McLaughlin v. Security-First National Bank

THE COURT. Plaintiff’s complaint having been tested by demurrer and found lacking, the demurrer was sustained without leave to amend and a judgment of dismissal entered. [604]It is from this judgment that the plaintiff has appealed. We are of the opinion that the determination of the trial court was correct; the complaint does not state facts sufficient to constitute a cause of action.

From the complaint we find that, plaintiff’s grandmother having provided in her will that $3,000 should be left in trust for him until he attained the age of thirty, that sum was in 1925 distributed to the defendant’s predecessor in responsibility, Security Trust & Savings Bank, as trustee for the plaintiff. The trustee, Security Trust & Savings Bank, was succeeded by the defendant during the life of the trust; we need not distinguish between them. The trustee in its operation as a bank had a number of notes secured by trust deeds or mortgages against which it issued participating certificates. In these participating certificates the bank, as trustee in many trusts, invested the funds it held, and in this manner it invested the $3,000 it held in trust for the plaintiff. The fault the plaintiff finds with the purchase of the certificates, referred to in the first and second reports and accounts rendered by the trustee, is that the certificates were void because they were securities issued without a permit from the commissioner of corporations. This same objection is made to the certificate referred to in the third and fourth account and further objection is made that the security back of this certificate was woefully inadequate, the market value of the land being less than 10 per cent of the mortgage and the makers of the mortgage being insolvent.

Four reports and accounts of the trustee to the court are mentioned, the fourth being the final account rendered after the plaintiff attained the age of thirty. The complaint is silent as to the dates upon which they were rendered or when they were confirmed and approved. To the extent noted later, these reports referred to the investments that had been made, and, as already noted, the reports were confirmed and approved.

The activities of a trustee are properly reported to the probate court. (Sec. 1120, Prob. Code.) Its decree approving these activities, when final, is “conclusive upon all persons in interest”. (Sec. 1123, Prob. Code.) The- complaint contained no allegations that due notices of the hearings on the accounts had not been given, so we must presume that proper notices were given. (Abels v. Frey, 126 Cal. App. 48 [14 Pac. (2d) 594].) In the premises, the decrees