Sanborn v. Neal

| Minn. | Jul 15, 1860

Emmett, C. J.

By the Court. This case turns mainly upon tbe question, whether the Court below erred in holding that parol evidence might be received to show that the Defendants executed the note on which the action is brought in their official capacity, as the Trustees of School District No. 10, in Rice county, and not as individuals. That the note was given not for their own debt, but the debt of the district; that it was the intention of the parties to bind the district only — and that it was so understood by the Plaintiff at the time, and the note received by him as the note of the district.

The decision of the Courts of the various States upon the questions here involved, have been so conflicting and discordant, that authorities are not wanting to sustain either side of the question. "We are not surprised therefore, at the degree of confidence with which counsel have maintained their respective views.

The jury having found for the Defendants, we are to presume that the facts involved are as stated in the answer, and that therefore the note in controversy was in fact made under the circumstances, for the purposes, with the intent and upon the consideration therein alleged. If then the Defendants intended to charge the district and not themselves, and the Plaintiff’s intention also, was to obtain not the security of the Defendants iudividually, but the security of the district, it becomes the duty of the Court to carry out these intentions of the parties, if it can be done without violating a positive rule of law — for it is observable that notwithstanding the various and apparently contradictory decisions cited, the intention of the parties is recognized in every one of them as affording the true rule for interpreting the contract. If the intention of the parties to this contract, as ascertained by the jury, is not inconsistent with, or may de distinctly derived from a fair and rational interpretation of the words actually used, it will be taken as the meaning of the language used in the note. Let us apply this test to the note in controversy, which is in the following terms:

“ $1,116 66. One year from date, we as Trustees of School District No. 10, in Pice county, and Territory of Minnesota, promise to pay John Sanborn or bearer, the sum of one thous- and, one hundred and forty-six and 66-100 dollars, with interest at the rate of four per cent, per month until paid, for value received. Dated Cannon City, Pice county, this 11th day of October, 1851. Signed,

William Neal,

William B. Sanborn,

John Bailor.”

This language, if it does not show conclusively that the makers did not intend to promise in their individual capacity, at least renders it doubtful as to the nature of their promise ; and in such a case it appears to us that the doubt could best be solved by ascertaining the actual intention from the surrounding circumstances, the debt for which the note was given, the object sought to be attained by the arrangement, the declarations of the parties at the time in the presence of each other, and the disposition made of the money for which the note was given.

This was the course adopted by the Court below, and the evidence submitted was abundantly sufficient to justify the verdict. It was shown that the Defendants were Trustees of the school district named. The district had contracted debts for which the Trustees were anxious to provide. These debts had been contracted before the Defendants went into office. Part was due to the Plaintiff, who was Clerk of the Board, and had been a director when the debts were contracted. It was determined by the new board to borrow money to pay these debts on the security of the property belonging to the district. Applicaton was made to a Mr. Tripp, but he declined the security offered. It was then arranged that the Plaintiff should himself borrow the money of Tripp on his own account, and accept the security which Tripp had declined. The money was obtained pursuant to this arrangement, and the Defendants signed the note in question, which, together with a mortgage on the property of the district to secure the same, was drawn up for the Defendants to execute at the instigation of the Plaintiff. When the several papers were ready for signature, the Defendants expressly stated in the presence and hearing of the Plaintiff that they did not intend making themselves individually liable for the payment of the note, but signed the same with the express understanding that they were promising in their official capacity only ; and the only question that then arose, was, not whether they should give their note as individuals, but whether (they having doubts about their right to bind the district by such proceedings) they might not be held individually responsible in law, notwithstanding they were acting in their official capacity merely, if it should eventually be determined that they were not authorized by law to make the arrangement on behalf of the district. These doubts however were dissipated by the legal opinion of the person whom the Plaintiff had employed to draw up thepapers, and the money was obtained from Tripp and remained in the hands of the Plaintiff, who paid it out upon the debts of the district at his own discretion, without any portion of it ever passing to the hands of the Trustees. Under such a state of facts, the injustice of holding the Defendants liable in their individual capacity is manifest.

