Case Name: Levi S. Noyes, App'lt, v. William Turnbull, Impleaded, Resp't
Court: New York Supreme Court, General Term
Jurisdiction: New York
Decision Date: 1889-09-21
Citations: 26 N.Y. St. Rep. 66
Docket Number: 
Parties: Levi S. Noyes, App’lt, v. William Turnbull, Impleaded, Resp’t.
Judges: 
Reporter: New York State Reporter
Volume: 26
Pages: 66–79

Head Matter:
Levi S. Noyes, App’lt, v. William Turnbull, Impleaded, Resp’t.
(Supreme Court, General Term, Third Department,
Filed September 21, 1889.)
1. Tbustee — Retiring not liable bob goods purchased abteb ms RELEASE.
Trustees who are authorized to carry on a business do not occupy the position of partners, and the principle that a retiring partner may be liable for subsequent purchases made of one with whom the firm previously dealt, and who has not been notified of the retirement, does not apply to such a trustee who has been released from his trust. Ingalls, J., dissents.
2. Same — Not personally liable when deed authorizes the incurring OP DEBTS AGAINST ESTATE:
Where the trust deed authorizes the incurring of liability, the liabilities . incurred are those of the trust estate, unless by some personal act the trustee makes himself liable. Ingalls, J., dissents.
3. Same — Notice op retirement.
Where several trustees conducting a business used a letter head containing their names as trustees of the former firm, and on the release of two, the remaining trustee used one containing the name of such firm with his name as trustee, Held, that this change in the letter heads was sufficient notice to put one dealing with said trustee on inquiry. Ingalls, J., dissents.
Appeal by the plaintiff front a judgment in favor of the •defendants, after a trial at the circuit, by the court without a jni’y-
Theodore L. Pomeroy had for some years prior to his death carried on a manufacturing business in Massachusetts with his son, Silas II., as his partner, under the name of “L. Pomeroy’s Sons.” He died in September, 1881, having made his will which was duly proved in that state, in which he resided. By that will he gave all this manufacturing property (which he seems to think belongs to himself solely) to three trustees, William Turnbull, Silas H. Pomeroy, and Charles Atwater in trust to continue and carry on said business until his son, Theodore L., should arrive at twenty-one, incurring liabilities on account of the estate, exercising the same power which the testator exercised, and paying over during the trust such portion of the profits to Silas and Theodore L. as in their judgment the administration of the trust would permit.
The trustees accepted the trust, and in carrying on the business used the name “L. Pomeroy’s Sons.”
In 1882 and 1883 the trustees bought from John Consalus wool to be used in the said business, and prior to the death of Mr. Pomeroy, the firm of “L. Pomeroy’s Sons ” had also bought wool of Consalus. But Consalus had no dealings with “L. Pomeroy’s Sons,” from March 13, 1883, to August 28, 1886.
Sometime prior to May, 1885, an action was brought by Turn-bull and Atwater, in the supreme judicial court of Massachusetts, against Silas H. Pomeroy and others interested in the estate of Theodore Pomeroy, deceased. In the bill of complaint therein the plaintiffs, for reasons therein given, asked to be released from, the trust, and that new trustees be appointed. Thereupon, May 18, 1885, an agreement in that action was made between the parties, and subsequently, June 1, 1886, a decree was made by the said court. By this decree Silas H. Pomeroy was authorized to act as sole trustee; the business was to be so conducted as to create no liability on the plaintiffs as trustees, and they were not to be liable for any debt incurred by him as trustee, or on any note or obligation thereafter made by “L. Pomeroy’s Sons,” or by said Silas H. in that name. As soon as William Turnbull & Co. had received their mortgage for a balance due them, and said Silas H. had paid or renewed outstanding commercial paper of L. Pomeroy’s Sons, the plaintiffs were to be discharged as trustees.
Subsequently, in January and February, 1887, Consalus sold wool to “ L. Pomeroy’s Sons,” for which he received notes dated respectively May 28, 1887, and June 9, 1887, signed “L. Pomeroy’s Sons,” which have been transferred to plaintiff, and have not been paid.
The question is, whether William Turnbull is liable on these' notes.
Prior to the time of the decree, the trustees in their business had used for correspondence letter paper with the following letterheads :
“William Turnbull, Charles Atwater and S. Harris Pomeroy, trustees of L. Pomeroy’s Sons, Pittsfield, Mass.ail before “L. Pomeroy’s Sons ” being in red ink.
After the decree Silas H. Pomeroy procured and used letter •paper with the letter head
“L. Pomeroy’s Sons,” Pittsfield, Mass., S. H. Pomeroy trustee.
The other letter heads were not in use by defendants after June 1, 1886.
On paper bearing the second letter head, said S. H. Pomeroy corresponded largely with said Consalus, and that too prior to' the purchase for which the notes in question were given.
E. F. Bullard, for app’lt; Jesse Johnson, for resp't.

Opinion:
Learned, P. J.
It is evident that, as a matter of fact, the defendant, Turhbull, was not one of the persons who bought the wool alleged in the complaint, and was not one of the persons-who made the .notes therein set forth. The wool was in fact bought, and those notes in fact made solely by Silas H. Pomeroy. But the plaintiff claims that Turnbull is liable, on the principle that a retiring partner may be liable for subsequent purchases-made by the firm of one with whom the firm has previously dealt, and who has not been notified of the retirement.
