Weber Engine Co. v. Barley

256 P. 803, 123 Kan. 665, 1927 Kan. LEXIS 322

• Court: Supreme Court of Kansas
• Decided: June 11, 1927
• Docket: No. 27,420
• Status: Published

Opinion

The opinion of the court was delivered by

Harvey, J.:

This is an action by a creditor against individual unit or certificate holders of the Olson Lease Syndicate, an association formed and operating under an agreement commonly called a business trust, a common-law trust, or a Massachusetts trust. Plaintiff seeks to hold such unit holders individually liable for the debts of the association. Defendants demurred to the petition. The trial court sustained the demurrer, and plaintiff has appealed.

In Weber Engine Co. v. Alter, 120 Kan. 557, 245 Pac. 143, after thorough consideration and the examination of former decisions, it was held:

“Under articles of association in form of declaration of trust, trustees and shareholders are individually liable for the association’s debts, notwithstanding attempted limitation of liability.” (Syl. ¶ 2.)

And in Linn v. Houston, ante, p. 409, 255 Pac. 1105, the question was again considered, and it was held:

“A common-law trust has none of the attributes of limited liability or freedom from personal liability which attach to limited partnerships or ordinary business corporations.” (Syl. ¶ 2.)

These decisions control the case before us and require that the judgment of the court below be reversed with directions to overrule the demurrer. It is so ordered.