BANKS AND BANKING - DEPOSIT OF TRUST FUNDS IN INDIVIDUAL ACCOUNT OF TRUSTEE - LIABILITY OF DEPOSITARY

Authors

Abstract

Committee for an incompetent was directed, by the court order appointing him, to deposit in X bank all funds which might come into his possession. In violation of this order he deposited checks payable to himself as committee in his individual account in the defendant bank. Plaintiff, as substituted committee, sued the depositary for alleged diversions by the original committee, on the theory that the defendant aided the diversions by accepting the deposit of trust funds in the individual account of the committee. Held, under the rule of Bischoff v. Yorkville Bank defendant bank is not liable for the diversion of trust funds deposited in the individual account of the trustee in the absence of notice of a threatened misappropriation. Clarke v. Public National Bank, 259 N. Y. 285, 181 N. E. 574 (1932).

Recommended Citation

BANKS AND BANKING - DEPOSIT OF TRUST FUNDS IN INDIVIDUAL ACCOUNT OF TRUSTEE - LIABILITY OF DEPOSITARY, 31 Mich. L. Rev. 718 (1933).
Available at: https://repository.law.umich.edu/mlr/vol31/iss5/10