BANKS AND BANKING - MISAPPROPRIATION OF TRUST FUNDS - LIABILITY OF BANK

Authors

Abstract

Committee for incompetent deposited checks payable to him as such committee in the defendant bank to the credit of his individual account. The committee's account was entirely dissipated, but, so far as the facts appear in the opinion, the defendant bank at no time had any knowledge of the use to which the money was put. The committee was removed and the substituted committee sued the defendant bank for aiding the original committee in the diversion of the funds. Held, that it was the duty of the defendant bank to inquire whether the committee had authority to deposit the checks in his individual account, and having failed to do so, "upon conversion of the proceeds of the checks by" the committee "the defendant bank aided and abetted in said conversion by accepting the checks for deposit in the individual account of" the committee. Clarke v. Public Nat. Bank & Trust Co. of New York, (App. Div. 1931) 254 N. Y. S. 201.

Recommended Citation

BANKS AND BANKING - MISAPPROPRIATION OF TRUST FUNDS - LIABILITY OF BANK, 30 Mich. L. Rev. 961 (1932).
Available at: https://repository.law.umich.edu/mlr/vol30/iss6/13