Marianna Lime Products Co. v. Mckay

Decision Date24 March 1933
Citation147 So. 264,109 Fla. 275
PartiesMARIANNA LIME PRODUCTS CO. v. McKAY.
CourtFlorida Supreme Court

Rehearing Denied April 10, 1933.

En Banc.

Error to Circuit Court, Jackson County; Amos Lewis, Judge.

Action by C. A. McKay against the Marianna Lime Products Company. Judgment for plaintiff, and defendant brings error.

Affirmed.

COUNSEL John H. Carter and John H. Carter, Jr., both of Marianna, for plaintiff in error.

Carter & Pierce, of Marianna, and W. J. Oven and James Messer, Jr. both of Tallahassee, for defendant in error.

OPINION

DAVIS Chief Justice.

Judgment was recovered against the plaintiff in error on its express undertaking in writing to assume and pay, among other liabilities of the Florida Basic Rock Company, a certain promissory note in the principal sum of $2,000. The declaration in substance alleged that while a suit was pending between C. A. McKay and the Florida Basic Rock Company, upon a note executed by that company to Couch &amp Mosehall, Inc., and owned by McKay, Marianna Lime Products Company bought from the stockholders of the Florida Basic Rock Company all of its stock, and as part of the consideration for the trade, expressly agreed in writing under seal to assume and pay off, as a part of the liabilities of Florida Basic Rock Company, the note for the amount of which the judgment appealed from in this case was recovered.

The rule in this state is that when a contract shows that it was intended to be for the benefit of a third party, such third party may, under section 4201, Comp. Gen Laws, section 2661, Rev. Gen. St., [1] sue thereon. In such cases the test is, not that the promisee is liable to the third person, or that there is some privity between them, or that some consideration moved from the third person, but that the parties to the contract intended that a third person should be benefited by the contract. It is the undertaking on the part of the promisor, as a consideration to the promisee, to benefit the third person, that gives rise to a cause of action by the beneficiary against the promisor, resting upon the contract itself. American Surety Co. of New York v. Smith, 100 Fla. 1012, 130 So. 440; Enns-Halbe Co. v. Templeton, 101 Fla. 609, 135 So. 135; see, also, Dean v. Walker, 107 Ill. 540, 47 Am. Rep. 467; Tweeddale v. Teweeddale, 116 Wis. 517, 93 N.W. 440, 61 L. R. A. 509, 96 Am. St. Rep. 1003.

Under the foregoing rule which is based on our statutes, where A contracts with B to pay a debt due from C to D, D can maintain an action against A on the contract in the event of A's default, as much so as if the contract were merely one by which A contracts with B to pay a debt B owes to C. The case of Luria v. Bank of Coral Gables (Fla.) 142 So. 901, is not to the contrary, since the aforementioned proposition was merely adverted to, but was not decided in that case, a decision of the point being unnecessary to a disposition of that suit.

The obligation sued on, as shown by the declaration in this case, was that in consideration of the trade being consummated between Marianna Lime Products Company and the stockholders of Florida Basic Rock Company, the Marianna Lime Products Company would and did assume and agree to pay a certain promissory note held by C. A. McKay as indorsee against Florida Basic Rock Company as maker. The suit here was not on the note itself, which is material only as fixing the amount of liability assumed by Marianna Lime Products Company under its sealed contract of August 6, 1930. The suit is therefore on the contract of assumption itself as made by Marianna Lime Products Company. In suing on the contract, C. A. McKay, the plaintiff below, was proceeding under the statute which entitled him to maintain the present suit as the real party in interest under the contract to the extent of the Marianna Lime Products Company's assumed liability to pay the Florida Basic Rock Company's note of which McKay was holder when the contract was made. So the demurrer to the declaration was properly overruled. Ennis-Halbe Co. v. Templeton, supra.

The next proposition relied on by plaintiff in error for reversal of the judgment is with reference to the pleas held bad on demurrers interposed by plaintiff below.

