Wallace v. Langston

The opinion of the Court was delivered by Mr. Chief Justice McIver. It appears that, on the 29th of August, 1893, the plaintiffs, holding the legal title to certain real estate, known as the King’s Mountain Military School property, in trust for certain beneficial owners of said property, sold and conveyed the same to the defendants, as named in the title, for the sum of $6,000, taking the bond and mortgage of the defendants to secure the payment of the purchase money. The deed conveying • the property is in the names of Jos. F. Wallace, I. D. Wither-spoon, and C. E. Spencer, “Trustees for the beneficial owners” of said property, “according to (their) several interests, as set forth in the deed of W. Brown Wylie, clerk, to said trustees,” more particularly described by reference to the record thereof. The conveyance is made to “W. J. Langston, Samuel M. Grist, J. Andy Tate, William Dobson, and Horace E. Johnson, trustees;” and the h'abendum clause is as follows: “unto the said W. J. Langston, Samuel M. Grist, J. Andy Tate, William Dobson, and Horace E. Johnson, trustees, the survivors of them, their successors and assigns, forever, in trust for such board of trustees, and for such uses •and trusts as York, Chester, Union, and Moriah Baptist Associations, or a majority of them, may hereafter appoint and designate and declare.” The bond is in the names of the several defendants, “trustees,” but it is signed by defendants, without appending the word “trustee” ,to their several names, and the same is true of the mortgage. Upon breach of the conditions of the bond and mortgage this action was commenced, on the 23d of May, 1896, and in their complaint the plaintiffs demand judgment against-the defendants personally, as well as for a sale of the mortgaged premises. The defendants, in their answer, while interposing, no objection to a sale of the mortgaged premises and the-ap — 152 — plication of the proceeds thereof to the balance due on the bond, and while admitting that they executed the bond and mortgage, deny any personal liability thereon, alleging that they were acting merely as trustees or agents of the Baptist Associations of York, Chester, Union, and Moriah, and so known to be by the plaintiffs, at the time these papers were executed. A referee was appointed to take all testimony offered, noting any objections, and report the same to the Court. This report was made, and all of the testimony taken, together with the objections noted, appears in the “Case.” The cause was heard by his Honor, Judge Aldrich, who rendered his decree, from which defendants appeal. - The decree of the Circuit Judge, together with the exceptions thereto, will be embodied in the report of the case. 1 The real question in the case is, whether there was error in adjudging that the defendants were personally liable for the debt represented by the bond, and in authorizing plaintiffs to issue execution against defendants for any balance that ma3' remain unpaid, after applying the proceeds of the sale to the mortgage debt. In 1 Am. & Eng. Enc. of Law, 2d edit., p. 1035, it is said: “The intent of the parties, as legally evidenced by the terms of the contract itself, is always the governing consideration in determining who is bound by the contract; hence a contract by an agent should be in the name of his principal, so as to show beyond question that it is the principal who contracts, and not the agent.” And on the next page of that valuable work it is said: “The general rule above stated is most strictly applied to sealed instruments. It is essential to their proper execution that they be in the name of the principal and under his seal, and purport to be his deed.” And again, on page 1038 of the same work, it is said: “An agent who executes a sealed instrument in his own name, using apt words to charge himself, fails to bind his principal, and is personally liable on the contract, though he adds to his name descriptive words indicating that he is the agent — 153 — of a named principal; and the rule is applicable whether such description occurs in the body of the instrument, in the signature, or in both.” These doctrines are supported by numerous authorities cited in the foot-notes. To the same effect are the authorities in our own State. In Mc-Dowall v. Reed, 28 S. C., 466, the bond was in the name of “J. P. Reed, trustee,” and the condition was, that “if the above bound John P. Reed, trustee,” shall pay, &c., and it was signed “J. P. Reed, trustee (l. S.),” and the Court held Reed personally liable. In that case, Mr. Justice McGowan, in delivering the opinion of the Court, quotes, with approval, the following language of Judge Story: “In general, a trustee is only suable in equity in regard to any matter touching the trust. But if he chooses to bind himself by a personal covenant in any such matter, he will be liable at law for a breach thereof, although he may, in the instrument containing the covenant, describe himself as covenanting as trustee; for the covenant is still'operative as a personal covenant, and the superadded words are but a descriptio persona;.'''' That case was recognized and followed in Moss v. Johnson, 36 S. C., 551. See, also, the case of Edings v. Brown, 1 