The assignment or pledge is in the exact form prescribed by the Bank Act or of like effect (Figure 48), and is a legal transfer to the bank of the title of the customer to the goods described in it. A legal acquisition of valid pledges, warehouse receipts or bills of lading confers on the bank priority of claim over an unpaid vendor. To obtain title it is necessary that the pledge should be contemporaneous with the advance, or pursuant to a written promise to give security made either prior to

Security under Sec. 88 for One or more PromIsssory Notes

In consideration of advances of....................................

.......................dollars made by The Canadian Bank of Commerce to the undersigned, for which the said Bank holds the following bills or notes made by the undersigned :

Notes dated..............191......due.............191. . .. $. .

Here describe fully the bills or notes so taken.

..................................................................................... ...................................................................................

Rule out the classes of products, etc., not covered by this assignment.

the products of agriculture, the forest, quarry and mine the products of the sea, lakes and rivers the live stock or dead stock, or the products thereof the goods, wares and merchandise the grain mentioned below are/is hereby assigned to the said Bank as security for the payment of the said bills or notes, or renewals thereof or substitutions therefor and interest thereon.

The security is given under the provisions of Section 88 of the Bank Act, and is subject to the provisions of the said Act.

The said

Rule out the classes of products, etc., not covered by this assignment.

products of agriculture, the forest, quarry and mine products of the sea, lakes and rivers live stock or dead stock, or the products thereof goods, wares and merchandise grain are/is now owned by the undersigned and are/is now in the possession of......

and are/is free from any mortgage, lien, or charge thereon (except previous assignments to the Bank) and are in....................................

Describe fully the place or places where the goods are.

situated........................................

and are the following.................................................

Insert as full description as possible of goods assigned, e.g., logs, lumber, wheat, etc., and specify the products on hand.

.............................................................................................. ............................................................................................. ............................................................................................

Dated at...............the.............day of..............191. .. .

N.B. - If necessary, for want of space, the bills or notes or the description of the goods may be set out in schedule to be annexed, in which case insert in the appropriate spaces the words "those mentioned in the schedule hereto."

Figure 48. Assignment or at the time the advance is made. When assign-ments are given in connection with a general or continuous promise to give security, it is advisable to include all goods covered by previous assignments given under that promise, by describing all the property then in existence and in the customer's possession.

In filling out an assignment all the notes representing the total advances to date should be clearly detailed in the blank provided, and the goods and the places where stored should be described as definitely as possible.

The advance from the bank should be described as it actually is and not in general terms such as "all advances" used in the written promise. Assignments must be given as security for a specific loan in money, or for a specified promissory note or notes.

The best description is one which takes in all goods in a particular place, such as the following: "all the logs, lumber, lath and shingles which are now in the following place(s), namely. . . ." This description, if the place or places are properly described, would leave no doubt as to what goods are assigned. It would transfer the goods to the bank subject to whatever claim it might already have under previous assignments and, in addition, all goods covered by the description that had been added since the date of the last previous assignment. The words "except previous assignments to the bank" should always be left in the form when there are previous assignments.

Failing this general description, the security, to be good, must contain such a definite description by marks, location or otherwise as will enable the bank to identify the goods without question, even if there are other goods of the same kind in the same place not assigned to the bank.

A clear and definite description of the place or places where the property is stored is as necessary as a description of the goods themselves, and indeed, is an essential part thereof. The ponds, yards, etc., where logs and lumber are stored, the warehouses about a mill containing flour or grain and, in fact, all the places in which the goods to be assigned are situated, must be described in such a way that there can be no doubt which particular places are meant, and so that if there are other places of a similar kind belonging to the customer they can be clearly distinguished. Such a description as "my mill" or "my elevator" if the customer owned two mills or two elevators would not be good. If the customer is likely to use any other than the usual storage places the phrase in the written promise and assignment should be made broad enough to include these also.

It is to be noted that the act authorizes a bank to take assignments of goods whether in the possession of the owner or not. The pledge (Figure 48) has been framed to meet customary cases, but it may be altered to suit the circumstances when goods are in possession of another person, as, for instance, at a railway station where the agent cannot grant a warehouse receipt.

Promise to Give Warehouse Receipts or Security under Section 88

....................................191...

TO the manager

The......................BANK

Dear Sir:

The bank is hereby requested by the undersigned to grant and continue during the current season a revolving line of credit for ray/our................................................business of $.............., and to make advances to the undersigned thereunder either by way of overdraft or in the form of discounting bills and/or notes of or for the undersigned on the security of all the

(hereinafter referred to as "goods") which are now owned or which may be owned by the undersigned from time to time while any advances made under this credit remain unpaid, and which are now or may hereafter be in...........................................

situated .......................................... ..............

And the undersigned promise and agree to give the said Bank from time to time security for the said advances by way of assignments under Section 88 of the Bank Act, covering all the said goods or part thereof, and/or bills of lading and/or warehouse receipts for goods of the above kinds or some of them; and you or the Acting Manager for the time being are hereby appointed the Attorney of the undersigned, to give from time to time to the Bank the security above mentioned and to sign the same on behalf of the undersigned.

The Bank may from time to time take from the undersigned bills and/or notes representing the advances in whole or part. Such bills and/or notes shall not extinguish or pay the indebtedness created by such advances but shall represent the same only.

This undertaking is to apply to all advances made to the undersigned under the said line of credit, the intention being that all said goods which the undersigned may from time to time have in said place(s) shall from time to time be assigned to the Bank under Section 88, as security for all advances, and that all bills of lading or warehouse receipts covering goods of the above kinds which the undersigned may receive from time to time shall be given to the Bank as such security.

Yours truly,

Figure 49

The goods and their location must, of course, be similarly described in both the written promise and the assignment.

Contract with Customers Respecting Warehouse Receipts, etc.

IN CONSIDERATION of the advances being made to the undersigned upon the security of warehouse receipts or bills of lading, or upon security under Section 88 of the Bank Act, the undersigned consent and agree with the Bank as follows:

1. To keep the property covered by the warehouse receipts, bills of lading, or security given from time to time, insured against fire to the extent of the advances made thereon, or to the full insurable value thereof in case such advances exceed the insurable value, and to assign the policies to the Bank (or have the loss, if any, made payable to it). Should the undersigned neglect to keep up such insurance, the Bank may insure and hold the property as security for the premiums paid and interest thereon, which premiums and interest the undersigned will pay on demand.

2. Any sale of the property covered by any such warehouse receipt, bill of lading, or security under such Section 88, given or which may be given to the Bank by the undersigned, may be by private sale, if the Bank thinks fit, - no advertisement or public notice of sale or intention to sell need be given, - and if three days' notice of general intention to sell be given by registered letter mailed in the Post Office and addressed to the undersigned at the address last known to the Bank, such notice shall be sufficient, and the property may be sold en bloc or in smaller quantities either by public auction or private sale or partly by each mode, at any time after the expiration of such period without further notice.

This is to be a continuing consent and agreement, and is to apply to all warehouse receipts, bills of lading and securities (and the property covered thereby) given, and which may be given, to the Bank by the undersigned. Dated at...................the........day of............, 191----Figure 50

An assignment of goods is continuous and follows the relative goods thru all processes of manufacture until the bank's security is converted into the finished article.