ÿWPC„2 …# VU:a %› 0 4¡4Õéøw@ 0³@ 0Dó 0J7 b 0T‰ 0^Ý 0h; 0r£ 0P 0|e 0†á 0g 1u÷ 0dlU*Ð D3úB)- BVDCs AM¶° 1mÄ 0c1¯”®C 0@ñ†1p·'"v~¨$vÓ&& 0wù+ 0Šp, 0 ú, 0´š- 0ÇN. 0Û/ 0ïð/ AOß0Æ.1 0Dô1 D/82 Bg2˜HP LaserJet 4SiHPPCL5MS,ü,,,,,ü0nL&Ò,†r‰AZ‹"Arial RegularX( ¤U$¡¡Ó  ÓösS$tÔôÔô3|xôQ èQéQDêQëQîQðQ„eñQUòQUóQ PôQÓ€(DG2w$¤¤Ý ƒ¤U!ÝÓ  ÓÝ  ÝÒ€°ÒÒÀ°Òà Ø àÔ€ôèôôXXÔòòÚ  Ú0Ú  Úóó(#Ã$òòÚ  Ú0Ú  Úóó2 ÿÿ0Indent1Ô2ÔÔ3  Ô- ù-2" ÿÿ0Indent2à0 àÔ2ÔÔ3  Ô2, ÿÿ0Indent3à0 àà0 àÔ2ÔÔ3  Ô26 ÿÿ0Indent4à0 àà0 àà0 àÔ2ÔÔ3  Ô2@ ÿÿ0Indent5à0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô((3¾¸$§§Ý ƒ¤U!ÝÓ  ÓÝ  Ý2J ÿÿ0Indent6à0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2T ÿÿ0Indent7à0 àà0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2^ ÿÿ0Indent8à0 àà0 àà0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô  ÿÿ?AGMSYaioIndent0I.A.1.a.(1)(a)i)a)P ÿÿ8Mac DefaultMac DefaultÓ ` °šXÓ< Œ 9p`(Arial$$$$'ÿÿdxd% Line 7 d d####7Border 1dd€-%Cþÿ << Gÿÿ Ý ƒ!ÝÑ  ÑÑ#€d#ÑÔ€ÔÓ  ÓÝ  ÝÔ€ÔÓ  ÓÔ YYY ÔFILEDÔ€XÔÌÌò òFebruary€23,€1998ÌÌCecil€Crowson,€Jr.ÌÔ€ôÔAppellate€Court€Clerkó ó ¦Ý ƒ!ÝÑ#€d#ÑÔ€ÔÓ  ÓÝ  ÝÝ ƒ $ÝÒ € ÒÒ À Òà àÔ€ôÔòòÚ  ÚÚ  ÚóóÝ  ÝThough€none€of€these€documents€bear€a€stamp€from€the€clerkððs€office,€reflecting€theÏprecise€date€of€filing,€the€parties€agree€that€the€documents€were€filed€with€the€clerk.€€However,€noÏcourt€action€was€taken€on€them.€Ì*tuvwxyz#,37=CIQYag­­1.a.i.(1)(a)(i)1)a)(;s˜$´´Ô2,ÔÚ  Ú0Ú  Ú.Ô3  Ôà0  à ¥Ý ƒ!ÝÑ#€d#ÑÔ€ÔÓ  ÓÝ  ÝÝ ƒ $ÝÒ € ÒÒ À Òà àÔ€ôÔòòÚ  ÚÚ  ÚóóÝ  ÝWe€are€aware€that€Tenn.€Code€Ann.€ðððð€34„4„101€through€34„4„310€have€been€repealedÏand€€replaced€with€Tenn.€Code€Ann.€ðððð€34„11„101€through€34„13„109,€which€became€effectiveÏJanuary€1,€1993.€€However,€this€circumstance€was€not€raised€by€the€parties€in€the€Court€of€AppealsÏor€in€this€Court.€€Therefore,€statutory€citations€are€to€the€Code€provisions€in€effect€prior€to€January€1,Ï1993.€€However,€in€our€view,€the€new€law€would€not€change€the€outcome€of€this€appeal.Ì ¤Ý ƒ!ÝÑ#€d#ÑÔ€ÔÓ  ÓÝ  ÝÝ ƒ $ÝÒ € ÒÒ À Òà àÔ€ôÔòòÚ  ÚÚ  ÚóóÝ  ÝWe€note€that€in€€òòSloan€óó€this€Court,€in€considering€whether€an€account€payable€to€ð ðhusbandÏor€wifeðð€created€a€tenancy€by€the€entirety,€quoted€with€approval€the€following€passage€from€aÏPennsylvania€case,ððWhere€a€deposit€is€made€payable€to€either€spouse,€agency€or€authority€existsÏby€implication,€and€the€husband€or€the€wife€may,€from€that€authority,€withdraw€the€entire€account,Ïòòbut€the€money€thus€withdrawn€is€impressed€with€the€entirety€provision€that€it€is€the€property€of€both,Ïand€any€one€dealing€with€such€specific€property€as€severalty,€knowing€it€belongs€to€both,€mustÏsubmit€to€the€consequences.óóðð€€òòSloanóó,€241€S.W.2d€at€508„509€(emphasis€added€and€internalÏquotations€omitted),€quoting€òòMadden€v.€Gosztonyi€Sav.€&€Trust€Co.óó,€200€A.€624,€630€(Pa.1938).ÏThis€passage€was€again€quoted€and€reaffirmed€in€the€more€recent€case€of€òòGriffin€v.€Princeóó,€632ÏS.W.2d€at€536.ÌÌà àThe€intermediate€court€in€òòMaysóó€characterized€the€legal€status€of€property€purchased€withÏtenancy€by€the€entirety€funds€as€a€question€of€first€impression.€€That€precise€question€was€not€atÏissue€in€òòSloanóó€and€òòGriffinóó,€so€technically,€the€characterization€is€correct.€€The€intermediate€courtÏdecided€the€issue€by€rejecting€the€decision€of€the€Pennsylvania€Supreme€Court,€quoted€withÏapproval€in€òòSloanóó€and€òòGriffinóó,€and€by€adopting€instead€the€position€of€the€Arkansas€courts€that€fundsÏwithdrawn€by€one€spouse€from€a€tenancy€by€the€entirety€account€are€not€impressed€with€theÏentirety€provision€and€can€not€be€recovered€by€the€other€spouse€absent€a€showing€of€fraud.€€òòMaysóóÏappears€to€be€inconsistent€with€this€Courtððs€prior€decisions.€€However,€we€need€not€reach€this€issueÏto€resolve€this€appeal.Ì("ÿÿ$££Ò  ÒÒ  Ò |Ý ƒ!ÝÑ#€d#ÑÔ€ÔÓ  ÓÝ  ÝÝ ƒ $ÝÒ € ÒÒ À Òà àÔ€ôÔòòÚ  ÚÚ  ÚóóÝ  ÝòòSeeóó€Tenn.€Code€Ann.€34„11„115(c)€(1997€Repl.),€which€specifically€requires€aÏconservator€to€seek€court€approval€before€changing€the€nature€of€a€conservateeððs€investment.Ì fÝ ƒ!ÝÑ#€d#ÑÔ€ÔÓ  ÓÝ  ÝÝ ƒ $ÝÒ € ÒÒ À Òà àÔ€ôÔòòÚ  ÚÚ  ÚóóÝ  ÝSeeking€guidance€from€the€trial€court€was€particularly€important€in€this€case€because,€onÏJanuary€10,€1989,€Omer€Davis€had€executed€a€power€of€attorney€appointing€Geneva€Grahl€attorneyÏin€fact.