This section of the book is from the "Canadian Banking Practice" book, by John T. P. Knight.
Question 583.— In your reply to question 582 you say that "no doubt it would be practicable in some way to get security " for goods in bond, but that it cannot be by way of warehouse receipt. Would you indicate in what way you think this could be done?
Answer.—With reference to the above it seems clear that advances on the security of warehouse receipts for goods in bond are in a somewhat precarious position. There is, however, this to be said: That as between the warehouseman and the merchant, the warehouse receipt might be held good, and that while not under the Act a warehouse receipt which a bank could acquire under section 73, it might possibly acquire the receipt as collateral security under section 68 as for a debt already contracted; but in Ontario questions would arise not only under the Bank Act, but also under the Chattel Mortgage Act.
There is no difficulty in the matter of goods in bond, in cases where security can be taken under section 74. An assignment in accordance with Schedule " C " would be quite good whether the stuff is in bond or not, assuming it to be right in other respects.