0% found this document useful (0 votes)
622 views10 pages

Fiduciary Dispute Between Brothers

This document summarizes a legal case between two brothers, Eboe v. Eboe, heard before the High Court of Accra in 1961. 1) The plaintiff left Ghana in 1942 to go to Lebanon, leaving his motor spare parts business in Accra and other stores under the management of the defendant, his brother, with full authority to run them. The defendant then sold the businesses without the plaintiff's knowledge. 2) The defendant claimed the agency relationship ended in 1947 when the businesses collapsed, but the court found the agency had never ended and the defendant held the businesses in trust for the plaintiff. 3) The court ruled that statutes of limitations did not apply given the fiduciary relationship between

Uploaded by

Erica Bustamante
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
0% found this document useful (0 votes)
622 views10 pages

Fiduciary Dispute Between Brothers

This document summarizes a legal case between two brothers, Eboe v. Eboe, heard before the High Court of Accra in 1961. 1) The plaintiff left Ghana in 1942 to go to Lebanon, leaving his motor spare parts business in Accra and other stores under the management of the defendant, his brother, with full authority to run them. The defendant then sold the businesses without the plaintiff's knowledge. 2) The defendant claimed the agency relationship ended in 1947 when the businesses collapsed, but the court found the agency had never ended and the defendant held the businesses in trust for the plaintiff. 3) The court ruled that statutes of limitations did not apply given the fiduciary relationship between

Uploaded by

Erica Bustamante
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 10

EBOE v.

EBOE
[1961] GLR 324

Division: IN THE HIGH COURT, ACCRA


Date: 16TH JUNE, 1961
Before: OLLENNU, J.

Agency—Defendant given general powers to manage plaintiff’s banking account and shops at his
discretion—Whether agency of a fiduciary nature—Defendant sells shops and invests moneys in other
business of his own—Whether business interests and assets held in trust for plaintiff.

Limitations of actions—Actions based on fiduciary relationships—Whether caught by statutes of


limitation—Whether Limitation Act, 1623 (7 Jac. 1 c.16), and Mercantile Law Amendment Act 1856
(19 & 20 Vict. c.97) statutes of general application.

HEADNOTES
The plaintiff and the defendant are brothers of the full blood. The plaintiff came to Ghana (then the
Gold Coast) in 1928 to trade. In about 1934 he brought defendant from Lebanon to assist him. In
1942 the plaintiff left for Lebanon, leaving his business, a motor spare parts shop in Accra, and others
at Koforidua and Suhum, in the charge of the defendant with full powers to run them as he thought fit
and to remit the profits to him in Lebanon from time to time.
The plaintiff had wanted to return to Ghana, but he failed to obtain a return visa. The defendant also
had power to operate the plaintiff’s banking accounts. Within a few months of the plaintiff’s departure
the defendant without the knowledge of the plaintiff sold the business in Accra to one Salim Sangarri.
He also sold the plaintiff’s other stores at Koforidua and Suhum, again without the plaintiff’s
knowledge.
With the monies realised from these sales, the defendant entered the textile trade and other businesses.
Through correspondence, he gave the plaintiff the impression that he was running all those businesses
on the plaintiff’s behalf when the contrary was the truth. In 1960 the plaintiff instituted the present
action against the defendant for a declaration that the defendant holds his business interests and assets
in trust for the plaintiff, an order for accounts and payment to him of what may be found due.
Held:
(1) on the facts the defendant was a general or universal agent of the plaintiff — an agency of a
fiduciary nature;
(2) such an agency created the defendant a trustee holding in trust for the plaintiff the business
moneys and all other properties which came into his possession or under his control;
(3) on the evidence the business interests of the plaintiff did not cease in 1947 as alleged by
defendant. Consequently the agency and the trusteeship have never determined: they continue
to subsist;

[p.325] of [1961] GLR 234

(4) the Limitation Act of 1623 (7 Jac. 1 c.16) and the Mercantile Law Amendment Act, 1856 (19 &
20 Vict. c.97) are statutes of general application, and apply in Ghana;
(5) where a claim is based on a fiduciary relationship, time ceases to run, and the Limitation Acts
do not apply. In the instant case, even though the agency is not created by an express trust the
claims by the plaintiff being claims arising out of a fiduciary relationship are not statute barred;
(6) as the defendant’s present business interests and assets are all the result of an investment
originally made with funds of the plaintiff which the defendant held as a trustee, those interests
and assets continue to be held by the defendant as a trustee for the plaintiff; the plaintiff can
follow and recover them.

