This section of the book is from the "Canadian Banking Practice" book, by John T. P. Knight.
Question 591.— The security under section 74 which we have taken from our customers reads:
" All the lumber in our yard situated on Victoria Street, and also that in our yard on Peter Street."
There is a very great deal more lumber than is necessary to cover the advance. Would such security be good against other creditors? Is it not defective inasmuch as it does not mention any quantity, and could not the debtor sell practically all the lumber in each yard and still be within the law?
Answer.—We do not think the description is defective. (See Mr. Lash's article on "Warehouse Receipts, Bills of Lading and Securities under Section 74 of the Bank Act," page 54, Vol. 11 of the Journal. The security would be good against creditors if otherwise properly taken. The fact that there is a great deal more lumber than is necessary to cover the advance does not affect this question. The absence of a reference to the quantity does not enable the debtor to sell any part of the lumber assigned. The effect of the assignment is to vest in the bank the ownership of the lumber as it was at the time the assignment was given, and the customer would have no right to remove any lumber thereafter without the bank's consent.