BANKS AND BANKING - CHANGING CHARACTER OF DEPOSIT TO ESTABLISH TRUST

Authors

Abstract

Respondent had a savings account with a local bank and, having arranged that the bank should purchase certain bonds for him, made an additional deposit therein. Four days later respondent was informed by an officer of the bank that the bonds had been purchased and was given a slip noting that his account had been charged with an amount equal to the purchase price. On its own books the bank charged the respondent's savings account with that amount and entered it as a "deposit" in its "bond account." Upon the insolvency of the bank it was found that no bonds had ever been purchased. Held, that the arrangement between respondent and the bank and the entry of the debit and credit items on the bank's books were insufficient to establish a trust relationship and the respondent was not entitled to a preferential recovery. Blakey v. Brinson, 286 U.S. 254, 52 Sup. Ct. 516, 76 L. ed. 1089 (1932).

Recommended Citation

BANKS AND BANKING - CHANGING CHARACTER OF DEPOSIT TO ESTABLISH TRUST, 31 Mich. L. Rev. 841 (1933).
Available at: https://repository.law.umich.edu/mlr/vol31/iss6/10