able latitude.1 Minnesota has adopted the same distinction.2 Misşouri also has held some duty necessary and a moral duty sufficient, but the latest decision inconsistently dispenses with the requirement. A suggestion of the sort is occasionally found in other states." The supposed necessity results from a confusion of the two distinct types of cases. The early New York cases bearing on the right of a creditor to sue one who promises the debtor to pay the debt recognized that the creditor's right was derivative and that it was by virtue of his claim against the debtor that he acquired a right to sue upon the promise to the debtor. But the requirement of a debt or duty is wholly inapplicable to contracts for the sole benefit of a third person. It might equally well be said that a gift should be invalid unless the donor was under a duty to make it. Moreover, whenever such a requirement is proper a moral obligation cannot suffice. When an obligation is of such a character that the obligee cannot enforce it directly against the obligor, it can no more furnish the basis for a right against one who has promised the obligor to pay the debt, than it could for the garnishment of a debt due to the obligor. In the first case cited as illustrating the New York rule it was true not only that the promisee was under no duty to the plaintiff, but also that the plaintiff was not intended by the promisee as the beneficiary of the contract. The benefit expected to result to the plaintiff was merely incidental to the general object of the contract. This was sufficient ground for the decision; but in the later cases where the doctrine was applied the result was needlessly to defeat an intended gift.

There are several recurring situations which illustrate the contract for the sole benefit of a third person. The commonest is the case already referred to of a life insurance policy for the benefit of another. This case may well be regarded as depending upon the nature of a policy of insurance as a mercantile instrument. At all events the insurance decisions form a class by themselves, and but little reference is made in them to the general law of con

1 Buchanan v. Tilden, 158 N. Y. 109; Knowles v. Erwin, 43 Hun 150, affd. 124 N. Y. 633; Whitcomb v. Whitcomb, 92 Hun 443; Babcock v. Chase, 92 Hun 264; Luce v. Gray, 92 Hun 599. In all these cases the promise was to pay money to a dependent relative.

2 See cases, p. 780, n. 5.

3 Phoenix Ins. Co. v. Trenton Water Co., 42 Mo. App. 118; Howsmon v. Trenton Water Co., 119 Mo. 304; St. Louis v. Von Phul, 133 Mo. 561; Devers v. Howard, 144 Mo. 671; Glencoe Lime Co. v. Wind, 86 Mo. App. 163.

4 Crone v. Stinde, 156 Mo. 262.

5 Sample v. Hale, 34 Neb. 220; Lyman v. Lincoln, 38 Neb. 794.

tracts. Presumably everywhere the beneficiary is given a right to enforce such a policy, and generally by a direct action. This result has been reached in England and Massachusetts by statute, but in most states without the aid of statute.1

Another common illustration arises on these or similar facts: A parent gives property to a son, who upon receiving it promises to make specified payments to daughters or others either at once or upon the death of the donor. There is properly no trust or even equitable charge, because it is contemplated that the son shall deal as he sees fit with the property transferred to him and pay the beneficiaries from any source he chooses. Courts are rightly almost universally unwilling to deny the beneficiaries a remedy in such a case.2 Even in England there are cases that have never been overruled, in which a beneficiary was allowed to recover in an action of debt against a devisee whose devise was left upon the condition that he should make a payment to the beneficiary. If the devisee accepts the gift he is personally liable to perform the duty which he thereby assumes, and his liability is not restricted to the value of the property he has received. So far as this question of

3

1 45 & 46 Vict. c. 75, § 11; Mass. Stats. 1887, c. 214, § 73; 1894, c. 225. (See Cleaver v. Mut. Reserve Fund Life Assoc., [1892] 1 Q. B. 147; Nims v. Ford, 159 Mass. 575; Wright v. Vermont Life Ins. Co., 160 Mass. 170.) Numerous authorities in other jurisdictions are collected in 3 Am. & Eng. Cyc. 980.

