Safekeeping

• Author: M.H. Ogilvie
• Profession: Professor of Law, Carleton University
• Pages: 395-401

395

CHAP TER 12

SAFEKEEPING

A. INTRODUCTION

Banks have prov ided safekeeping for customer property of va lue since

the beginning of modern banki ng in late mediaeval Europe and safe-

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

related to accounts and loans. Safekeepi ng is normally available by th ree

means: safety deposit boxes, sa fekeeping, and night safe depositories,

each governed by contract. In addit ion to such voluntary contracts of

bailment, banks may also become bailee s of customer property such

as collateral securities taken for loans1 and other securities traded by

their customers through an agency and temporar ily in the possession

of the bank.2 They might also become involuntary bailees of personal

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 contract

1Carnegie v. Federal Bank of Cana da (188 4), 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].

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

(Ont. C.A.). This is less likel y today, since securities in p aper form (now rare)

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

tory and settle ment system for securities in C anada. See D.M. Hanley, “Central

Depository System for S ecurities” (1983) 7 Can. Bus. L.J. 306.

3Bell 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.).