Bowen v. Farley

Crosby, J. This is an action to recover the balance alleged to be due on a promissory note. The plaintiff is a contractor and builder, and the controversy arises out of the erection by him of a garage for the defendants. The defendants are the present trustees of the “Berry Real Estate Trust,” a voluntary trust created by a declaration of trust duly recorded with Suffolk deeds, its declared objects being “for the purpose of acquiring and holding the land upon which the garage was subsequently built, and such other real and personal property as thereafter might be conveyed to the trustees for the purposes of the trust.” The issues between the parties at the trial were (1) is the note in suit binding on the trustees; and (2) was an agreement reached on June 20, 1919, a final settlement between the plaintiff and the parties of all matters arising from the contract for the construction of the garage? The note was signed, “Berry Real Estate Trust Trustees Owen F. Farley, Jr., for self & Co.” It was indorsed by Owen F. Farley, Jr., and several payments of principal and [22] a payment of interest were indorsed thereon. While at the time of the execution and delivery of the note the defendants Farley and Weeks constituted the trustees, and the former alone signed for the trustees, it was found by an auditor, to whom the case was referred, that Weeks left the management of the affairs of the trust entirely to Farley and that such was the situation when Farley met the plaintiff on June 20, 1919, and gave him the note in suit; that while Weeks did not expressly authorize Farley to give the note to the plaintiff or know that it had been given until later, he left the matter of settling with the plaintiff entirely to Farley as he had previously left all other business details of the trust to him; that soon after the date of the note Weeks knew that Farley was making regular payments on it and then knew that Farley had come to some kind of an understanding with the plaintiff; that he never objected to these payments; that so far as he could delegate authority to his cotrustee he did by his conduct and acts give to Farley full power to make a settlement with Bowen on behalf of the trust, and that by permitting the note to remain outstanding for several months after he had learned that it had been given and was being paid by Farley in instalments without objection on his part, and by permitting Farley to continue these payments he ratified the settlement with the plaintiff and confirmed the note given as a part of such settlement. The auditor further found that the agreement reached between the plaintiff and Farley on June 20, 1919, which resulted in the giving of the note, was a final settlement of their respective claims arising from the contract. The case was heard by a judge of the Superior Court, sitting without a jury, upon the auditor’s report and other evidence. He found for the defendants. Upon the findings by the auditor, it is plain that the acts of Farley in making a settlement with the plaintiff and in giving the note for the balance agreed to be due, if not expressly authorized by Weeks, were ratified and confirmed by him. It accordingly appears that the maker of the note-is the Berry Real Estate Trust and that the defendants are not liable thereon. It does not purport to be an obligation of the defendants, and [23] upon the findings of the auditor the trial judge was justified in finding for the defendants. The instrument on its face shows that the promissor was the Berry Real Estate Trust and that Farley signed as its representative and officer. The defendants were expressly authorized by power conferred upon them in the declaration of trust to issue promissory notes as trustees in carrying out the business of the trust. As they did not purport to be parties to the instrument, they are not liable thereon. G. L. c. 107, § 42. Jefts v. York, 10 Cush. 392. Grafton National Bank v. Wing, 172 Mass. 513, 515. Frost v. Thompson, 219 Mass. 360. Adams v. Swig, 234 Mass. 584. The plaintiff’s requests for rulings were rightly denied. Exceptions overruled.