State Ex Rel. Bane v. Nicholson

164 S.E. 750, 203 N.C. 104, 1932 N.C. LEXIS 315

• Court: Supreme Court of North Carolina
• Decided: June 29, 1932
• Status: Published

Opinion

Clarkson, J.

The question involved:’ Is it a breach of'a guardian’s bond for the guardian to place the entire trust fund, in’ the. amount of $8,401.01, on permanent (savings account) deposit in a commercial bank, without security, under ah agreement that the bank would pay six per cent interest thereon, said arrangement being allowed to stand until the failure of the bank, more than nine months after the deposit; the guardian so acting voluntarily, in the utmost good faith, and with tbe express approval of ber bondsman, but witb tbe result of tbe loss of tbe greater part of tbe fund in consequence of tbe insolvency of tbe bank? We tbink so.

C. S., 2308 is as follow's: “Guardians shall have power to lend any portion of the estate of their wards upon bond with sufficient security, to be repaid with interest annually, and all tbe bonds, notes or other obligations which be shall take as guardian shall bear compound interest, for which be must account, and be may assign tbe same to tbe ward on settlement witb him.” A guardian will be held liable for any loss resulting from a loan made without taking any security, however solvent tbe debtor may bave been when tbe loan was made. Collins v. Gooch, 97 N. C., 186 ; Cobb v. Fountain, 187 N. C., 335; Roebuck v. Surety Co., 200 N. C., 196; Bank v. Corporation Commission, 201 N. C., 381.

In 12 R. C. L., at p. 1133, part sec. 30, we find: “The deposit of funds in an incorporated bank of good reputation temporarily, while they are awaiting investment or needed for current use, is proper;.but a deposit in bank for a fixed period of time has been held to be a loan without security and to render the guardian responsible for any loss.” The case of Pierce v. Pierce, 197 N. C., 348, is distinguishable. In the judgment of the court below we find

No error.