Life insurance policies.

The Vermont court in Fairchild v. North-Eastern Life Asso. (1879) 51 Vt. 613, held that a beneficiary named in a life insurance policy under seal, who was not a party to the instrument, could maintain no action in his own name for breach of the covenant therein, since the law is well settled that suit upon instruments under seal must be brought in the name of the covenantee, even though the instrument may be expressly for the benefit of a third person, as there is not sufficient privity in law between such third person and the covenantor to enable him to maintain an action. To the same effect is Morrill v. Catholic Order of Foresters (1907) 79 Vt. 479, 65 Atl. 526.

So, as only parties to an instrument under seal may maintain suit upon it though it be for the benefit of another, an action of covenant cannot be maintained on a policy of insurance under seal entered into with an individual "as well in his own name as for, and in the name and names of, all and every other person and persons to whom the property insured does, may, or shall appertain," by anyone other than that individual with whom the contract was made. De Bolle v. Pennsylvania Ins. Co. (1839) 4 Whart. (Pa.) 68, 33 Am. Dec. 38. See also American Ins. Co. v. Insley (1847) 7 Pa. 223, 47 Am. Dec. 509.

And the beneficiary named in the certificate of a mutual benefit association cannot maintain an action on the certificate in his own name if it is under seal, notwithstanding a statute providing that beneficiary corporations may establish by assessment a fund "to be held by such association until the death of a member occurs, then to be forthwith paid to the person or persons entitled thereto, .

as it cannot be inferred from this language that the legislature intended to provide that an action to enforce such contract could be maintained by one who was not a party thereto, or that an action to enforce it could be brought both by the insured's representatives and by the beneficiary, but was intended only to provide a mode in

which the corporation should collect and disburse the fund, leaving the remedy for any failure to perform the contract as it before existed. Flynn v. Massachusetts Ben. Asso. (1890) 152 Mass. 288, 25 N. E. 716.

Nor can the beneficiary in a policy of life insurance on his father-in-law, under seal, maintain an action thereon, though he had paid the annual premiums on the policy. Flynn v. North American L. Ins. Co. (1874) 115 Mass. 449.

Contract to pay debt of another.

Under the rule supra II. a, a creditor cannot enforce a contract under seal made between his debtor and a third person, binding the latter to pay the debt. Johnson v. Foster (1846) 12 Met. (Mass.) 167; Robb v. Mudge (1860) 14 Gray (Mass.) 534; Forbes v. Thorpe (1911) 209 Mass. 570, 95 N. E. 955; McAlister v. Marberry (1844) 4 Humph. (Tenn.) 426.

And a mortgagee cannot enforce a stipulation or covenant in a deed or lease under seal by which the grantee or lessee contracts with the grantor or lessor to pay the mortgage debt. Smith v. Emery (1830) 12 N. J. L. 53; Crowell v. Currier (1876) 27 N. J. Eq. 152, affirmed in (1876) 27 N. J. Eq. 650; Mississippi C. R. Co. v. Southern R. Asso. (1871) 8 Phila. (Pa.) 107. See also Montague v. Smith (1816) 13 Mass. 396; Robbins v. Ayres (1847) 10 Mo. 538, 47 Am. Dec. 125. (The general question of the rights of a mortgagee against a grantee from the mortgagor, who has assumed payment of the mortgage, is discussed in an annotation in 21 A.L.R. 439 [Mortgage, § 46]).

Thus if, in a deed under seal, the grantee assumes and agrees to pay part of the purchase price, a mortgage against the property, an implied assumpsit arises in favor of the mortgagee, who may maintain an action of assumpsit in his own name against the grantee, and recover the mortgage debt, using the deed as evidence of the promise and the amount to be paid. Baldwin v. Emery (1897) 89 Me. 496, 36 Atl. 994.

