45 
 
 Security under section 74 107, 199, 146 
 
 Return.s 1J7, 1 J50, 146 to 1 41; 
 
 Guarantee Fund — 
 
 May be estaljlished 1^:5 
 
 Guardian— 
 
 When not personally liable as a sliaicholder 44, 45 
 
 When so liable 4.1 
 
 Insolvency — 
 
 Calls on 1 36 
 
 How made 137 
 
171 liANiss AND Banking 
 
 Inscjlvciicy —Conliniiai. 
 
 If not paid, toilciuirc incurred i.^'i 
 
 Rclusal to Iraki.', a nn->(lL'nn.'aiu)r 137 
 
 Disposal of ui claimed numcys on 1^1 
 
 Notes to bear interest until redeemed in ( ertam cases , .57 
 
 When such interest ceases 132 
 
 I'cnaltics in case ot 54 
 
 Sliareholders hahility on 133 
 
 If shares transferred within sixty days of 3O, 138 
 
 What cfjustitntcs 136 
 
 In ii:Ki,.^f 
 
 When taken by hanks hunted to 7 per cent ..119 
 
 If m.ie paid, excess not rei;overahlc \ 10 
 
 Loans— 
 
 On bank slock ])rohibitcd 66, 70 
 
 IV'nah\ in resjiect > f 119 
 
 To directors 11 
 
 MEEiiNds -annual. See Annu:d Meetings 
 
 Not II e ot, vvha'. should c:onti;in 20 
 
 i^roxics may vote ai 22 
 
 Renewal ot 22 
 
 Who may hold .22 
 
 Special general, how called 19 
 
 Vuting at, to be l>y ballot 21 
 
 If an equality ot votes 16, 2 1 
 
 Mi;KcHANrs Hani^ oi I'. H.I. — 
 
 Provisions ot .Act extended to 6 
 
 Deposit by, with .Minister of I''inance ^^ 
 
 .•\'nount of h iw ditcrmnied 55 
 
 MoRi'GAi-.i:s — 
 
 .\s additional sfcurity for debts ((aitrarted 23 
 
 .A.S continuing security 83 
 
 Norks — 
 
 .Advertisements not to be issued in form of 65 
 
 (Chartered banks onl\- to issue 63 
 
 Counterreit 64 
 
 May be signed by machinery. . . 62 
 
 C)ne signature at least to be written 63 
 
I 
 
 i 
 
 1m)| X. 
 
 1 
 
 i J 
 
 Notes — Con till iit-d. 
 
 Penally lur un iiitlu)ri/i;d I'^suo ol Gt, 
 
 To he |Ki\,il)U' .il pai 60, (j I 
 
 NoTlCKS Ikmv to l)c L'jve.-n 142 
 
 Offkn'Ces against Hank .\( t 9, 37, 141 
 
 How i)iiiii->!ial)if 142 
 
 OfKKNCKS LJnDKK IHK ("kIMINAI. ( \i1)B; — 
 
 " lianker " delincil 15H 
 
 " liank note" liefmed 158 
 
 Conspiracy to detVaud, how puni-ilied 158 
 
 ("lerks issuing false dividend wiir.int>, how |Jiinished. 163 
 
 Crinnnal hreach of trust, how lamished 155 
 
 I'rocedure in such cise 15:; 
 
 " Document ' defined 15S 
 
 " Document of title to goods ' delined 15S 
 
 Drawing document without authority 161 
 
 " Hxche(juer hill '' defined 158 
 
 False accounting hy official, how |;unislu(i 155 
 
 False accounting by clerk, how punished 156 
 
 ■' False document " defined 159 
 
 False statement by official, how punished .... 155 
 
 '• Forgery " defineti i :^y 
 
 lUinishment for ... 1 60 
 
 Gaming in stocks and merchandise, how punished. . . 152 
 Innocent partners not liable for offences committed 
 
 in liame of firm i -s 
 
 Instruments of forgery, making, [lossessing or using, 
 
 how punished , 1 1 
 
 Making false statements in receijjts for property that 
 can be dealt with under 'Fhe Bank .Act, 
 
 how punished j-y 
 
 Fraudulently dealing with projierty to which such 
 
 receipts refer, hf)w punished 157 
 
 Making false entries in books relating to public funds . 162 
 Owners of merchandize disijosing thereof contrary to 
 agreements with consignees who have made 
 
 advances thereoii; how punished 157 
 
 Personation of t ertain persons 163 
 
IMAGE EVALUATION 
 TEST TARGET (MT-3) 
 
 1.0 
 
 I.I 
 
 ilM IIIII25 
 
 ;:'3 2 
 
 36 
 
 122 
 
 12.0 
 
 1.8 
 
 
 1.25 1.4 
 
 1.6 
 
 
 ^ 6" — 
 
 
 ^ 
 
 ^.^ 
 
 <^ 
 
 /}. 
 
