Newman v. Tillman

Woods, J., delivered the opinion of the court. The only question thought to be debatable is a very narrow one, and readily resolvable. The note left with the Newmans for collection was, on its face, payable to the order of J. F. Tillman. It was unindorsed by the payee, or by his personal representatives. These facts were sufficient to have put the Newmans on inquiry, and any inquiry would have shown that J. F. Tillman was dead, and his estate in process of administration, and that William Wood & Co. were not entitled to the proceeds of the note when collected. No matter what William Wood directed, or did not direct, as to the disposition of the collection, the Newmans had notice which was ample to put them on inquiry, and they failed to make it, and are fairly chargeable with participation, beneficially, in the disposition of this trust-fund. William Wood’s supposed assumption of ownership of the note, and William Wood’s supposed authorization and direction to the Newmans to collect and place to his credit, cannot avail the Newmans. They knew, or could and should have known, that the money to be collected was a'trust-fund, and its misappropriation was beneficially participated in by them. By settled law they must respond to the true owner. Affirmed.