CASES REFERRED TO
(1) Soar v. Ashwell (1893) 69 L.T. 585
(2) Burdick v. Garrick (1870) L.R. 5 Ch. App. 233
(3) Lyell v. Kennedy (1889) 14 App. Cas. 437.

NATURE OF PROCEEDINGS
ACTION for a declaration of trust and an order for accounts. The facts are fully set out in the
judgment.

COUNSEL
E. Akufo-Addo (with him O. Y. Asamoah) for the plaintiff.
E. N. P. Sowah (with him N. O. Graham-Douglas) for the defendant.

JUDGMENT OF OLLENNU J.
The plaintiff and the defendant are Lebanese, and are brothers of the full-blood. The plaintiff, the
elder of the two, claims nine reliefs against the defendant, which may be grouped under three
headings:
(1) a declaration that the defendant is a trustee holding a share of certain business interests and
properties in trust for the plaintiff;
(2) a true and faithful account of all sums of moneys and profits from a certain partnership
business; and
(3) an order for the payment to the plaintiff of moneys which may be found due to him, and the
transfer to him of properties and shares in certain companies which may be found due to him.
In brief the plaintiff’s case is that in 1942 he appointed the defendant his agent with full powers to
operate his banking account which he entrusted to him, and with the running of his motor spare parts
business, and then left this country for Lebanon his home intending to return after a short leave of
absence; that unfortunately his visa to return to Ghana was revoked, and so he was unable to come
back; that the defendant sold the said business using the proceeds together with other monies he
collected for the plaintiff in carrying on one partnership business and another, until eventually, i.e. in
or about 1947, he converted the last of such partnership businesses into a limited liability company
from which have now been established two large and flourishing commercial concerns.
The case of the defendant, on the other hand, is briefly that although he was an agent of the plaintiff
for the business he carried on either alone or in partnership with other persons from 1942 up to early
1947, the business he so carried on for the plaintiff completely collapsed

[p.326] of [1961] GLR 234


early in 1947, and his agency was thereby determined; and that as from the said 1947 up to date
hereof any business or commercial venture in which he has been engaged has been undertaken by him
in his individual capacity and as his separate estate and not as an agent of the plaintiff.
Nine issues were settled for trial upon the original pleadings, the sixth of those issues is whether the
trade run by the defendant during the years 1942 to 1947 was the sole business of the defendant or
whether defendant began and ran that business with the plaintiff’s funds then in his hands as an agent
of the plaintiff, and whether the defendant ran that business with the approval of the plaintiff.
That issue arose out of a plea by the defendant that the trade in textiles and general merchandise
which he ran between 1943 and 1947 either single-handed or in partnership first with Sawaf and
Mougrabi, and later with Mougrabi alone, was his alone, and he ran it with funds provided by himself.
That plea, however, was subsequently amended, the defendant admitting that all the business he did
during that period in textiles and general merchandise except for a brief period in 1947 immediately
preceding the beginning of a new venture, a furniture business, was done by him as an agent of, and
with funds in his hands which belonged to the plaintiff.
Upon that amendment, the main vital question left for determination in that regard is whether or not
the agency of the defendant determined at any time before he embarked upon the furniture business.
Arising out of that issue is the question whether the defendant received certain sums belonging to the
plaintiff, and whether he paid all such sums to the plaintiff, or properly accounted to him for them.
Closely associated with the issue of whether or not the defendant’s agency was determined at any
point of time is another vital issue, namely, what is the nature of the defendant’s agency? It is
necessary to determine that issue first.
The nature of the defendant’s agency is proved by the mass of evidence, oral and documentary, of the
relationship which existed between the plaintiff and the defendant, and of the circumstances from
which the agency arose. The plaintiff came to this country, the Gold Coast, as it then was, in 1928 and
worked with one S. Kalmoni. Later he worked in partnership with one Kharoum. He brought the
defendant out from Lebanon sometime in 1943, and worked with him in the store of S. Kalmoni, later
in a store owned by him, the plaintiff, and his partner Kharoum. In 1938 the plaintiff started a motor
spare parts business of his own and operated it under the name and style of “Eboe Automotive
Products Company”. This business was conducted by him personally, but he was assisted in the store
by the defendant.
In 1942 the plaintiff had to go away with his family to Lebanon, and left his brother, the defendant, in
charge of his business. By that time the said business had developed into a flourishing concern. When
cross-examined about the state of the business at the time the plaintiff left it