2 Beals v. Beals, 20 Ind. 163; Henderson v. McDonald, 84 Ind. 149; Waterman v. Morgan, 114 Ind. 237; Stevens v. Flannagan, 131 Ind. 122; Weinreich v. Weinreich, 18 Mo. App. 364; Knowles v. Erwin, 43 Hun 150; 124 N. Y. 633; Luce v. Gray, 92 Hun 599; Thompson v. Gordon, 3 Strobh. 196. See also Lawrence v. Oglesby, 178 Ill. 122.

Contra are Townsend v. Rackham, 143 N. Y. 516; Coleman v. Hiler, 85 Hun 547 (the promisee in these cases was under no moral duty to the beneficiaries); Guthrie v. Kerr, 85 Pa. 303 (conf. Hostetter v. Hollinger, 117 Pa. 606). Relief in an action at law was also denied in Baxter v. Camp, 71 Conn. 245, and Linneman v. Moross, 98 Mich. 178; but it was suggested that the plaintiff might have a remedy in equity.

8 Ewer v. Jones, 2 Ld. Ray. 937; 2 Salk. 415; 6 Mod. 26; Webb v. Jiggs, 4 M. & S. 119; Braithwaite v. Skinner, 5 M. & W. 313. In the last case it was said by some of the judges that the plaintiff's recovery would be restricted to the value of the land.

In this country the devisee is personally liable without restriction. Harland v. Person, 93 Ala. 273; Williams v. Nichol, 47 Ark. 254; Millington v. Hill, 47 Ark. 301; Lord v. Lord, 22 Conn. 595; Olmstead v. Brush, 27 Conn. 530; Zimmer v. Sennott, 134 Ill. 505; Porter v. Jackson, 95 Ind. 210; Owing's Case, 1 Bland 370; Felch v. Taylor, 13 Pick. 133; Bacon v. Woodward, 12 Gray 376, 382; Adams v. Adams, 14 Allen 65; Prentice v. Brimhall, 123 Mass. 291, 293; Smith v. Jewett, 40 N. H. 530, 535; Wiggin v. Wiggin, 43 N. H. 561; Glen v. Fisher, 6 Johns. Ch. 33; Gridley v. Gridley, 24 N. Y. 130; Loder v. Hatfield, 71 N. Y. 92; Brown v. Knapp, 79 N. Y. 136; Yearly v. Long, 40 Ohio St. 27; Flickinger v. Saum, 40 Ohio St. 591; Hoover v. Hoover, 5 Pa. 351; Etter v. Greenwalt, 98 Pa. 422; Dreer v. Pennsylvania Co.,

personal liability is concerned these cases present quite as much difficulty in principle as the cases where the gift is made inter

vivos.

In most jurisdictions no distinction is made when the promise is based on valid consideration other than a transfer of property; for instance, services or forbearance of a claim.1

It is a common stipulation in a building contract that the contractor will pay all bills for labor and materials. In most cases the fulfilment of this promise by the contractor operates to discharge a liability of the owner of the building, whose building would be liable to satisfy the liens given by the law to workmen and materialmen. It cannot, therefore, be inferred that the promisee requires the promise in order to benefit such creditors of the contractor. The natural inference is that his object is to protect himself or his building. When, however, the owner of the building is a municipality, or county, or state, such an inference cannot so readily be justified, for the laws give no liens against the buildings of such owners. In such cases if the stipulation can be regarded as the result of more than the accidental insertion of a provision common in building contracts without reflection as to its necessity, it must be supposed that the object was to benefit creditors of the contractor. This supposition becomes a certainty when the legislature in view of litigation in the courts in regard to the matter enacts that all building contracts made by towns or counties shall contain such a stipulation. Creditors have in some states been allowed not only to take advantage of the promise but to sue the contractor and his sureties upon a bond given by him to secure the performance of his contract.2

