Competing claims to a mixed fund were resolved by the application of equitable principles. Funds had been contributed by a benefactor of a hospital for particular trust purposes and had for more than 170 years been held, administered and applied as part of the general funds of the hospital. The Court of Session had been directed by an earlier decision of the House of Lords to settle how much of the funds which had been managed in this way belonged to the hospital. The Court of Session held that the benefactor’s funds had been immixed with the funds of the hospital from an early period down to that date, and that they must therefore be held to have participated proportionately with the hospital’s funds and property in the increase of value of the aggregate funds and property of the hospital during that period. Steps were then taken to ascertain and fix the amount of the whole of the aggregate funds and what the amount of the benefactor’s funds was in proportion to the present value of the aggregate. The case was again appealed on the question whether it was right to treat the two funds as having been inextricably mixed up.
Held: The decision was upheld Lord Blackburn The Court of Session solved the difficulty ‘in a way perfectly consistent with justice and good sense, and not inconsistent with any technical rule of law, and no other solution has been suggested which would be so satisfactory.’ and ‘No other way was suggested at the bar in which the fund, if the two were inextricably mixed up, could be apportioned except that of taking the proportion which the two funds bore to each other, and dividing the mixed fund in that proportion; and I cannot myself see any other way.’
Judges:
Lord Blackburn
Citations:
(1879) 4 AC 823
Jurisdiction:
Scotland
Cited by:
Cited – Magistrates of Edinburgh v McLaren HL 1881
. .
Cited – Foskett v McKeown and Others HL 18-May-2000
A property developer using monies which he held on trust to carry out a development instead had mixed those monies with his own in his bank account, and subsequently used those mixed monies to pay premiums on a life assurance policy on his own life, . .
Lists of cited by and citing cases may be incomplete.
Equity
Updated: 06 May 2022; Ref: scu.220691