Gordon Campbell Petroleum Co. v. Gordon Campbell-Kevin Syndicate
| Decision Date | 28 January 1926 |
| Docket Number | 5835. |
| Parties | GORDON CAMPBELL PETROLEUM CO. v. GORDON CAMPBELL-KEVIN SYNDICATE et al. |
| Court | Montana Supreme Court |
Rehearing Denied Feb. 15, 1926.
Appeal from District Court, Cascade County; Stephen J. Crowley Judge.
Action on an account stated by the Gordon Campbell Petroleum Company against the Gordon Campbell-Kevin Syndicate and others. Judgment for plaintiff, and defendants appeal. Reversed and remanded, with directions.
Louis P. Donovan, of Shelby, and Belden & De Kalb, and Merle C Groene, all of Lewistown, for appellants.
J. W Choate and S. C. Ford, both of Helena, for respondent.
In this action, upon an account stated, plaintiff recovered judgment, and defendants appealed.
The record discloses that on April 2, 1921, Gordon Campbell, Helen Campbell, his wife, and L. C. Stevenson executed, acknowledged, and caused to be recorded a declaration of trust, in which the declarants recited that their purposes were to acquire certain real property, hold the same in trust, and explore it for oil and gas, and to conduct other operations enumerated; that the beneficial interests acquired should be represented by 10,000 units or shares evidenced by certificates; that the units or shares should be sold; that the trust should be known as the Gordon Campbell-Kevin Syndicate; that the business of the syndicate should be managed by a board of trustees consisting of three members, the first board to be composed of the declarants; that Stevenson should hold office until the first Monday in January, 1923, Mrs. Campbell, until the first Monday in January, 1924, and Gordon Campbell, until the first Monday in January, 1925; that, at the annual shareholders' meeting on the first Monday of January of each year beginning in 1923, one trustee should be elected for the term of three years. Provision was made for regular monthly meetings of the board and for called meetings. The other terms of the declaration are not material here.
It appears that the 10,000 units or shares were sold; that at the annual meeting in January, 1923, E. M. Harvey was elected trustee to succeed Stevenson; that on February 10, 1923, Helen M. Campbell resigned as a trustee; that on February 19, an attempt was made to appoint W. W. Rhea to fill the unexpired term; that later Rhea resigned, and on August 6, 1923, an attempt was made to appoint C. A. Springmyer to succeed him.
On March 4, 1924, there was what purported to be a meeting of the trustees of the syndicate, at which meeting Gordon Campbell and Springmyer were the only persons present. Gordon Campbell presented an account for $40,903.94 in behalf of the plaintiff and against the syndicate. This account had been prepared by Springmyer at Campbell's direction, and the purported action thereon, as disclosed by the minutes of the meeting, follows:
We deem it unnecessary to consider at length Springmyer's title to the office of trustee. For the purposes of this appeal, he may be treated as a de facto trustee.
An account stated is a new contract arising out of an account existing between the parties-an agreement that the items of the account and the balance struck are correct, with an agreement express or implied for the payment of such balance. The consideration for the new contract is the original account (Martin v. Heinze, 77 P. 427, 31 Mont. 68), or speaking with greater exactness, the consideration is the settlement of the original account (Johnson v. Gallatin Valley Milling Co., 98 P. 883, 38 Mont. 83).
This action is upon the new contract, which it is alleged was entered into on March 3, 1924, and plaintiff must recover upon that contract or fail. Noyes v. Young, 79 P. 1063, 32 Mont. 226.
While plaintiff is in form a corporation, it is in fact but an alias under which Gordon Campbell was conducting his private business at the times mentioned herein. Hanson Sheep Co. v. Bank, 163 P. 1151, 53 Mont. 324. This is apparent from Campbell's own testimony, and it is admitted to be the fact in the brief of plaintiff's counsel.
If, then, the new contract pleaded was entered into at any time, it must have been made by Gordon Campbell as one party thereto and the syndicate, represented by some one competent to act for it, as the other party.
The record discloses that the original account was presented by Gordon Campbell, and this constituted a sufficient offer. If it were agreed to and acknowledged to be correct by the syndicate, then there was an acceptance of the offer, with the result that the account was stated and defendants cannot complain of the judgment. But it is axiomatic that a person cannot contract with himself. There must be the meeting of two separate and independent minds, at least two parties to a contract, and each must be competent. Section 7468, R. C. 1921.
It is the contention of the defendants that the plaintiff's own case discloses a want of competent parties to make the new contract pleaded and relied upon.
The defendant syndicate is not a legal entity. It is merely a voluntary association of individuals-a business trust. The title to the property in which the individuals, as unit holders, are interested, is held by a board of trustees consisting of three persons, at least two of whom must concur in order to render valid any act done by or on behalf of the syndicate. The declaration of trust so provides, and its provisions measure the powers of the trustees so far as we are concerned now. Section 7914, R. C. 1921. The representatives of the individuals are trustees of an express trust (section 7902, R. C.), and the individuals as unit holders are the beneficiaries (section 7881, R. C.).
But the trustees are not merely agents who act independently one of another. They constitute a board, and they can act only as a unit (section 6789, R. C.) in the disposition of any business of the trust which requires the exercise of judgment or discretion ( Coleman v. Connolly, 90 N.E. 278, 242 Ill. 574, 134 Am. St. Rep. 347; Hosch Lumber Co. v. Weeks, 51 S.E. 439, 123 Ga. 336; Sears' Trust Estates as Business Companies, § 132; Dunn on Business Trusts, §§ 97, 98).
The relationship existing between the trustees and the beneficiaries is somewhat analogous to, but is of a more confidential character than, that existing between the directors of a corporation and the corporation itself ( Tatem v. Eglanol Min. Co., 113 P. 295, 42 Mont. 475), and it is elementary that a corporation acts through its board of directors as an entity and not through the individuals who may happen to compose the board (Farrell v. Gold Flint Min. Co., 80 P. 1027, 32 Mont. 416).
If the contract, the account stated, was ever made at all, it was made on March 4 or April 12, 1924, and on each of those dates ...
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