Debtor creditorBanker customerHouse of Lords

Foley v Hill

(1848) 2 House of Lords Cases 2818481 min read

The case in brief30-second read

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.
Principle: Money deposited with a banker becomes the banker's property; the relationship is debtor-creditor, not trustee-beneficiary

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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.

Exam use

How to use it in an answer

| 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 |

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Citation

Foley v Hill (1848) 2 House of Lords Cases 28

Reported: (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.