€€The€dual€capacity€in€which€Grahl€was€functioning,€attorney„in„fact€for€Omer€Davis€andÏconservator€for€Lillie€Davis€inherently,€posed€a€conflict€of€interest€with€respect€to€the€assets€in€whichÏthey€both€held€interests.Ì wÝ ƒ!ÝÑ#€d#ÑÔ€ÔÓ  ÓÝ  ÝÝ ƒ $ÝÒ € ÒÒ À Òà àÔ€ôÔòòÚ  ÚÚ  ÚóóÝ  ÝIn€so€holding,€we€do€not€by€any€means€imply€that€Grahl€acted€in€bad€faith€or€fraudulently.€€InÏfact€the€proof€in€this€case,€including€the€testimony€of€the€defendants,€indicates€that€she€did€not.€ÏHowever,€when€she€was€appointed€conservator,€she€was€then€bound€to€act€in€accordance€with€theÏduties€imposed€by€law€upon€all€fiduciaries.€€€The€good€faith€of€a€conservator€does€not€justify€a€breachÏof€those€strict€legal€requirements.ÌPtPtHHÚ(ÿáÿáùEG(üHHØ(d'`Styl{WP}01•ÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃà Ãà Ãà Ãà Ãà ÃÃÃÃÃÃÃÃÃÃÃÐ ÐÐHHÐÐ  ÐÐ2ÐÐÿÿ¸æ$ÿÐÐHHÐÐÐÐÐÐÐÐ  ÐÐ ÐÐ ÐÑÑÑGenevaÑÑ ÑÑ € ÑÑ<Px–ÈÑÒÒÒ443!#4ÒÒ$ *$ÒÒ$*$ÒÒ ÿKK ÒÒ  Geneva ÒÒ  Geneva ÒÓ.,ÓÓÓÓ6ÓÓ ÓßßßßßßßßßßßßßßßßßßÑGenevaÑÑ ÑÒ  ion-F Geneva ÒÒ  ion-F Geneva Ò(OÞ{$µµà0  àÔ2,ÔÚ  ÚaÚ  Ú.Ô3  Ôà0` (#(#à(b²D$¶¶à0  àà0` (#(#àÔ2,ÔÚ  ÚÚ  Ú.Ô3  Ôà0¸ ` (#` (#à(xÓñ$··à0  àà0` (#(#àà0¸ ` (#` (#àÔ2,Ô(Ú  Ú0Ú  Ú)Ô3  Ôà0¸ (#¸ (#à(ŒÆ‚$¸¸à0  àà0` (#(#àà0¸ ` (#` (#àà0¸ (#¸ (#àÔ2,Ô(Ú  ÚaÚ  Ú)Ô3  Ôà0h(#(#à(Ÿù…$¹¹à0  àà0` (#(#àà0¸ ` (#` (#àà0¸ (#¸ (#àà0h(#(#àÔ2,Ô(Ú  ÚÚ  Ú)Ô3 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ÔÔ€ÔÓ  ÓÝ  ÝÒ € ÒÒ À ÒÑ ` Ñ›Ñ7€W¡XXdædÈ7ÑÑ  ÑÑ\R AØ'\ÑÑ  ÑÔ  ÔÑ€ÑØ ØÓ&€XÐd&ÓÞ ÞÌà@ àÔ€¼Ôò òIN€THE€SUPREME€COURT€OF€TENNESSEEÌÙ€€ÙœßR€&'%A1-j|` Å `€€@ÿRß›à@ àAT€KNOXVILLEÔ€XÔó óÌÌœà àà àà àà àà àà àà à›ÌœÌÌÌÌ›ÌÌÌGENEVA€GRAHL,à àà àà àà à)à àà àòòò òFOR€PUBLICATIONóóó óÌà àà àà àà àà àà à)à àà àò òFiled:ó ó€ò òFebruary€23,Ï1998ó óÌà àAppellant,à àà àà àà à)à àà àÌà àà àà àà àà àà à)à àà àBlount€Circuità àÌv.à àà àà àà àà àà à)à àà àÌà àà àà àà àà àà à)à àà àHon.€W.€Dale€Young,ÌLILLIE€DAVIS,à àà àà àà à)à àà àJudgeÌà àà àà àà àà àà à)à àà àà àà àÌGREGORY€SCOTT€JUDKINS€andà à)à à€€€à àÌJEFFREY€TODD€JUDKINS,à àà à)à àà àAppeal€No.à àÌà àà àà àà àà àà à)à àà à03S01„9701„CV„00011Ìà àAppellees.à àà àà àà à)à àà àÌà àà àà àà àà àà à)à àà àÌà àÌÌÌÌÌÌòòFor€Appellantóó:à àà àà àà àòòFor€AppelleesóóÌDavid€R.€Dugganà àà àà àà àNorman€H.€NewtonÌDUGGAN€&€ANDERSONà àà àà àCRAWFORD,€CRAWFORD€&€NEWTONÌMaryville,€Tennesseeà àà àà àMaryville,€TennesseeÌà àÌJ.€Michael€Garnerà àà àà àà àDuncan€V.€CrawfordÌNICHOLSON€&€GARNERà àà àà àCRAWFORD,€CRAWFORD,€&€NEWTONÌ€Maryville,€Tennesseeà àà àà àMaryville,€Tennesseeà àÌÌJohn€A.€Walker,€Jr.ÌWALKER€&€WALKER,€P.C.ÌKnoxville,€TennesseeÔ€„ÔÌÌÌÌÌÌà@ àO€P€I€N€I€O€NÔ€XÔÌÌÌÌÌÌÌÌCOURT€OF€APPEALS€AFFIRMED.à àà àà àà àDROWOTA,€J.ÇÑ , ÑÓÓà àThe€primary€issue€in€this€appeal€is€whether€the€conservator,€GenevaÏGrahl,€breached€her€fiduciary€duty€to€the€deceased€conservatee,€Lillie€Davis,€byÏallowing€the€conservateeððs€husband,€Omer€Davis,€to€transact€four€certificates€ofÏdeposit€in€which€the€conservatee€had€an€interest€and€reinvest€the€funds€intoÏcertificates€of€deposit€held€either€solely€in€the€name€of€Omer€Davis€or€jointly€in€theÏname€of€Omer€Davis€and€Geneva€Grahl.€€After€carefully€considering€theÏcontrolling€authority,€we€have€determined€that€Grahl€breached€her€fiduciary€dutyÏby€allowing€Omer€Davis€to€transact€the€accounts€without€first€seeking€courtÏapproval,€and€by€dealing€with€the€conservateeððs€property€so€as€to€eventuallyÏattain€a€personal€benefit.€€Accordingly,€we€affirm€the€judgment€of€the€Court€ofÏAppeals€reversing€the€judgment€of€the€trial€court,€and€remand€this€case€for€furtherÏproceedings€consistent€with€this€opinion.ÌÌà@ àòòò òFACTUAL€BACKGROUNDóóó óÌà à€This€case€arises€from€the€action€of€the€trial€court€in€approving€a€finalÏaccounting€by€Geneva€Grahl€in€her€capacity€as€conservator€of€the€estate€andÍperson€of€Lillie€Davis,€who€is€now€deceased.€€There€are€no€material€facts€inÏdispute.ÌÌà àIn€May€of€1989,€Geneva€Grahl,€the€daughter€of€€Lillie€Davis€and€OmerÏDavis,€filed€a€complaint€in€the€Circuit€Court€of€Blount€County€asking€the€court€toÏapprove€the€sale€of€land€owned€by€her€parents€as€tenants€by€the€entirety.€€GrahlÏalleged€that€her€mother€was€confined€to€a€nursing€home€and€incompetent.€€GrahlÏalso€alleged€that€her€father€€was€in€a€nursing€home,€but€that€he€could€competentlyÏmanage€his€own€affairs.