Kahn v. Hamilton

EmeRsoN, J.,

delivered the opinion of the court. ,

The contracts sued on were not made by the defendants in person, but by one Charles W. Cook, as agent. He had no agency from them except as trustees, and hence to be binding on the defendants, these contracts must appear to have been made in the exercise of powers which the defendan fcs, as trustees, were not only authorized to grant, but actually did confer.

They were clothed with two distinct trusts, and executed to Cook a separate power of attorney, to act for them in Utah in respect to each.

*119This first trust was under a trust deed from an English corporation, called the Mammoth Oopperopolis of Utah (limited), securing debenture bonds held in England. The property embraced in that deed was mining property, situated in this Territory, which the company had owned and operated. The deed contained an express declaration of the trust, and particular directions how it should be executed, providing for taking possession in a certain event, an option to work the mine on certain terms, and upon default and request of debenture holders they were required to make a sale.

The corporation was largely indebted to various persons in Utah, and a second fund was proposed to be subscribed to be used for the purpose of retiring such debts. The loan so made was intended finally to be secured by new debenture bonds and a second mortgage.

"When about $30,000 had been subscribed for this object by persons who were stockholders in the company and others, they constituted the defendants their trustees to administer it according to a precise plan, and Cook was appointed their agent to carry it out. He was sent to Utah with explicit instructions, the general purport of which was to negotiate with the Utah creditors, to whom the floating debt was owing, for the purchase of their debts, if they could be bought for a specified part of the subscribed sum. The money by this plan, and these instruction s. was to be invested in these debts, as a present security to the subscribers, until the plan should be so far worked out that the other and ultimate security by a second series of debentures and a trust deed could be made.

Their agent paid out all the money in purchasing one secured debt on which the company’s mine had been sold, in satisfying others unsecured, and in sundry expenses, and working the mine; and he made the promises sued on in respect to other debts, which the subscribed fund was not adequate to pay or purchase.

An examination of the powers of attorney satisfies us that all the operations of Cook in Utah, touching the local debts *120of the company, must be attributed to the agency he assumed, and for a different line of conduct possessed for the defendants as trustees of the subscribed fund. He had no power whatever from the defendants as trustees of the debenture creditors to deal with the creditors of the company in Utah for any purpose. And as agent for the investment of the subscribed fund, he had no power or authority to make the contracts in question.

Note. — See the case of Mathews v. Hamilton, ante, and the case of Wolf v. Hamilton, post. Repórter.

The trust only embraced the fund subscribed; and as trustees they could neither make, nor authorize to be made, any valid contract for the payment of an additional sum. Nor for any action in excess of Cook’s or their own authority, under color of one power of attorney or trust, could the defendants be made liable in their other fiduciary capacity.

As this view disposes of the cases, it is not necessary to consider the other questions which were discussed.

Judgment reversed, with costs.

BoeemaN, J., concurs.