The Burr Case was cited by the court in Durnherr v. Rau (1892) 135 N. Y. 219, 32 N. E. 49, in support of the statement there made that "the cases also attribute to the parties to such a covenant [a covenant in a deed to assume and pay a mortgage] the further purpose of benefiting the holder of the securities, and the natural scope of the covenant is extended so as to give them a right of action at law on the covenant, in case of breach, as though expressly named as covenantees." In this case, however, the suit was brought by the wife of the grantor against the grantee for damages on account of the latter's failure to pay the mortgage as he had covenanted to do, whereby her dower right had been cut off. Her right to maintain this suit was denied on the ground that the essential relation of debtor and creditor between the grantor and the person seeking to enforce the covenant was lacking.

Among other decisions of the court of appeals holding, without discussion of the effect of seals on deeds, that a mortgagee may enforce a covenant to assume and pay the mortgage in a deed conveying the mortgaged premises, against the grantee in the deed, see Hartley v. Harrison (1861) 24 N. Y. 170; Dingeldein v. Third Ave. R. Co. (1868) 37 N. Y. 575; Ricard v. Sanderson (1869) 41 N. Y. 179; Turk v. Ridge (1869) 41 N. Y. 208; Thorp v. Keokuk Coal Co. (1872) 48 N. Y. 253; Calvo v. Davies (1878) 73 N. Y. 211, 29 Am. Rep. 130; Pardee v. Treat (1880) 82 N. Y. 385; Root v. Wright (1881) 84 N. Y. 74, 38 Am. Rep. 495; Campbell v. Smith (1877) 71 N. Y. 26, 27 Am. Rep. 5; Bowen v. Beck (1883) 94 N. Y. 86, 46 Am. Rep. 124; Wilbur v. Warren (1887) 104 N. Y. 193, 10 N. E. 263.

And it has been held that a covenant may be sustained on an instrument in writing under seal entered into by a constable and his surety, whereby they jointly and severally agreed to pay to each and every person such sum or sums of money as the said constable shall become liable for on account of any execution which shall be delivered to the constable for collection, by the

plaintiff in an execution delivered to the constable for collection, for the payment of which the constable has become liable, notwithstanding that the plaintiff was not a party to the instrument named in it. Fellows v. Gilman (1830) 4 Wend. 414. The court said, however: "It must undoubtedly appear that the covenant which is alleged to have been broken was made for the benefit of the person bringing the action. He must in some manner be pointed out or designated in the instrument; but it is not necessary that his name should in terms be used. A familiar illustration of this is to be found in the case of a covenant with a man and his heirs or executors. There, the names of the heirs or the executors do not appear in the deed; but still they can sue upon the covenant if broken. They are pointed out or designated in a manner which, with the aid of proper averments, shows that the covenant was intended for their benefit. So, in this case the defendants covenant to pay to each and every person such sum or sums of money as the constable shall become liable for on account of any execution which may be delivered to him. This, in connection with the allegations and averments in the declaration, shows as satisfactorily as in the case of an heir or an executor, that the plaintiff was one of the persons for whose benefit the covenant or instrument was designed."

In Diamond v. Talbot (1924) 123 Misc. 339, 205 N. Y. Supp. 309, the position was taken that if the contract was such as not legally to require a seal, the enforcement thereof would not be confined to parties to it, notwithstanding that it was in fact under seal. To the same effect is Campbell v. Poland Spring Co. (1921) 196 App. Div. 331, 187 N. Y. Supp. 643, both cases involving leases under seal. The contrary was held in Smith v. Pierce (1899) 45 App. Div. 628, 60 N. Y. Supp. 1011.

III. View that third party may sue.

a. In general.

Although, as stated supra, II. a, a majority of the cases considering the question under discussion have

reached the conclusion that a third person, although a beneficiary under an agreement under seal, cannot maintain an action at law in his own name on such agreement, notwithstanding the rule permitting third parties to sue upon simple contracts made for their benefit, quite a number of courts have adopted the rule,-which, in view of the historical basis of the rule advanced by cases referred to supra, II., the negligible significance that we attach to the addition of a seal to most agreements, and the modified and code forms of pleading which have taken the place of the strict common-law theories of pleading, is the really logical and sound rule, that a contract under seal may be enforced in an action at law in the name of the one for whose benefit it was made, although he is not a party to the instrument, exactly as though the contract were a simple contract; in other words, no distinction is recognized between contracts under seal and simple contracts, so far as respects the right of a third party to sue upon either.

