Guardianship of Ounjuian

LANGDON, J.

The respondent Miller was on January 15, 1930, appointed guardian of the estate of Alea K. Ounjuian, an incompetent person. In 1930 and 1931 he had in his possession money of the estate in the sum of $8,000, awaiting investment. This amount he deposited in the Bank of West Hollywood, in his name as guardian. The bank failed in June, 1931. Dividends were paid during liquidation, but on November 3, 1933, when respondent filed his final account, a balance of $5,227.38 was still owing. Respondent sought to be allowed a credit as to this sum. Objections were filed on behalf of the United States Veterans’ Administration. The lower court allowed the credit, and this appeal followed.

There is no claim that the respondent acted illegally, fraudulently or negligently, and it is clear that the deposit was a temporary one for safekeeping, and not an investment of the funds of the estate. The only ground of appeal which requires consideration arises from the fact that the guardian, upon ,his appointment, entered into an agreement with the United States Fidelity and Guaranty Company, his surety, giving the latter joint control over the funds in the bank, so that the respondent could not draw any of the money on deposit without the counter-signature of a representative of the bonding company. In

Estate of Wood,

159 Cal. 466 [114 Pac. 992, 36 L. R. A. (N. S.) 252], the court held that where a trustee or similar fiduciary enters into an arrangement which limits his control over trust moneys, he becomes a guarantor of the funds, and is responsible for their loss. The theory behind the decision is that any such arrangement hampers the guardian in the performance of his duty to safeguard the funds.

The court in

Estate of Wood, supra,

suggested that only the legislature could provide a method by which a surety company might have some control over the funds. (159 Cal. 473.) A few years later, in 1915, a statute was enacted to govern the deposit of money held by bonded fiduciaries. It provides: “It shall be lawful for any party of whom a bond undertaking or other obligation is required to agree with his surety or sureties for the deposit of any or all moneys and assets for which such surety or sureties are or may be held

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