Scott v Scott and Provincial Bank of Ireland

• Jurisdiction: Ireland
• Judgment Date: 27 May 1924
• Docket Number: (1922. No. 137.)
• Date: 27 May 1924
• Court: Chancery Division (Irish Free State)

M. R.,

Scott

and

Scott and Provincial Bank of Ireland Ltd

Stocks and shares purchased by one of next-of-kin out of profits of business -Scrip deposited with bank as security - Bank not having notice of breach of trust - Other next-of-kin adopting the trading and seeking to follow assets - Claim which is a mere equity conflicting with an equitable estate - Priority of equitable estate - Equities not equal - Equitable mortgage made in breach of trust - Trustee and cestuis que trustent - Negligence of trustee -Whether loss falls on cestuis que trustent or on strangers.

1. T. S., who carried on two separate businesses, died intestate, and letters of administration were granted to his widow, E. S. E. S., instead of administering his estate, continued to carry on both businesses. Three years later E. S. appointed her eldest son, J. B. S., to manage one of the businesses which was carried on under the name of T. S. & Co. For this purpose she used to sign blank cheques in the name of T. S. & Co., leaving them to be filled up by J. B. S. About eight years after the death of T. S., E. S. transferred her banking account to the defendant bank, where she opened an account in the name of T. S. & Co. J. B. S. also opened an account in his own name with this bank. J. B. S.,instead of using the signed blank cheques for the purposes of the business, used them to pay for certain stocks and shares, which he had bought in his own name. In consequence of these purchases, the account of T. S. & Co. got into debit. J. B. S. also borrowed money from the bank to purchase a house. The bank having asked for security, J. B. S.deposited with them the scrip of the shares and the lease of the house. The bank was unaware that the business of T. S. & Co.had been that of T. S., and that E. S. was carrying it on as his administratrix. An action having been brought by the younger children of T. S. against E. S., J. B. S., and the bank to administer the estate of T. S.,and claiming the shares pledged to the bank as assets of T. S.:—Held that the plaintiffs, having elected to...