SELANGOR UNITED RUBBER ESTATES, LTD. v. CRADOCK AND OTHERS

[1968] 2 Lloyd's Rep. 289

CHANCERY DIVISION

Before Mr. Justice Ungoed-Thomas

Banking - Duty of care-Customer's (company's) moneys used for purchasing stock in company - Liability of paying bank as constructive trustee and in negligence-Duty on bank to make inquiry-Whether duty only to take care not to pay otherwise than in accordance with mandate. Company-Director-Take-over of "shell" company-Company's moneys used for purchasing stock in company-Liability of company's directors as trustees of company's moneys-Liability of company's bankers and transferees of moneys as constructive trustees and in negligence-Whether directors should be relieved from liability-Effect of illegality-Companies Act, 1948, Sects. 54 and 448. Trust - Breach - Company's moneys used for purchasing stock in company-Liability of directors as trustees and company's bankers and transferees of moneys as constructive trustees-Whether company's claim based on breach of trust defeated by illegality- Whether novation with regard to debt defeated company's claim in equity - Meaning of "dishonest and fraudulent".