€In€June€of€1989,€Grahl€amended€her€complaint€to€seekÏappointment€as€conservator€over€the€person€and€estate€of€her€mother,€LillieÏDavis.€€Notice€of€the€amended€complaint€was€served€upon€the€defendants,ÏGregory€Scott€Judkins€and€Jeffrey€Todd€Judkins,€grandsons€of€Lillie€Davis,€theÏconservatee,€and€the€only€children€of€a€deceased€daughter€of€the€conservatee.€ÏThe€defendants€thereafter€filed€an€answer.ÌÌà àA€hearing€was€held€on€June€19,€1989,€at€which€both€Geneva€Grahl€andÏOmer€Davis€testified€that€the€cash€assets€of€Lillie€Davis€consisted€of€fourÍcertificates€of€deposit€and€a€joint€checking€account€for€a€total€balance€ofÏ$197,512.00.€€The€next€day,€June€20,€1989,€the€trial€court€entered€an€orderÏfinding€Lillie€Davis€incompetent€and€appointing€Geneva€Grahl€conservator€ofÏboth€her€person€and€estate.€€This€order€directed€Grahl,€as€conservator,€to€file€anÏinventory€and€bond€in€the€amount€of€$135,000.00.€€By€a€separate€order,€the€CourtÏapproved€the€sale€of€the€jointly€held€property€for€$68,000.00€and€directed€that€theÏproceeds€be€divided€$34,000.00€to€Omer€Davis€and€$34,000.00,€less€expenses,Ïto€the€conservatee,€Lillie€Davis.ÌÌà àOn€March€8,€1990,€the€conservator€filed€an€inventory€which€showed€theÏconservatee€had€total€assets€in€financial€institutions€in€the€amount€ofÏ$197,512.00,€which€consisted€of€a€joint€checking€account,€and€four€certificates€ofÏdeposit.€€Three€certificates€were€owned€by€ð ðOmer€Davis€or€Lillie€Davisðð€and€oneÏcertificate€was€owned€by€ð ðMr.€Omer€Davis,€Trustee€for€Mrs.€Omer€Davis.ððÌÌà àOn€June€19,€1990,€the€conservator€filed€the€first€annual€accounting€whichÏcovered€the€period€June€19,€1989,€the€date€of€her€appointment,€through€June€19,Í1990.€€This€accounting€reflects€itemized€expenditures€of€$24,034.94€andÏindicates€total€assets€in€the€conservatorship€estate€in€the€amount€of€$16,659.92.€ÏThe€conservateeððs€share€of€the€proceeds€from€the€court„approved€sale€ofÏproperty€are€included€in€this€figure.ÌÌà àThe€second€page€of€this€first€accounting€is€the€conservatorððs€hand„writtenÏexplanation€of€the€disposition€of€the€four€certificates€of€deposit€and€the€checkingÏaccount€shown€on€the€conservatorððs€original€inventory.€€In€summary,€theÏconservator€reported€that€Omer€Davis€had€redeemed€the€certificates€of€depositÏhe€had€held€jointly€with€or€in€trust€for€the€conservatee€and€had€used€the€proceedsÏto€purchase€four€new€certificates€of€deposit,€two€of€which€he€held€in€the€name€ofÏOmer€Davis€alone,€and€two€of€which€he€held€jointly€with€the€conservator.€WithÏrespect€to€the€joint€checking€account,€the€conservator€explained€that€Omer€DavisÏhad€utilized€the€remaining€$1,167.71€in€the€account€after€a€separateÏconservatorship€account€had€been€established.€ÌÌà àOmer€Davis€died€testate€in€Blount€County€on€December€20,€1989,Ïpredeceasing€his€wife,€the€conservatee,€Lillie€Davis.€His€will€provided€in€pertinentÏpart,€as€follows:ÌÓÓà8 àà àI€hereby€give,€devise€and€bequeath€to€my€daughter,€GENEVAÏGRAHL,€all€my€property,€of€whatever€nature,€or€wherever€located€orÏsituated,€in€Trust,€for€the€use€and€benefit€of€my€dear€wife,€LillieÏDavis.€€The€entire€property€is€to€be€used€for€the€best€interest€of€myÏwife,€and€as€far€as€possible€in€the€same€way€and€manner€that€IÏwould€do€were€I€living.ÌÌà8 àà àThe€trust€shall€continue€for,€and€during€the€natural€life€of€myÏdear€wife,€Lillie€Davis,€or€as€long€as€there€are€any€assets€left€in€theÏTrust.€€The€Trust€shall€terminate€upon€the€happening€of€the€first€ofÏthe€events€mentioned€above.ÌÌà8 àà àIn€the€event€that€there€is€[sic]€any€assets€left€in€the€Trust€afterÏit€is€terminated€as€provided€above,€I€give,€bequeath€the€same€to€myÏdaughter,€GENEVA€GRAHL,€in€its€entirety,€absolutely€and€in€feeÏsimple,€without€condition€or€limitation,€it€being€her€sole€discretion€toÏretain€all€of€the€assets€or€funds€as€hers,€or€to€make€any€gifts€of€themÏwhich€she€may€choose.ÌÌà8 àà àI€make€this€provision€having€great€confidence€that€she€willÏcare€for€my€dear€wife€in€the€same€way€and€manner€I€would€do€wereÏI€living.ÌÓÓÌà àFollowing€the€death€of€Omer€Davis,€the€conservator€became€the€owner€ofÏtwo€of€the€successor€certificates€of€deposit€by€right€of€survivorship.€€With€regard€toÍthe€other€two€certificates€of€deposit€held€in€the€sole€name€of€Omer€Davis,€theÏconservator,€in€accordance€with€her€fatherððs€will,€changed€both€into€trust€accountsÏin€the€name€of€€ð ðLillie€Davis,€Geneva€Grahl,€Trustee.