Rights in Security Flashcards
1
Q
Types of security?
A
> personal e.g. cautionary
> real e.g. asset
- proper
- improper
2
Q
Albatown v Credential Group
A
- parasitic nature of security
- standard security unenforceable where secured obligations had been extinguished
3
Q
Hewitt v Williamson. What case endorsed this view?
A
- creditor granting security over an asset belonging to a third party was treated as caution
- Smith v Bank of Scotland
4
Q
What was removed by Mercantile Law (S) Act?
A
“discussion and division”
- must now be supplanted by agreement
- discussion = co-cautioner pro rate share of debt only where all cautioners asked
- division = cautioner only pays where all reasonable steps taken to enforce debt against principal
5
Q
RBS v Rankin
A
- example of non-operative misrepresentation which will not strike down a cautionary obligation
- cannot escape liabiltiy through turning blind eye to financial position of debtor
6
Q
Young v Clydesdale Bank
A
- creditor has general duty of good faith
- reliance only at time information sought
- cannot rely on silence to cover position
- cautioner must investifate own position
7
Q
Royal Bank v Greenshield
A
- principal failed to discharge debt
- cautioner resisted action for payment
- Held: no general duty of disclosure
8
Q
Barclays Bank v OBrien
A
- requirement in certain relationships for notice of acquiring legal advice
- creditor must have actual or constructive notice of particularly close relationship
- bank should send notice to gain independent advice
9
Q
Smith v Bank of Scotland
A
- general duty of cautioner is to make necessary enquiries of own interest
- BS had not suggested independent legal advice
- BS had constructive notice of misrepresentation made by S’s husband
- S’s appeal against action for reduction allowed
10
Q
Braithwaite v Bank of Scotland
A
- related to assignation of shares
- transaction could not be reduced, steps not fulfilled:
- breach of duty of good faith
- actionable wrong
11
Q
RBS v Wilson
A
- additional requirement of gratuitous obligation
- independent legal advice alone is sufficient
- calling up notice must be used to enforce heritable security if sale is desired remedy
12
Q
RBS v Etridge
A
- quality of advice is also required in relation to independent legal advice
- e.g. face to face meeting
- this approach was rejected by Sco court in RBS v Wilson
13
Q
Veitch v National Bank
A
- fluctuating amount subject to liability ceilings
- payable amount is ascribed to both guaranteed part of debt and non-guaranteed part of debt
14
Q
Mackinnon
A
“double ranking”
- cannot rank for same debt twice on insolvency
15
Q
Hamilton v Western Bank
A
Pledge
- creditor retains possession otherwise security lost
- must fulfill publicity principle
- delivery
