Follansbe v. Menage

• Court: Minnesota Supreme Court
• Writing for the Court: GILFILLAN
• Citation: Follansbe v. Menage, 9 N. W. 882, 28 Minn. 311 (Minn. 1881)
• Decision Date: 04 October 1881
• Parties: FOLLANSBE v MENAGE AND OTHERS.

28 Minn. 311

9 N.W. 882

FOLLANSBEvMENAGE AND OTHERS.

Supreme Court of Minnesota.

Filed October 4, 1881.

Appeal from judgment of municipal court, city of Minneapolis.

J. H. Bradish, for respondent.

Erland & Shores, for appellants.

GILFILLAN, C. J.

On November 5, 1878, Amanda A. and Louis F. Menuge made their note to Henry G. Menage, and to secure it executed their mortgage upon three lots in Minneapolis. November 19, 1878, they conveyed the lots to defendant. In the deed of conveyance was a clause to the effect that, as a part of the consideration for it, the grantee assumed and agreed to pay the grantors' note and mortgage. Afterwards the mortgagee assigned the note and mortgage to plaintiff. This is a personal action to recover on the defendant's contract with his grantor the debt secured by the note and mortgage. The decided weight of authority in this country is to the effect that, with regard to contracts not by specialty, the person for whose benefit the promise is made may enforce it, though he be a stranger to the contract and to the consideration. This is inconsistent with the general rule that an action on contract cannot be maintained unless there is privity of contract between the parties. But justice would be imperfectly administered if no exceptions were allowed to that general rule. Many trusts arising ex contractu would fail. We will not undertake to define the cases in which an exception shall be allowed in favor of the person for whose benefit stipulations in a contract between others are made. One exception recognized by a mass of authorities in this country, too great to be disregarded, is where the contract creates a duty or relation in the nature of a trust; as if A. should transfer property to B., and as the consideration, or as part of the consideration, for the transferB. should assume and promise to pay debts of A. In such case the consideration retained might well be regarded as held in the nature of a trust for the persons indicated by the contract. That such persons may maintain an action at law against the party promising, was held in the following among a great number of cases: Morgan v. Overman Silver Mining Co. 37 Cal. 534;Snell v. Ives, 85 Ill. 279;Helmer v. Kearns, 40 Ind. 124;Johnson v. Knapp, 36 Iowa, 616; Anthony v. Herman, 14 Kan. 494; Joslin v. N. J. Car Co. 36 N. J. L. 141;Thompson v. Thompson, 4 Ohio St. 333; Urquhart v. Brayton, 12 R. I. 169; Hind v. Holdship, 2 Watts, 104;McDowell v. Laer, 35 Wis. 171;Saunders v. Classen, 13 Minn. 379;Campbell v. Smith, 71 N. Y. 26. This is that kind of case, and we hold the action maintainable.

One other question was made in the case: In his answer the defendant alleged that the clause by which he was made to assume, and promise to pay, the note and mortgage was fraudulently inserted by Louis F. Menage; was contrary to the actual agreement, which was that he should not assume or pay any encumbrances on the real estate; and that he supposing the deed would be made according to the actual agreement, the clause in it escaped his attention till after the delivery. On the trial he offered to prove by oral testimony that the agreement between him and his grantors, both before and at the time of the execution of the deed, was that he would not pay any encumbrances on...