Geiger v. Tramp

• Decision Date: 07 May 1923
• Docket Number: 6035.
• Parties: GEIGER v. TRAMP et al.
• Court: U.S. Court of Appeals — Eighth Circuit

291 F. 353

GEIGER v. TRAMP et al.

No. 6035.

United States Court of Appeals, Eighth Circuit.

May 7, 1923

Lucian J. Eastin, of St. Joseph, Mo. (Eastin & McNeely, of St Joseph, Mo., on the brief), for plaintiff in error.

E. F McEniry, of Creston, Iowa (Higbee & McEniry, of Creston Iowa, on the brief), for defendants in error.

Before LEWIS, Circuit Judge, and POLLOCK and SYMES, District Judges.

POLLOCK District Judge.

This was an action at law, the petition containing 26 counts brought to enforce payment of the contents of a like number of promissory notes made to what is called a commonlaw trust, namely, The Clinton Townsite & Farm Development Company.

Defendants were the trustees of said trust, and were sought to be maintained liable for the payment of the notes as individual indorsers of the paper. One of said notes, with the indorsement of defendants thereon, reads, as follows:

'350.00

Creston, Iowa, July 29, 1912.

'On or before July 29, 1916, I promise to pay to the Clinton Townsite & Farm Development Company, or order, at the office of its treasurer in Creston, Iowa, three hundred fifty and no/100 dollars, with interest at six per cent. per annum after date, payable annually, and a reasonable attorney's fee if collected by an attorney. Value received.

Fred S. Freeman.'

This paper was indorsed:

'The Clinton Townsite & Farm Development Company, H. L. Tramp, J. C. Sullivan, C. A. Allen, Trustees. C. S. Rice. Jennie A. Rice.'

There is no attempt in this action to bind either the trust or its property or the indorsers Rice. As the indorsements on all of the notes are identical, no other need be referred to or set forth.

It was the theory of the plaintiff the indorsement set out bound the trustees making it personally to payment of the obligations. On the contrary, it was the claim of defendants they acted in making the indorsements as the trustees or representatives merely of the trust; that their action in making the indorsements was to convey the legal title to the paper, and while the trust was bound by their acts in so doing, in so far as any property held by the trust in making the indorsements, they did not bind themselves as individuals; and in support of this contention they pleaded in defense a provision of the trust agreement, which was duly made, filed, and recorded in the proper office of the county in Colorado in which the trust was engaged in operating townsite, real estate and other business. This provision of the trust agreement under which the trust was created, reads as follows:

'The trustees shall have no power to bind the shareholders personally, and in every written contract they shall enter into reference shall be made to this declaration of trust, and the person or corporation contracting with the trustees shall look to the funds and property of the trust for the payment under such contract, or for the payment of any debt, mortgage, or judgment or decree, or of any money that may otherwise become due or payable by reason of the failure on the part of said trustees to perform such contracts in whole or in part, and neither the trustees nor the shareholders, present or future, shall be personally liable therefor.'

By way of reply to this contention made by the defendants in answer, the plaintiff alleged the mandatory provision of this condition of the trust agreement, that reference should be made in all contracts entered into by the trustees to the agreement itself, was not obeyed by defendants as trustees in the making of the indorsements on the promissory notes in action, therefore the provision of the agreement above quoted afforded defendants no protection from individual liability. While some of the counts of the petition were dismissed before trial by the plaintiff, as to the remainder a jury was waived and the trial had to the court, and a general finding and judgment therein was entered for defendants. Plaintiff below brings error. For convenience, the parties will be referred to in this opinion as they stood on the record in the court below.

At the outset we are confronted with the contention, made on behalf of defendants, that as shown by the record made in the court below there is no question of error raised on this record which may be considered or reviewed by this court. As before stated, the intervention of a jury to try the case was waived in writing and the case was tried to the court. On the trial the court found generally for defendants and against the plaintiff. An examination of the record discloses no request was made of the court to make special findings of facts, and none were made. There were no declarations of law arising on the facts requested to be made of the trial court, and none were made. The record shows merely an exception taken to the action of the court in rendering judgment.

This court as a reviewing tribunal has no power to retry an action at law and render such judgment as in its opinion should have been rendered by the trial court. On the contrary, it is empowered to review actions at law according to the course of the common law, as modified by statute, when a cause is brought here on petition in error, for such errors of law as were directly and specifically challenged in the trial court. When we come to a consideration of the errors assigned by plaintiff, it is clearly disclosed as follows:

Assignment No. I relates to the articles of association of the trust, and the admission of such written articles of association in evidence when offered by the defense, and it is contended in the assignment made said writing is not competent to affect the rights of the plaintiff in error and should have been excluded for the following reasons:

'Plaintiff in error sued on the contract of indorsement. That contract appears on the back of the note, and does not make reference to the declaration of trust as required by that instrument. The provisions of the declaration of trust, not having been obeyed, defendants in error were left to the liability imposed by the contract they actually made.

'The terms of the contract contained in the indorsement are plain. That contract is definite. It fixed liability, and could not be supplemented or modified by the writing referred to.

'The writing, even, if the most favorable construction be given it, does not constitute a defense to the action upon the indorsement. The indorsement was made by defendants in error as individuals, and it was not competent by this writing to relieve them.

'The writing creates but an association. That association is not an entity known to the law. It cannot sue or be sued. Defendants in error are therefore the principal, and must personally answer legal demands arising in the conduct of the business transacted.

'The writing empowered the defendants in error to make contracts and thus create legal obligations. Upon these obligations the defendants in error must respond at law. Equities may be adjusted between defendants in error and their beneficiaries (the shareholders), but not between them and those with whom they contract.'

Now, had the trial court been requested by plaintiff to make declarations of law as to the legal effect of this written agreement, which requests to declare the law embodied the language or the legal ideas employed in this assignment, and had such request been denied by the trial court, and exceptions to such rulings saved, then the question of law attempted to be urged would have come up for review before this court. However, nothing of the kind was done.

Again, in so far as the assignment of error complains of the reception of the articles of agreement in evidence is concerned, the record discloses the facts to be, as follows: When the same were offered, counsel for the plaintiff stated his objection, as follows:

'The plaintiff objects to the exhibit, for the reason that it is incompetent, irrelevant, and immaterial to any issue in this case. It is not articles of incorporation with relation to a corporation that is authorized by the laws of this state or of Colorado. It is not articles of limited partnership authorized by this state or by the laws of Colorado. It is nothing but a voluntary association of individuals, and creates no entity that is recognized by the laws of this state or the state of Colorado.

'The Court: The court will not pass upon the legal effect of it, but it is pleaded here as one of the elements of defense. The instrument may be admitted, and the legal effect of it will be hereafter determined.'

Thereafter no motion was made by plaintiff to strike the same out, and no exception was taken to the court giving the same consideration, if consideration of the writing was by the court given. In Oakland Water Front Co. v. Le...