Court Opinion

ID: 6861716
Source: CourtListenerOpinion
Date Created: 2022-07-23 20:49:28.579585+00
Date Added: 2024-06-11T16:05:15.423385
License: Public Domain

BINGHAM, Circuit Judge
(dissenting).
I cannot agree to the opinion of the court in this case. The only question of importance arises on the plaintiff’s exception to the action of the District Court in directing a verdict for the defendant. This exception must be sustained unless reasonable men could draw no other conclusion from the evidence than that the plaintiff and defendant, at the time of making the contract for the construction of the building in Washington, agreed that the defendant and its cotrustee should be discharged from all personal liability under the building contract, and that the contractor, the plaintiff, should look solely to the property of the trust for its compensation.
It is conceded that, in the absence of such an agreement, the defendant and its cotrustee would be personally liable to the plaintiff for the balance due it as compen*150sation for the erection of the building. Philip Carey Co. v. Pingree, 223 Mass. 352, 111 N. E. 857; Larson v. Sylvester, 282 Mass. 352, 185 N. E. 44.
To excuse itself from liability for the balance due under the building contract, the defendant set up in its answer a clause in the declaration of trust reading:
“In every written contract made by the Trustees reference shall be had to this instrument and any person contracting with the Trustees shall look to the trust premises and not to the Trustees individually for payment of any debt, note, mortgage, judgment or decree or any other obligation or of any money that may otherwise become due and payable by reason of the failure on the part of the said Trustees to perform such contract in whole or in part or for any other cause.”
This provision of the declaration of trust was introduced in evidence, subject to plaintiff’s exception. No evidence was introduced by the defendant tending in any manner to show that the plaintiff or any of its representatives, having to do with the building contract or any negotiations leading up to the making of that contract, were ever informed, prior to its execution, that the defendant or its cotrustee, now dead, were not to be personally liable under the contract. Nor did the defendant offer any evidence that the plaintiff or any of its representatives were ever informed that the declaration of trust contained any provision seeking to relieve the defendant and its cotrustee from personal liability. And, in the absence of such evidence, this clause of the declaration of trust was not admissible.
The reference in the building contract to the declaration of trust did not make it a part of that contract. The only effect that could be given to that was to charge the plaintiff with notice of the authority of the defendant and its cotrustee to enter into the building contract and subject the trust to its obligations.
If the plaintiff, prior to the execution of the contract, had examined the declaration of trust and there learned that the trustees did not intend to become personally liable under the building contract, then there would be some evidence upon which reasonable men might find, if the plaintiff thereafter went on and made the contract, that it agreed to absolve the defendant and its cotrustee from personal liability. But the evidence given by the plaintiff was, and it was in no wise contradicted by the defendant, that no one on the plaintiff’s behalf ever saw the declaration of trust; that it was not shown to the plaintiff, or anybody else representing it, prior to the execution of the contract; and that the circumstances concerning the execution of the building contract were that the plaintiff executed it in duplicate in the city of New York, and the duplicate and original were then forwarded to Boston where they were executed; the defendant and its cotrustee keeping one copy and returning the other to the plaintiff in New York.
To say that on this evidence reasonable men could reach no other conclusion than that the plaintiff agreed to absolve the defendant and its cotrustee from personal liability under the building contract is to state something that to my mind is not so. On the contrary, it seems to me that the only reasonable conclusion that could be reached on the evidence was that no such agreement was made, and that the verdict should have been for the plaintiff, for the execution of the building contract, the performance of the work, and the balance due under it were all agreed upon. In any event the plaintiff was entitled to have its case submitted to and passed upon by the ju-iy-
The defendant and its cotrustee could readily have absolved themselves from liability had they informed the plaintiff of their desire to be excused therefrom. and pro.cured its consent. But to direct a jury to find that the parties agreed to something the plaintiff never knew or heard about (which is what was done here) is manifest error.
Under the Federal Reserve Act § 11 (k), as amended (12 USCA § 248 (k) the defendant bank was authorized to act as trustee. In making the building contract in that capacity it did not exceed its authority or act beyond its corporate powers. When Congress authorized national banks to act as trustees, it could, if it had thought fit, have provided that in that capacity they should be free from personal liability. But it did not do so. It left it to the banks themselves to procure .through contracts their exemption from such liability.
The judgment should be vacated, and the case remanded for a new trial.