Ogden Railway Co. v. Wright

Pee Cueium. The only question on this appeal is whether, upon the face of the notes, the defendants-are personally liable. In the execution thereof they have designated themselves as trustees of F. Nodine, and, as a trustee is one who holds the legal title to property under an agreement, express or implied, to apply it and the income arising therefrom to the use and benefit of another (1 Parsons on Contracts, 122; Anderson’s Law Dictionary, title “ Trustee ”), it must be assumed-, in the absence of the circumstances indicating a different relation, that they are simply the holders of the legal title to certain property in trust for Nodine. And upon this theory the sufficiency of the complaint must be determined. Now, the law is well settled, as stated by Mr. Parsons, that such a trustee “is bound personally by the contracts he makes as trustee, although designating himself as such; and nothing will discharge him but an express provision showing clearly that both parties agreed to act upon the responsibility of the funds alone, or some other responsibility exclusive of that of the trustee, or some other circumstance clearly indicating another party who is bound by the contract, and upon whose credit alone it is made. The mere use by the promisor of the name of trustee, or any other name of office or employment, will not discharge him. Some one must be bound by the contract,. and if he does not bind 153 some other he binds himself, and the official name is then regarded only as describing and designating him:” 1 Parsons on Contracts, 121. See, also, Taylor v. Davis’ Administratix, 110 U. S. 330 (4 Sup. Ct. 147.) Many authorities are cited by the defendants to the effect that where it appears from the face of the instrument that the party signing it acted in a representative capacity, and intended to bind his principal, and not himself, the courts will, in furtherance of justice, adopt such a construction as will effectuate the actual intention of the parties. But there is nothing in the record here to show that the defendants, in executing the notes, were acting as the agents or representatives of any one. They say they are trustees of a private individual, and a trustee is not an agent, and has no principal. As clearly pointed out by Mr. Justice Woods in Taylor v. Davis’ Administratrix, 110 U. S. 330 (4 Sup. Ct. 147), “An agent represents and acts for his principal, who may be either a natural or artificial person. A trustee may be defined generally as a person in whom some estate, interest, or power in or affecting property is vested for the benefit of another. When an agent contracts in the name of his principal, the principal contracts and is bound, but the agent is not. When a trustee contracts as such, unless he is bound, no one is bound, for he has no principal. The trust estate cannot promise. The contract is, therefore, the personal undertaking of the trustee. As a trustee holds the estate, although only with the power and for the purpose of managing it, he is personally bound by the contracts he makes as trustee, even when designating himself as such. The 154 mere use by tbe promisor of tbe name of trustee, or any other name of office or employment, will not discharge him.” It is therefore manifest that the complaint states a cause of action against the defendants personally, and, if the facts and circumstances surrounding the execution of the notes are such as to change their apparent liability, it must be made so to appear by answer. The court below was in error in sustaining the demurrer to the complaint, and the judgment must be reversed, and the cause remanded, with directions to overrule the demurrer, and for such further proceedings as may be right and proper, not inconsistent with this opinion. Reversed.