Rich., 255, which was an action for the breach of a covenant contained in a bill of sale, signed “Catherine Brown (l. S.), per R. E. Brown, trustee.” It being admitted that Catherine Brown was a feme covert, and incapable, under the law as it then stood, of contracting, R. B. Brown was held personally liable. The present case is much stronger than either of the cases above cited, for in those cases the persons held personally liable signed the written instruments, with the word “trustee” appended to their names, while here the defendants signed both the bond and mortgage in their own names, without any such appendage; and there is nothing in the body of either the bond or mortgage which even tends to show that they were acting otherwise than in their individual capacity, for the addition of the word “trustees,” not the words “as trustees,” amounts to nothing more than mere descriptio personae — 154 — (Barrett v. Cochran, 11 S. C., at page 35). Even if we refer to the terms of the deed, as it is permissible to do, it being a part of the same transaction, we find nothing to warrant the inference that these defendants, in signing the bond and mortgage, were contracting for others and not for themselves. The deed only shows that the property was conveyed to the defendants, “in trust for such board of trustees, and for such uses and trusts as York, Chester, Union, and Moriah Baptist Associations, or a majority of them, may hereafter appoint and designate and declare.” It cannot be supposed that the defendants, in signing the bond and mortgage, were acting for some unknown body of persons, who had not then, and, as the Circuit Judge finds, have not since, been appointed or designated, and who, so far as appears, will not likely ever be appointed or designated, inasmuch as the very laudable enterprise for which the property was purchased seems, unfortunately, to have failed. The result, then, is, that these defendants, having executed the bond and mortgage in a manner which would render them personally liable, they must be so held, unless the parol evidence offered is admissible, and is sufficient to show that the defendants did not intend to assume, and did not as matter of law assume, any personal liability. 2 We agree with the Circuit Judge that the parol evidence offered was inadmissible, and his conclusion being supported by the authorities cited, we scarcely deem it necessary to add anything to what he has said. The only purpose of the parol evidence, was to show that a contract under seal, executed by the defendants in such a manner as would render them personally liable to perform the same, was not intended to bind them personally, but was intended to bind some one else — who, it is difficult to conjecture. The Baptist associations above named could not have been the parties intended to be bound, for the undisputed evidence is that neither those associations nor the churches composing them were corporate bodies, capable of contracting or being contracted with.' It could not have' — 155 — been intended to bind the board of trustees referred to' in the deed, for they had not then been appointed. So that it is impossible for us to conceive who else could have been intended to be bound. Indeed, even if the parol evidence offered could be regarded as competent, we do not see how it could relieve the defendants from personal liability^ Surely, it is not to be supposed that the plaintiffs would have parted with their property as they did, without some consideration — without some legal assurance that the purchase money agreed upon would be paid; and unless defendants are held to the liability which they unquestionably assumed when they signed the bond, we do not see to whom the plaintiffs could look for the payment of the purchase money. The impression left upon our minds by a careful study of the testimony is, that all parties honestly believed, at the time the purchase of the property was effected, that the purchase money would be paid by voluntary contributions from the members of the religious denomination, for whose interests the defendants were acting; and so confident were they in that belief, that they had no idea that the defendants would, in fact, incur any personal risk by signing the bond; but We cannot believe that any of the parties supposed,- at the time, that the plaintiffs w*ere parting with their property without any legal security for the payment of the purchase money. Under this view, the apparent discrepancy between the testimony of Mr. Spencer and the testimony of the defendants, may be explained without the slightest imputation upon the credibility of any of the witnesses, all of whom are conceded to be persons of unquestionable credibility. We must conclude, therefore, that, in the absence of any allegation or proof of fraud, which is distinctly disclaimed, the parol evidence offered was inadmissible; and even if admissible, it is insufficient to relieve the defendants from personal liability on the bond. The judgment of this Court, I think, should be that the judgment of the Circuit .Court be affirmed; but as the Court — 156 — is equally divided, the judgment of the Circuit Court must stand affirmed, under the Constitution. Justices Pope and Gary dissent.