Century Indemnity Co. v. Bank of Gowanda

265 A.D. 907, 38 N.Y.S.2d 318, 1942 N.Y. App. Div. LEXIS 6430

Opinion

Memorandum: We are still of the opinion that the decision in the case of Raymond Concrete Pile Co. v. Federation Bank (288 N. Y. 452) is not controlling in the instant case. In that ease the opinion states: “As a general rule * * a banker who knows that a fund on deposit with him is a trust fund cannot appropriate that fund for his private benefit *- * *. But one who relies upon the application of those principles must always affirmatively establish that the bank had notice or knowledge not only that the moneys on deposit were for a trust purpose but also that they were diverted from that purpose.” Again the opinion states: “ It necessarily follows that no trust arises * * * from the mere fact that the contractor received and has in his hands moneys in payment on account of a public improvement.” But, in the instant case, there were findings (findings 17, 18 and 19) supported by evidence, that defendant had notice and knowledge of the fact that the moneys were trust funds and diverted to the payment of the contractor’s debt to the bank. Present — Crosby, P. J., Cunningham, Taylor, Dowling and MeCurn, JJ.