Vlad, as agent, is paid $5,000 owed by a debtor of Lee, Vlad's principal. Instead of giving it immediately to Lee, Vlad invests it in the stock market. Luckily, the market price of that particular stock rises to $10,000 before Lee learns of the wrongdoing. Under these circumstances, _____.
A) Vlad cannot be sued as the money was put to good use
B) Lee is entitled only to $5000
C) Lee is entitled to all of the stock
D) Vlad is not guilty of wrongdoing because he managed to make a profit

Question

Quizplus · Accepted Answer

Agents are often given property of the principal for use in the principal's business. If the agent takes the property with the intent to deprive the principal of it, the agent is guilty of the crime of embezzlement. Whether or not the property of the principal is wrongfully used, the agent must return it or be liable for its value in an action for conversion. Hence, under the given circumstances Lee is entitled to all of the stock.

Vlad, as Agent, Is Paid $5,000 Owed by a Debtor