Smith v. Olympic Bank

Charles Alcombrack was appointed as the guardian for his son Chad who was the beneficiary of his grandfather’s life insurance policy. The insurance company issued a check for $30,588.39 made payable to “Charles Alcombrack, Guardian of the Estate of Chad Stephen Alcombrack a Minor.” The attorney for the son’s estate instructed the father to take the check, along with the letters of guardianship to the bank and open up a guardianship savings and checking account. The father did not follow the attorney’s instructions and instead opened a personal checking and savings account with the check. The father indorsed the check in his guardianship capacity. Despite the fact that the check was payable to the father in his guardianship capacity, the bank allowed the father to place the entire amount in his newly opened personal accounts. The attorney called to follow up on the guardianship account, and the trust officer wrote the attorney, specifically mentioning the “Estate of Chad Alcombrack.” The father used all but $320.60 of the trust money. After the depletion of the estate, the plaintiff, J. David Smith (the “plaintiff”) was appointed successor guardian. The trial court granted Summary Judgment in favor of the defendant, Olympic Bank (the “defendant”) but the Court of Appeals reversed and remanded holding that the trial should determine the factual issue of whether the bank was a holder in due course.