The Defendants hówever expressly say, in the body of the note, that they promise as Trustees of the district. Could they have used language more explicit ? Is it at all inconsistent with the intention alleged and proved? Would it have made this intention any more apparent, had the Defendants added to their signatures the words “ Trustees,” or “ as Trustees” of the district ? The Plaintiff’s counsel virtually admitted by the argument, that had these words been appended to their signatures, the intention of the Defendants to be held in their official capacity only would have been-manifest, even although the note itself was silent on the subject. But we do not think it would have so plainly indicated this intention as the language actually used in the body of the note.

To write out at length the legal effect of such a signature would be but to repeat the very language of the note itself, and as tbe primary object, in all cases, is to ascertain what the parties really intended to declare by the language used, it should make no material difference whether this intention appears in the signature or the body of the instrument.

We do not think that the defence set up in this case, is. at all inconsistent with a rational interpretation of the terms of the note. As before remarked, it is at least doubtful in what capacity the Defendants promised, and where the interpretation is doubtful, the intention of the parties .furnishes the only sure criterion.

Another position assumed by the Plaintiff, is that the Defendants had no authority to bind the district by such a contract, and having failed to render their principal liable on the note, they are themselves obliged to pay it.

There is abundant authority for a general proposition of this sort, but there is also an admitted exception, in favor 'of public agents, acting within the scope of their general powers.

It is not thought necessary to decide or discuss whether the Defendants were authorized to make this note on behalf of the distinct, nor whether the district has not, since the making thereof, so far ratified the act of the Trustees as to become liable to the Plaintiff in any event. We are satisfied that Trustees of school districts are public agents, within the meaning of the exception to the rule above referred to. 15 Pick. 35; 18 John. 124; 3 Conn. 564; 10 Conn. 338; 14 Conn. 248; 21 id. 627; 22 id. 379; 1 Cranch, 345" court="SCOTUS" date_filed="1803-03-18" href="https://app.midpage.ai/document/hodgson-v-dexter-84774?utm_source=webapp" opinion_id="84774">1 Cranch, 345. When public agents, in good faith, contract with parties having full knowledge of the extent of their authority, or who have equal means of knowledge with themselves, they do not become individually liable, unless the intent to incur a personal responsbility is clearly expressed, although it should be found that through ignorance of the law they may have exceeded their authority. In the whole list of cases cited to this point there is not a reason given for this doctrine, which does not apply with full force to Trustees of school districts and all other officers acting on behalf of the public, whether they act for the public at large, or that portion only embraced in a particular district. In this as in all other cases, the intention of the parties governs, and when a person, known to be a public officer, contracts with reference to the public matters committed to his charge, he is presumed to act in his official capacity only, although the contract may not in terms allude to the character in which he acts, unless the officer by unmistakable language assumes a personal liability, or is guilty of fraud or misrepresentation. Being a public agent with his powers and duties prescribed by law, the extent of his powers are presumed to be as well known to all with whom he contracts as to himself. "When therefore there is no want of good faith, a party contracts with such an officer with his eyes open, and has no one to blame if it should afterwards appear that the officer had not the authority which it was supposed he had. "Were the rule otherwise, few persons of responsibility would be found willing to serve the public in that large class of offices, which requires a sacrifice of time and perhaps money, but affords neither honor nor profit to the incumbent. "Where one acts as the agent of a private person the rule is different. There the authority is known only to the agent and his principal. He is therefore, with reason, held personally responsible, if he fails to bind his principal, because he is bound to know the extent of his authority, while the party with whom he contracts, is not presumed to know anything concerning it.

It is believed that the decision of these points- disposes of the various questions made on the argument. The rulings of the court below, and the charge to the jury were substantially according to the views here expressed. The questions however have not been without their embarrassments, for in the language of the opinion in Hewitt vs. Wheeler, and another, 22 Conn. 257. “ The books are full of cases upon this refined subject, and are burdened and overburdened 'with elaborate learning, not unfrequently more nice than wise, and show such embarrassing conflict of judicial opinion that one in search of the law is well nigh tempted to discard the whole that is written and follow the dictates of his own understanding.”

Judgment affirmed.

Justice Atwater dissents from the foregoing opinion.