In Porter County Dev. Corp. v. Citibank, the Court of Appeals held that when a creditor accepts payment for valuable consideration in good faith and without any knowledge of misappropriation, it is not liable to the victim of the misappropriation for repayment. The facts showed that an employee of the Porter County Development Corporation misappropriated money from the corporation and placed them in his checking account. The employee then made three payments to Citibank for personal credit cards from these funds. Citibank was unaware of any wrongdoing at all relevant times.
In finding no liability on the part of the good faith creditor, the Court went against the established, but antiquated, precedent of Porter v. Roseman (Ind. 1905) and Peoples State Bank v. Kelly (Ind. Ct. App. 1922), applying modern case law from Rhode Island, Georgia, Ohio, Pennsylvania, Maryland and the Seventh Circuit.
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