Gill v. Carmine

Alvey, J., delivered the opinion of the Court. Under the instructions of the Court, given in the terms of the second prayer of the plaintiff, and the sixth prayer [342] of the defendants, as modified by the Court, we must assume that the jury found that the work and materials furnished for the completion of the buildings, for which this suit was brought, were furnished upon the order and request of the defendants, and that there was no agreement on the part of the plaintiff to look to the trust estate alone for payment. That the contract was with the defendants is not denied; the only question is, whether the credit was given exclusively to the trust estate in the hands of the defendants as trustees, or whether they were looked to as responsible in their individual character. The defendants contend that inasmuch as the completion of the buildings was contracted for under the sanction of the Circuit Court, as a Court of equity, therefore there could be no individual responsibility contemplated or incurred. But that was by no means the necessary consequence of the order of Court, authorizing the defendants as trustees to have the work done. The order of the Court was a complete indemnity to the trustees for having the work done, and a determination that the cost or expense of the work should be allowed the trustees out of the trust funds. But it did not bind the plaintiff to look exclusively to the trust funds for payment, whether sufficient or not, unless, by agreement, he should bind himself to look to that fund exclusively. By the deed of trust from Boche to the defendants, the latter were invested with the entire estate of the former, for the benefit of creditors ; and the law is perfectly well settled, that the party holding the estate in trust, even with general powers of management, is bound personally by the contracts that he may make as trustee, though he designates 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 of some other responsibility, exclusive of that of the trustee ; or some other circumstance clearly indicating [343] another party who is hound by the contract, and upon whose credit alone it was made.” 1 Pars. Contr., (4th Ed.,) 102. This principle has long since been settled in the law, and was fully recognized and acted upon in the case of Horsley vs. Bell, Ambler, 770; more fully reported in a note to the case of Cullen vs. Queensberry, 1 Bro. C. C., 101, and the authority of which was fully sanctioned in the case of Eaton vs. Bell, 5 Barn. & Ald., 34. And in the recent case of New vs. Nicoll, 73 N. Y., 121, where a trustee, holding and managing an estate for the benefit of a married woman, and others after her death, was sued on a contract for repairs done to the buildings on the land, it was held and laid down as a settled principle, that when a trustee is authorized to make an expenditure, and he has no trust funds, and the expenditure is necessary for the protection, reparation, or safety of the trust estate, and he is not willing to make himself personally liable, he may, by express agreement, make the expenditure a charge upon the trust estate. Eor, as it is there said, he could himself advance the money to make the necessary reparation or improvement, and he would have a lien upon the trust estate therefor; and that being so, he could, by express contract, transfer such Hen to any other party who would agree, upon the faith of the trust estate, to make the necessary expenditure. But, in the absence of such express agreement, or circumstances plainly indicating an intention on the part of the party doing the work or making the expenditure, to exclude the personal liability of the trustee, and to rely exclusively upon the estate, or some other source, for payment, the trustee, at whose request the work was done or expenditure made, will he held personally liable. In such case, he must seek reimbursement from the trust estate. In this case, it would hardly he rational to conclude that the plaintiff intended to do the work for the benefit [344] of an insolvent estate, and to place himself upon the footing of a simple contract creditor, with the right to demand only a pro rata distribution with that class of creditors, however small that distribution might he. We must suppose that he intended either to do the work upon the credit of the estate, with the right to he paid in full, or that the work was done upon the individual credit of the trustees. This was matter of fact; and the jury have found, under the instructions of the Court, that the work was done, not alone upon the credit of the estate, hut upon the personal credit and liability of the defendants. The unquestioned proof is that one trustee acted for all, and what was the order or direction of one was the order and direction of all. And the fact that the plaintiff made out a bill for the work done in completing the houses, and filed it in the case, and received a distribution thereon, was hut a circumstance to he considered by the jury, in passing upon the question, whether the work was done upon the credit of the estate alone, or that of the individual liability of the defendants. (Decided 27th January, 1881.) We perceive no error in the rulings of the Court, in granting the second prayer of the plaintiff, and refusing those on the part of' the defendants. Judgment affirmed.