ðð€€The€interest€earned€onÏthese€two€certificates€was€deposited€into€the€conservatorship€account€and€usedÏon€behalf€of€the€conservatee.€€Grahl€transferred€funds€between€these€accounts€toÏobtain€the€best€rate€of€interest,€but€the€sum€of€the€principal€of€the€two€accountsÏremained€the€same.€€The€conservator€did€not€use€any€of€the€principal€from€theseÏtwo€trust€accounts€for€the€conservateeððs€care.€€The€conservator€filed€a€secondÏannual€accounting€on€June€26,€1991,€which€reflected€the€interest€from€these€twoÏaccounts€as€income.€€This€accounting€showed€that€the€conservatorship€estateÏhad€total€assets€in€the€amount€of€$3,871.11.× ƒ( ××  ×ÌÌà àLillie€Davis€died€intestate€on€October€5,€1991.€€Grahl€was€appointed€andÏqualified€as€administratrix€of€her€estate.€€Sometime€in€November€of€1991,€Grahl,Ïin€her€capacity€as€conservator,€filed€a€motion€€to€approve€a€final€accounting€andÍtransfer€€the€remaining€assets€in€the€conservatorship€estate€to€the€administratrix.€ÏThe€final€accounting€indicated€total€assets€in€the€conservatorship€estate€in€theÏamount€of€$1,937.17.ÌÌà à€On€November€20,€1991,€the€trial€court€approved€the€final€accounting€andÏtermination€of€the€conservatorship.€€The€defendants€received€no€notice€of€theÏhearing€or€order€approving€the€final€accounting.€€On€December€17,€1991,€theÏdefendants€filed€a€motion€to€amend,€alter,€or€modify€the€order,€or€in€the€alternativeÏto€grant€a€new€trial€on€the€motion€to€approve€the€final€accounting.€€The€trial€courtÏdenied€the€motion,€but€the€Court€of€Appeals€reversed€the€denial€and€remandedÏthe€case€for€further€proceedings,€finding€that€the€defendants€ð ðare€entitled€to€beÏheard€on€the€matter€of€the€final€accounting€and€settlement€of€theÏconservatorship.ððÌÌà àThe€trial€following€remand€focused€on€whether€Grahl,€as€conservator,€hadÏbreached€her€fiduciary€duty€by€allowing€Omer€Davis€to€transact€the€certificates€ofÏdeposit€and€purchase€other€certificates€which€did€not€reflect€the€conservateeððsÍownership€interest.€€The€conservator€testified€that€Omer€Davis€had€beenÏdiagnosed€with€cancer€in€November€of€1988€and€that€he€had€been€told€byÏphysicians€that€the€cancer€would€likely€be€fatal€within€two€years.€€Because€of€hisÏdeteriorating€physical€health,€Omer€Davis€moved€out€of€his€home€and€into€theÏsame€nursing€home€where€Lillie€Davis€was€already€residing.€€This€moveÏculminated€in€the€petition€to€sell€the€jointly€owned€property€which€was€convertedÏto€a€conservatorship€proceeding.ÌÌà àGrahl€testified€that€€at€the€time€of€the€conservatorship€proceeding,€andÏlater,€when€the€inventory€was€filed,€the€deceased€conservatee€and€her€husband,ÏOmer€Davis,€held€three€certificates€of€deposits€in€the€name€of€ð ðOmer€or€LillieÏDavisðð€and€a€fourth€certificate€of€deposit€in€the€name€of€ð ðOmer€Davis,€Trustee€forÏMrs.€Omer€Davis.ððÌÌà àConsistent€with€the€summary€attached€to€the€first€annual€accounting,€GrahlÏtestified€that,€after€her€appointment€as€conservator,€Omer€Davis,€on€June€22,Ï1989,€redeemed€First€Tennessee€Bank€certificate€of€deposit€number€219244,Íwhich€was€owned€by€ð ðOmer€Davis€or€Lillie€Davis.ðð€€He€combined€the€proceedsÏfrom€the€certificate,€$69,485.35,€with€additional€funds€and€purchased€anotherÏFirst€Tennessee€Bank€certificate€of€deposit€in€the€amount€of€$100,000.00,€in€theÏname€of€ð ðOmer€Davis€or€Geneva€Grahl,ðð€as€joint€tenants€with€the€right€ofÏsurvivorship.€€ÌÌà àOn€June€28,€1989,€Omer€Davis€redeemed€First€American€National€BankÏcertificate€of€deposit€number€0096463,€which€was€held€in€the€name€of€ð ðOmerÏDavis€or€Lillie€Davis.ðð€€He€received€a€cashierððs€check€payable€to€ð ðOmer€Davis€orÏLillie€Davisðð€in€the€amount€of€€$28,530.72.€€He€negotiated€the€cashierððs€check€atÏFirst€Federal€Savings€and€Loan€Association€of€Maryville,€combined€it€with€otherÏfunds€he€had€at€that€institution,€and€purchased€a€First€Federal€certificate€ofÏdeposit€in€the€amount€of€$90,983.90,€in€the€name€of€ð ðOmer€Davis€or€GenevaÏGrahl,ðð€as€joint€tenants€with€right€of€survivorship.€ÌÌà àOn€August€17,€1989,€Omer€Davis€transferred€the€entire€balance€in€theÏamount€of€$84,816.87€from€the€First€Federal€Savings€and€Loan€Association€ofÍMaryville€certificate€of€deposit€number€1207825,€which€was€held€in€the€name€ofÏð ðMr.