Lemly v. . Atwood

Eeade, J. The only question is, whether the assignee of a trust fund — in this case a bond — with notice of its character, who takes it for purposes other than the trust, is liable to the cestui que trust who suffers loss. It is settled that he is. Exum v. Bowden, 4 Ire Eq. 281. Jesse Atwood, guardian of John T. Atwood, held a bond payable to him as guardian on its face. Jesse Atwood died and C. L. Banner administered on his estate, accounted to the estate for the bond, took it as his own, and assigned it to the defendant, in an individual transaction with the defendant; and John T. Atwood, the ward, by reason of the insolvency of the estate of his guardian, lost the amount of the bond. It is said that Banner had the right in equity to assign the bond, because he accounted to Jesse Atwood’s estate for it, and, therefore, committed no fraud. But then the bond was not Jesse Atwood’s and both Banner and the defendant had express notice, as the bond, upon its face, was payable to Jesse Atwood as guardian. The ward having suffered loss had the right to follow the fund in the hands of the defendants. No error. Pee Oueiam. Judgment affirmed.