Foley v Hill
Rule established
Money deposited with a banker becomes the banker's property; the relationship is debtor-creditor, not trustee-beneficiary
Facts
- Foley deposited money with Hill (a banker). Foley later claimed the money was held on trust for him and sought an account of profits made by the banker using his money.
Issue
- Whether a banker holds deposited money as trustee for the customer or as debtor.
Held
- The House of Lords held that money deposited with a banker becomes the banker's property. The relationship is debtor-creditor: the banker is debtor, the depositor is creditor. The banker may use the money as he pleases and is liable only to return an equivalent sum on demand.
Ratio Decidendi
The House of Lords held that money deposited with a banker becomes the banker's property. The relationship is debtor-creditor: the banker is debtor, the depositor is creditor. The banker may use the money as he pleases and is liable only to return an equivalent sum on demand.
How to use it in an exam
- | Subject | How Applied | Chapter |
- |---------|------------|---------|
- | Banking Law | Defines the primary banker-customer relationship as debtor-creditor | BANK 2.1 Banker Customer Relationship Overview |
- | Banking Law | Explains why depositors are unsecured creditors in bank liquidation | BANK 2.2 Debtor Creditor and Fiduciary Relationship |
- | Jurisprudence | Illustrates how ownership passes upon deposit (no proprietary tracing) | JUR 5.1 Ownership Definition and Kinds |
Source
Source: (1848) 2 House of Lords Cases 28
This is an educational summary, not the judgment itself. Cite the reported version in professional or academic work.