€Omer€Davis,€Trustee€for€Mrs.€Omer€Davis,ðð€to€a€new€First€Federal€certificateÏof€deposit€held€solely€in€the€name€of€ð ðOmer€Davis.ððÌÌà àFinally,€on€August€17,€1989,€Omer€Davis€redeemed€First€Tennessee€BankÏcertificate€of€deposit€number€0109679,€which€was€held€in€the€name€of€ð ðOmerÏDavis€or€Lillie€Davis.ðð€€He€deposited€the€proceeds€in€the€amount€of€$13,723.59Ïinto€an€existing€joint€savings€account€at€First€Tennessee€Bank€in€the€names€ofÏð ðOmer€Davis€or€Geneva€Grahl.ðð€€These€proceeds€remained€on€deposit€for€lessÏthan€a€month,€until€Geneva€Grahl€withdrew€the€proceeds,€and€additional€fundsÏfrom€the€account,€and€purchased€a€new€certificate€of€deposit€at€First€TennesseeÏin€the€amount€of€$15,000.00,€which€was€held€in€the€sole€name€of€ð ðOmer€Davis.ððÌÌà àGrahl€testified€that€she€drove€her€father€to€the€financial€institutions€andÏaccompanied€him€when€he€accomplished€these€transactions.€€It€is€undisputedÏthat€Omer€and€Lillie€Davis€were€married€at€the€time€these€transactions€wereÏeffected.€€Grahl€testified€that€she€had€realized€Omer€Davis€was€transactingÍcertificates€of€deposit€which€reflected€the€conservateeððs€ownership€interest€andÏtransferring€the€funds€to€certificates€of€deposit€which€did€not€reflect€theÏconservateeððs€ownership€interest.€€Grahl€testified€that€she€had€taken€no€action€toÏstop€Omer€Davis€from€completing€these€transactions.€€When€asked€why€she€hadÏnot€taken€any€action,€Grahl€replied€that€her€father€had€known€the€consequencesÏof€his€actions€and€could€not€be€easily€dissuaded€after€he€had€decided€on€aÏcourse.€€Grahl€also€said€that€she€had€been€unaware€that€she€was€supposed€to€doÏanything€to€stop€him.€€Grahl€had€become€the€owner€of€two€of€the€successorÏcertificates€of€deposit€by€right€of€Ñ < Ñsurvivorship€upon€the€death€of€her€father,€andÏshe€had€become€the€owner€of€the€two€successor€trust€accounts€after€the€death€ofÏthe€conservatee,€her€mother,€under€the€terms€of€her€fatherððs€will.ÌÌà àWith€respect€to€the€joint€checking€account€listed€on€the€inventory€of€theÏconservatorship€assets,€Grahl€testified€that€it€had€been€utilized€by€her€father€forÏhis€personal€purposes,€and€she€had€opened€a€separate€conservatorshipÏaccount.€€After€her€appointment€as€conservator,€Grahlððs€name€had€been€added€toÏthe€joint€account€so€that€she€could€write€checks€on€it€if€needed.€€Following€theÏdeath€of€Omer€Davis€in€1989,€the€conservator€expended€several€hundred€dollarsÍfrom€the€joint€account€on€behalf€of€the€conservatee.€€Thereafter,€she€transferredÏthe€remaining€balance€in€the€amount€of€$396.17,€from€the€joint€account€to€theÏconservatorship€account.ÌÌà àThe€defendants€also€testified€at€the€hearing€and€said€that€they€had€noÏknowledge€of€undue€influence€or€fraud€on€the€part€of€the€conservator€in€relationÏto€the€transactions€involving€the€certificates€of€deposit.€€The€defendants€testifiedÏthat€they€had€seldom€seen€their€grandparents€in€the€years€preceding€their€death.ÌÌà àBased€upon€this€proof,€the€trial€court€again€granted€Grahlððs€motion€andÏentered€an€order€approving€the€final€accounting€and€transfer€of€the€funds€to€theÏadministratrix€of€the€probate€estate€of€Lillie€Davis.€€In€so€holding,€the€trial€courtÏstated€that€the€conservator€had€committed€no€fraud€or€undue€influence€and€thatÏOmer€Davis€had€the€unquestioned€authority€to€engage€in€the€transactionsÏinvolving€the€accounts€in€this€case.€€The€Court€of€Appeals€reversed€the€trialÏcourtððs€judgment,€finding€that€three€of€the€certificates€of€deposit€purchased€byÏOmer€Davis€with€funds€from€the€joint€accounts€of€Omer€and€Lillie€Davis€remainedÏproperty€owned€by€them€as€tenants€by€the€entirety,€even€though€theÍconservateeððs€name€did€not€appear€on€the€successor€instruments.€€As€to€theÏfunds€in€the€fourth€trust€certificate€which€had€been€transferred€to€Omer€Davis,€theÏintermediate€court€held€that€the€conservator€had€a€duty€to€act€to€protect€theÏinterest€of€the€conservatee.€Thereafter,€we€granted€permission€to€appeal€toÏdetermine€whether€the€conservator€violated€her€fiduciary€duty€to€the€conservatee.€ÏOn€the€separate€grounds€stated€below,€we€affirm€the€judgment€of€the€Court€ofÏAppeals.ÌÌÌà@ àòòò òFIDUCIARY€DUTIESó óóóÌà àWe€begin€our€analysis€with€a€brief€review€of€the€fiduciary€duties€whichÏgovern€the€actions€of€a€conservator.