9911796707
TMI Blog1908 (7) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... buthnot Co. wrote in reply acknowledging the cheque, and stating that on receipt of the further sum they would, as desired, place the total amount of ₹ 1, 200 in fixed deposit for 12 months, and issue and send Mr. Smith their receipt therefor in favour of himself and Mrs. F. Smith, either or survivor. Mr. Smith did not at once remit the balance, and before he had done so, Messrs. Arbuthont Co. became insolvents. Mr. G. Smith now claims to be repaid the ₹ 627 out of the general assets in the hands of the Official Assignee, and his claim has been allowed by the learned Commissioner on the ground that Messrs. Arbuthnot . Co. held the ₹ 627 in a fiduciary capacity. Now, if Messrs. Arbuthnot Co. received the sum in quest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ix it with his own and use it, and this is why it is in accordance with the principle explained in In re Hallett's Estate (1880) 13 Ch. D. 696; 49 Ch. 415; 42 L.T.421. In Faley v. Hill 2 H.L. 28, Lord Brougham, at page 44, points out that, if a banker were a trustee he could not use the trust money as his own without a breach of trust, and in The South Australian Insurance Company, v. Randell (1869-70) 3 P.C. 101 it was held by the Judicial Committee to be an indelible principle of trust property that a trustee can never make use of it for his own benefit. Mr. Heber Hart in his book on 'Banking', 2nd edition, page 485, quotes Cane, J., who decided In re Brown Ex parte plitt 60 L.T.R., 397, as having observed during the argument ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion in the affirmative by finding that this money was held by Messrs. Arbuthnot Co. in a fiduciary character, and not in such circumstances as to give rise to the ordinary relation between banker and customer. Now, it is to be observed that Mr. Smith's letter of 12th October 1906 says nothing as to the manner in which the proceeds of the cheque were to be dealt with after collection, pending the remittance of the balance to make up the ₹ 1,200. After that time it was, of course, to be used by Messrs. Arbuthnot Co. as their own; but even before that time it is contended for the appellant on the authority of Foley v. Hill 2 H.L. 28, that Messrs. Arbuthnot Co. were entitled to use it and that the relations of Mr. Smith and Mes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... derstand them rightly, that in the ordinary course of his trade a banker is entitled to use moneys paid into his bank as his own unless, of course, there is what amounts to a direction to the contrary as in the two cases referred to in the learned Commissioner's judgment. We cannot find any such direction in Mr. Smith's letter of the 12th October 1906, which merely says I request you will be good enough to receive the amount in fixed deposit together with ₹ 573 which I shall remit no sooner I receive an acknowledgment for the enclosed. Under these circumstances, we are constrained with great respect to differ from the conclusions arrived at by the learned Commissioner that the moneys in question were held by Messrs. Arbuthno ..... X X X X Extracts X X X X X X X X Extracts X X X X
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