Foley v Hill and Others

JurisdictionUK Non-devolved
Judgment Date01 August 1848
CourtHouse of Lords
Date01 August 1848

English Reports Citation: 9 E.R. 1002

House of Lords

Edward Thomas Foley
Thomas Hill and Others

Mews' Dig. i. 42, 1007; ix. 76; xi. 988. S.C. In 8 Jur., 347; 1 Ph. 399; 13 L.J. Ch. 182. On point as to relation between banker and customer, considered in St. Aubyn v. Smart, 1867, L.R. 5 Eq. 189; A.-G. v. Edmunds, 1868, L.R. 6 Eq. 390; Moxon v. Bright, 1869, L.R. 4 Ch. 294; Summers v. City Bank, 1874, L.R. 9 C.P. 587; Marten v. Rocke, 1885, 53 L.T., 1948. Distinguished on point as to limitation (1 Ph. 399; cf. 2 H.L.C. pp. 41, 42) in In re Tidd (1893), 3 Ch. 156, and in Atkinson v. Bradford Third Equitable, etc., Society, 1890, 25 Q.B.D. 381.

Banker and Customer - Accounts not complicated, subject for action, and not for Bill.

/?/// y SQ2I.3S'. '3- ,' 0. [28] EDWARD THOMAS FOLEY,-Appellant; THOMAS .HILL and Others,- ò. l*$(? , Respondents [July 31, August 1, 1848]. [Mews' Dig. i. 42, 1007; ix. 76; xi. 988. S.C. in 8 Jur., 347; 1 Ph. 399; 13 L.J. Ch. 182. On point as to relation between banker and customer, considered in St. Aubyn v. Smart, 1867, L.R. 5 Eq. 189; A.-G. v. Edmunds, 1868, L.R. 6 Eq. 390 : Moxon v. Bright, 1869, L.R. 4 Ch. 294 ; Summers v. City Bank, 1874, L.R. 9 C.P. 587; Marten v. Rocke, 1885, 53 L.T., 1948. Distinguished on point as to limitation (1 Ph. 399; cf. 2 H.L.C. pp. 41, 42) in In re Tidd (1893), 3 Ch. 156, and in Atkinson v. Bradford Third Equitable, etc., Society, 1890, 25 Q.B.D. 381.] Banker and Customer-Accounts not complicated, subject for action, and not for bill. The relation between a Banker and Customer, who pays money into the Bank, is the ordinary relation of debtor and creditor, with a superadded obligation arising out of the custom of bankers to honour the customer's drafts; and that relation is not altered by an agreement by the banker to allow the interest on the balances in the Bank. The relation of Banker and Customer does not partake of a fiduciary character, nor bear analogy to the relation between Principal and Factor or Agent, who is quasi trustee for the principal in respect of the particular matter for which. he is appointed factor or agent. Held, therefore, that an account between Bankers and their customer, not long 1002 FOLEY V. HILL [1848] II H.L.C., 29 nor complicated, but consisting of a few items and interest, is not a fit subject for a bill in equity. This was an appeal against an order of Lord Chancellor Lyndhurst, by which he reversed a decree of the Vice Chancellor of England, and dismissed the appellant's bill (13 Law Journ. 182, and 1 Phillips, 399). In, and previously to, the year 1829, the appellant and Sir Edward Scott, owners of collieries in Staffordshire, kept a joint account at the respondent's bank at Stour-bridge, in Worcestershire. In April 1829, a sum of £6117 10s. was transferred from that account to a separate account then opened for the appellant; and the respondents, in a letter inclosing a receipt for the sum so transferred, agreed to allow £3 per cent, interest on it. From 1829 to the end of the year 1834, when the joint [29] account was closed, the appellant's share of the profits of the collieries was from time to time paid by 'cheques, drawn by the colliery agents against the joint account. These cheques were, as the respondents alleged, paid in cash or by bills drawn by them on their London bankers in favor of the appellant, and none of them was entered in his separate account. The only items found in that account were the £6117 10s. on the credit side, and two sums of £1700 and £2000 on the debit side, both being payments made to or on behalf of the appellant in 1830. There were also entries, in a separate column, of interest calculated on the sum or balance in the Bank, up to. the 25th of December 1831, and not afterwards. The appellant filed his bill in January 1838, against the respondents, praying that an account might be taken of the said sum of £6117 10s., and all other sums received by the respondents for the plaintiff on his private account since April 1829, with interest on the same at the rate of £3 per cent, per annum; and also an account of all sums properly paid by them for or to the use of the appellant on his said account since that day, and that they might be decreed to pay the appellant what, upon taking such accounts, should be found due to him. The defendants at first put in a plea of the Statute of Limitations (21 James 1, c. 16), supported by an answer; but the plea being overruled (3 Myl. and Cr. 475), they put in their further answer and claimed the benefit of the statute. A schedule annexed to the answer set forth the separate account of the appellant from the bank book, containing the items and entries before mentioned. The Vice-Chancellor, on the hearing of the cause, [30] decreed for an account as prayed, being of opinion that the respondents were bound in duty to keep the account clear; that they were to be charged according to their duty, the neglect of which could be no excuse, and that the agreement to allow the interest was in effect the same, in answer to the Statute of Limitations, as if the interest had been regularly entered or paid (13 Law J. p. 183). Lord Lyndhurst, taking a different view of the case, upon appeal, held, first, that the Statute of Limitations was a sufficient defence; and, secondly, that the account, consisting of only a few simple items, was not a proper subject for a bill in Equity, but a case for an action at law for money had and received, and his Lordship reversed the decree, and dismissed the bill (id. ib.; and 1 Phill. 403). Mr. Stuart and Mr. G. L. Eussell for the appellant: The judgment appealed 'from proceeded partly on the ground that the Statute of Limitations is a bar to the appellant's demand and partly on the ground that the account prayed for is a simple account of debtor and creditor, and, therefore, not a fit subject for a suit in Equity. The question is, what is the nature of the relation between a banker and those who deposit money with him, and who are called his customers. If it could be shewn that a banker is in the position of a trustee for those who employ him, that he is clothed with a fiduciary character in relation to them, and that there is a personal trust and confidence in him, then the Statute of Limitations would be inapplicable, and the second defence also must be held to fail. The respondents were not in the relation of mere debtors to the appellant for the money deposited, [31] which, in ordinary cases, is considered to be a loan, and therefore a debt; Carr v. Carr (1 Meriv. 541 (note)), Devaynes v. Noble (id. 568), Sims v. Bond (5 Barn, and Ad. 392-3), Potts v. Glegg (16 Mees. and W. 321). The Chief Baron, in Potts v. Glegg, doubted whether in all cases there was not an implied contract between a banker and his customer, as to the money deposited, which 1003 II H.L.C., 32 FOLEY V. HILL [1848] distinguishes it from an ordinary case of loan, but he yielded to the opinion of the other Judges, that it was a simple loan and debt. It may be admitted that bankers are debtors, but debtors with various super-added obligations, as, for...

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