IN RE: OUNJUIAN'S ESTATE.a1 HINES, Administrator of Veterans' Affairs, etc., et al. v. MILLER.
Appeal from an order settling the final account of a former guardian of the estate of Alea K. Ounjuian, an incompetent person.
Two questions are raised by appellant which are stated as follows: “1st: Whether the former guardian should be surcharged with funds which he deposited in a bank which failed, said deposit being in the form of a term deposit. 2d: Whether, if not otherwise liable for the loss of said funds, the fact that said funds were under the joint control of his surety, a bonding company, would make the guardian a guarantor of said funds and liable for their loss.”
These questions arise by reason of the allowance by the court as a credit in the guardian's final account of the sum of $5,227.38, which amount was treated as lost to the estate because of the failure of the Bank of West Hollywood wherein the funds of the estate were on deposit. This amount represents three items: $4,800, balance of a term deposit in said bank; $347.38, balance on deposit in a checking account; and $80, balance in the escrow department of the bank remaining from the proceeds of property sold for the estate.
Appellant contends that this term deposit was an investment of estate funds, and, inasmuch as no court approval was had for making this term deposit, the guardian is liable to the estate for this loss of $4,800.
The evidence shows that respondent for some months prior to the bank failure was seeking a suitable investment for these funds, and had contacted a broker with a view to purchasing some bonds. Pending a decision on the question of such an investment, respondent deposited $8,000 of estate funds in a term account in the Bank of West Hollywood, where he was also carrying a small amount in a checking account. Before he found a satisfactory investment for the $8,000, the bank failed. In the process of liquidation, dividends to the amount of $3,200 were paid on this account, leaving $4,800 unpaid in the term account, which amount was treated as a loss of estate funds, and for which the guardian in his account asked credit. On this branch of the appeal, we feel the court, under the evidence, was justified in finding that the money deposited in said bank was for temporary safe-keeping and did not constitute a “loan on personal security in lieu of an investment.”
As to the second point, it appears that, at the time the United States Fidelity & Guaranty Company furnished the guardian's bond for respondent, he entered into a written agreement with the bonding company by the terms of which the bonding company was to have joint control with the guardian over the funds in both the bank deposit accounts. Respondent testified that he could not draw any of the funds on deposit in the bank without the counter signature of a representative of the bonding company.
In Re Estate of Wood, 159 Cal. 466, 114 P. 992, 36 L. R. A. (N. S.) 252, the court had before it a similar question. The money belonging to the estate of the minor on deposit in the bank was subject to withdrawal only on the joint signatures of the guardian and a representative of the bonding company that furnished the bond for the guardian. In holding the guardian liable for loss of funds on deposit upon failure of the bank, the court gave approval to the rule of liability as stated in the syllabus in the case of McCollister v. Bishop, 78 Minn. 228, 80 N. W. 1118: “If a trustee enters into any arrangement with reference to trust funds which surrenders or limits his control over them, he becomes a guarantor of the fund, irrespective of his motives, or whether his surrender of control was the cause of the loss of the fund.” The opinion cites other cases which sustain the view expressed in the above quotation.
We are unable to distinguish the instant case from that of In re Estate of Wood, supra, nor does respondent cite us to any case in this or other jurisdictions which is in conflict with the views therein expressed.
We therefore conclude that the court erred in allowing the guardian credit in his final account for the said items of $4,800 and $347.38. The judgment is reversed only as to the allowance of the two items of $4,800 and $347.38. Otherwise it is affirmed.
HAHN, Justice pro tem.
We concur: HOUSER, Acting P. J.; YORK, J.