(v) Retention of Equitable Title
Where the claimant has an existing equitable interest in property that is mixed with other property or is transferred to a third party, it is necessary to show that the claimant has retained that equitable interest in the original or substitute property. Normally, the interest will be retained even if the property is transferred to a third party who is unaware of that interest. So, for example, in Foskett v McKeown, the claimants were able to establish that they had retained an equitable proprietary interest in money that was stolen by the trustee. Also, in Re Diplock,161 the executors of the deceased’s estate mistakenly paid part of the money from the estate to third parties. The deceased’s next of kin, who should have received the property, were able to bring a proprietary claim to recover it on behalf of the estate, since they had retained an equitable proprietary interest in the property, despite the executors’ mistaken transfer.
-   1 AC 102. 161  Ch 465. See also Nelson v Larholt  1 KB 339.