Safekeeping

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

430

CHA PTER 12

SAFEK EEPING

A. INT RODUC TION

Banks have provided sa fekeeping for customer property of value since

the beginning of modern banking in late medi aeval Europe and safe-

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

related to accounts and loans. Safekeeping is norm ally available by

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

tories, each governed by contract. In addition to such voluntar y 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 tempora rily 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.) [McVet y].

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.).