€€The€purpose€of€appointing€a€conservator€isÏð ðto€preserve€the€estate€of€an€incompetent€or€disabled€person.ðð€€Tenn.€Code€Ann.Ïðð€34„4„202€(1991€Repl.).× ƒ+ ××  ×€€Pursuant€to€Tenn.€Code€Ann.€ðð€34„4„207€(1991€Repl.),Ía€conservator€ð ðshall€have€the€same€duties€and€powers€as€a€guardian€of€a€minor,Ïand€all€laws€related€to€the€guardianship€of€a€minor€shall€be€applicable€to€aÏconservator.ðð€A€conservator€occupies€a€fiduciary€position€of€trust€of€the€highestÏand€most€sacred€character.€€òòSee€Meloy€v.€Nashville€Trust€Co.óó,€177€Tenn.€340,Ï149€S.W.2d€73€(1941).€€The€conservator€is€to€manage€the€conservateeððs€estate€toÏthe€best€advantage.€€òòSeeóó€òòSteele€v.€Reeseóó,€14€Tenn.€(6€Yer.)€263€(1834).€€TheÏconservator€should€endeavor€to€manage€the€estate€so€that€if€the€incompetentÏperson€recovers,€he€or€she€will€find€€the€estate€as€nearly€as€possible€in€the€sameÏcondition€as€he€or€she€left€it.€€òòFolts€v.€Jonesóó,€175€Tenn.€74,€132€S.W.2d€204,€208Ï(1939).€€A€conservator€should€not€change€the€character€of€the€conservateeððsÏproperty€interests€unless€the€change€is€necessary€to€protect€and€promote€theÏinterests€of€the€conservatee.€€òòIdóó.€€In€considering€a€conservatorððs€request€to€cash€aÏlife€insurance€policy€for€the€benefit€of€the€conservateeððs€estate,€this€Court,€in€òòFoltsÏv.€Jonesóó,€stated:ÌÓÓÌà8 àBefore€the€character€of€the€interest€in€property€held€by€aÏ[conservatee]€can€be€changed,€it€must€be€made€manifest€that€it€isÏnecessary€to€protect€and€promote€his€interest.€€Although€as€a€rule,Ïthe€court€will€preserve,€as€far€as€possible,€the€interests€of€theÏsuccession,€this€rule€yields€to€the€paramount€rule€which€makes€theÍ[conservateeððs]€welfare€the€first€consideration€without€regard€to€theÏrights€of€those€who€may€have€eventually€rights€to€succession.ÌÓÓÌòòIdóó.;€òòseeóó€òòalsoóó€òòMorris€v.€Morrisóó,€195€Tenn.€133,€258€S.W.2d€732€(1953).ÌÌà àA€conservator€is€not€the€alter€ego€of€the€conservatee,€however,€and€has€noÏauthority€to€exercise€an€elective€right€or€power€of€the€conservatee.€€òòFoltsóó,€132ÏS.W.2d€at€207.€€Therefore,€a€conservator€has€no€authority€to€terminate€jointÏaccounts€in€which€the€conservatee€has€an€interest€or€to€change€a€beneficiary€onÏa€life€insurance€policy.€òòFoltsóó,€132€S.W.2d€at€207;€òòseeóó€òòalsoóó€òòHoward€v.€Imesóó,€90ÏSo.2d€818€(Ala.€1956);€òòIn€Re:€Estate€of€Wrightóó,€424€N.W.2d€268€(Mich.€1988);€ÏòòHendricks€v.€Grant€County€Bankóó,€379€P.2d€693,€697€(Okla.€1963);€òòMatter€ofÏGuardianship€of€Richóó,€520€N.W.2d€63€(S.D.€1994);€òòRozycke€v.€Srokaóó,€279€N.E.2dÏ155€(Ill.€Ct.€App.€1972);€òòMatter€of€Estate€of€Brileyóó,€825€P.2d€1181€(Kan.€Ct.€App.Ï1992);€òòMaess€v.€Greenfieldóó,€547€S.W.2d€777€(Ky.€Ct.€App.€1977);€òòStrain€v.ÏRossmanóó,€614€P.2d€102€(Or.€App.€1980).€€Instead,€the€conservator€must€petitionÏthe€court,€and€the€court,€on€behalf€of€the€conservatee,€can€exercise€such€anÏelection€if€it€is€clearly€proven€to€be€in€the€best€interests€of€the€conservatee.€€€òòFoltsÍv.€Jonesóó,€132€S.W.2d€at€207;€òòseeóó€òòalsoóó€òòSchlieper€v.€Rustóó,€360€N.E.2d€1192,€1197Ï(Ill.€Ct.€App.€1977);€òòRozycke€v.€Srokaóó,€279€N.E.2d€at€158.ÌÌà àA€conservator€owes€the€conservatee€an€undivided€duty€of€loyalty.€18€Tenn.òòÏóóJuris.,€òòMentally€Ill€and€Other€Incompetentsóó,€ðð€8,€p.€323€(1984).€€The€conservatorÏcannot€be€allowed€by€law€to€have€any€inducement€to€neglect€the€interests€of€theÏconservatee.€€òòFreeman€v.€Martinóó,€181€Tenn.€470,€181€S.W.2d€745,€746€(1944).€ÏTherefore,€it€is€generally€held€that€a€conservator€violates€his€or€her€fiduciary€dutyÏby€acquiring,€by€purchase€or€otherwise,€the€property€of€the€conservatee.€€òòIdóó.;€òòseeóóÏòòalsoóó€òòLanius€v.€Donnellóó,€222€Tenn.€158,€432€S.W.2d€659€(1968).ÌÌà àHaving€generally€described€the€fiduciary€obligations€of€a€conservatorÏtoward€the€property€and€estate€of€the€conservatee,€we€must€next€considerÏwhether€the€conservatee€had€a€proprietary€interest€in€the€certificates€of€depositÏand€the€joint€bank€account.€€To€that€end,€we€begin€with€the€well„settledÏproposition€that€tenancy€by€the€entirety€is€a€form€of€property€ownership€which€isÏunique€to€married€persons.€€òòGriffin€v.€Princeóó,€632€S.W.2d€532,€534€(Tenn.€1982).