110 Iowa 276 | Iowa | 1900
Lead Opinion
The superior court of the city of Keokuk appointed defendant as receiver of a stock of granite and marble owned by one John T. Grotty, and in the order; appointing him directed that he dispose of the same in the usual course of trade, subject to the orders of the court. The order further continues:’ “Said receiver is further empowered to take from the defendant, John T. Grotty, the orders for tombstones and monuments now in his hands, and to fill same, if in his discretion he shall see fit to do so. Said receiver is authorized to make such purchases of material and stock during the conduct of said business as he shall deem best. Said receiver shall at once make an inventory of the stock on hand, and the contracts which shall come into his hands from the defendant, John T. Grotty.77 Defendant relies on this as his authority for executing the notes in suit. The order was entered on February 23, 1893, and the notes were not executed until the fall of the yeai 1896 and the early spring of 1897. At the time these notes ■were executed, the necessity for the receivership had practically ceased, but defendant still continued to act in that
But it is said that both parties intended to bind the defendant as receiver, and not individually, and that the contract should be reformed to express the true agreement. Granting, for the purpose of the case, that that was the intent of the parties, yet it also appears that plaintiff intended to hold some one by the notes, and that it fully understood defendant had authority to act as receiver. As a general rule, equity will reform contracts entered into through mistake, so as to make them express the true agreement, and such reformation will be granted, although the mistake was purely of law. Lee v. Percival, 85 Iowa, 639; Smith v. Watson, 88 Iowa, 79; Trust Co. v. Swan, 100 Iowa, 722; Williams v. Hamilton, 104 Iowa, 428. These authorities, and others that might be cited, also hold that a note signed by one as agent will be reformed so as to make it the obligation of the principal. To this rule there are some exceptions growing out of the capacity in which the agent assumes to act. For instance, an executor or administrator' cannot, in the absence of authority given by the will of
Cases holding an agent liable who contracts without authority are numerous, and, almost without exception, the rule is that, if an executor, assignee, trustee, administrator, guardian, or receiver, enters into an executory contract on a new and independent consideration, he is personally bound thereby, although he may have intended to bind the estate- or fund in his hands. The law denies the authority of such person, and in this respect the case differs from one of pure agency. That distinction was made plain in the early case-of Winter v. Hite, supra. As he had no- authority to bind any person but himself, the notes are his, and he cannot have them reformed. That the parties may have intended to bind the funds in the hands of the receiver is not controlling. Under the facts disclosed, his contract is personal,, and no reformation can be had; for, if there was no responsible principal, there can be no- reformed contract.
Appellee relies on adjudications- from other states that with one exception are found to relate to a state of facts where there was a responsible principal, but both parties-were mistaken as to his actual authority. The exceptional case we do not think is sound, and we decline to follow it.
That the parties intended to make binding contracts there can be no doubt. To hold the defendant individually responsible is to follow the law as it is written, and -the-result is one they are conclusively presumed .to have apprehended. Defendant may charge the funds for the-amount recovered against him if the contracts were of benefit to the estate or funds in his hands. If he has distributed-the funds without talcing into account the notes in suit, it is a mistake from which the law will not relieve him. On the whole, the result that follows seems to be equitable, in view of the facts disclosed by the record, and we have no doubt that the proper application of legal principles accords with: the equities of the case. Plaintiff should have judgment for the amount of t-lie notes in suit. — Reversed.
Dissenting Opinion
(dissenting). — I do not concur in the conclusion of the majority, and my reasons, briefly stated, are-these: The receiver had authority to carry- on the business,.