City of Portland v. Berry
739 P.2d 1041, 86 Or. App. 376 (1987)
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Rule of Law:
A party who takes stolen money in good faith and for valuable consideration obtains good title to it, prevailing over the original owner, even if the currency consists of rare or large-denomination bills.
Facts:
- Berry and Kelly employed a live-in attendant named Wetzel.
- Wetzel stole nine $1,000 bills and eighteen $500 bills from Berry and Kelly.
- Over a period of three months, Wetzel took the stolen bills to the United States National Bank of Oregon (Bank).
- At the Bank, Wetzel exchanged the large bills for smaller denominations of cash, travelers’ checks, a cashier’s check, and deposits into savings accounts.
- Bank employees, aroused by the large denominations, asked Wetzel about the source of the money.
- Wetzel claimed the money was an inheritance, and the bank employees considered this explanation believable.
Procedural Posture:
- After the thief, Wetzel, was convicted of theft, the City of Portland initiated an interpleader action in a state trial court to determine rightful ownership of the recovered bills.
- The trial court awarded the bills to the defendant, United States National Bank of Oregon.
- The other defendants, Berry and Kelly (the original owners), appealed the trial court's decision.
- On appeal, Berry and Kelly are the appellants, and the United States National Bank of Oregon is the appellee.
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Issue:
Does a third party who receives stolen money in good faith and for valuable consideration obtain good title to it, even if the bills are of large, uncommon denominations like $500 and $1,000?
Opinions:
Majority - Rossman, J.
Yes. A third party who takes stolen money in good faith and for valuable consideration obtains good title and prevails over the original owner. This "money rule" is an exception to the general principle that a thief cannot pass title to stolen property, and it exists to ensure that currency can pass freely in commercial transactions. The court held that even though $500 and $1,000 bills are rare, they are still legal tender and subject to this rule. The Bank acted in good faith, as judged by a subjective standard of 'honesty in fact,' because its employees believed Wetzel's story about an inheritance and did not suspect theft. Furthermore, the Bank gave valuable consideration by exchanging the bills for their face value in other financial instruments.
Analysis:
This decision formally adopts the "money rule" in Oregon, establishing that the policy of ensuring the free circulation of currency can override the property rights of a theft victim. By applying the rule to rare, large-denomination bills, the court affirmed the rule's broad scope and rejected the idea that unusual currency should trigger a higher duty of inquiry. The adoption of a subjective standard for "good faith" makes it more difficult for original owners to reclaim stolen cash, as they must prove the recipient's actual dishonesty rather than mere negligence or failure to be suspicious.
