Leach v. Sandborn State Bank

The claimants are owners of government bonds, left with the defendant Sanborn State Bank for safekeeping. These bonds were wrongfully converted by the bank.

Are the claimants entitled to a decree for preferential payment on a trust theory? It is beyond dispute that the bonds in question were held under a contract of bailment, which constituted an express trust. The bonds are now gone, and the record discloses that the receiver never had possession of them. In fact, the Sanborn bank lost control of these bonds during the year 1920. They were either sold or hypothecated by the Sanborn bank, in…