Law Commons^™

Trusts Banks And Banking - Liability Of Depository For Trustee's Misappropriation Of Trust Funds - Uniform Fiduciary Act, Michigan Law Review

Michigan Law Review

Defendant bank was the depository of trust funds specially earmarked for payment of an outstanding issue of trust notes. The trustee's individual account in defendant was overdrawn; and the trustee was also indebted to defendant on a promissory note. The trustee drew a fiduciary check in favor of himself for the entire amount of the trust account, indorsed it, and deposited it in his individual account. This wiped out the overdraft and left a credit balance. Then the trustee paid his note to defendant with a check drawn on his individual account in favor of defendant. Held, under the …