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Professor Dan Friedmann has asked me to distribute his thoughts on the Seinfeld case:

"This seems to me the answer to your question: Judge Judy's decision is correct and so is Allan Axelrod. Where D sells an interest to P and afterwards D receives (from C) payment in respect of this interest, he is accountable to P. E.g. D assigns to P a debt which C owes him. C pays the debt to D. P can recover the payment from D (even if he has an alternative claim against C). The same rule applies where D is in possession of P's property and receives from a third party compensation in respect of loss or damage to this property. This applies irrespective of whether C was legally liable to make the payment (provided he did not intend a personal gift to D. The case of the comedian is not a case of a pure gift even if the comedian was not legally liable. He was under a moral obligation and this obligation was to P).

I suppose that the difficulty of the RDG stems from the fact that important cases, such as The Winkfield, The Alabazero and Hepburn v. Tomlinson, that are relevant to this principle are not discussed in the leading English books on restitution (on this lacuna see Restitution ­ Past, present and Future 138)."

I should have known that the law of tracing would save the day. L.