Safekeeping

• Author: M.H. Ogilvie
• Profession: Chancellor's Professor and Professor of Law, Carleton University
• Pages: 430-436

430

CHAPTER 12

SAFEKEEPING

A. INTRODUCTION

Banks have provided safekeeping for customer property of value since

the beginning of modern banking in late mediaeval Europe and safe-

keeping remains a ser vice used by most customers in addition to those

related to accounts and loans. Safekeeping is normally available by

three means: safety deposit boxes, safekeeping, and night safe deposi-

tories, each governed by contract. In addition to such voluntary con-

tracts of bailment, ba nks may also become bailees of customer propert y

such as collateral secur ities taken for loans1 and other sec urities traded

by their customers through an agency and temporarily in the posses-

sion of the bank.2 They might also become involuntary bailees of per-

sonal property forgotten at a branch by the customer and owe a duty

to the customer not to damage them.3 When customers enter into a

1 Carnegie v. Federal Bank of Canad a (1884), 5 O.R. 418 (Ch.); Hochelaga Bank v.

Larue(1910), 13 W.L.R. 114 (Alta. C.A.); Royal Bank v. Talbot, [1928] 3 D.L.R. 157

(Alta. S.C.A.D.); Sterling Bank v. McVety, [1923] 3 D.L.R. 246 (Sask. C.A.) [McVety].

2 TDF Investments Lt d. v. Canadian Bank of Comm erce (1961), 27 D.L.R. (2d) 609

(Ont. C.A.). This is less likely to day, since securities in pape r form (now rare)

are stored with t he Canadian Depositor y for Securities Ltd., a centr al deposi-

tory and sett lement system for securities i n Canada. See D.M. Hanley, “Central

Depository Syste m for Securities” (1983) 7 Can. Bus. L.J. 306.

3 Bell v. Capital and Counties Bank (1887), 3 T.L.R. 540 (Q.B.D.); Heddle v. Bank of

Hamilton (1912), 5 D.L.R. 11 (B.C.C.A.).