State Ex Rel. Roebuck v. National Surety Co.

Claricson, J. The judgment of the court below shows: “Both plaintiffs and defendants being represented by counsel and present, the parties having waived a jury trial and agreed for the court to find the facts and the court, after hearing the evidence and arguments, finds the following facts.” In Colvard v. Dicus, 198 N. C., at p. 271, this Court said: “A jury trial was waived and the trial judge found the facts and entered judgment thereon. There was evidence to support the findings of fact, and the facts found support the judgment. In such event the findings of fact and the judgment thereon are conclusive. Eley v. R. R., 165 N. C., 78; Holmes Electric Co. v. Carolina Power and Light Co., 197 N. C., 766.” The findings of fact material for the decision of this action: “That the said bank was authorized by its charter to become guardian for *200 minors, and act in the capacity of guardian. That there came into the hands of the guardian for its ward the sum of one thousand nineteen and 47/100 dollars ($1,019.47), as shown by the final count, which appears of record in the clerk’s office, which was duly audited and approved by the clerk Superior Court; that at the time that said guardian was seized of said funds, it deposited same in the Martin County Savings and Trust Company, to the credit of Martin County Savings and Trust Company, guardian of W. A. Roebuck, and was intermingled with oilier funds of said hank, and that said funds were deposited in the said hank, in the usual manner and custom to the checking account of said guardian, and were deposited in the absence of any agreement; that same was to be a special deposit, and said guardian did not loan said funds on any security We must bear in mind that the Martin County Savings and Trust Company was doing a banking business and also under its charter acting as guardian of W. A. Roebuck. It took the guardian funds and intermingled them with the bank funds; it had no more right to do this than an individual. In Tiffany’s Persons and Domestic Relations (2 ed.), p. 343, we find: “So long as the ward’s property can be identified in the hands of the guardian in whatever form it may take the ward is entitled to-recover it as against the guardian’s creditors in case of his insolvency or bankruptcy. Thus where a guardian invested his ward’s funds in a promissory note payable to his own order and died insolvent, it was held that the ward was entitled to recover the full amount of the note from the estate. But, if the property of the ward is mingled with that of the guardian in such a way that its identity is lost, the ward has no rights superior to those of general creditors.” Wood v. Bank, 199 N. C., 371. In Sheets v. Tobacco Co., 195 N. C., at p. 153, is the following: “For any loss or losses sustained by'his ward’s estate, by reason of investments made of guardian funds by the guardian, resulting from a breach of his duty with respect to such investments, the guardian and the sureties on his bond are liable. Inasmuch as the law imposes upon a guardian the duty to invest funds in his hands, belonging to his ward, it must follow that the guardian has power and authority, with respect to making investments, commensurate with his duty. In the exercise of this power and authority, conferred upon him in order that he may perform his duty, the guardian is and should be held to a high degree of diligence and good faith. In Cobb v. Fountain, 187 N. C., 335, it is said: ‘As a general rule, a guardian may discharge himself at the termination of his trust by turning over to the person lawfully entitled thereto whatever securities he may have taken in good faith as a result of the prudent management of his ward’s estate.’ ” *201 In Pierce, v. Pierce, 197 N. C., 348, tbe principle is laid down: Tbe liability of a guardian and tbe surety on bis bond for a loss to tbe estate of tbe ward caused by the failure of a bank in which tbe guardian kept deposits of tbe estate, does not attach when it is found that tbe guardian exercised good faith and due diligence, and tbe refusal of tbe trial court to substantially submit this issue to tbe jury under the evidence in this case is reversible error. Tbe funds were not invested by tbe guardian, but intermingled with tbe other funds of tbe bank; nor was there any agreement that tbe same was a special deposit made by tbe guardian or deposit for a special purpose. Tbe principle applicable here is laid down in Hawes v. Blackwell, 107 N. C., at p. 199-200, it is there said: “When a bank, in tbe course of its business, receives deposits of money in the absence of any agreement to the contrary (italics ours), tbe money deposited with it at once becomes that of tbe bank, part of its general funds, and can be used by it for any purpose, just as it uses, or may use, its moneys otherwise acquired. Tbe depositor, when, and as soon as be so makes a deposit, becomes a creditor of tbe bank, and tbe latter becomes bis debtor for tbe amount of money deposited, agreeing to discharge tbe debt so created by honoring and paying tbe checks or orders the depositor may, from time to time, draw upon it, when presented, not exceeding tbe amount deposited. Tbe relation of tbe bank and depositor is simply that of debtor and creditor, tbe debt to be discharged punctually in tbe way just indicated. Tbe contract between them, whether express or implied, is legal -in its nature, and there is no element of quality in it different from tbe same in ordinary agreements or promises, founded upon a valuable consideration to pay a sum of money, specified or implied, to another party. There are none of tbe elements of a trust in it. Tbe bank does not assume or become a fiduciary as to tbe money deposited for tbe depositor, nor does it agree to bold a like sum in trust for him. Boyden v. Bank, 65 N. C., 13; Bank v. Millard, 10 Wall., 152; Bank v. Schuler, 120 U. S. R., 511.” Corp. Com. v. Trust Co., 194 N. C., at pp. 127-8. See Ex parte Hemlen, 156 S. C., 181, 69 A. L. R., 443. Guardians are required to give bond with certain terms and conditions. C. S., 2161, 2162. A guardian bond can be given in a surety company. C. S., 339. It goes without saying that tbe surety company is held to tbe same accountability as an individual who is surety. An individual who acts as guardian cannot fraudulently or knowingly and wilfully misapply or convert money of bis ward to his own use, nor can a corporation that has a right under its charter to act as guardian do so. C. S., 4268. Under tbe facts and circumstances of this case, the bank, acting as guardian bad a right to invest its ward’s money, but in *202 so doing is beld “to a high degree of diligence and good faith.” It did not invest the money of its ward, but intermingled it with other funds in its bank. C. S., 2162, in part: “The bond must be conditioned that such guardian shall faithfully execute the trust reposed in him as such, and obey all lawful orders of the clerk or judge touching the guardianship of the estate committed to him.” The bank, as guardian, in not investing the funds of its ward, but intermingling it with other funds of its bank, was faithless to the trust reposed in it; and its bondsman, the defendant, must suffer the loss for such faithlessness. For the reasons given, the judgment of the court below is Affirmed.