And in Mississippi C. R. Co. v. Southern R. Asso. (1869) 4 Brewst. (Pa.) 79, in considering a provision of

a lease binding the lessee to pay and discharge certain debts of the lessor, upon maturity and demand of payment either by the lessor or the debtor, the court said that, as this was a covenant under seal, the action undoubtedly would have to be in the name of the covenantee, though it were exclusively for the benefit of the third party, and though the consideration moved from the latter. To the same effect is Strohecker v. Grant (1827) 16 Serg. & R. (Pa.) 237, where it was said that where a covenant is made by one for the benefit of another, the action must be brought in his name who made the covenant, and not in that of the person benefited thereby, though this is not so in assumpsit, as there the person for whose benefit the promise is made may support the action.

In Jenkins v. Morton (1825) 3 T. B. Mon. (Ky.) 28, the court held that it was a well-settled rule that where a covenant was given to one for the benefit of a third person, or stipulating that a sum of money shall be paid to such third person, the action must be brought in the name of the covenantee, who holds the legal interest, and cannot be maintained by such third person.

c. Statutory changes.

The right of a third person to sue upon a contract under seal may be expressly provided for by statute, though, of course, unless the statute has received judicial interpretation with respect to the right to sue upon sealed instruments, in a reported decision disclosing its existence, it will not be brought to the attention of the reader. One interested in this question should, therefore, satisfy himself that there is no local statute governing the right to sue.

In New Jersey the rule permitting a third party not named in a simple contract to maintain an action thereon in his own name if the contract is for his benefit has been extended by statute to contracts under seal. Styles v. F. R. Long Co. (1904) 70 N. J. L. 301, 57 Atl. 448; People's Bank & T. Co. v. Weidinger (1906) 73 N. J. L. 433, 64 Atl. 179; Holt v. United Secur. L. Ins.

& T. Co. (1909) 76 N. J. L. 585, 21 L.R.A. (N.S.) 691, 72 Atl. 301; Chambers v. Philadelphia Pickling Co. (1910) 79 N. J. L. 1, 75 Atl. 159, writ of error dismissed in (1911) 81 N. J. L. 388, 79 Atl. 273; Tapscott v. McVey (1911) 82 N. J. L. 35, 81 Atl. 348, affirmed in (1912) 83 N. J. L. 747, 85 Atl. 343. See also Burt v. Brownstone Realty Co. (1921) 95 N. J. L. 457, 112 Atl. 883,

This statute provides in substance that any person for whose benefit the contract is made, whether such contract be under seal or not, may maintain an action thereon, notwithstanding the consideration that such contract did not move from him. See Chambers v. Philadelphia Pickling Co. 79 N. J. L. 1, 75 Atl. 159, writ of error dismissed in (1911) 81 N. J. L. 388, 79 Atl. 273.

The sole test of the right to maintain the action under the statute is whether or not the contract between two parties, by the terms of which one agrees to pay a debt which the other owes to a third party, is for the benefit of such third party. Ibid.

But this statute was never intended to go so far as to permit a suit upon a contract to be maintained by persons with whom the parties to the contract never meant to enter into contractual relations; it is not enough that the plaintiff may be benefited by the performance, but he can only maintain an action when the contract is made expressly for him. Styles v. F. R. Long Co. (N. J.) supra.

And in Illinois a change from the rule originally adopted in that state, that the right of a third party to sue on a contract made for his benefit does not extend to permit the enforcement of contracts under seal, has been changed by statutory enactments permitting sealed instruments to be sued upon in any form of action they might have been sued upon had they not been under seal. Dean v. Walker (1882) 107 III. 540, 47 Am. Rep. 467; Harms v. McCormick (1889) 132 Ill. 104, 22 N. E. 511, contra; Webster v. Fleming (1899) 178 Ill. 140, 52 N. E. 975; Harts v. Emery (1900) 184 Ill. 560, 56 N. E. 865; American Splane Co. v. Barber

based upon the McCormick Case (Ill.) supra, cannot be deemed of any force in Illinois.

d. New York cases.

