James Mills Orchard Co. v. Bank of America

The defendant has appealed from a judgment- of $4,148.79, which was rendered against it in a suit for conversion of money on deposit in its bank. The appellant contends the money was deposited to the credit of Kitrick & Hall, who were grain merchants and brokers, and that it was derived from the proceeds of the sale of barley previously sold and delivered to them by the plaintiff as evidenced by three negotiable warehouse receipts therefor, and that the bank lawfully applied the money to the payment of an existing debt of the brokers represented by their promissory note, pursuant to section 3054 of the Civil Code, without knowledge on its part of any defect of title thereto. It is asserted the finding to the effect that Kitrick & Hall were not the owners of the fund which was credited to the payment of their promissory note, with implied knowledge on the part of the bank of the lack of title thereto, is not supported by the evidence.

In support of the judgment, the respondent declares that the warehouse receipts for the grain which was held in storage by the brokers were indorsed and delivered to Kit-rick & Hall in trust, for the sole purpose of enabling them to sell the grain as…