€ÏThe€essential€characteristic€of€a€tenancy€by€the€entirety€is€that€ð ðeach€spouse€isÍseized€of€the€whole€or€the€entirety€and€not€of€a€share,€moiety,€or€divisible€part.ðð€ÏòòSloan€v.€Jonesóó,€192€Tenn.€400,€241€S.W.2d€506,€507€(1951).€€Upon€the€death€ofÏone€spouse,€ownership€of€tenancy€by€the€entirety€property€immediately€vests€inÏthe€survivor,€and€the€laws€of€descent€and€distribution€do€not€apply.€€òòIdóó.€at€509.€€ItÏis€well„settled€in€this€state€that€personal€property€as€well€as€realty€may€be€ownedÏby€spouses€by€the€entirety.€€òòGriffinóó,€632€S.W.2d€at€535.€€It€has€also€been€expresslyÏheld€that€a€tenancy€by€the€entirety€with€the€right€of€survivorship€may€exist€inÏcertificates€of€deposit€and€bank€accounts.€€òòWhite€v.€Watsonóó,€571€S.W.2d€493,€495Ï(Tenn.€App.€1978);€òòSmith€v.€Haireóó,€133€Tenn.€343,€181€S.W.€161€(1915)Ï(certificates€of€deposit);€òòSloanóó,€òòsupraóó,€and€òòGriffinóó,€òòsupraóó,€(bank€accounts).€€In€fact,Ïthere€is€clear€authority€in€€this€state€that€a€bank€account€or€negotiable€instrumentÏin€the€name€of€ð ðhusband€or€wifeðð€will€be€deemed€to€create€a€tenancy€by€theÏentirety€with€right€of€survivorship,€in€the€absence€of€proof€to€the€contrary.€€òòGriffinóó,Ï532€S.W.2d€at€536.ÌÌà àApplying€these€longstanding€principles€to€the€facts€in€this€case,€it€is€clearÏthat€when€the€conservator€filed€the€inventory,€three€of€the€certificates€of€depositÏand€the€joint€bank€account€were€held€by€Lillie€Davis€and€Omer€Davis€as€tenantsÍby€the€entirety,€with€right€of€survivorship.€There€is€no€proof€to€the€contrary€in€thisÏrecord.€€The€fourth€certificate€of€deposit€was€held€by€Omer€Davis,€as€trustee€forÏthe€conservatee,€Lillie€Davis.€€Therefore,€the€conservatee€had€a€proprietaryÏinterest€in€the€certificates€of€deposit€and€in€the€joint€checking€account.€€Further,Ïthat€interest€was€listed€as€an€asset€of€the€conservatorship€estate€on€the€initialÏinventory.€€From€the€very€beginning,€therefore,€the€conservator€had€a€duty€toÏpreserve€the€conservateeððs€property€interest€in€those€assets.€€We€must€nextÏdetermine€if€the€conservator€breached€her€fiduciary€duty€when€she€allowed€andÏassisted€Omer€Davis€to€transact€the€certificates€of€deposit€and€utilize€the€jointÏchecking€account.ÌÌà àRelying€upon€a€decision€of€the€Court€of€Appeals,€òòMays€v.€Brighton€Bankóó,Ï832€S.W.2d€347€(Tenn.€App.€1992),€òòperm.€app.€deniedóó,€the€conservator€arguesÏthat€€Omer€Davis,€as€one€of€the€entirety€tenants,€had€the€right€to€redeem€theÏcertificates€of€deposit,€€reduce€the€entire€amount€to€his€separate€possession,€andÏreinvest€the€proceeds.€€According€to€the€conservator,€under€such€circumstances,Ïthe€divested€spouse€can€recover€the€funds€only€if€fraud€is€alleged€and€proven.€ÍShe€asserts€that€the€defendants€have€neither€alleged€nor€proven€fraud€in€thisÏcase,€and€therefore€are€not€entitled€to€recover€the€funds.€ÌÌà àRelying€upon€this€Courtððs€decisions€in€òòGriffinóó€and€òòSloanóó,€the€defendantsÏrespond€that€the€conservateeððs€interest€was€not€defeated€because€moneyÏwithdrawn€from€a€tenancy€by€the€entirety€account€is€impressed€with€the€entiretyÏprovision.€€The€defendants€also€claim€that€the€conservatorððs€reliance€upon€òòMaysóóÏis€misplaced€because€òòMaysóó€is€factually€distinguishable€and€€inconsistent€with€thisÍCourtððs€decisions€in€òòGriffinóó€and€òòSloanóó.× ƒ, ××  ×ÌÌà àThe€conservator€fails€to€recognize€that€this€case€does€not€involve€a€disputeÏbetween€two€competent€€persons€over€funds€withdrawn€from€a€tenancy€by€theÏentirety€account.€€In€our€view,€resolution€of€this€appeal€does€not€depend€upon€theÏrights€of€Omer€Davis.€€Instead,€resolution€of€this€appeal€depends€upon€whetherÏthe€conservator€violated€her€fiduciary€duties€by€allowing€and€assisting€OmerÏDavis€to€transact€and€utilize€accounts€in€which€the€conservatee€had€an€interest.€ÍEvaluating€the€conservatorððs€actions€and€inaction€in€light€of€the€fiduciaryÏobligations€previously€delineated,€we€clearly€must€answer€that€question€in€theÏaffirmative.ÌÌà àWhatever€the€rights€of€Omer€Davis,€Grahl€had€a€fiduciary€obligation€toÏprotect€and€conserve€the€assets€of€the€conservatee.€€Grahl€owed€a€duty€ofÏundivided€loyalty€to€the€conservatee.€€Moreover,€Grahl€had€no€authority€toÏchange€the€character€of€the€conservateeððs€property€interests€unless€the€changeÏhad€been€necessary€to€protect€and€promote€the€interests€of€the€conservatee.