I. Introductory, 5.

a. In general, 6.

a. In general, 20.

I. Introductory.

Probably no question in the law of contracts has involved the courts in more difficulties than the frequently discussed question of the right of one not a party to a contract intended for his benefit to maintain an action thereon in his own name. The early common law denied absolutely that any such right existed. This rule had its origin in the early conception of assumpsit, limiting the action to the person from whom the consideration moved. 2 Elliott, Contr. 1411. The ancient rules were, however, relaxed to some extent, yet down to the present time conflicting rules are advanced in the different jurisdictions, and varying theories are indulged in by the courts in sustaining or denying the right to sue. These varying attempts at theoretical analysis, and the contrary results reached, as well as the fact that this question has been also a source of trouble and confusion in the Roman law and the modern civil law, show the inherent difficulty of determining the legal rights under such contracts. 1 Williston, Contr. § 347. At present the English rule, which is followed in several American jurisdictions, seems to be (aside from the possible exception where there is close relation between the promisee and the person from whom the consideration moves [see 6 R. C. L. 892]) that, notwithstanding a contract may have been intended for the benefit of a third person, he cannot enforce the promise if he is a stranger to both the contract and the consideration, unless the con

tract is of such a nature as to constitute the promisor a trustee for the benefit of such person; but in a majority of jurisdictions in this country the contrary rule prevails; stated in general terms, leaving out limitations recognized in various jurisdictions, the rule is (in some states embodied in statutes) that a third person may enforce a promise made for his benefit even though he is a stranger both to the contract and the consideration. 6 R. C. L. 882, § 271.

The object of this annotation is to discuss the application of this general rule to actions by third persons on contracts under seal. For the purposes of this discussion, it necessarily will be assumed that the third party might have sued but for the fact the agreement was under seal, and only cases in which the seal was a factor in the decision reached are considered. As indicated in the title hereto, cases involving actions at law only will be included. The annotation is confined strictly to a discussion of the right of one who is not a party to the instrument in fact or by construction of law, to sue upon it, excluding, therefore, questions as to the right of one who did not sign a sealed instrument, who by construction of law is deemed a party thereto, to sue on it.

The class of cases excluded is illustrated, perhaps, more clearly by the statement in Jones v. Buck (1914) 4 Boyce (Del.) 546, 90 Atl. 86, that some courts, while recognizing the rule that the inter partes character of the contract under seal determines who are

the parties with legal interest, and excludes from the enforcement thereof all others with mere beneficial interests, nevertheless look for a party with legal interest in some other part of the contract than in the premises, and finding that the contract has conferred upon a third person, who may happen to be the person beneficially interested, the legal right to enforce that interest by an action at law, and that this legal right is conferred by a clear expression, and not by implication, permit such other party to enforce the contract in his own name, upon the ground, however, that there is really another party to the contract who has an enforceable legal interest.

One phase of the general question of the right of a third party to enforce a contract made for his benefit is considered in the annotation in 2 A.L.R. 1193, supplemented in 33 A.L.R. 739 [Parties, § 10], entitled "Right of beneficiary to enforce contract between third persons to provide for him by will." Another phase is covered in the annotation in 21 A.L.R. 439, on “Liability of grantee assuming mortgage debt to mortgagee or one in privity with him."

Clearly one not a party to an instrument under seal, and not a beneficiary thereunder, can maintain no action on it. Leon v. Kerrison (1904) 47 Fla. 178, 36 So. 173; Gibson v. Johnson (1901) 23 Ky. L. Rep. 1322, 65 S. W. 116. This rule, however, is founded on the principle of contract law, that contracts do not as a rule confer rights on anyone but the parties thereto (see 6 R. C. L. 881), and the rule would be the same with respect to simple contracts.

II. View that third party cannot maintain action in own name.

a. In general.

At the present time, a majority of adjudicated cases passing upon the question under discussion hold that the rule which permits third persons to sue on contracts made for their benefit does not extend to give a third person the right to sue on a contract under seal; in other words, the fact that the instrument is under seal pre

Massachusetts.-Montague v. Smith (1816) 13 Mass. 396; Watson v. Cambridge (1818) 15 Mass. 286 (dictum); Johnson v. Foster (1846) 12 Met. 167; Huntington v. Knox (1851) 7 Cush. 371 (dictum); Millard v. Baldwin (1855) 3 Gray, 484; Northampton v. Elwell (1855) 4 Gray, 81; Robb v. Mudge (1860) 14 Gray, 534; Flynn v. North American L. Ins. Co. (1874) 115 Mass. 449; Flynn v. Massachusetts Ben. Asso. (1890) 152 Mass. 288, 25 N. E. 716; Saunders v. Saunders (1891) 154 Mass. 337, 28 N. E. 270; Clark v. Bullard (1911) 208 Mass. 586, 94 N. E. 1042 (dictum); Boyden v. Hill (1908) 198 Mass. 477, 85 N. E. 413; Forbes v. Thorpe (1911) 209 Mass. 570, 95 N. E. 955; CAVANAUGH BROS. HORSE Co. v. GASTON (reported herewith) ante, 1.

