A bank appealed a Quebec Court of Appeal decision that had curtailed its recovery after enforcing Bank Act security against a manufacturer's inventory.
The Supreme Court held the debtor was in default on demand loans, the bank was justified in calling the loans, and the debtor had consented to delivery of the secured inventory for realization.
The Court further held that contractual clauses authorizing possession and sale were valid and not contrary to public policy or the Bank Act where the debtor did not object.
The Court restored the trial judgment, rejected the higher inventory valuation advanced on appeal, and dismissed the cross-appeal and new damages claims.