[p.327] of [1961] GLR 234

with him, the defendant had this to say:


“It is correct that by the time my brother left in 1942 he had established a very very good business, but I
cannot say that it was the leading spare parts business in Accra.
It is correct that within 2 months of my brother’s departure I was able to send him £G9,000”.

The plaintiff left this country between February and early March, 1942. He had meant to return after a
short leave and therefore obtained a re-entry visa. But it soon became apparent both to him and to the
defendant that he would not be permitted to return here and that he would have to stay away
indefinitely. Although the defendant indicated in a few of the large number of letters he wrote to the
plaintiff that he was making efforts to assist the plaintiff to obtain a return visa and to come back, in
reality his greatest desire was that the plaintiff should not set foot again on the soil of this country. He
did not make any secret of it. Early in the day he wrote letters to the plaintiff pleading with him not to
dream of coming back to this country. In a letter exhibit D2 dated the 5th May, 1942, he said to the
plaintiff, among other things:
“As regard the new regulations, you have written us that you are contemplating to return here, please
brother Rachid, take it as an advice from a brother to his brother not to think of returning here because
the hardship of doing business here. Your understanding is enough”.

Again on the 9th September, 1942, in a letter exhibit D7 the defendant wrote: “Dear brother, your
return to this country is not advisable, please desist from it”. And on the 16th July, 1944, in his letter
exhibit J9 the defendant further stated:
“Dear brother Rachid do not get worried because of what I have written to you in the past; my request to
you is that you should not think of coming back to this country; this is my only request to you, and God
willing, you will see that I shall be discharging all my duties towards you”.

As it was impossible for the plaintiff to return to this country to conduct his said business personally,
one of two alternatives was laid open to him, either sell up and close down the business, or to entrust
it absolutely to the control and management of the defendant. The evidence shows that he elected the
second alternative and entrusted the business entirely to the defendant with absolute discretion in the
defendant to do whatever he thought was right.
The defendant was quite conscious of the unique position he occupied as an agent of the plaintiff, and
exercised the powers so vested in him without restraint. In that consciousness, he, without previous
consultation with the plaintiff, stopped orders for goods which the plaintiff had placed with suppliers
in America and England, and within a few months of the plaintiff’s departure from this country he
sold the spare parts business to one Salim Sangarri, again without prior consultation with the plaintiff.
In a letter exhibit D3 dated the 19th May, 1942, in which he reported to the plaintiff the stopping of
the orders and the sale of the business, the defendant warned him not to question the exercise of his
discretion in

[p.328] of [1961] GLR 234

those matters. He said inter alia—


“Brother Rachid, as regards the goods ordered from America and England we have informed all the
customers by cables to stop shipments. This is for your information and understanding after we heard
very bad rumours from some people. You understand what we mean.
... we have sold the store to Mr. Salim Sangarri together with the car and the house furniture for the sum
of £G10,000 of which he paid £G2,000 and the balance is £G8,000.
If you want to know my dear brother why I sold the store it is nothing which I have to mention to you.
You know what I mean.”

Similarly, the defendant sold stores at Koforidua and Suhum belonging to the plaintiff without
previously consulting him, and merely wrote to inform him of it in a letter exhibit D4 of the 24th
May, 1942, as follows:
“As regards the store of Suhum and the store at Koforidua, we have sold them to our cousin Khalid.
After all account he owes us £G682 18s. 4d. Be it known to you.”

