First Nat. Bank of Pennsboro v. Delancey

Hatcher, Judge: I The plaintiff in error, J. W. McGinnis, is a trustee of a church. He signed a note executed on behalf of the church. The circuit court found that he was bound thereon personally. The note in question is as follows: “Pennsboro, W. Va., July 19th, 1924. ‘ ‘ On demand, we, the trustees of the Ellenboro M. E. church, promise to pay to the order of the First National Bank without ■ offset and for value received One Thousand Dollars negotiable and payable at the First National Bank of Pennsboro, W. Va., with interest from date. “C. W. Delancey, “S. D. Riley, “Lulu M. Dwyer, “Mary L. Riley, “J. W. McGinnis, “C. B. Morris, “E. H. Delancey.” *137 The church building was under construction and the money borrowed on the note was needed for its completion. The bank was fully apprised of the situation. According to the court records, S. D. Biley, J. W. McGinnis, and E. H. Delancey were trustees.- There was oral testimony not objected to or contradicted (see record, pages 26 and 31) to the effect that C. W. Delancey and C. B. Morris were also trustees, and with the other three constituted the entire board. Lula M. Dwyer and Mary L. Biley were members of the church building committee. Section 20 of the Negotiable Instrument Law (Code, c. 98A), provides: “Where the instrument contains * * * words indicating that he [a maker] signs * * * in a representative capacity, he is not liable on the instrument if he was duly authorized. McGinnis and his associates described themselves in the body of the note as “we, the trustees of the Ellenboro M. E. church.” The word “trustees” signifies representation. It points ex vi termini to a real party in interest — here disclosed. Johnson v. Smith, 21 Conn. 627, 632, 633. No reason appears for using the descriptive phrase except to show the representative capacity of the makers. Men do- not make an idle reference in a personal contract to their official connection with some third party in no way related to the transaction. Bank v. Steel Co., 155 Ind. 581, 585, 58 N. E. 833, 52 L. R. A. 307. The promise to pay in the body of the instrument is the promise of the trustees, as such. We should not “be astute to misapprehend” such plain language. Annotation, 48 Am. St. Rep. 919. As a general rule, a trustee has no implied power to bind the trust estate for money borrowed, and, even if he promise as trustee, he is bound personally. “The trust estate cannot promise.” Taylor v. Davis, 110 U. S. 330, 335, 4 S. Ct. 147, 150, 28 L. Ed. 163; Dantzler v. McInnis, 151 Ala. 293, 44 So. 193, 13 L. R. A. (N. S.) 297, 125 Am. St. Rep. 28; 28 A. & E. Ency. Law 983; 39 Cyc. 331. But Code, c. 57, § 8, gives to the board of trustees for a church express authority to borrow money “if required for building * * * purpose,” and to “execute a lien upon any property, real or personal, held by them as such trustees to secure the payment thereof. ’ ’ As the *138 money secured from tbe bank was required for tbe ebureb building, tbe right to borrow it was witbin tbe statutory authority of tbe board. There is no proof of a formal meeting by tbe board of trustees. But greater formality is not required to constitute board action by church trustees, than by directors of private corporations. See, generally, 34 Cyc. 1134. In tbe case of tbe latter "it is sufficient if all tbe members are present and participate in tbe meeting and proceedings. ’ ’ 14a C. J. p. 86, § 1844. Tbe joint execution of tbe note by all tbe trustees after having "talked it over” (as a witness said) made it their act as a board. Therefore, the trustees acted in a representative capacity in a matter witbin their authority and are protected by tbe statute. Tbe evidence as to bow tbe bank or bow McGinnis considered be was bound on tbe note is immaterial. The written words exempt him from liability, under tbe law and tbe circumstances. Wilson v. M. E. Church, 138 Tenn. 398, 198 S. W. 244. Tbe decisions from other jurisdictions to tbe contrary, cited in tbe appellee’s brief, were not made under tbe Negotiable Instrument Law and cannot withstand its express provisions. Tbe judgment of tbe lower court is therefore reversed as to tbe plaintiff in error, and tbe action dismissed as to him. Reversed; dismissed as to plaintiff in error.