Two questions are presented: The one whether that principle applies in this case; the other whether Consalus had not in fact, notice that he was dealing only with Silas H.
The three trustees were never partners. And in many respects their rights were very different from those of partners. They had no beneficial interest in the property. They were joint ten-ants, not tenants in common. On the death or one, his representatives would have no interest in the trust estate. One of the trustees could not voluntarily relinquish the trust. They were accountable for the proper management of the trust to the persons beneficially interested therein.
, All these particulars show that the position of trustees is widely different from that of partners.
It is not perhaps necessary to decide in this case whether or not. all of the three trustees were personally liable to Consalus for purchases made prior to the decree. We are not willing to assume that they were thus liable. The cases of Thacher v. Dinsmore, 5 Mass., 299; Schmittler v. Simon, 101 N. Y., 554, only decide that an executor who signs or endorses or accepts nego tiable paper is personally liable, although he adds to his name the word " executor " or the like. Foland v. Dayton, 40 Hun, 563; 2 N. Y. State Rep., 121, held that an executor will be personally liable for services done for the estate where there is no agreement-to look to the estate; and that such agreement may be shown by circumstances. Austin v. Munro, 47 N. Y., 360, is to the; same effect. For it is said that executors have no right to bind the estate for debts contracted by them.
This reason, it will be seen, does not apply to these trustees; So in New v. Nicott, 73 N. Y., 127, it was held that generally trustees cannot charge the trust estate, unless so authorized by the instrument creating the trust; but are personally liable on contract made by them.
Now that exception takes the present case out of the two decisions last cited. For these trustees were expressly authorized to incur, on account of the trust, further liabilities, and were to carry on the manufacturing business, which would require a constant incurring of debts. It cannot be assumed that they were to do this on their own responsibility; especially when they were expressly authorized to do this on account of the trust. Nor did they give their personal obligations; the business being, throughout, conducted in the old name of "L. Pomeroy's Sons."
Even if it should be urged that Silas H. Pomeroy, who made the purchases, prior to the decree, was personally liable; it would not follow that Turnbull was liable also. As above pointed out these trustees were not partners. When a partner purchases in the business of the firm, all the partners are liable; because all are interested beneficially in the purchase in the profits of the business. But it is not so with trustees. They are not interested in -the profits of the business. They are conducting a trust for the benefit of others. An executor who gives his note as executor for a purchase made by him for the estate, may be personally liable. But it does not follow that his co-executor is also personally liable on that note.
So, even if Silas H. was personally liable for purchases made-by him, it would not follow that Turnbull was personally liable.therefor, although he knew of the fact. Because, as we have: seen, the authority expressly as well as impliedly given by the will was to incur liabilities on account of the trust estate. And there was abundant notice given, by the letter heads above mentioned, that the business was in the hands of trustees. Those who. dealt with the concern must, therefore, have known that the business was carried on by persons having no beneficial interest-therein. And inquiry would at once have disclosed the terms of the will and the authority given thereby.
Passing this question, however, we come to the effect of the-discharge of Turnbull from his trust under the decree. Now, the plaintiff compares this transaction to the retiring of a partner. There is no resemblance. A partner who retires often takes some of the capital with him. At any rate, he withdraws, or assumes to withdraw, that personal liability for the partnership debts which is on him as a partner. He retires voluntarily and as a matter of right. The trustee discharged by the decree takes with him no capital. The property of the trust remains unaffected. He withdraws no personal liability. For when the trust deed authorized, as did this, the incurring of liability, then the liabilities incurred must be those of the trust estate, unless by some personal -act a trustee makes himself liable. Furthermore, the trustee •cannot relinquish his trust at pleasure. He can only be released by the court. Whatever the misconduct of his co-trustee, he' cannot, as a matter of right, step out of the trust.
In all these respects the supposed analogy between the two cases fails.
Furthermore, it may be said generally that a trustee is liable only for his own acts or his own negligence. A partner is often liable for the acts or negligence of his co-partner. Hence it is that those dealing with a partnership may look to the liability of all the partners. And, therefore, arises the principle that the retiring partner must give notice of his retirement. But it is not so with a trustee.
The court of equity has special power over all express trusts. It may discharge a trustee and appoint another. It may remove a trustee against his will. Should the trustee removed against his will be liable for acts subsequently done, even if he did not give notice of his removal ?
Some stress is laid on the fact that prior to the decree Turn-bull knew that his co-trustee, Pomeroy, was purchasing wool on credit But it does not appear that Pomeroy was purchasing on the credit of Turnbull, and that Pomeroy should purchase on the credit of the trust estate, or on his own credit, would be no ground of liability against Turnbull. Even if the trustee had divided the trust duties among them, we do not see that one would be responsible for the acts of another.
A further consideration is that which was principally relied upon by the learned justice who tried this case; that is, the change in the letter head. We must consider that some years had elapsed between the purchases made before the decree and those made after. Then Consalus received some twenty letters in which the letter head contained, as above stated, the name only of S. H. Pomeroy as trustee. As the old letter heads contained the names of the three, this change should have put him upon inquiry.
For all these reasons, we think the judgment should be affirmed, with costs.
Landon, J., concurs.