TRUSTS - PARTICIPATION IN BREACH OF TRUST BY DEPOSITARY OF TRUST FUNDS - TRACING

Authors

Michigan Law Review, University of Michigan Law School

Abstract

A township treasurer, elected custodian of school funds by the trustees of schools, paid a personal debt to the bank in which those funds were deposited with a check drawn by him as treasurer on the trust account. Subsequently, in like manner, he transferred some $2,000 from the trust account to his personal account in the same bank to meet an overdraft of $ 1,000, using the balance then left in his personal account for his personal advantage without benefit to the bank. Held, that the surety who had paid a judgment in favor of the school trustees for the total sum misappropriated did not establish a preferred claim against the receiver of the bank, since it failed to trace any portion of the misappropriated funds into the receiver's hands. People ex rel. Barrett v. State Bank of Herrick, 290 Ill. App. 130, 8 N. E. (2d) 71 (1937).

Recommended Citation

Michigan Law Review, TRUSTS - PARTICIPATION IN BREACH OF TRUST BY DEPOSITARY OF TRUST FUNDS - TRACING, 36 Mich. L. Rev. 677 (1938).
Available at: https://repository.law.umich.edu/mlr/vol36/iss4/19