In the exercise of those powers in him vested, the defendant, after the sale of the spare parts business,
went into the textile business alone placing large orders for cotton prints as shown in his letter exhibit
D6 dated the 5th August, 1942 and carried it on up to about August, 1942 when he entered into a
partnership which lasted for only a few months. In January, 1943 he entered into another partnership
with Mougrabi alone. For the purpose of executing the deed in the Sawaf-Mougrabi and Eboe
partnership the defendant caused the plaintiff to give him written authority, a power of attorney,
exhibit D. As regards the Mougrabi-Eboe partnership the defendant forwarded the deed to the plaintiff
with a request that he should execute the same and he accordingly did. In further exercise of his wide
discretion and powers the defendant had the partnership with Mougrabi dissolved without prior
reference to the plaintiff. Thus in a letter exhibit G8 of the 12th June, 1943, he wrote to the plaintiff as
follows:
“I have to inform you today that we have dissolved the Company which existed between us and our dear
Rafick El-Mougrabi, may God give him long life. Brother the reason for the dissolution of the company
is the lack of goods,...’

And in exhibit G12 of the 15th October, 1943 he said:


“Dear brother Rachid, I wrote to you in the past regarding the dissolution of your partnership with
Rafick Mougrabi. Dear brother, I beg to assure you that I have not done such thing everything is still the
same, please take note. It is true that Rafick wrote to you about the dissolution of this partnership, but he
did so on my advice. The reason for having written to you about the partnership dissolution was what I
had heard from people in connection with Inham’s statement about me...”

Inham is the wife of the plaintiff. After the dissolution of the Mougrabi-Eboe partnership, the
defendant embarked upon the business of a general merchant, trading in textiles, iron rods, and
enamel wares; he took up an agency for tyres including motor spare parts, all of which he did in his
absolute discretion. In spite of an assurance he had given to the plaintiff in the letter exhibit G12 that
he would run the said business in the name of Eboe Brothers, he ran it in his own name A. R. Eboe.
The authority of the defendant included power to operate the plaintiff’s banking accounts and to use
the moneys on any venture or in any

[p.329] of [1961] GLR 234

way he thought fit. Thus he gave loans secured by mortgages of the premises occupied by them as
tenants, as shown in his letter exhibit J15 of the 10th December, 1944, redeemable after a period of
eight years commencing from the 1st January, 1945, and a further loan as shown in exhibit M1 of the
14th February, 1945.
So strong was the defendant’s position with respect to the business and finances of the plaintiff that
we find him saying to the plaintiff in a letter exhibit G9 of the 18th August, 1943, “Please do not ask
me to remit money to you because I am trying to enlarge our business.”
As to what control he had over the finances of the business the defendant said on oath:
“When my brother was leaving there was no question of my salary being agreed upon, I was left free
hand to draw from the business such moneys as I required for my maintenance, what I took for myself I
regarded it as pocket money. From the profits or from the capital I took what I required, and from the
same profits or capital I made remittance to my brother.”

From that picture it is made abundantly clear that the plaintiff was entirely at the mercy of the
defendant as far as the business was concerned. In those circumstances the greatest asset which the
plaintiff had in Ghana, as counsel for the plaintiff put it, is the honesty and integrity of the defendant.
The defendant was very much alive to that fact and never missed an opportunity now and again to
impress it as forcefully as possible upon the plaintiff. To that end he kept on giving assurances to the
plaintiff of his honesty and good faith. Thus in exhibit J8 of the 30th June, 1944, he wrote:
“Yesterday I sent you a letter requesting you to send me a letter in English cancelling the power of
attorney which I have from you with me. I cannot explain to you the reason; but I want you to be always
sure of your brother Abdul Rahman.”
“Brother I enclose herewith the letter which will cancel the Power of Attorney; I request you to affix
your signature to it.”

