For the purposes of collateral security, what is the legal test for collateral security?
British Columbia, Canada
The following excerpt is from Finning Tractor & Equipment Company Limited v. Mee, 1980 CanLII 598 (BC SC):
On the other hand in the case of Bryans v. Peterson cited earlier in these reasons Masten J. in the appellate division at p. 307 said: "It must be clearly borne in mind that the term 'collateral security' is not a legal but a commercial term, of somewhat loose and vague import, and that in the present case the agreement on which this action is founded is collateral in the sense that it is ancillary and subsidiary not only to the personal obligation of Tees, the primary debtor, but ancillary and subsidiary to the original chattel mortgage taken by Bryans from Tees to secure the loan."
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