Oregon. Hughes v. Oregon R. & Nav. Co. (1884) 11 Or. 437, 5 Pac. 206. Wisconsin. Kimball v. Noyes (1864) 17 Wis. 695; McDowell v. Laev (1874) 35 Wis. 171; Bassett v. Hughes (1877) 43 Wis. 319; Houghton v. Milburn (1882) 54 Wis. 554, 11 N. W. 517, 12 N. W. 23; Stites v. Thompson (1898) 98 Wis. 329, 73 N. W. 774. See also Etscheid v. Baker (1901) 112 Wis. 129, 88 N. W. 52.

This rule has been said to apply with peculiar force where there is a Code provision requiring actions to be prosecuted in the name of the real party in interest. Starbird v. Cranston (Colo.) and Hughes v. Oregon R. & Nav. Co. (Or.) supra.

In the following cases the courts permitted third parties to maintain actions in their own names on instruments apparently under seal, without discussion of the effect of the character of the instrument as a sealed one on the plaintiff's right to sue: South Side Planing Mill Asso. v. Cutler & S. Lumber Co. (1878) 64 Ind. 560 (indemnity bond); Knight & J. Co. v. Castle (1909) 172 Ind. 97, 27 L.R.A. (N.S.) 573, 87 N. E. 976 (bond); Mize v. Barnes (1880) 78 Ky. 506 (deed reserving a lien for purchase money in favor of third party); Blakeley v. Adams (1902) 113 Ky. 392, 68 S. W. 393 (deed reserving lien in favor of party suing); Dick v. Reynolds (1826) 4 Mart. N. S. (La.) 525 (deed to which plaintiff was not a party) following New Orleans v. Bailey (1817) 5 Mart. (La.) 321; Fitzgerald v. McClay (1896) 47 Neb. 816, 66 N. W. 828 (bond stipulating obligor should pay for labor and materials); Van Schaick v. Third Ave. R. Co. (1868) 38 N. Y. 346 (lease); C. A. Burton Machinery Co. v. Ruth (1917) 196 Mo. App. 459, 194 S. W. 526 (bond).

1

However, in Huckabee v. May (1848) 14 Ala. 263, it was admitted that the third party could not maintain an action of covenant on a deed, but could only sue in assumpsit; and in that case it was held that assumpsit would lie at the instance of a creditor of the grantor in a deed of land and negroes, in consideration of the grantee assuming all debts owing by the grantor to his creditors.

Nevertheless, in Douglass v. Branch Bank (1851) 19 Ala. 659, the court admitted the rule to be "that when a deed is inter partes, a stranger to the deed cannot sue upon it, although it contained an express covenant for his benefit;" the decision in that case, that a bank might recover the rent reserved under a lease under seal, where by the terms of the lease the rent was reserved to it, notwithstanding the lease on its face was from the assistant commissioner of the bank, was upon the ground that it was only a misnomer of the corporation in the contract of lease.

The Minnesota court seems to have acceded to the rule that one not a party to a contract may sue upon a promise in it for his benefit only in case the contract was not under seal, in Follansbee v. Johnson (1881) 28 Minn. 311, 9 N. W. 882, but the distinction in this respect between contracts by specialty and simple contracts was abandoned in Jefferson v. Asch (1893) 53 Minn. 446, 25 L.R.A. 257, 39 Am. St. Rep. 618, 56 N. W. 604. The court said that if there ever was any reason for the distinction, it could only have been a technical one, which no longer has any merit to commend it, and it did not think it ought to be recognized.

Admitting that the old authorities maintain that a party for whose use a stipulation in the contract is made may sue in his own name on such a stipulation only when the contract is not under seal, the court in Rogers v. Gosnell (1873) 51 Mo. 466, said that it could see no reason for keeping this sort of distinction, and therefore refused to follow Robbins v. Ayres (1847) 10 Mo. 538, 47 Am. Dec. 125. Later in Fitzgerald v. Parker (1879)

70 Mo. 685, it was said that the Gosnell Case extended the rule that a party for whose benefit a stipulation in a simple contract is made may maintain a suit on such stipulation in his own name, to covenants under seal made for the benefit of a third person, and distinctly repudiated the old rule that no one but a covenantee could sue on the covenant.

