Court Opinion

ID: 7005869
Source: CourtListenerOpinion
Date Created: 2022-07-24 03:50:21.402955+00
Date Added: 2024-06-11T16:10:04.763999
License: Public Domain

Mr. Justice Smith delivered the opinion of the court. The principal question presented by this record is whether or not the defendants, appellees, are liable personally in covenant on the contract declared on. In solving this question we must first consider what is the meaning and intent of the contract. If the intention be to bind the defendants personally by the contract, then the defendants are liable. If on the other hand the clear intent and meaning is to bind the trust estate and thereby to create an equitable lien or charge thereon, which may be enforced in equity, the defendants arc not personally liable. By the express terms of the document it is an agreement between appellant and the “Estate of Charles Comstock, party of the second part, hereafter designated the ‘Owner.’ ” The names of the defendants nowhere appear in the contract except in the signatures thereto. The mode of signing the contract corresponds with the first clause which designates the contracting parties. The name of the appellant company is signed by J. A. Hammett, who appears to be an officer of the company. The second party named in the first clause of the contract is then signed as follows: “Estate of Charles Comstock [Seal] Per William C. Comstock, [Seal] Alice J. Comstock, [Seal] George S. Baker, [Seal] Trustees.” It clearly appears from the averments of the declaration that the defendants, who were trustees of the Estate of Charles Comstock, were about to erect a fire-proof build-ins' at the corner of Sherman avenue and Davis streét in O Evanston, Illinois, and that Charles B. Ayars had prepared specifications and drawings therefor as their architect. For that purpose the contract in question was entered into, which provides that the contractor (appellant) under the direction and to the satisfaction of Ayars as architect, should provide the materials and perform all the work mentioned in the specifications or shown on the drawings for the fire-proofing work for the four-story brick and steel .building mentioned, in consideration of the agreements of the owner therein made. Bunning through all the provisions of the contract the covenants and. stipulations are in terms between the contractor and the owner. The contract mentions no covenant or agreement between the contractor and the defendants. It clearly appears, therefore, that the defendants were acting as trustees and not as individuals, in a trust capacity, and not for themselves personally. This appears from the situation of the parties and the surrounding circumstances appearing from the averments of the declaration as well as from the contract itself. The clear intent and meaning of the contract is that the defendants agreed in their capacity as trustees of the Estate of Charles Comstock, in as far as they could legally bind the estate, but without assuming any personal obligation whatever, for it clearly appears that they intended to charge the trust estate and not themselves, and that appellant accepted the responsibility of the trust fund alone. It is true that the “Estate of Charles Comstock” is not a legal entity, capable of suing or being sued, nor is it a person or corporation. But that is not decisive of the question. Such an estate is known to equity, and contracts relating to trust estates may be made by trustees and may be enforced in equity. As stated in Sperry, etc., v. Fanning et al., 80 Ill., 371, cited by appellant: “It will also be observed that there is a clear and marked distinction, in all the authorities, between the agreement of an agent who describes himself as contracting for a principal, and the covenant of a principal who contracts by and through an agent. The former may be regarded as the personal contract of the agent, while the latter may be held to be the undertaking of the principal.” In the above case Sperry was the guardian of Henry W. Kingsbury, a minor, who owned the premises upon which the buildings were erected. The agreement was made between Fanning & Co., plaintiffs, on one part and Sperry as guardian, on the other part, and it was executed by the defendant: “Anson Sperry, guardian of the estate of Henry W. Kingsbury.” The court say that it will be observed that the contract was not made in the name of the ward by a guardian or agent, and held that the addition of the words “guardian,” etc., were a mere matter of description, and held Sperry liable on the contract on the ground that he executed the contract in his own name, not in the name of the ward, and did not assume to bind the ward, and did not limit the liability of the defendant by a provision that the plaintiffs should be paid from the assets be-' longing to the ward in his hands as guardian. In the case under consideration, the contract was, as we have seen, made in the name of the trust estate, and every provision of the contract, as well as the manner of signing it, manifests the intention of the parties to bind the trust fund alone. Every fact and circumstance set out in the declaration rebuts the idea that the defendants assumed any personal responsibility for the work, but, on the contrary, show that the defendants contracted in the name of and for the estate and that plaintiff accepted the trust fund as security for the work and materials. The case of Johnson v. Leman et al., 131 Ill., 609, holds that a person employed by a trustee to render services useful to the trust estate, without the order of the court, when the trustee does not profess or undertake to create any lien on the estate, and does not stipulate against his personal liability, must look to the trustee, and not to the estate. The court was not considering a case, like the one at bar, ivhere there was an express charge upon the trust property created by the contract. The attempt there was to enforce a charge upon the trust property, upon the ground that appellant had rendered beneficial services to the trust estate under a personal contract with the trustee. This alone was held to be an insufficient ground for holding the trust fund liable. The law is well settled that where one party makes a. general contract with another for any lawful purpose, the addition of the words “trustee” or “as trustee” to his name do not relieve the party from personal liability. Where, however, it clearly appears that the contract is made for the benefit of a trust fund, and payment is to be made out of that fund, as in this case, or where a church corporation or other similar corporations, acting by trustees, make contracts, such fund, or such corporations are bound by the contract, and not the trustee, unless he has exceeded his. authority as such. In entering into contract relations like the one under consideration both parties are vitally interested in the character and terms of the agreement. If the plaintiff was unAvilling to accept the fund as security for its payment, it should have insisted upon a personal contract with the parties acting on behalf of the fund. On the other hand, trustees executing a trust may be unwilling to accept a trust and enter into any contracts relating thereto, if he is required to assume a personal liability. Trustees have the right to bind the trust fund and that alone,'and may make their contracts accordingly. In our opinion the contract under consideration does not bind the trustees personally and it must be so construed. Fowler v. Mutual Life Ins. Co., 8 Hun (N. Y.) 195; Thayer v. Wendell, 1 Gallison, 37 (U. C. C.). It follows, in our opinion, that the defendants cannot be held upon the award alleged in certain counts of the declaration. The award is alleged to have been made by Charles Eiker under certain provisions of the contract. If there is no personal liability created by the contract, there can be no personal liability fastened upon the defendants by any thing done under and in pursuance of the terms and provisions of the contract, unless it appears that defendants either directly or constructively waived the contract and assumed such personal liability. Mothing of that character is averred in connection with the making of the award. The award does not find that the defendants are personally liable for the amount. There is nothing in the award indicating that the arbitrator intended to find them personally liable for the amount of the award. The judgment of the court below is affirmed. Affirmed.