€€TheÏproof€in€this€record€established€that€the€principal€amount€of€the€certificates€ofÏdeposit€were€never€utilized€to€meet€the€needs€of€the€conservatee.€€Even€if€aÏconservator€deems€it€necessary€to€change€the€character€of€property€to€meet€theÏneeds€of€the€conservatee,€the€appropriate€course€of€action€is€to€seek€courtÏapproval.€€òòFoltsóó,€132€S.W.2d€at€207.× ƒ. ××  ×€€If€a€conservator€has€no€authority€to€changeÏthe€nature€of€the€conservateeððs€interest€for€the€benefit€of€the€conservatorshipÏestate,€certainly€a€conservator€has€no€authority€to€act€or€fail€to€act€so€that€theÍconservateeððs€interest€is€completely€extinguished,€with€no€benefit€to€theÏconservatorship€estate.€Therefore,€when€Omer€Davis€expressed€his€desire€toÏtransact€the€certificates€of€deposit,€as€conservator,€Grahl€was€obligated€to€seekÏguidance€from€the€trial€court.€€This€proposition€applies€with€equal€force€to€both€theÏcertificates€of€deposit€held€jointly€by€Omer€and€Lillie€Davis€and€to€the€certificateÏheld€by€Omer€Davis€as€Trustee€for€Mrs.€Omer€Davis.€€Accordingly,€Grahl€had€noÏauthority€to€consent€to€the€withdrawal€of€the€funds€on€behalf€of€the€conservatee,Ïand€violated€her€fiduciary€duty€by€failing€to€petition€the€trial€court€for€guidance.× ƒ/ ××  ×ÌÌà àMoreover,€in€this€case,€Grahl€personally€benefited€by€allowing€Omer€DavisÏto€transact€the€certificates€of€deposit.€€Grahl€was€named€as€the€joint€tenant€withÏright€of€survivorship€on€two€of€the€successor€certificates€of€deposit.€€Therefore,ÏGrahl€became€the€owner€of€those€funds€immediately€upon€the€death€of€OmerÏDavis.€€By€virtue€of€the€fact€that€Omer€Davis€changed€the€other€two€successorÍcertificates€of€deposit€into€his€name€alone,€they€passed€through€his€will€to€GrahlÏto€be€held€in€trust€for€the€conservatee,€Lillie€Davis.€€Upon€the€death€of€theÏconservatee,€Grahl€became€the€owner€of€these€funds.€€By€allowing€Omer€Davis€toÏtransact€the€certificates€of€deposit,€Grahl€eventually€acquired€legal€ownership€ofÏthe€funds€which€otherwise€would€have€passed€to€the€conservatorship€estate,€byÏright€of€survivorship,€upon€the€death€of€Omer€Davis.€€Therefore,€Grahl€violated€herÏfiduciary€duty€by€acquiring€the€property€of€the€conservatee.× ƒ0 ××  ×ÌÌà àMoreover,€contrary€to€the€conservatorððs€assertion,€damages€arose€as€aÏresult€of€the€breach€of€her€duties.€€Though€the€proof€is€undisputed€that€theÏpersonal€needs€of€the€conservatee€were€fully€satisfied,€the€proof€also€clearlyÏdemonstrates€that€the€assets€in€the€estate€of€the€conservatee€substantiallyÏdecreased€as€a€result€of€the€action€and€inaction€of€the€conservator.€€Since€GrahlÏwas€functioning€as€conservator€of€the€person€òòand€estateóó€of€Lillie€Davis,€she€wasÍduty€bound€to€carefully€manage€the€estate€in€addition€to€providing€for€theÏpersonal€needs€of€the€conservatee.ÌÌÌà@ àòòò òCONCLUSIONóóó óÌà àHaving€determined,€for€the€reasons€previously€explained,€that€theÏconservator€breached€her€fiduciary€duties€by€allowing€Omer€Davis€to€redeem€theÏcertificates€of€deposit€without€first€seeking€court€approval,€and€by€dealing€with€theÏconservateeððs€property€so€as€to€eventually€attain€a€personal€benefit,€we€affirm€theÏjudgment€of€the€Court€of€Appeals€reversing€the€judgment€of€the€trial€courtÏapproving€the€final€accounting€of€the€conservator.€€This€cause€is€remanded€to€theÏtrial€court€for€a€new€and€correct€final€accounting€under€which€the€conservatorÏshall€be€required€to€restore€to€the€conservatorship€estate€of€Lillie€Davis€the€totalÏamount€of€the€four€certificates€of€deposit€when€redeemed€in€1989€and€interestÏearned€on€that€sum€from€the€dates€of€redemption€to€the€date€of€restoration€to€theÏconservatorship€estate.€€The€conservator€shall€also€be€required€to€account€for€theÏamount€of€funds€held€in€the€joint€checking€account€at€the€time€of€the€initialÏaccounting,€$1,167.71,€and€restore€to€the€conservatorship€estate€any€portion€ofÍthat€amount€for€which€a€proper€accounting€is€not€provided.€€The€trial€court€shallÏallow€a€set€off€for€the€interest€that€was€deposited€to€the€conservatorship€estateÏafter€the€date€of€redemption€of€the€certificates€of€deposit.ÌÌÌÌÓÓà àà àà àà àà à_____________________________________Ìà àà àà àà àà àFRANK€F.€DROWOTA,€III,Ìà àà àà àà àà àJUSTICEÌÌÌò òConcur:Ìó óÌAnderson,€C.€J.ÌReid,€Birch,€Holder,€JJ.ÌÓÓÌ