Commenting upon the cases denying the application of the rule that one for whose benefit a contract is made may sue thereon in his own name notwithstanding that he is not a party to the contract, to instruments under seal, the Wisconsin court in Kimball v. Noyes (1864) 17 Wis. 695, said: "In most of these cases there is no attempt to give any reason, and in none of them is there any satisfactory reason given, for a distinction between sealed and unsealed contracts in this respect. On the contrary, the reason usually given is that the third person for whose benefit a sealed promise is made cannot maintain an action on it, because he is not a party to the contract. But that is the same objection that has always been made in cases of simple contracts. And it appears from the opinion in Carnegie v. Morrison (1841) 2 Met. (Mass.) 405, that, after some vacillation, the rule has become established in England, that the objection is good in either case; and it seems obvious that it is good in both if good at all. For, where A promises B upon a good consideration to pay C a sum of money, it seems clear that it is wholly immaterial whether it has a seal or not, so far as concerns the question whether it is a promise to C upon which he can sue in his own name. There is no sound reasoning by which it can be shown that he is a party to it sufficiently to sue on it before it has a seal, but not so afterwards. If it is an unsealed promise to him before, by the same reasoning it is a sealed promise to him afterwards. It follows that, as the rule is fully established in this country that such third party may sue directly on a simple contract for his benefit, the law, to be consistent, should allow the same on a contract under seal."

The reasoning of the court in the Kimball Case was declared in McDowell v. Laev (1874) 35 Wis. 171, to be "very clear and satisfactory," and was adopted as correct. The court said: "Certainly upon the doctrine held in Carnegie v. Morrison (1841) 2 Met. (Mass.) 396, and in Brewer v. Dyer (1851) 7 Cush. (Mass.) 340, that the law operating upon the act of the parties creates the duty, establishes a privity, and implies the promise and obligation on which the action is founded, there can be no good reason assigned for withholding contracts under seal from the operation of the principal."

Without deciding whether an instrument which recites on its face the name of the principal for whom his agent is acting, and is signed by the agent under seal, is in reality the deed of the principal, the court in Hekimian v. Woodward (1917) 46 App. D. C. 27, held that, notwithstanding the conflict of authorities as to whether the rule that a third person for whose benefit a contract is made may maintain an action for a breach of the agreement extends beyond a mere simple contract, to contracts under seal, that, as the contract in the case at bar was made in the name of and on behalf of the principal, who was recited as a party to the first part, there would be no good reason for denying the principal the right to bring an action upon the contract, notwithstanding that it was executed by the agent under seal. The court stated that there was quite a difference between a contract like this, executed on behalf of the principal, who was named, and one wherein there is no mention of the principal's name and which is entirely in the name of the agent.

b. Applications and illustrations. Under the rule stated, supra, III. a., a mortgagee may maintain an action at law in his own name to recover his mortgage debt against a grantee who accepted a conveyance under seal of the mortgaged premises containing an agreement to assume and pay the mortgage. Central Trust Co. v. Berwind-White Coal Co. (1889; C. C.) 95

Fed. 391; Starbird v. Cranston (1897) 24 Colo. 20, 48 Pac. 652; Webster v. Fleming (1899) 178 Ill. 140, 52 N. E. 975 (where statute has abolished separate causes of action) followed in Hart v. Emery (1900) 184 Ill. 560, 56 N. E. 865; Robinson v. Holmes (1898) 75 Ill. App. 203, affirmed on rehearing in (1899) 82 Ill. App. 307; Fitzgerald v. Barker (1879) 70 Mo. 685, on later appeal in (1884) 85 Mo. 13; Stites v. Thompson (1898) 98 Wis. 329, 73 N. W. 774. (In this connection it may be noted that, generally speaking, a mortgagee may enforce an assumption clause in a deed of the premises by the mortgagor, against a grantee assuming the mortgage. See annotation in 21 A.L.R. 439 [Mortgage, § 46], on the question of the liability of grantee assuming a mortgagee debt. While, as stated in 21 A.L.R. 454, in the great majority of jurisdictions the liability of the grantee in such case is referred to the rule that a third person for whose benefit a contract is made may enforce the contract though he is not a party thereto, no consideration apparently is given the fact that the promise is embodied in a deed of real property, which in many instances must have been under seal.)