 '^2 
 
 "m- 
 
 ^"., 
 
 
 o 
 
 /, 
 
 
 O 
 
 '^W 
 
 Photographic 
 
 Sciences 
 Corporation 
 
 s 
 
 ^^ 
 
 s 
 
 ^' 
 
 V 
 
 :\ 
 
 <^\^ 
 
 \ 
 
 C^ 
 
 ^V 
 
 A*- 
 
 ^ 
 
 
 %^ 
 
 ri7 
 
 23 WES? MAIN STREET 
 
 WEBSTER, NY I4S80 
 
 (716) 872-4503 
 

 
 ^ 
 
 
 ♦^ 
 
17li 
 
 I'lANKS \N|. j'WklNC 
 
 
 I 
 
 Ik 
 
 M 
 
 
 C)frcnrt's undtT ttic Criminal ('.u(\k: -Continued. 
 
 PossesMPt; forfitd hank notes i6i 
 
 I'rinting ( intilars in likeness of notes. 16-5 
 
 Sending telegrams in false names 161 
 
 Sending talsc telegrams 161 
 
 Spreading false news, how punished 132 
 
 "'Ihelt delincd" 152 
 
 '['heft hy agent and attorney, how |)unished 155 
 
 'I'hff hy a iieison holding a power of attorney 15,^ 
 
 Thelt l>y clerks and servants, how |iunished 154 
 
 Theft by misappropriating proceeds held under a 
 
 . re,;ion i 54 
 
 " Trust^-e " defined is-"^ 
 
 I'.ijiiri fiV'-.'-'j documents 161 
 
 " ^'cii-aM'" . iiy ' defined : 59 
 
 \V.'reho'i5i;e;..c.r , i^-<., giving false receipts, how 
 
 punished 1 5f> 
 
 Knowingly using the same 156 
 
 OlFICERS — 
 
 Appointed V)y directors 1 S 
 
 Certain, must give security i<S 
 
 l-lffect of alteration of duties ot, on liability of surety. . . ig 
 (living undue preference, guilty of a misdemeanor. . . 1,59 
 Making false statements in returns, guilty of a mis- 
 demeanor 140 
 
 Pension funds may be established 13 
 
 PKNAi.nas 49. 51- 52. ^.^1 ^4. 65, 114. 1J9. i^^. '29, 
 
 130, 131. 124 
 
 How recovered 1 4° 
 
 President— 
 
 Election of ' ^ 
 
 Hew removed at special general meeting 20 
 
 How replaced ' ^' 
 
 Presumption in favor of validity of transaction 83 
 
 PROC KUURE — 
 
 To efTetl forfeiture of slock -3' 
 
 Sale of lumber, goods, Ike , held in pledge 117 
 
 Sale of stock for debt of owner ~(> 
 
 i 
 
I * 
 
 India. ^"^ 
 
 I'kOKITS — 
 
 To be a|)|iliccl in luakin;^ good loss of capital 4'"^ 
 
 l^kOXIES — 
 
 Renewal of 2* 
 
 Who may vote on 22 
 
 QUORUM of directors ' * 
 
 Rkai, Rsiatf. — 
 
 Kor actual occupation 79 
 
 Moitgaced to bank may be ai (juiicd absohilrh .. S;, 91 
 
 May be purchased if sold under execution 8<) 
 
 May only be held for 7 years, unless in actual oc ( upation XS 
 
 May be sold under |)o\ver of sale 91 
 
 Rf.CKII'IS — False s;atcnienls m, a misdeiueanor 114 
 
 Rksf.rvi-.s— part o(, to be in Doinnuon notes 49 
 
 Reiurns— 
 
 Annual, to be made to Mini-ler of Finance i-'9. 1 ."^o 
 
 Form of ' 3° 
 
 Penalty for not making 1 ;, 1 
 
 Monthly, to be made to the Minister of Finance 1 27 
 
 I'onn of ' -7 
 
 Penalty for not making \ 2>^ 
 
 Special, may be called for t)y the Minister of Finance. 1 2S 
 
 S.M.E OF (loous — 
 
 On nonpayment of debt ^ <<' 
 
 Notice of, to be given 1 '() 
 
 Effect of want of notice 117 
 
 Without owner's consent, must be by publu au< tion 1 10 
 
 Sale of Stock for debts and liabilities tnr debts 76 
 
 Skci.'RITIF.s— Bank may hold certain as collateral 65 
 
 Sale of 7 7 
 
 Shares- Amount of 7 
 
 .\mount payable on, in ,^0 days from subs( ription .'9 
 
 Are personal estate ■^7 
 
 Books of subscription for, may be opened in the 
 
 United Kingdom and elsewhere ^7 
 
 Calls on 30 
 
 Dividends on, may be made payable in United 
 
 Kingdom and elsewhere. 27 
 
p.' 
 
 
 IS > 
 
 H i 
 
 I!- I 
 
 178 
 
 Hanks anh Hankinc; 
 
 Shares — Continued. 
 
 Forfeiture of, for non payment of calls 
 
 How and when paid 28. 
 
 I.ien on for debts and Hahilities for debts to the 
 
 ''''I'lk 34, 35. 3('. 
 
 Sale of, to enfnrce ben 
 
 List of tran^fers of, to fje made up daily 
 
 'i'o be open to sharelioklers 
 
 No fractional part of, iranskrable 
 
 Sale of, on exei iilion i8. 
 
