Foley v Hill
1848 · (1848) 2 HL Cas 28
Posted By lanbuk.com
- Facts
- A customer paid money to his bankers. The bankers used it in their business. The customer sought an account as if the bank were a trustee of a specific fund.
- Issue
- Is money deposited with a bank held on , or is the bank a debtor?
- Held
- The House of Lords held that the banker is a debtor. The customer is a creditor for the sum deposited. The bank may use the money as its own.
- Principle
- The ordinary relationship of banker and customer is debt, not trust. If the bank fails, the customer is an unsecured creditor. He cannot claim particular notes.
- Why it matters
- It is the starting point for deposits, and the reason a deposit is not a real security in the customer's hands.
Words and Latin in this note
- Trust
- An arrangement in which a trustee holds property at law but must use it for beneficiaries, or for a charitable purpose. The beneficiaries have the equitable interest. Open the note.
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