# Stewart v. Phoenix National Bank

> Arizona Supreme Court · January 11, 1937 · 49 Ariz. 34

URL: https://www.frixlaw.com/law-library/cases/3256009

## Case

- **Full name:** FRANK R. STEWART, Appellant, v. PHOENIX NATIONAL BANK, a Corporation, Appellee
- **Court:** Arizona Supreme Court
- **Decided:** January 11, 1937
- **Citations:** 49 Ariz. 34; 64 P.2d 101; 1937 Ariz. LEXIS 214
- **Precedential status:** Published
- **Opinion:** Concurrence by Ross
- **Judges:** Lockwood, Ross
- **Cited by:** 72 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/3256009

## How later opinions describe it (automated extraction)

- holding that a confidential relationship existed when the bank had acted as the plaintiffs financial adviser for many years and he relied upon the bank’s advice
- concluding a special relationship existed between debtor and creditor only because the bank’s officers and directors acted as the debtor’s financial advisors for twenty- three years
- finding special relationship between debtor and creditor existed only because bank officers and directors had been debtor’s financial advisors for twenty-three years

## Opinion text

ROSS, J.
I concur in the result but not in the conclusion that the complaint alleges facts showing that the defendant bank sustained the relation of a trustee to plaintiff. A bank may be a trustee of its assets for the benefit of its stockholders, depositors, and creditors and be under obligation to make loans of its funds only to third persons who are able to repay the loans and interest, but it is not a trustee of the borrower. Often officers of a bank and the bank’s customers are on most friendly terms and the former may frequently advise with the latter as to where or how to make investments, but who would think of holding the bank responsible as trustee of such customer and liable to him as such for poor or mistaken advice of its officers. Efficient and competent bankers do not lend money on mere friendship, and when an old customer fails for any reason to meet his unsecured loans when due, such bankers should and will take necessary steps to prevent any loss on account thereof either by legal process or by obtaining’ voluntary security. If plaintiff had not secured his overdue notes by a mortgage, the defendant could have sued him and attached his property, foreclosed the lien, and realized its debt much quicker than it did. No question of friendship or trusteeship would have been involved.
The facts alleged do not show any fiduciary relation between plaintiff and defendant bank but a relation of
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creditor and debtor, wbo became such under circumstances that preclude the bank from acting as trustee either in the making of loan or in securing it by mortgage after default in payments.
These principles of law seem to me to be so just and elementary as not to need citation. Under the rule announced, bankers and managers of banking institutions cannot afford to be very friendly with their borrowing customers lest thereby they constitute their employers the trustee of the borrower, accountable to the latter for any excess of value of pledged or mortgaged property over the debts secured when and if the debtor says that was the understanding or that the security was given only to satisfy the bank examiner and not to be foreclosed according to its terms.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/3256009. Public record. Not legal advice.