Duckett v. National Bank

Citations

• 88 Md. 8
• 41 A. 161
• 1898 Md. LEXIS 198

Syllabus

<p>Trusts — Liability of Bank for aiding Trustee in Breach of Trust — Appropriation with Notice of Money belonging to Trust Estate to Trustee's Personal Indebtedness — Memorandum on Check — Bona fide Purchaser of Bonds.</p> <p>A party who knowingly, or with means of knowledge, aids a trustee in committing a breach of trust, is liable therefor to the trust estate.</p> <p>As between cestui que trust and trustee and all persons claiming under the trustee otherwise than by purchase for valuable consideration without notice, all property belonging to the trust estate, however much changed in its nature, and all the fruits of such property, continue to be affected by the trust.</p> <p>When a bank accepts from a trustee in payment of his personal indebtedness the check of a third party which shows upon its face that the money is due to the trustee in his fiduciary capacity, as trustee of a designated estate, the bank is affected with notice of the breach of trust and is liable to the trust estate for aiding the trustee in committing his wrongful act.</p> <p>Equity has jurisdiction to enforce the liability of a party who receives trust property with knowledge that it is being disposed of in breach of trust.</p> <p>C. held as trustee of an estate certain certificates of indebtedness of P. G. county. An Act of the Legislature of 1890 authorized the county to issue bonds in payment of this and other debts. The bonds were executed but were not legally issued, because purchasers objected to a proviso in the Act. This proviso was repealed by an Act passed in 1892, which required the bonds made under the Act of 1890 to be destroyed, before any should be issued under the Act of 1892. In 1891, C., the trustee, obtained from the county bonds to the amount of $12,500, in payment for the certificates of indebtedness so held by him. In the same year, the defendant bank loaned a sum of money to C. in his personal capacity, and accepted said bonds as collateral security. In 1892, the coun