conversion
Can the victim of a conversion recover money from a vendor to a converter?
<p>Suppose B "converted" money entrusted to him by A. B then turns around and buys goods, say a car, from C using the converted funds. </p>

<p>A can sue B for conversion, of course. But can A sue C as the recipient of converted funds. Or can C (who didn't know that the funds were converted) use as a defense, I sold B a car for the money, your remedy is the car owned by B?</p>

<p>Normal rules are that you cannot have good title to a thing if, somewhere down the line, there was a thief who had converted that thing from its rightful owner.</p>

<p>There are exceptions, the relevant one here is a negotiable instrument, which includes cheques (unless marked "Not negotiable" - now you know what it means), stocks, bonds and ... money. The legal owner of a negotiable instrument is the person who has it, provided that person gained possession of it lawfully. </p>

<p>In your example, C gained possession of the money in a lawful transaction with B; A has no recourse against C. Contrast this where B stole the car from A and sold it to C: a car is not a negotiable instrument so C does not have good title, they must return the car to A and try to get their money back from B.</p>
