Monday,
31st July
1848
Foley v Hill
Edward Thomas Foley v Thomas Hill & Ors
Fazriel Fauzi
The Facts of the Case
Appellant’s Submission
The Appellant submitted that the
relationship between the banker and
the customer is fiduciary in nature.
To be specific, it is on the nature of
Principal and Agent. This submission
was made on the ground that the
appellant demanded to know about
the whereabouts of his money when
the money was given to the bank.
They contended that they have the
rights on the money even when the
money was given to the bank.
The Principle of Law
The legal issues in this dispute.
The court’s duty in this case is to
determine the relationship between a
banker and a customer. Specifically
for this case, in the event the
relationship between the parties is
fiduciary in nature, therefore the
dispute will fall under the jurisdiction
of the Court of Equity.
Peaky Blinders
Further elaboration
Bank are debtors, but debtors with
various superadded obligations.
Therefore, the rights and ownership of
the money was transferred to the bank. It
is up to bank whatever they wanted to do
ie. Ptofit making from the money.
Old Bank of England.
Lord Cottenham LC, Lord Lyndhurst, Lord Campbell
The Decision
The judgement for the case.
The Court had drawn an analogy to
determine whether or not the
relationship of a banker and a
customer fall under fiduciary
relationship.
In Principal and Agent relationship,
when the property of the Principal is
transferred to the agent, the ownership
and the rights of the property is still
the Principal. Even when the property
is sold, the money that the agent hold
is still the Principal’s. The agent
obtains no interest in the subject-
matter beyond his remuneration. He
is not a trustee, but just a quasi-trustee
for that particular transaction.
Further elaboration
Bank are debtors, but debtors with
various superadded obligations.
1. To repay the money deposited
when demanded.
2. Honour the depositor’s cheques.
3. Pay interest on the deposit.
Page 1
2 HLC 28
9 ER 1002
The Court, referred to the case of Parker v
Marchant [1843] 41 ER 667, said that,
“Money, when paid to the bank, ceases
altogether to be the money of the principal.
It’s the money of the bank, who is bound to
return an equivalent by paying a similar
sum to that deposited with him when he
asks for it. It is up to the bank as it is as if as
his own money.”
Therefore, the appellant’s contention on
the relationship of the parties being
fiduciary in nature is rejected. This is when
the Court explained that the nature of
relationship between a banker and a
customer, which is, they are debtor-creditor
in nature. The bank are debtors, but
debtors with various superadded
obligations.
Appeal dismissed with cost.
Did you know?
The case of Foley v Hill
Is so authoritative that even the court in
Malaysia still referred to this case up
until this date.
Page XX