United States Fidelity & Guaranty Co. v. First National Bank of Monrovia
Before: Shaw
Synopsis
Complaint by Surety op Guardian Against Bank—Money op Ward Deposited in Own Name and E'mbezzled—Cause op Action not Stated.—A complaint by the surety oí a guardian which states that the guardian received a check upon the defendant bank, payable to the guardian as such, from a former curator of the ward, that said bank took a receipt from the guardian, as such, and sent it to the curator, that the guardian indorsed the check, as such, to defendant bank, with instruction to enter the account in his own name, that he drew out and embezzled the money, and died insolvent, and that the surety was compelled to pay the loss to the ward, but which does not allege that the bank profited in any manner especially by the account, states no cause of action against the bank, and a general demurrer thereto was properly sustained.
Id.—General Bule—Nonliability op Bank to Trustee—Limitation. Where no part of a trust fund is received by a bank otherwise than as a temporary deposit to be paid out on cheeks by the depositor, the general rule is that, in the absence of any law to the contrary, whatever may be said as to the policy of so doing, there is no legal reason which prevents a trustee from depositing the funds of his cestui que trust to his individual account, and that the bank may receive such deposit and pay it out in the discharge of its duty to the depositor, subject to the limitation that the bank, having knowledge of the fiduciary character of the fund, cannot honor cheeks in its own. favor in payment of his personal indebtedness to the bank.
SHAW, J.
The complaint, in so far as essential to a consideration of the question involved, shows that one Henry P. Kenyon was the duly appointed and qualified guardian of the person and estate of Frank C. Kenyon, alias Frank C. Davis, a minor; that for the purpose of enabling Kenyon to qualify as such guardian, pursuant to an order of court, plaintiff duly executed an undertaking in favor of the minor conditioned for the faithful performance of the duties imposed upon Kenyon as such guardian; that on February, 1908, one C. T. Clifford, of Clarksville, Missouri, sent to defendant bank a check reading as follows:
“Clarksville, Mo., Feb. 7, 1908.
“CITIZENS’BANK.
“Pay to Henry Kenyon, guardian for Frank C. Kenyon, a minor, alias Frank C. Davis, a minor, or order, $438.14, four hundred thirty-eight and 14/100 dollars.
“C. T. CLIFFORD,
“Curator for Frank C. Davis, a Minor.”
—with instructions to deliver the same to Henry F. Kenyon as guardian of Frank C. Kenyon, alias Frank C. Davis, a minor, upon obtaining his receipt therefor; that the bank delivered the check as instructed and took Kenyon’s receipt therefor as such guardian, and forwarded the same to Clifford; that Kenyon duly indorsed the check as such guardian, presented it to the bank, and requested that it open an account with him in his individual name and when collected place the amount of the check to such account; that the bank collected the amount of the check and, as requested by Kenyon, placed the proceeds thereof to his individual credit, having
[439]
knowledge at the time that the money did not belong to him, and that he individually had no right thereto or interest therein, and that his sole right and interest to and in the same was in his capacity as such guardian; that thereafter Kenyon drew his checks upon such account, which checks the bank paid to him personally, or as thereby ordered, the amount so paid out of said fund being $437.50, all of which belonged to said minor, and for all of which the guardian failed to account or pay over to his ward; that said Henry Y. Kenyon died insolvent, and plaintiff thereafter paid to his successor as guardian of the minor the sum of money so embezzled from the estate of his ward, and which sum, after demand therefor made by plaintiff upon defendant, it refused to pay.
More from California Court of Appeal
- People v. Hill (1998)
- In Re Autumn H. (1994)
- Nwosu v. Uba (2004)
- In Re Casey D. (1999)
- Santisas v. Goodin (1998)
- Cahill v. San Diego Gas & Electric Co. (2011)
- People v. Rivera (2015)
- People v. Barnett (1998)
- People v. Serrano (2012)
- Benach v. County of Los Angeles (2007)