Bunge Corporation v. Manufacturers Hanover Trust Company

Summary

The New York Court of Appeals affirmed the Appellate Division’s dismissal of Bunge Corporation’s conversion claim, holding that equitable estoppel bars Bunge because its employee’s misconduct caused the loss. The Court reasoned that official checks are freely returnable to the issuing bank and that Bunge, having enabled the diversion, must bear the loss. A dissent argued that the bank should be liable where the checks were delivered to the payee.