Spartanburg County v. Arthur ( 1933 )

The opinion of the Court was delivered by

Mr. Justice! Bonham.

The history of this litigation, and the cáuses which led to it, are clearly and succinctly stated in the order of Judge Sease, from which this appeal comes to this Court. That order correctly disposes of the issues made by the appeal.

It is not seriously denied that the transactions between E. G. Miller and the Bank of 'Union created a trust in favor of the County of Spartanburg in the assets of the bank. The gist of the contention is that they did not create a trust ex maleficio which entitles the county to a preference in the distribution of those assets.

The evidence in this case is conclusive that the Bank of Union had knowledge that the funds which it received from E. G. Miller were funds of the County of Spartanburg, which Miller had in trust as the treasurer of the county, and that they were being misappropriated by him to the payment of the obligations of the Bank of Duncan, of which he was president, to the Bank of Union. When, therefore, the Bank of Union received them with this knowledge and converted them to its uses, there arose a trust ex maleficio; there were present the characteristic elements of fraud by him who misappropriated the funds, and knowledge thereof by the bank which received them in payment of obligations not due it by the lawful owner of the funds.

The exceptions are overruled, and the order of Judge Sease is affirmed. Let it be reported.

Mr. CitiEE Justice BeEase and Messrs. Justices Stabler and Carter concur.