 Who t<j transfer 
 
 Sale of, on forfeiture for non-payment oi calls 
 
 How transferred in such case 
 
 Surrender of certificate of, on irans/er 
 
 'rr.ifticking in, effect of on liability of shareholders . . . . 
 
 'I'r.insferable at will of holder 
 
 Transfer of, when valid 34, 
 
 Can only be made l)y registered owner 
 
 In case cif sale by bank for debts or liabilities for 
 
 debts 
 
 Transmission of, othe-iwise than by transfer 
 
 How proved 
 
 How authenticated it ni;i(ie out of ( 'anacla 
 
 On marriage of female sharelvjlder 39, 
 
 On death of shareholder 
 
 Further provisions in sue h case 
 
 Votes on 
 
 Sharkhoi,I)k:rs — 
 
 All calls on, to he paid before voting 
 
 General powers of 1 1, 
 
 May authorize establishment of guarantee antl 
 pension funds 
 
 May call sjjccial general meetings 
 
 May remove president for mal-administration 
 
 May increase cajjital stock 
 
 May reduce capital stock 
 
 Infant, may repudiate 
 
 Liability of, on insolvency. ... 
 
 32 
 29 
 
 75 
 76 
 36 
 36 
 34 
 37 
 37 
 32 
 
 74 
 27 
 3^> 
 36 
 
 76 
 3« 
 3« 
 
 .S9 
 40 
 40 
 
 4« 
 21 
 
 13 
 '9 
 
 20 
 20 
 24 
 
 35 
 35 
 
 i^ 
 
Imh x. 
 
 179 
 
 I I 
 
 
 Shareholders— 6>'w//«w<v/. 
 
 Calls to meet such liability 13^ 
 
 Forfeiture for non-i.ayineni ot snch rails i .vS 
 
 Who h:ne traiisfcrrcd stock within siuty days 
 
 hefcjre insolvency 3^'. '.^^ 
 
 List of, to he transmitted yearly to Mmistur "f iMtiam e. i 2y 
 
 Penally lor oniissicn '3° 
 
 May regulate certain luattfr^ 1)> hy law 1 1 
 
 Vote hy proxy -^ 
 
 Not allowed to inspect hook>, iVc 46 
 
 To vote hy ballot • • • ■ 21 
 
 Ships — Advances for building; 9^ 
 
 Stai KM r.NT- Annual to hi prepared 45 
 
 What it must show ;,S. 46 
 
 False in returns, a inisdi'nieanor 14° 
 
 Stock— See capital stock—- 
 
 'I'ransi F.K Hook, closing of 47 
 
 Treasiry I'iOAki), defined . • 2 
 
 Certificate of, to be obtained ') 
 
 Rules mav be made by, as to jjaynicnt of money out 
 
 of redemption fund 60 
 
 Tkustee — 
 
 When not liable as a shareholder 44- -45 
 
 When so liable 44 
 
 Tri'sts — Hank not bound to see to \2, 4,5, i 25 
 
 Usi'in' — 
 
 Hank not liable to penalty for 119 
 
 Instruments not void on a< count of 120 
 
 Not to render innocent party liable to penally for. .121 
 Not to render innocent j)arty liable to loss of remedy. 121 
 Provisions as to 1 1 9 to 121 
 
 Vendor Unpaid — 
 
 Has no lien over bank in cerU;in cases 116 
 
 Vessel— see ships. 
 
 Vice-President — 
 
 Election of 16 
 
 How removed and replaced at special general meeting. 20 
 

 IKO 
 
 Hanks ^\l. I'i\nki.\(; 
 
 U- \ 
 
 
 . 2 I 
 . 21 
 
 it .1 tu-. ( li.iiiiiKiti I'l have rastii'Li vu\v f\(cpt .i! i-lor 
 
 II'tM (>l (llIC'( lots 3 1 
 
 M.ij'itity .)(, Id (k'tcriniiu' (iiiislion . n 
 
 ( M jiiiiit lii)l(icrs t)f charts , ^i 
 
 < III ^ll.lU'S 
 
 I'll l)( l)\ 'lalloi 
 
 \\ Ms-UK. 1^1 Kl.iiii'i ( "i Misi'.s, ( DiislitiitionaiiUdt . ^ • 
 \\ \Ki Hni ^1 ki.ciaiM a'. (DllaiiTai -.t( imi\ .;2, (^ ( I'-.yO, 1)7 
 
 1 ImW L;i((i.is ^ll(lulcl he (k'Sf ril)f(i III 100 
 
 Ale -iul»tiluk"(l jv""'"^ tdvcrc'd hy . . (oo 
 
 I'.flc t ot ( t.'iivi'rsiun iqq i i c 
 
 I'.fKi I ot a((|iiisiii(ji) thereof yn, 102 
 
 Meaniiii; uf j 
 
 I'uiah) U,v inakiii.L; f.iKe sla'.iiieiil 111 114 
 
 Mil) he c.\( lian^eil !ui hill i.f l.uimi; 1 i ', 
 
 Transiei of", hy aj;eiit ot (Avner 102 
 
 \\ lio may /wx ,^X 
 
 I i 
 
i