Bank of America Nat'l Trust & Sav. Ass'n v. Parnell

After bearer bonds belonging to Bank of America (plaintiff) disappeared before it could redeem them, Parnell (defendant) later presented the bonds on Rocco's (defendant's) behalf to First National Bank, which had them cashed through the Federal Reserve Bank of Cleveland; the proceeds ultimately reached Rocco. Bank of America sued for conversion in federal court on diversity jurisdiction, and the district court applied state law, placing the burden on defendants to prove good faith; the jury found for Bank of America, but the court of appeals held federal law under Clearfield Trust Co. v. United States governed and placed the burden instead on Bank of America to prove bad faith. Bank of America sought certiorari.