Stauffacher v. Coadum Capital Fund 1, LLC, 344 S.W.3d 584 (Tex. App.—Houston [14th Dist. 2011, pet. denied).


Trust Intent


In a case involving alleged breaches of a joint-venture agreement, the defendant argued that he was not personally liable because he signed “as trustee” and thus would not incur personal liability under Trust Code § 114.084. For two reasons, the appellate court concluded that this action did not relieve the defendant of liability. First, merely signing an agreement “as trustee” and using the term “trustee” in the agreement does not create a trust. The parties intended to create a joint-venture, not a trust. Trust Code § 112.001. “A court has no authority to impose a trust unless the prerequisites of a trust are satisfied.” Stauffacher at 588. Second, even if a trust were involved, the exclusion of personal liability triggered by a signature “as trustee” applies not to the trustee’s liability to the parties to the trust (settlor and beneficiary) but rather to the trustee’s liability to third parties who are contracting with the trustee.

Moral: A court will not hold that a trust was created unless the parties actually manifested trust intent.