108 Pa. 26; Jordan v. Donahue, 12 R. I. 199; Hodges v. Phelps, 65 Vt. 303; Taliaferro v. Day, 82 Va. 79.

1 Allen v. Davison, 16 Ind. 416; Marcett v. Wilson, 30 Ind. 240; Strong v. Marcy, 33 Kan. 109; Clarke v. McFarland's Exec., 5 Dana 45; Benge v. Hiatt's Adm., 82 Ky. 666; Felton v. Dickinson, 10 Mass. 287 (overruled by Marston v. Bigelow, 150 Mass. 45); Todd v. Weber, 95 N. Y. 181; Buchanan v. Tilden, 158 N. Y. 109; Whitcomb v. Whitcomb, 92 Hun 443; Babcock v. Chase, 92 Hun 264.

See also Lawrence v. Oglesby, 178 Ill. 122.

But in Pennsylvania, though the promise is perhaps enforceable by the beneficiary when the consideration is the transfer of property, it is not if the consideration is anything else. Edmundson v. Penny, 1 Barr 334. See also Washburn v. Interstate Investment Co., 26 Oreg. 436.

2 Baker v. Bryan, 64 Ia. 561 (but see Hunt v. King, 97 Ia. 88); St. Louis v. Von Phul, 133 Mo. 561 (overruling Kansas City Sewer Pipe Co. v. Thompson, 120 Mo. 218); Devers v. Howard, 144 Mo. 671; Glencoe Lime Co. v. Wind, 86 Mo. App. 163; Sample v. Hale, 34 Neb. 220; Lyman v. Lincoln, 38 Neb. 794; Doll v. Crume, 41 Neb. 655; Korsmeyer Co. v. McClay, 43 Neb. 649; Kaufmann v. Cooper, 46 Neb. 644;

A somewhat similar case arises where a water company contracts to furnish water sufficient to supply the hydrants of a town or district, and the failure of the water company to keep its promise to the town results in the destruction of a building by a fire which might have been extinguished but for the lack of water. The owner of the house is not generally allowed to sue on such a promise. Though the town or district which is the promisee, not being itself liable for the lack of water or for the destruction of the building, has no pecuniary interest in the performance of the promise, yet it may be doubted whether the stipulation was exacted for the benefit of such people as might have their buildings destroyed from lack of water. It is a more reasonable construction that the object of the promise is to benefit the community as a whole. Whatever may be the reason, the plaintiff is not usually allowed to recover in such cases.1

A telegraph company's contract made with the sender of a telegram to deliver it to the person addressed is sometimes treated as a contract made for the sole benefit of the latter, who is allowed to sue for this reason.2 In some cases this construction is fair enough, but senders of telegrams perhaps more frequently are seeking objects of their own rather than the benefit of another.

One of the numerous ways of making out a fictitious consideraHickman v. Loyal, 47 Neb. 816; King v. Murphy, 49 Neb. 670; Rohman v. Gaiser, 53 Neb. 474; Pickle Marble Co. v. McClay, 54 Neb. 661. Contra, Jefferson v. Asch, 53 Minn. 446; Union Ry. Storage Co. v. McDermott, 53 Minn. 407; Buffalo Cement Co. v. McNaughton, 90 Hun 74; 156 N. Y. 702; 157 N. Y. 703; Parker v. Jeffery, 26 Oreg. 186; Brower Lumber Co. v. Miller, 28 Oreg. 565. See also Montgomery v. Rief, 15 Utah 495.

An action on the bond presents the difficulty that the plaintiffs not only are not the promisees, but are not the payees. The promise is to pay the penalty of the bond, not to the creditors, but to the town or county. This difficulty is not much alluded to in the cases. See, however, Jefferson v. Asch, and Buffalo Cement Co. v. McNaughton, supra.

