Fletcher v. Whitaker, No. 02-17-00138-CV, 2018 WL 4924944 (Tex. App.—Fort Worth Oct. 11, 2018, no pet.).
Three individuals, Bob, Toby, and Geneva, opened a
joint account with right of survivorship. Bob provided all the funds for
the account. Toby died and Geneva used some of the funds for his
funeral. Bob executed a durable power of attorney which, among other
things, permitted Gary to deal with banking transactions. Gary withdrew
$25,000 via a cashier’s check. Before it was cashed, both Gary and Bob
signed the check. A few months later, Bob died. Bob’s executors then
attempted to recover the funds Geneva used for Toby’s funeral and Geneva
sought the funds Gary withdrew using Bob’s power of attorney. The trial
court held that the Geneva did not have to repay the funeral withdrawal
but that Gary along with the person to whom Gary gave some of the money,
were responsible for paying Geneva the $25,000.
The appellate court agreed that Geneva’s conversion
judgment for $25,000 was correct. Gary did not dispute that he breached
his fiduciary by withdrawing the money, depositing it in his account,
and using those funds for things other than Bob’s care. The court
explained that Gary was not acting in Bob’s interest when he made the
withdrawal and, despite Bob signing the check, he had “wrongfully
exercise[d] dominion and control over the money to the exclusion of, or
inconsistent with, Geneva’s rights.”
Moral: An agent may not withdraw funds from
the principal’s account and then use them for the agent’s own purposes.