Zimmer Construction Co. v. White

CRAIL, J.

This is an appeal from a judgment against the plaintiff rendered after the sustaining of a demurrer without leave to amend. The demurrer was interposed to the second amended complaint by the defendant W. H. Douglass.

The allegations of the complaint are sufficient to state a cause of action against the respondent unless it be for the reason that the plaintiff, in setting forth the facts upon which he relies, alleges that the building for the construction of which the parties were contracting was to be built upon a certain piece of real property the title to which was in the name of the respondent as trustee. The contention of the respondent is that since he is merely a trustee of the real property he is not personally liable under the contract. There is no merit in this contention, for two reasons: First, the allegation of the complaint is that “the defendant W. H. Douglass [respondent] acting on behalf of himself” entered

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into the contract; and second, even if the respondent had signed a contract “as trustee” still he would be liable individually unless he had stipulated that he was not to be personally responsible. This is the rule as between the trustee and third persons even where the terms of the trust agreement exempt the trustee from personal liability.

(Goldwater

v.

Oltman,

210 Cal. 408 [292 Pac. 624, 71 A. L. R. 871], and cases cited.) In that ease the Supreme Court quoted with approval from the case of

Taylor

v.

Davis,

110 U. S. 330 [4 Sup. Ct. 146, 28 L. Ed. 163], as follows: “A trustee is not an agent. An agent represents and acts for his principal. . . . When an agent contracts in the name of his principal, the principal contracts and is bound, but the agent is not. 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. . . . He is personally bound by the contracts he makes as trustee, even when designating himself as such. ... If a trustee contracting for the benefit of the trust wants to protect himself from individual liability on the contract, he must stipulate that he is not to be personally responsible, but that the other party is to look solely to the trust estate. ’ ’ Por a recent expression of this court to the same effect see