EQUITY- CONSTITUTIONAL LAW - POWER OF LEGISLATURE TO CHANGE EQUITABLE DOCTRINES

Authors

Abstract

A Nebraska statute provided that in case of insolvency of a state bank the general depositors, subject to prior liens for taxes, have a first lien on all assets of the bank. A bank converted a note deposited for a special purpose, and indistinguishably mingled the proceeds with the general assets of the bank before insolvency. The deposit was held to have created a trust and the cestui was allowed to recover the amount of the note (trust fund) as a preferred claim upon the general assets of the bank. To the argument that this statute prohibited the imposition of a trust on the general assets to the disadvantage of general depositors, the court replied: "If the statute is construed to authorize the receiver to appropriate any part of the intervenor's trust funds to the claims of general depositors, it will prevent the exercise of chancery power conferred upon district courts by the Constitution of Nebraska and to that extent will be void."

Recommended Citation

EQUITY- CONSTITUTIONAL LAW - POWER OF LEGISLATURE TO CHANGE EQUITABLE DOCTRINES, 30 Mich. L. Rev. 773 (1932).
Available at: https://repository.law.umich.edu/mlr/vol30/iss5/9