Smith v. Olympic Bank
Supreme Court of Washington
693 P.2d 92 (1985)
Guardian Charles Alcombrack deposited a $30,588.39 check, made out and endorsed in his capacity as guardian of his son's estate, into his own personal account at Olympic Bank (defendant), which separately corresponded with the guardianship's attorney referencing the "Estate of Chad Alcombrack" the same day; Alcombrack spent nearly all the funds personally, and successor guardian Smith (plaintiff) sued the bank to recover the trust money after the trial court granted the bank summary judgment.
Whether, under the Uniform Commercial Code, a purchaser has notice of an adverse claim, and thus cannot qualify as a holder in due course, if the purchaser has knowledge that a fiduciary has negotiated the instrument in a transaction for his own benefit.