New York courts in a number of cases have repeatedly said that the rule that a simple contract made for the benefit of a third party may be enforced by such third person in his own name does not apply to instruments under seal; that no one but a party to a contract under seal may sue upon it. Spencer v. Field (1833) 10 Wend. 87; Tylee v. M'Lean (1833) 10 Wend. 374; Henricus v. Englert (1893) 137 N. Y. 488, 33 N. E. 550; Case v. Case (1911) 203 N. Y. 263, 96 N. E. 440, Ann. Cas. 1913B, 311; Nevins v. Gardner (1877) 1 N. Y. City Ct. Rep. 407; Smith v. Pierce (1899) 45 App. Div. 628, 60 N. Y. Supp. 1011; Williams v. Magee (1902) 76 App. Div. 512, 78 N. Y. Supp. 550, affirmed in (1903) 177 N. Y. 534, 69 N. E. 1133; Ivy Courts Realty Co. v. Barker (1911) 71 Misc. 460, 128 N. Y. Supp. 715; Buge v. Newman (1908) 61 Misc. 84, 113 N. Y. Supp. 198, affirmed in (1909) 132 App. Div. 928, 118 N. Y. Supp. 1097; Barzilay v. Lowenthal (1909) 134 App. Div. 502, 119 N. Y. Supp. 612; Cleary v. Heyward (1910) 123 N. Y. Supp. 334; Weber v. Columbia Amusement Co. (1914) 160 App. Div. 835, 146 N. Y. Supp. 53 (dictum); O'Grady v. Howe & R. Co. (1915) 166 App. Div. 552, 152 N. Y. Supp. 79 (dictum); Zimmerman v. Goodman Mortg. & Realty Co. (1921) 191 N. Y. Supp. 698 (dictum). See also Denike v. De Graaf (1895) 87 Hun, 61, 33 N. Y. Supp. 1015, affirmed without opinion in (1897) 152 N. Y. 650, 47 N. E. 1106; Re Bishop (1915) 89 Misc. 355, 151 N. Y. Supp. 768; O'Brien v. Clement (1916) 160 N. Y. Supp. 975. On the other hand, there are decisions of courts of this state (one of them, as will be observed, a decision of the court of last resort) the correctness of which has never been questioned, that the same rule applies with respect to the right of a third party to sue upon a contract under seal as applies to his right to sue upon a simple contract to which he was not a party. Coster v. Albany (1871) 43 N. Y. 399;

Riordan V. First Presby. Church (1893) 6 Misc. 84, 26 N. Y. Supp. 38, appeal denied in (1894) 7 Misc. 744, 27 N. Y. Supp. 1123; Vulcan Iron Works v. Pittsburg-Eastern Co. (1911) 144 App. Div. 827, 129 N. Y. Supp. 676; Smart Set Specialty Clothing Co. v. Franklin Knitting Mills (1920) 191 App. Div. 33, 180 N. Y. Supp. 821. See also Burr v. Beers (1861) 24 N. Y. 178, 80 Am. Dec. 327; Durnherr v. Rau (1892) 135 N. Y. 219, 32 N. E. 49; Lockwood v. Smith (1913) 81 Misc. 334, 143 N. Y. Supp. 480.

However, the New York courts have consistently applied the rule denying third parties the right to sue on sealed instruments made for their benefit, in actions by undisclosed principals on contracts under seal entered into by their agents. Briggs v. Partridge (1876) 64 N. Y. 357, 21 Am. Rep. 617; Henricus v. Englert (1893) 137 N. Y. 488, 33 N. E. 550; Smith v. Pierce (1899) 45 App. Div. 628, 60 N. Y. Supp. 1011; Ivy Courts Realty Co. v. Barker (1911) 71 Misc. 460, 128 N. Y. Supp. 715; Buge v. Newman (1908) 61 Misc. 84, 113 N. Y. Supp. 198, affirmed in (1909) 132 App. Div. 928, 118 N. Y. Supp. 1097; Cleary v. Heyward (1910) 123 N. Y. Supp. 334. See also O'Brien v. Clement (1916) 160 N. Y. Supp. 975; Van Ingen v. Belmont (1923) 121 Misc. 109, 200 N. Y. Supp. 847.

The rule is not affected by the fact that the word "agent" is added to the signature to the instrument; the agent remains the real party in interest. Buge v. Newman (1908) 61 Misc. 84, 113 N. Y. Supp. 198, affirmed in (1909) 132 App. Div. 928, 118 N. Y. Supp. 1097; Cleary v. Heyward (1910) 123 N. Y. Supp. 334.

