Vuckovich vs. Royal Bank of Canada, 1998 CanLII 2398 (ON CA)

[19] Returning to basic banking principles, it has long been established that the relationship between a bank and its customer is one of debtor and creditor. The banker borrows money from the customer under terms to repay it: see Hart (Inspector of Taxes) v. Sangster, [1957] 2 All E.R. 208 (C.A.) citing Foley v. Hill (1848), 2 H.L. Cas. 28 and quoting with approval Joachimson v. Swiss Bank Corporation, [1921] 3 K.B. 110 at 130. Once funds are properly deposited in a bank account, they become the property of the bank in accordance with the terms of the deposit. Those terms constitute a simple contract debt setting out the conditions under which the bank is required to repay to the customer the balance in the account from time to time. So long as the funds are in possession of the bank, they remain its property until taken into possession by the customer. If the bank permits another without authority to cause it to remove those funds, then the bank’s debt to the customer is not discharged to the extent of the funds removed.