1 Boston Safe Deposit Co. v. Salem Water Co., 94 Fed. Rep. 240; Nickerson v. Bridgeport Hydraulic Co., 46 Conn. 24; Fowler v. Water Co., 83 Ga. 219; Davis v. Water Works, 54 Ia. 59; Becker v. Keokuk Water Works, 79 Ia. 419; Phoenix Ins. Co. v. Trenton Water Co., 42 Mo. App. 118; Howsmon v. Trenton Water Co., 119 Mo. 304; Eaton 7. Fairbury Water Works, 37 Neb. 546; Ferris v. Carson Water Co., 16 Nev. 44; Wainwright v. Queens County Water Co., 78 Hun 146; 3 Lea 45. Contra, Paducah Lumber Co. v. Paducah Water Supply Co., 89 Ky. 340.

2 Western Union Tel. Co. v. Hope, 11 Ill. App. 291 (but see Western Union Tel. Co. v. Dubois, 128 Ill. 248); Western Union Tel. Co. v. Fenton, 52 Ind. 3 (statutory); Markel v. Western Union Tel. Co., 19 Mo. App. 80 (statutory); Aiken v. Western Union Tel. Co., 5 S. C. 371; Western Union Tel. Co. v. Jones, 81 Tex. 271. The cases allowing a right of action, based on various reasons, are collected in Joyce on Electric Law, § 1008.

tion for charitable subscriptions is to regard the promises of the subscribers as mutual promises to pay the beneficiary, who is then allowed to sue as on a contract made for its benefit.1 In fact, in such subscriptions the promise, on a fair construction, almost always runs directly to the beneficiary or to trustees representing it.

In a recent New Jersey case the beneficiary was undetermined when the contract was made. The defendant contracted to pay $750 to the owner of the foal by the defendant's stallion that first trotted a mile in 2.30. The plaintiff who answered the description was allowed to sue on the contract though not a party to it.

3

A decision in Indiana 3 presents the rather unusual case of the enforcement by injunction of a promise for the benefit of a third person. The defendant as lessee of certain premises had covenanted with the lessor to sell on the premises no beer except that manufactured by the plaintiff company. The lessor was a relative of stockholders in the company, but had no pecuniary interest in the matter. The company was granted an injunction to enforce the covenant.4

It is in regard to contracts to discharge a debt of the promisee that the greatest confusion prevails. In the first place the intrinsic difficulty of the case is greater than where the third person is the sole beneficiary of the contract. Trust, agency, novation, must here be carefully distinguished, and the facts may not clearly indicate in which class a particular case belongs, since the parties may not have sufficiently expressed any intention. Further, it is in this class of cases that the reasoning of the courts is most artificial. New York by the decision of Lawrence v. Fox5 has done more than any other jurisdictions to spread and strengthen the theory that a third person can sue on such a contract. In a later case the New York court said:

6

1 Rogers v. Galloway Female College, 64 Ark. 627; Wilson v. First Presbyterian Church, 56 Ga. 554; Irwin v. Lombard University, 56 Ohio St. 9, 20. See also Hale v. Ripp, 32 Neb. 259; Roberts v. Cobb, 31 Hun 150; Parsons, Contracts, 8th ed., 468 seq. Contra is Curry v. Rogers, 21 N. H. 247. A curious case where the promises actually were by the subscribers to each other is New Orleans St. Joseph's Assoc. v. Magnier, 16 La. Ann. 338. A number of hatters agreed to close their shops on Sunday. For any breach it was agreed that the offender should pay the plaintiff $100. The plaintiff was not allowed to recover because its benefit was not the object of the

contract.

2 Whitehead v. Burgess, 61 N. J. L. 75.

3 Ferris v. American Brewing Co., 155 Ind. 539.

4 And in Chicago, etc., R. R. v. Bell, 44 Neb. 44, an agreement not to sue a third person was effectively used as a bar to an action against the latter. See also Ayer's

Appeal, 28 Pa. 179.

620 N. Y. 268

6 Simson v. Brown, 68 N. Y. 355, 361.