Amadu Fulani & Anor V. Bank Of British West Africa (1953)

LawGlobal Hub Judgment Report – West African Court of Appeal

Contract—Will with trusts—Executor opening an estate account—Executor drawing cheques in breach of trust—Bank without notice of trusts.

Facts

By his will the deceased left his property to his executor in trust for his children. The executor took out probate and produced the probate and the will to the Bank, where he opened an “Account of Estate of M.D. deceased”, to which he transferred the money found in the deceased’s name; and in breach of trust he drew cheques on the estate account, which he nearly exhausted.

When the executor died, administrators were appointed, and they with the children’s guardian sued the Bank for negligence on the ground that the Bank became or should have become aware of the trust and ought not to have allowed the breaches.

The defence was, briefly, that the Bank, though having a copy of the will, did not know of the trust and honoured cheques on what was merely an estate account, as they were bound to do. The action was dismissed and the plaintiff appealed.

According to the evidence the Bank had no “trust department” and had never acted as trustee; and it was their general practice to open an ordinary estate account.

There was no evidence that the trust was expressly brought to their notice.

Held

On the evidence the Bank could not be held to have known of the trust or to have had notice of it by the mere production of the will and probate, or to have had a duty to make inquiry into the purposes of the estate account when opened by the executor. The Bank was bound to honour his cheques as his debtor on the account, and in honouring them incurred no liability to any third person with whom the Bank had no contract either express or implied.

Appeal dismissed.