American Surety Co. v. First Nat. Bank

HARRY E. WATKINS, District Judge.

The Circuit Court of Appeals of the Fourth Circuit has held the defendant bank liable to the plaintiff surety company for $4,050 paid by the surety company on account of funds of a bankrupt estate misappropriated by a trustee in bankruptcy. American Surety Co. of New York v. First Nat. Bank in West Union, W. Va., 141 F.2d 411, 413. The case was remanded to this court for further proceedings in accordance with that opinion.

The opinion makes it clear that the bank’s liability is based on the theory of a constructive trust; that it is liable as a constructive…