BILLS AND NOTES -"MASSACHUSETTS" TRUST- LIABILITY OF TRUSTEE UNDER SECTION 20 OF THE N. I. L

Authors

Abstract

Plaintiff sued the trustee of a realty business trust in his personal capacity on three notes signed by him as follows: "Robert J. Smith, Trustee of Fair Haven Estates." The notes were given in payment of the purchase price of certain land sold by the plaintiff to the defendant, which was secured by a purchase money mortgage. The indenture of trust under which the business was carried on, and which was recorded, provided that all persons who did business with the organization should look only to the trust funds for reimbursement, and neither the trustee nor the shareholders should be personally liable. Plaintiff's attorney had been employed to draw this trust indenture, and furthermore, he had received plaintiff's warranty deed conveying the land for which the notes were given, which with the mortgage which the attorney received from the defendant referred to the grantee and mortgagor respectively as trustee under the above recorded indenture. The court in affirming a directed verdict for the defendant below, without expressly mentioning Section 20 of the N. I. L., held, that while it might be contended that the representative words here used were only descriptio personae, nevertheless parol evidence was admissible between the original parties to show that they did not intend the trustee to be personally liable, and that, furthermore, since the attorney was the plaintiff's agent and had actual knowledge of the limitations imposed by the trust indenture, the plaintiff's rights were limited to the trust estate accordingly. Brown v. Smith, (C. C. A. 2d, 1934) 73 F. (2d) 524.

Recommended Citation

BILLS AND NOTES -"MASSACHUSETTS" TRUST- LIABILITY OF TRUSTEE UNDER SECTION 20 OF THE N. I. L, 34 Mich. L. Rev. 121 (1935).
Available at: https://repository.law.umich.edu/mlr/vol34/iss1/14