Missouri.-Robbins v. Ayres (1847) 10 Mo. 538, 47 Am. Dec. 125 (overruled by Rogers v. Gosnell (1873) 51 Mo. 466, on later appeal in (1875) 58 Mo. 589).

See infra, II. d.

New York. Pennsylvania. Strohecker v. Grant (1827) 16 Serg. & R. 237; De Bolle v. Pennsylvania Ins. Co. (1839) 4 Whart. 68, 33 Am. Dec. 38; Mississippi C. R. Co. v. Southern R. Asso. (1869) 4 Brewst. 79. See also American Ins. Co. v. Insley (1847) 7 Pa. 223, 47 Am. Dec. 509; Mississippi C. R. Co. v. Southern 1.. Asso. (1871) 8 Phila. 107.

Wyoming. See McCarteney v. Wyoming Nat. Bank (1877) 1 Wyo. 382. England. Gilby v. Copley (1683) 3 Lev. 138, 83 Eng. Reprint, 618; Southampton v. Brown (1827) 6 Barn. & C. 718, 108 Eng. Reprint, 615; Barford v. Stuckey (1820) 2 Brod. & B. 333, 129 Eng. Reprint, 995; Berkeley v. Hardy (1826) 5 Barn. & C. 355, 108 Eng. Reprint, 132, 2 Eng. Rul. Cas. 274; Chesterfield & M. Silkstone Colliery Co. v. Hawkins (1865) 3 Hurlst. & C. 677, 159 Eng. Reprint, 698.

And in other cases, in fact dealing with simple contracts, it has been declared that one not party to a contract made for his benefit may nevertheless maintain an action on the con

New Jersey. Joslin v. New Jersey Car Spring Co. (1873) 36 N. J. L. 141. New York. - Nicoll v. Burke (1879) 78 N. Y. 580; Navarre Hotel & Importation Co. v. American Appraisal Co. (1913) 156 App. Div. 795, 142 N. Y. Supp. 89.

Brice v. King (1858)

1 Head. 152. Utah. Child v. Gillis Constr. Co. (1912) 42 Utah, 120, 129 Pac. 356. Vermont. Crampton v. Ballard (1838) 10 Vt. 251; Phelps v. Conant (1858) 30 Vt. 277; Cummings v. Blaisdell (1870) 43 Vt. 382. See also Warden v. Burnham (1836) 8 Vt. 390.

England. Sims v. Bond (1833) 5 Barn. & Ad. 389, 110 Eng. Reprint, 834. See also New England Marine Ins. Co. v. De Wolf (1829) 8 Pick. (Mass.) 56.

The right of the party for whose benefit a contract was entered into to sue thereon was denied without discussion of the fact that the instrument was under seal in Waycross Air-Line R. Co. v. Southern Pine Co. (1902) 115 Ga. 7, 41 S. E. 271 (covenant in sale of timber; right to ship timber over plaintiff railroad), and in Styles v. F. R. Long Co. (1902) 67 N. J. L. 418, 51 Atl. 710.

And in the following cases the right of a third party to maintain an action on a contract apparently under seal was denied: Prentice v. Brimhall (1877) 123 Mass. 291 (covenant in deed to assume and pay a mortgage); Coffin v. Adams (1881) 131 Mass. 133 (stipulation in deed poll to assume and pay mortgage); Ricard v. Sanderson (1869) 41 N. Y. 179; Borland v. Welch (1900) 162 N. Y. 104, 56 N. E. 556 (right of third party to enforce marriage settlement denied on ground that it was not made for benefit of plaintiff).

This rule, concerning which the earlier courts were practically unanimous,

is based largely upon technical grounds founded in the common-law distinctions in the form of action in which sealed instruments could be enforced and the form of action for breach of simple contracts, the former being enforceable only by an action of covenant or debt brought in the name of the covenantee. The reason for the rule can hardly be said to exist at the present time, as in practically all jurisdictions sealed instruments may be enforced by any action in which a simple contract may be enforced; and, as suggested by some of the cases set out infra, states which never adopted the common-law forms of pleading have consistently refused to make any different ruling with respect to the right of third parties to enforce instruments under seal than with respect to simple contracts. And, while some courts still adhere rigidly to this rule, there is a marked tendency, even where the rule has been adopted, to break away and permit sealed instruments to be enforced by third parties whenever the nature of the contract is such that it might have been enforced by such parties, had it not been under seal.

Thus, as said in Central Trust Co. v. Berwind-White Coal Co. (1899; C. C.) 95 Fed. 391, the generally admitted common-law right of one to sue in assumpsit in his own name upon a promise contained in an agreement to which he was not a party did not extend to a promise under seal which could only be enforced by an action of debt or covenant, because one not named in the instrument could not bring the action, for no covenant had been made with him; but in many states where common-law forms of action have disappeared, the stringency of this rule has been relaxed.