In exhibit J9 already referred to he wrote:


“My request to you is that you should not think of coming back to this country; this is my only request to
you, and God willing, you will see that I shall be discharging all my duties towards you.”
He repeated this quite a number of times in his letters to the plaintiff. The impression he always sought
to make upon the plaintiff in that regard is summed up by him in his letter exhibit M2 of the 25th March,
1945 in the following words: “please thank God that you have a brother who is fully prepared to
discharge all his duties towards to you.”

The plaintiff impressed me as a highly religious type of person, gentle, good-natured, and credulous.
In almost every single letter he wrote to the defendant, as shown by the letters tendered in evidence,
he repeated the words: “In The Name of Allah the Merciful”. It is not at all surprising therefore that
his letters making demands for money should be couched in humble, apologetic and supplicant
language as if he were a beggar. Yet each of these letters contain firm expressions which only the
person with a claim of right dare write to his charitable and generous

[p.330] of [1961] GLR 234

benefactor such as the defendant is being held out to the court to be. Thus in exhibit 3 of 23rd March,
1955, the plaintiff cabled to the defendant: “Help immediately 5,000”, which the defendant said meant
£G5,000.
In exhibit 4 dated the 27th January, 1956, he wrote:
“I pray you O Abdul Rahman and I say to you in the name of brotherhood and religion and bringing up
and honesty that you do according to my request so that I can get out from these debts which is bearing
on me”.

In exhibit 5 dated the 22nd October, 1956, he wrote:


“Now brother Abdul Rahman, I write to you this letter when I am in extreme need, therefore I request
you O, Abdul Rahman to give me my pocket expenses immediately ...
I am expecting my pocket expenses in a continuous manner which will not be cut-off from me”.

Again in his letter exhibit 6 dated the 4th November, 1956, he wrote:
“Brother, I send you many letters requesting assistance from you, but you did not heed my call or
request. I have no other assistance after God but you O Abdul Rahman. Now I call you in the name of
the Koran, I call you in the name of Religion, I call you in the name of Mohammed, and I call you in the
name of the parents who were the cause of our existence in this life, that you assist me immediately and
quickly without any delay in the sum of £G3,000 sterling because I owe promissory notes which shall be
due within a few weeks and it is impossible for me to extend them after this.”

This is not the normal language of a beggar, though no doubt some beggars may be impudent. This I
believe is not impudicity, it is a claim of right presented in gentle language and religious sentiment.
It would appear that in his reply to these last two letters of the plaintiff, exhibit 4 and exhibit 6, the
defendant had sent exhibit U which will be referred to presently, for we find the plaintiff on the 24th
February, 1958, in exhibit 7 writing as follows:
“Brother, I wrote to you in the past a lengthy and explained to you in detail everything concerning my
situation and my life which has become unbearable. A few days ago I received from you two envelopes
which did not enclose but papers which have no value for me in relation to one only thing which is a
letter from your hand. Did your brother Rachid Eboe is now no more your brother, and did you become
now, O Abdul Rachid Eboe? May God pardon you, and guide us all. A second time I tell you O Abdul
Rahman, my life is unbearable and my set back, you Abdul Rahman alone know how it was caused.
Think, O Abdul Rahman well”.

And in exhibit 9 dated the 1st August, 1959, the very last letter which he wrote to the defendant
before instituting this action, the plaintiff concluded in the following words:
“Brother Abdul Rahman, I say to you, look to the Almighty God, and think of your brother Rachid and
think of your brother Subhi, and think that the life is at an end, think of the children and think that I left
babies behind me. I do not ask you except that I live a protected life among people with all simplicity
which may cost you about £G80. Man is the brother of man; how it is when that man is your real brother,
and who has been the cause of your happiness, which God has granted you; therefore I ask you that I be
among my children and my family, and God may regard you for me the best reward. I write this to you
when tears are flowing from my eyes a great deal. And Peace be with you.”

