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129 Mass. 150

Everett v. Drew

Massachusetts Supreme Judicial Court · decided 1880-07-01

<p>If a person, acting as trustee for others, makes a contract in his own name, his cestuis que trust are not liable thereon, although the fact that he is a trustee is not known to the person with whom he makes the contract at the time it is made.</p> <p>If a declaration alleges that a contract was made by A., as agent for the defendant, and sets forth facts which show that A. was not an agent, a demurrer to the declaration does not admit the fact of agency.</p>

Key passage — most relied on by later courts

““It is true that the declaration alleges that Drew was the agent of the defendants. But it also alleges the specific facts which show the relations between the parties, and those facts show that he was not an agent. The allegations that he was an agent must be regarded as mere allegations of a conclusion of law which are not sustained by the facts. The defendants’ demurrer was therefore rightly sustained.””

quoted by 1 later decision, including Lovell v. Marshall

Good law ✅— No negative treatment on recordhow we know

Decided 1880-07-01

How this case has been cited

Cited by 8 later decisions — most recently July 1931

8 state decisions

30188018901900191019201930decided

Later decisions citing this case, by decade. The current decade is in progress, and our corpus holds fewer opinions from the most recent years, so the latest bars are undercounted — not a real decline.

View the full empirical analysis of this case →

Morton, J.

¶1This is an action of contract, and the substantial allegations of the plaintiff’s declaration are, that the defendants made an arrangement with Elijah C. Drew that he was to buy a parcel of land, to take the deed in his own name, and to execute a declaration that he held it in trust for the defendants, to pay a part of the consideration with money furnished by the defendants, and to give his own note and mortgage back for the balance thereof. The declaration also alleges that Drew *151purchased land of the plaintiff’s wife and other persons; that he paid therefor $10,000 with money furnished by the defendants; that the owners made a deed to him, and he, at their request, gave his note and a mortgage containing a power of sale to the plaintiff; that the plaintiff foreclosed said mortgage by a sale; that, after applying the proceeds of the sale, there remains a balance due on said note; and that the defendants owe the plaintiff the said balance and the interest thereon.

M. Williams & C. A. Williams, for the plaintiff.C. T. Russell & I. T. Drew, for the defendants, were not called upon.

¶2The plaintiff contends that Drew throughout the transaction and in giving the note acted as the agent of the defendants, and that, as the note is not a negotiable promissory note, he has the right to maintain an action on it against them as unknown and undisclosed principals.

¶3The general rule is well established that if an agent, acting for his principal, makes a contract without disclosing his principal, the latter is bound by the contract. Thomson v. Davenport, 2 Smith Lead. Cas. (5th Am. ed.) 358, and cases cited. He is bound because it is his contract made through another person. But this rule does not apply in the case at bar. Drew was not the agent of the defendants. He was not authorized to, and did not in fact, make any contract for and on behalf of them. He bought the land- and took the title, he gave the note and the mortgage, in his own name and for his own behalf as trustee. The relations between him and the defendants were not those of agent and principal, but of trustee and eestuis que trust. Such a relation is lawful, and, in the absence of fraud, does not render the eestuis que trust liable to suits at law upon contracts made by the trustee in his own name.

¶4It is true that the declaration alleges that Drew was the agent of the defendants. But it also alleges the specific facts which show the relations between the parties, and those facts show that he was not an agent. The allegations that he was an agent must be regarded as mere allegations of a conclusion of law which are not sustained by the facts. The defendants’ demurrer was therefore rightly sustained. Exceptions overruled.

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