In Briggs v. Partridge (1876) 64 N. Y. 357, 21 Am. Rep. 617, after pointing out that the real question was whether a vendor in a sealed executory agreement inter partes could enforce it as a simple contract of a person not mentioned or a party to the instrument, on proof that the vendee, who had signed and sealed it as his contract, had oral authority from such third person to enter into the contract for the purchase, the court said: "A seal has lost most of its former significance, but the

(1902) 194 Ill. 171, 62 N. E. 597, affirming (1900) 91 Ill. App. 359; Hume v. Brower (1887) 25 Ill. App. 130; Gridley v. Bayless (1892) 43 Ill. App. 503, contra; Home Library Asso. v. Witherow (1893) 50 Ill. App. 117; Robinson v. Holmes (1898) 75 Ill. App. 203, affirmed on rehearing in (1899) 82 Ill. App. 307; Hillsboro Bldg. & Improv. Asso. v. Simmering (1898) 75 Ill. App. 647, contra; Abbott v. Scotten (1906) 127 Ill. App. 58; Torpe v. Jahn (1913) 177 Ill. App. 85; Citizens Trust & G. Co. v. Peebles Paving Brick Co. (1917) 174 Ky. 439, 192 S. W. 508 (bond).

The first decision of the Illinois court in Dean v. Walker (Ill.) supra, construing the Illinois statute declaring that any deed, bond, or covenant or other instrument under seal, may be sued and declared upon in any form of action in which the instrument might have been sued upon had it not been under seal, to give a third person the right to sue upon a contract under seal, made for his benefit, was characterized as mere obiter dictum in Harms v. McCormick (1889) 132 Ill. 104, 22 N. E. 511; and it was held in the McCormick Case that the rule that a covenant cannot be sued upon by the person for whose benefit it is made if he is not a party to the deed, but the suit must be brought in the name of the person with whom the covenant is made, was not abrogated by the statute. This court was of the opinion that the statute only extended the right of set-off, and allowed recovery upon sealed instruments in form of actions other than those wherein such recovery might have been had prior to that statute; that it did not purport to abolish all distinctions between sealed and unsealed instruments, or give a right of action that did not exist, but merely provided additional forms of actions for the enforcement of rights predicated upon sealed instruments.

But the Walker Case was reaffirmed and the McCormick Case repudiated in Webster v. Fleming (1899) 178 Ill. 140, 52 N. E. 975. It was admitted that the language of the McCormick Case might have weakened the force of the decision in the Walker Case;

yet, after a further consideration, the court was of the opinion that the view expressed in the Walker Case, viz., that the rule that one for whose benefit a contract is made may sue on it in his own name, although the agreement might not be with or to him, applied as well to contracts under seal as to simple contracts,-was correct; the argument in the McCormick Case, that the statute did not purport to abolish the distinctions between sealed and unsealed instruments, but merely provided additional forms of actions for the enforcement of rights predicated upon sealed instruments, the court admitted to be sound, but pointed out that the rule that a third party could not maintain an action in his own name on a contract under seal between third parties was a rule growing merely out of the requirements of the common law in relation to the forms of action, and said that when the reason of the rule failed the rule itself ceased. The rule which forbids the party for whose benefit money is to be paid or an act to be performed, from bringing an action in his own name, has its rise in the nature of the actions of debt or covenant, and can have no application where an action of assumpsit is substituted for an action of debt or covenant, so far as the remedy upon sealed instruments is concerned. Webster v. Fleming (Ill.) supra.

Gridley v. Bayless (1892) 43 Ill. App. 503, holding that a real-estate broker not a party to a contract for the conveyance of land could not maintain an action on a provision therein for his benefit in event of a default of one of the parties to a contract, for the reason that the contract was under seal, is based upon Harms v. McCormick (Ill.) supra, and must fall with that decision. The same observation may be made with respect to Home Library Asso. v. Witherow (1893) 50 Ill. App. 117.

Likewise, the holding in Hillsboro Bldg. & Improv. Asso. v. Simmering (1898) 75 Ill. App. 647, that one for whose benefit a covenant under seal is made cannot sue on it, but must bring the suit in the name of the person with whom the covenant is made, being