Appellant bank sought review of the California trial court’s judgment in favor of respondent administratrix in respondent’s action against appellant, alleging negligence, money had and received, and breach of contract.
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Overview
Respondent administratrix filed suit against appellant bank for breach of contract, money had and received, and negligence arising out of co-executor’s misappropriation of funds from an estate commercial account held by appellant. Neither respondent administratrix nor the co-executor had expressed a desire to have two signatures required for withdrawals. The trial court found for respondent administratrix. The court reversed, finding that appellant was not liable for the co-executor’s diversion of estate funds. The court found that appellant was not notified either in writing, as required by Cal. Fin. Code §§ 852, 953, or orally by respondent administratrix or the co-executor that two-signature were to be required. The court also found that Cal. Prob. Code § 570 imposed a duty of joint action by co-executors only with respect to their relations with each other – at least where bank deposits are concerned. The court rejected the contention that banks were governed by § 570 insofar as requiring that withdrawals be made only upon the signature of all co-executors, contrary to the instructions, express or implied, from co-executors authorizing withdrawals upon one signature only.
Outcome
The court reversed the judgment of the trial court in favor of respondent administratrix in the action against appellant bank, because appellant’s action of not requiring both executors’ signatures for withdrawals was neither negligent nor a breach of contract. The court found that the co-executors did not desire the joint form of withdrawal and a custom requiring a two-signature withdrawal was contrary to the financial code.