[p.331] of [1961] GLR 234


The only conclusion I can come to upon these facts is that the defendant is general or universal agent
as defined in Halsbury’s Laws of England, (3rd ed.) Vol.1, p.151, - the type of agency, where the
principal reposes trust and confidence in the person whom he selects as his agent. That necessarily is
an agency of a fiduciary nature. See Halsbury’s Laws of England (3rd ed.) Vol.1, p.182, para. 426.
Being an agency of a fiduciary nature, the agency created the defendant a trustee holding the business
money and all property which came into his possession or under his control in that regard, in trust for
the plaintiff.
Now has this agency of the defendant been determined, and the business interest and property of the
plaintiff in Ghana wound up and accounted for to the plaintiff? That is the next important question.
The evidence of the defendant is that it has and that it was determined early in 1947. But this assertion
of the defendant stands uncorroborated. What is worse, it is contradicted by a mass of circumstantial
and documentary evidence on the record. It is only necessary to refer to some of it. [After carefully
reviewing the evidence in this regard his lordship concluded:] The evidence conclusively establishes
that the business interest of the plaintiff in this country was not liquidated in 1947 as alleged by the
defendant. Consequently the agency and trusteeship of the defendant have never determined: they still
go on. [Evidence of money received in respect of the business and of remittances to the plaintiff was
then discussed, and thereafter his lordship continued:]
For the submissions on behalf of the defence, the claim was divided into two categories, A and B.
Category A is said to be in respect of the accounts covering the period 1942 to 1947, and category B
in respect of the period 1947 to date. It was submitted that the claim in category A is statute-barred by
reason of the Limitation Act, 16231(1) and the Mercantile Law Amendment Act of 1856,2(2) the
action having been instituted more than six years after 1947. In respect of the claim in category B it
was submitted that it is based upon an alleged oral agreement of 1951 made between the parties in
Lebanon, which it was submitted had not been proved.
On the contention that the claim in category A is statute-barred, it was submitted for the defence that
the Limitation Act of 1623 and the Mercantile Law Amendment Act of 1856 apply to Ghana, that in
view of the latter statute the absence of the plaintiff from the jurisdiction did not stop time from
running against him. It was further submitted that there being no question of express trust, the claim
could not be entertained by the court, it not having been brought within six years. In support of those
submissions counsel referred to the text of the statutes reproduced in Banning on Limitation of
Actions, (3rd ed.) at pages 258 and 275 respectively and on the question of agency not being by
express trust, and therefore could not stop the time running, he referred to the same Banning on
Limitation of Actions, page 216 and the observation of Esher, M.R. in the case of Soar v. Ashwell3(3)
and to Burdick v. Garrick4(4).

[p.332] of [1961] GLR 234

For the plaintiff it was submitted that although the English statutes relied upon are statutes of general
application and formed part of the law of this country up to the 30th June, 1960, by virtue of section
83 of the Courts Ordinance5(5) now repealed, they are no more part of the law of Ghana as defined in
section 17 of the Interpretation Act, 19606(6) and section 66 (3) of the Courts Act, 19607(7).
I do not agree with this submission of learned counsel for the plaintiff. In making his said submission
he overlooked the saving section, section 154 of the said Courts Act, 1960, subsection (4) of which
provides as follows:
“(4) The repeal by this Act of section 83 of the Courts Ordinance (Cap. 4) shall not be taken to affect
the continued application of such of the statutes of general application which were in force in
England on 24th July, 1874 as applied in Ghana immediately before the commencement of this
Act:
Provided that the said statutes shall be subject to such modifications as may be requisite to enable them
to be conveniently applied in Ghana”.
I hold therefore that those two statutes of general application the Limitation Act of 1623, and the
Mercantile Law Amendment Act, 1856, are still in force in Ghana.
On the second submission of counsel for the defendant that the agency of the defendant is not one
created by express trust, and that the claim is statute-barred, counsel for the plaintiff submitted that
once the agency is of a fiduciary nature time will not run. He too relied upon the same cases cited by
counsel for the defence, and in addition cited the case of Lyell v. Kennedy8(8).
I have already decided that the agency of the defendant is one of a fiduciary nature. That principle is
set out plainly in Banning on Limitation of Actions (3rd ed.) at page 217. And in the case of Lyell v.
Kennedy9(9) Lord MacNaghten expressing his concurrence with the opinion of the Earl of Selbourne
stated the principle in the following words:
“I would only venture to add with regard to the appeal that it seems to me that the principle which
governs the case may be stated concisely in the words of the late Lord Justice Giffard. In Burdick v.
Garrick that learned judge expressed himself as follows: “I do not hesitate to say that where the duty of
persons is to receive property and to hold it for another and to keep it until it is called for they cannot
discharge themselves from that trust by appealing to the lapse of time. They can only discharge
themselves by handing over that property to somebody entitled to it.’
My lords, I think that is a sound proposition. I do not think it can make any difference what the nature of
the property may be, whether it is a lump sum, or collected in the shape of rents accruing from time to
time. I do not think it can make any difference whether the persons on whose behalf the property is
professedly received is or is not under disability or unborn or unascertained. Nor do I think it can make
any difference whether the duty arises from contract or is connected with some previous request, or
whether it is self imposed and undertaken without any authority whatever. If it be established that the
duty has in