It was argued in Starbird v. Cranston (1897) 24 Colo. 20, 48 Pac. 662, that a distinction should be made where the assumption agreement is contained in a deed, the theory being that the assumption clause must be treated as a covenant, and that an action on the covenant will lie only in the name of the covenantee; the court, in denying this contention, said that "this technical rule of the common law does not prevail in states that have adopted the reform procedure. Under our Code the action must be instituted in the name of the real party in interest; and certainly the beneficiary or person for whose benefit the promise is made is the real party in interest, whether the promise is evidenced by a simple contract or one under seal."

The New York practice of permitting a mortgagee to maintain an action at law against the grantee of the mortgaged premises who covenants to assume payment of the mortgage, irre

spective of the fact that the agreement was under seal, was followed in Central Trust Co. v. Berwind-White Coal Co. (Fed.) supra, which permitted a mortgagee to maintain an action at law on a provision in a coal lease requiring the lessee to pay from the royalty a specified sum to the mortgagee in payment of interest on the mortgage debt, notwithstanding that the lease was under seal, and even though the contract was executed in Pennsylvania, where the rule is that, if the promise for the benefit of a third person is under seal, the latter must obtain his remedy in a suit in the name of the covenantee for the use of himself.

And so, though creditors are not parties to an agreement under seal between two persons for the payment by one of the debts of the other, they may maintain an action thereon. Hume v. Brower (1886) 25 Ill. App. 130 (where distinction is abolished by statute). See Garvin v. Mobley (1866) 1 Bush (Ky.) 48; Kimball v. Noyes (1864) 17 Wis. 695; McDowell v, Laev (1874) 35 Wis. 171; Bassett v. Hughes (1877) 43 Wis. 319.

A covenant to pay anyone with whom a designated person should live expenses incurred for the maintenance of such person may be enforced by one not a party thereto. Houghton v. Milburn (1882) 54 Wis. 554, 11 N. W. 517, 12 N. W. 23.

And a stipulation in a contract under seal for the sale of land, to pay part of the purchase price to a third party for commission due on the sale, may be enforced by such third party. Rogers v. Gosnell (1873) 51 Mo. 466, on later appeal in (1875) 58 Mo. 589.

IV. Conclusion.

It is apparent that, while the decisions denying the right of one to sue upon a contract under seal made for his benefit outnumber the decisions which have taken the opposite view, and hold that the same rule applies with respect to sealed instruments as applies with respect to simple contracts, so far as concerns the question as to who may bring suit thereon, the

tendency to-day is strongly towards the latter. As already suggested, the latter rule is the sound and logical one; the former is based upon reasons that are now obsolete, viz., the necessity of debt or covenant upon an instrument under seal which could only be brought in the name of a party to the instrument. Again, attention is called to the fact that many decisions in which the rule has been laid down that only a party to a contract under seal may maintain an action in his own name on it have come from courts which deny or limit materially the rule that a third party may maintain an action on a contract made for his benefit; it is probable that in these cases the right of the plaintiff to sue in his own name would have been denied though the contract was not under seal. This latter statement probably can be applied to decisions of the New York courts; in this state (with the exception of the rule that an undisclosed principal cannot maintain suit on a contract under seal executed by his secret agent), notwithstanding the unqualified statements in some cases that a different rule exists with respect to the right of a third party to sue upon a contract under seal from that which exists with respect to such person's right to sue on a simple contract, the cases considered as a whole leave the impression that the actual decision on the facts of each individual case would have been no different had the contract been a simple contract, rather than a sealed one. Moreover, the great number of cases involving action by third parties on bonds, covenants in deeds, etc., which very frequently are under seal, which are disposed of under the rule allowing third parties to sue on contracts made for their benefit, without discussion of the effect on that rule of the fact that the instrument sued on is under seal, is indicative of the trend of the courts away from the rule distinguishing between the right of a third party to sue on a sealed instrument and his right to sue on a simple contract. G. S. G.