The action by McKay was on the contract that had been entered into between the stockholders of Florida Basic Rock Company on the one hand, and the Marianna Lime Products Company on the other. McKay was the real party in interest under that contract only to the extent of having the right to enforce the assumption of his note to the same extent, and to the same extent only, as the nominal party (the stockholders) were entitled to have a recovery against Marianna Lime Products Company based on the breach of the contract of assumption entered into by Marianna Lime Products Company. Therefore, any defense which was available to Marianna Lime Products Company against its contractee (the stockholders of Florida Basic Rock Company) was also available to it against McKay, who, though he had become the real party in interest, had become so only to the extent of having a legal right to such enforcement of the contract for his benefit, as the nominal parties (the stockholders) could have enforced in their own behalf on the same covenant.

The real party in interest statute, supra, is permissive, not mandatory. Its effect is not to change the contract, but to allow it to be enforced by a benefited party who is a stranger to its execution. The real party in interest would not be entitled to sue on a contract to which he is a nominal stranger but for the permissive effect of the statute. So a recovery by the real party in interest is a recovery on the contract itself. The right to such recovery is no greated under the statute than the contract would warrant if enforced in a suit at law between the nominal parties. The statute does not work a novation, but simply avoids circuity of proceedings by allowing the one for whose benefit a contract is made, to the extent that he is a real party in interest under it, to recover whatever the contract and the extent of the interest he shows entitles him to recover.

Any defense available under the contract described in the declaration in this case, going to the avoidance of the assumption of McKay's particular unpaid note, as to which plaintiff sued as the real party in interest, and any defense going to the avoidance or destruction of the entire contract was available to the defendant Marianna Lime Products Company. This much the defendant in...

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41 cases
  • International Erectors v. Wilhoit Steel Erectors & R. Serv.
    • United States
    • U.S. Court of Appeals — Fifth Circuit
    • 18 Octubre 1968
    ...is an incidental beneficiary and has no rights enforceable against the promisor under the contract. See Marianna Lime Products Co. v. McKay, 1933, 109 Fla. 275, 147 So. 264, 265; East Coast Stores v. Cuthbert, 1931, 101 Fla. 25, 133 So. 863, 866; First National Bank v. Perkins, 1921, 81 Fla......
  • United States v. Fla. W. Int'l Airways, Inc.
    • United States
    • U.S. District Court — Southern District of Florida
    • 10 Febrero 2012
    ...is the key to determining whether a third party is an intended beneficiary. Bochese, 405 F.3d at 981 (citing Marianna Lime Prods. Co. v. McKay, 109 Fla. 275, 147 So. 264, 265 (1933)); Int'l Erectors, Inc. v. Wilhoit Steel Erectors & Rental Serv., 400 F.2d 465, 471 (5th Cir.1968) (“The Flori......
  • Bochese v. Town of Ponce Inlet
    • United States
    • U.S. Court of Appeals — Eleventh Circuit
    • 7 Abril 2005
    ...whether a third party is an intended (i.e., donee or creditor) or only an incidental beneficiary. See, e.g., Marianna Lime Prods. Co. v. McKay, 109 Fla. 275, 147 So. 264, 265 (1933) ("[T]he is[ ] not that the promisee is liable to the third person, or that there is some privity between them......
  • Excess Risk Underwriters v. Lafayette Life Ins.
    • United States
    • U.S. District Court — Southern District of Florida
    • 3 Mayo 2004
    ...a cause of action by the beneficiary against the promisor, resting upon the contract itself." Id. (citing Marianna Lime Prods. v. McKay, 109 Fla. 275, 279, 147 So. 264, 265 (1933)). Florida law looks to "nature or terms of a contract" to find the parties' clear or manifest intent that it "b......
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1 books & journal articles
  • Contract cases
    • United States
    • James Publishing Practical Law Books Florida Causes of Action
    • 1 Abril 2022
    ...Bussey, 223 So.2d 713 (Fla. 1969). 4. Auto Mut. Indem., Co. v. Shaw, 184 So. 852, 856 (Fla. 1938). 5. Marianna Lime Products Co. v. McKay, 147 So. 264 (Fla. 1933). 6. East Coast Stores, Inc. v. Cuthbert, 133 So. 863 (Fla. 1931). 7. Woodbury v. Tampa Waterworks Co., 49 So. 556 (Fla. 1909). §......

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