Seagle v. Barreto

Putnam, J. (dissenting):

In this case the appellant’s bank account on April 30, 1913, received $1,887.05 proceeds of the two bonds which the husband had sold and converted. Here the trust moneys have been traced into this bank account of the appellant, who is the wrongdoer’s wife. At that time appellant’s bank balance was $40.76. Between April 30 and July 9,1913, she had by various *556checks thereon drawn out sums so as to leave to her credit only $40.76.

The court found that appellant paid no consideration for such deposit in her bank account, and that she received and retained said proceeds for her own benefit. Such a holder cannot be considered a bona fide purchaser for valuable consideration and without notice. As against the beneficiary of a trust ex maleficio mere absence of knowledge is not a sufficient defense. To get a prevailing title, such receiver, however innocent, must be a purchaser for value. If a depositary like a bank (for example) pay such funds out to third persons, these payments make a consideration. But if the volunteer uses the proceeds for herself or family, can her own appropriation be a defense? It is not a case of earmarking funds. It is the simpler question of showing a right higher than that of the true owner of the securities, whose proceeds have been thus abstracted. Hence I would affirm.

Jenks, P. J., concurs.

Judgment reversed, with costs, and complaint dismissed, with costs. Settle order, with new findings, on notice.