Allan's Executor v. Union Bank of Scotland [1908] ScotLR 124 (27 November 1908)

Allan's Executor v. Union Bank of Scotland [1908] ScotLR 124 (27 November 1908)

The bank's obligation to pay under a deposit-receipt payable to either of two persons is affected by the service of arrestment and the bank's knowledge of the true ownership and dispute. If the bank or its agent knew of the arrestment and the underlying dispute, payment to the co-depositor may constitute a breach of arrestment, and averments of knowledge and bad faith are relevant and must be examined at proof.

Citation
[1908] ScotLR 124
Parties
Pursuer (reclaimer): John Stanger Copland, as executor-nominate of the late Miss Catherine Allan; Defender (respondent): Union Bank of Scotland, Limited
Jurisdiction
Scotland
Judgment Date
27 November 1908
Procedural Posture
Civil / Appeal (reclaiming Motion) From Lord Ordinary's Decision
Outcome
Interlocutor of the Lord Ordinary recalled; proof before answer allowed.
Legal Topics
Arrestment, Bank Deposit Receipts, Bad Faith, Multiplepoinding, Ownership of Funds, Effect of Knowledge on Liability
Banking Law Civil Procedure Trusts and Estates Arrestment Bank Deposit Receipts Bad Faith Multiplepoinding Ownership of Funds +1 more

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Parties

John Stanger Copland, as executor-nominate of the late Miss Catherine Allan

Pursuer (reclaimer)

Union Bank of Scotland, Limited

Defender (respondent)

Procedural Posture

Civil / Appeal (reclaiming Motion) From Lord Ordinary's Decision

Legal Issues

  1. 1 Whether a bank is liable for breach of arrestment by paying out funds to a co-depositor after arrestment has been served against the other depositor.
  2. 2 Whether knowledge and bad faith on the part of the bank or its agent are relevant to liability for breach of arrestment.

Ratio Decidendi

The bank's obligation to pay under a deposit-receipt payable to either of two persons is affected by the service of arrestment and the bank's knowledge of the true ownership and dispute. If the bank or its agent knew of the arrestment and the underlying dispute, payment to the co-depositor may constitute a breach of arrestment, and averments of knowledge and bad faith are relevant and must be examined at proof.

Court Disposition

Interlocutor of the Lord Ordinary recalled; proof before answer allowed.

Orders

  • Proof before answer allowed on the relevancy of averments of knowledge and bad faith.
  • Issuance of interlocutor postponed in view of settlement negotiations.