Court Opinion

ID: 9831852
Source: CourtListenerOpinion
Date Created: 2023-09-01 21:25:08.683157+00
Date Added: 2024-06-11T07:43:38.555595
License: Public Domain

On Motion for Rehearing.
In the leading case of Taylor v. Mayo, Adm’x, 110 U. S. 330, 4 Sup. Ct. 147, 28 L. Ed. 163, the court said:
“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.”
[15] If the trustee designates himself as such, or signs as such, he is¡ nevertheless bound personally. Elliott on Contracts, § 511. If the trust or partnership estate cannot promise, it cannot employ. The employment of McCoy was therefore the personal undertaking of the “trustees” of The Fisheries Company. If the trustees had signed a contract with McCoy stating that they, as trustees, employed him, or that The Fisheries Company employed him, it is clear they individually would, nevertheless, be the persons who entered into the relation of masters. A contract stating that McCoy agrees to the nonliability portions of the so-called trust agreement, and that he will look alone'to the property and assets of The Fisheries Company for all debts and damages which may become due him, does not change the-status of the trustees, who are still individually his masters, but undertakes to restrict their liability.
[16] Appellants Munn and Moody contend that as trustees or partners are permitted to contract so as to limit liability to the assets held by them as trustees or partners, when they make such a contract it is one in their representative capacity. They then say that, as they made that kind of a contract with McCoy, they became his masters only in a representative capacity, and therefore “there is no limitation of the liability of the only employer, the representative as such.”
We consider this course of reasoning fallacious. In order to arrive at the conclusion that the trustees are masters in their representative capacity, and therefore “there is no limitation of the liability of the only employer, the representative as such,” reliance is placed solely on the terms of the contract. 'But Munn and Moody cannot base their contention on the assumption that the very provision in dispute is valid. We believe that under the authorities, if the contract had merely provided that McOoy, in the collection of his salary or wages, would be limited to the assets of the trust or partnership estate, the trustees could not claim that they were released from personal liability for injuries suffered by reason of negligence. In other words, it is not a question of capacity in which the contract is made, but a question of limitation of liability. Such a contract does not change the status of the trustees or partners, but restricts their liability, provided the restriction is not invalid on account of being contrary to public policy. To say that a provision is a limitation of liability, and upon such proposition base a train of reasoning culminating in the final conclusion that such provision is not a limitation of the liability of the master, is assuming the validity of the provision in question for the purpose of proving its validity.
Munn and Moody were the masters of Mc-Ooy, and they made a contract absolving themselves from liability for injuries suffered by reason of negligence. To the extent that the contract'so provided it is void, as contrary to public policy, unless there be some peculiar merit in trust or partnership enterprises, such as The Fisheries! Oompanyk which calls for the application of a different rule. Munn and Moody in their brief apparently take it for granted that, unless they can show that the provision of the contract relied on is not one limiting the liability of the masters, it will fall under the general rule and be invalid. In saying that the principle invalidating such contracts is considered by them to be of universal application, we made an unnecessary statement, and they protest that no rule of human origin can well be held to have universal application. We should have said that they appear to take it for granted in one portion of the argument that, if the contract was a limitation of the liability of the masters for negligence, it would be invalid under the general principle invalidating such contracts, but in another portion of the argument it is virtually contended that trust conducted enterprises or businesses have a peculiar merit or usefulness, from which argument it might be deduced that an exception to the general principle might well be permitted when the masters are conducting a trust business. It was in this connection, and not in answer to what we considered Munn and Moody’s main contention, that we stated that as the law has provided methods for carrying on business enterprises by means of corporations and limited partnerships, so that persons can limit their risk to what they put into the business, we could not see that public policy would recognize any particular necessity for favoring persons electing to do business under The Fisheries Company plan above an individual who engages in the same business. We did not contend that such legislation prohibits the right to contract for immunity, but the fact that there is such legislation may, we think, with propriety be considered, if it be contended that there is any peculiar necessity for, or merit in, business enterprises, such as The Fisheries Company, which would call for a different public policy as to those associated together therein than it would as to one person engaged in a similar enterprise or business.
*350It is stated that what we said concerning the facts might be subject to the construction that McCoy’s injuries were due to the personal fault of Munn and Moody. The evidence shows that neither of them undertook the supervision of the work of erecting the plant, and neither was present at - the time McCoy was injured. The findings of the jury are supported by the evidence. We adopt them as our findings, and deem them sufficient to support the judgment against Munn and Moody.
The motion for rehearing is overruled.