[p.333] of [1961] GLR 234


fact been undertaken and that property has been received by a person assuming to act in a fiduciary
character, the same consequences must I think, in every case follow.”

I adopt those words of the noble Lord, and hold that the claim is not statute-barred.
Counsel for the defendant next submitted that if the funds which came into the hands of the defendant
are regarded as trust property, they cannot be pursued into corporate bodies into which they might
have become merged. In my opinion that submission is erroneous; as the funds or rather the interest
acquired with those funds have not passed into the hands of a third party, e.g. a bona fide purchaser
for value, the shares and interests acquired thereby into which they have been converted, still vest in
the defendant: see Halsbury’s Laws of England, (3rd ed.) Vol. 14, page 628, para. 1163. The evidence
given by the defendant is that all the business and proprietary interest he now owns in the companies
with which he is now connected, and all assets he has acquired as pleaded in paragraph 16 of his
defence resulted from the amount of £G2,497 which he originally invested in the furniture partnership
business he ran with Shamoon. Since in my opinion that original investment was made with funds of
the plaintiff which the defendant held as a trustee, the plaintiff can pursue all the business interests
and other assets which have developed out of it.
Now all those business interests and other assets would have been declared to be vested solely in the
plaintiff except that I believe the evidence of the plaintiff and reject that of the defendant as to the oral
agreement reached between the parties in Lebanon when the defendant went there on leave in 1951. It
is clear from some of the letters of the defendant to the plaintiff that the defendant was anxious to
know his relationship with the plaintiff . Exhibit G9 is one such letter; in it the defendant said, inter
alia”:
“She [meaning Inham, plaintiff’s wife], said that I am an employee of yours under a yearly salary. For
this reason I have asked you to state what belongs to me in the business. Does my beloved brother
Rachid agree with what Inham has said, please let me know your opinion and send me a statement of my
account.”
I believe that when the defendant went over to Lebanon in 1951 he and the plaintiff discussed their
relationship in the business, that the plaintiff offered and the defendant accepted half share of all
interests and assets which would accrue from the operation of the business. Having found that as a
fact, I cannot declare that plaintiff is the sole owner of the said business interests and assets; I can
only declare him entitled to half such interests and assets.
There will be judgment for the plaintiff against the defendant for each of the declarations and orders
he seeks by his claims (a), (b), (c), (d), (e), (f), (g), (h) and (i) of his writ of summons.
The plaintiff will have his costs fixed at 1,750 guineas

DECISION
Judgment for plaintiff.
Endnotes
1 (Popup - Footnote)
1 7 Jac. 1 c.16
2 (Popup - Footnote)
2 19 & 20 Vict. c.97.
3 (Popup - Footnote)
3 (1893) 69 L.T. 585 at p. 586
4 (Popup - Footnote)
4 (1870) L.R. 5 Ch. App. 233
5 (Popup - Footnote)
5 Cap. 4 (1951 Rev.)
6 (Popup - Footnote)
6 CA 4
7 (Popup - Footnote)
7 CA 9
8 (Popup - Footnote)
8 (1889) 14 App. Cas. 437
9 (Popup - Footnote)
9 Ibid at p. 463.

You might also like