Mildred P. Grace, as Trustees Under the Will of David Fox, Deceased, Appellants v. Corn Exchange Bank Trust…

Summary

The New York Court of Appeals held that a bank is not liable as a joint wrongdoer for a trustee's embezzlement unless the bank had actual knowledge that the trustee was using trust funds for personal purposes. The court found the bank lacked such knowledge for transfers before November 1930, but acquired knowledge by September 1931 and therefore became liable from that date. The judgment of the Appellate Division and Special Term was reversed and the case remanded to determine the precise damages owed.