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Banks And Banking - Guaranty Of Indorsements - Recovery By Payer
Banks And Banking - Guaranty Of Indorsements - Recovery By Payer
Michigan Law Review
Relying on fraudulently prepared documents purporting to authorize the president to borrow money, P Bank loaned $100,000, taking the promissory note of the state university executed by such president. The amount of the loan was advanced by means of a cashier's check payable to the order of the university. This check, indorsed by the president without authority, was taken by D Bank , and the amount thereof added to the credit balance of the university in a checking account carried in that bank. Through the clearing house P Bank paid D Bank the amount of the check, which bore the …
Trusts-Participation By Banks In Diversion Of Trust Funds
Trusts-Participation By Banks In Diversion Of Trust Funds
Michigan Law Review
That fiduciaries who misappropriate or divert trust funds from their proper purpose are bound to make good is familiar doctrine. It is equally clear that those who guiltily participate in such. diversions by faithless fiduciaries are also liable. The point of chief difficulty is the determination of what participations are properly classified as guilty, for innocent participators clearly are not bound to make good. For example, a fiduciary with power to sell things held in trust may wish to turn the subject matter into cash preliminary to a misappropriation. A bona fide purchaser who provides the cash no doubt stands …