127 Pa. 360 | Pa. | 1889
Opinion;
The certificate of deposit in this case is of the same form as the one in Frankenfield’s App., 11 W. N. 373, and it was
The decree of the Orphans’ Court is reversed and record remitted, with instructions to restate the account in accordance with the foregoing opinion, the costs of this appeal to be paid by the appellee.
The opinion in Frankenfield’s Appeal, filed April 3, 1882, so far as relating to the question raised in the above ease, was as follows:
Green, J.: In this case the appellant, who was the committee of a lunatic, having trust funds in his hands, made a deposit of $2,000 thereof in the Franklin Savings Bank of Allentown, Pa., and took a certificate therefor in the following form:
Certificate Franklin Savings Bank,
of Deposit. Allentown, Pa., [Stamp.]
November 11th, 1876.
S. A. Frankenfield, Committee of Samuel Frankenlield, Hits deposited in this Bank Two Thousand Dollars, payable to his order, three months after date, with interest at the rate of six per cent per annum, on return of this certificate.
Thirty days’ notice to be given of the intention to withdraw this deposit.
$2,000.
J. E. Zimmerman, D. H. Miet.hr,
Cashier. Per J. E. Z., President.
The deposit was made in the name of the committee as such; it was done by the advice of counsel, and at the time of the transaction the bank was in good ropnte. So far, therefore, as those considerations affect the question of the appellant’s liability for the loss of the money by reason of the insolvency of the bank, it must; be conceded at once that no liability would arise. There was no bad faith ou the part of the appellant, and although the bank was really insolvent when the deposit was made, that fact was not known in the community. The question at issue is thus reduced to the narrowest limits. If this had been an ordinary deposit, subject to the check of the depositor from the day it was made, it is very probable the appellant would not have been liable. But it was not such a deposit. In practical effect, it was a loan to the bank for a fixed period and payable with interest. During that period it was entirely beyond the control of the depositor. lie could make no legal demand for the money until at least three months had expired, and not even then unless he had given thirty days’ notice of his intention to withdraw the fund. In no essential feature does this transaction differ from an ordinary loan. It is true, the borrower is a bank and not an individual. But that circumstance is of no moment in determining the character of the transaction. It is a loan still, just as it would have been had the depositary been a citizen or
Nor does the brevity of the time affect the question. There could be no difference in principle between a deposit payable in three months and one payable in twelve or twenty-four .months, when the question relates only to its character as a loan. This being so, the law regulating investments by committees of lunatics becomes applicable to the case and controls it. The act of June 13, 1836, § 25, P. L. 597, expressly directs that such investments must be made under the direction of the Court of Common Pleas, and only exempts the committee from liability for loss when lie pursues this course and in good faith. In Hemphill’s App., 18 Pa. 303, it was formally and definitely settled that a trustee can only protect himself from risk when he invests the trust fund in real or governmental securities or makes the investment in pursuance of an order by the court. On page 306, Brack, C. J., says: “It has never been doubted anywhere that a loss which accrues of a trust fund invested on personal security, must be borne by the trustee.” These considerations determine that the auditor and court below were right in holding the appellant liable for the loss of the sum of one thousand dollars, deposited with the Franklin Savings Bank.