At common law only an action of covenant or debt could be brought upon a sealed instrument; and so the rule that, where one person covenanted with another to pay money or to perform some act for the benefit of a third, the action must be brought in the name of the covenantee, and could not be maintained in the name of the beneficiary, even though he was a party in interest, and even though it was ex

pressly stated in the instrument that it was for his benefit-had its origin in the nature of the action of covenant, inasmuch as only a party to a sealed instrument can bring an action of covenant or debt. Webster v. Fleming (1899) 178 Ill. 140, 52 N. E. 975.

But it has been held that, without a violation of the rule denying a third party the right to enforce an instrument under seal, though made for his benefit, a sealed instrument may not only be used as evidence in an action in assumpsit by the parties for whose benefit it was made, but may form the very foundation out of which the action of assumpsit arises, if there is no stipulation in the instrument for the payment to the party to be benefited; and so, where an instrument under seal merely contains a statement of the rights of parties interested, upon the happening of certain events, without any agreement or contract by one party to account to the other or do any act for the benefit of the ones who are not parties, the latter may enforce rights secured under the instrument in assumpsit in their own names. Hinkley v. Fowler (1839) 15 Me. 285.

And while, for the purpose of this annotation, it has been assumed that third persons might have sued upon the contract but for the fact it was under seal, attention is called to the fact that, in Massachusetts, the right of a third party to sue upon a contract is conferred within very narrow limits; this is also true with respect to the Federal courts; and New Hampshire, Vermont, Virginia, and England, as well as some other jurisdictions, deny the right of a third party to sue at law on even a simple contract. See 1 Williston, Contr. § 368. As will be observed, decisions from these states, which form a very considerable proportion of the decisions denying the right of third parties to sue on sealed instruments, have been included in the citation of cases given in support of the view that the rule permitting third parties to sue on contracts made for their benefit does not extend to contracts under seal, inasmuch as in these cases the courts have based their decisions upon the fact that the instru

ment was under seal, and not upon any supposed difficulty in the way of a third party's right to enforce a simple contract; moreover, even in these jurisdictions there are various recognized exceptions to the rule adopted, viz., that no one but a party to a simple contract may sue upon it. Also, early decisions in Massachusetts recognized the right of a third party to sue on a simple contract, but denied his right to sue on a sealed instrument. Nevertheless, decisions from these jurisdictions cannot be accorded the weight they otherwise would have on the question of the enforcement of sealed instruments by third parties, as distinguished from the enforcement of simple contracts by third parties.

In Illinois and New Jersey the rule, once adopted in those states, has been abrogated in effect by statute (see infra, II. c.); this leads to the suggestion that in other states which have so far committed themselves to the rule denying the right of a third party to enforce a contract under seal that change is not likely to come by judicial decision, a change might well be effected by statute.

New York decisions reflect considerable confusion and are discussed infra, II. c.

b. Applications; illustrations of general rule.

The doctrine that when A makes a promise to B for the benefit of C, he may sue in his own name for a breach of that promise, is confined exclusively to simple contracts; it does not extend to contracts under seal. Millard v. Baldwin (1855) 3 Gray (Mass.) 484. On technical grounds no one but a party to an instrument under seal may sue upon it. Huntington v. Knox (1851) 7 Cush. (Mass.) 371. (Earlier Massachusetts courts adopted the rule permitting a beneficiary to sue upon simple contract [see 1 Williston, Contr. § 367]; but this rule was apparently abandoned in favor of the rule denying the beneficiary the right to sue.) So, we find the Massachusetts court in Saunders v. Saunders (1891) 154 Mass. 337, 28 N. E. 270, saying as follows: "It is well settled in this state in re

gard to simple contracts, that 'a person who is not a party to a simple contract, and from whom no consideration moves, cannot sue on the contract, and consequently that a promise made by one person to another for the benefit of a third person who is a stranger to the consideration will not support an action by the latter.' . . . In regard to contracts under seal, the law has always been that only those who were parties to them could sue upon them."

And in How v. How (1817) 1 N. H. 49, it was held that a wife could not maintain an action in her own name on a stipulation in a deed under seal by her husband, by which the grantee therein covenanted to maintain the wife in case she survived the grantor, the covenant not being made with her, but with another for her use. (Note that in New Hampshire the rule denying a third party the right to maintain an action on a simple contract for his benefit prevails.)

The rule as announced by the Maryland court in Seigman v. Hoffacker (1881) 57 Md. 321, is that, although in the matter of simple contract a promise to one for the benefit of another may be enforced by the person for whose benefit the promise is made, in actions upon contracts under seal, and inter partes, suit must be brought by the party to the instrument, although it is for the benefit of someone else mentioned therein as beneficiary.

And, admitting that there were some cases to the contrary, the Rhode Island court in Woonsocket Rubber Co. v. Banigan (1899) 21 R. I. 146, 42 Atl. 512, said that the rule was well established with respect to contracts under seal, that none but parties to such contracts could sue upon them, and this though the contract be for the benefit of others.

In case of what is technically called an instrument inter partes, it is a settled rule that, although a covenant be expressed in the instrument for the benefit of a third person named in it, an action can be brought in the name of one of the parties only, and not in the name of such third person. Smith v. Emery (1830) 12 N. J. L. 53; Loeb