La Mourea v. Rhude
| Decision Date | 13 December 1940 |
| Docket Number | No. 32555.,32555. |
| Citation | 295 N.W. 304,209 Minn. 53 |
| Parties | LA MOUREA v. RHUDE et al. |
| Court | Minnesota Supreme Court |
Appeal from District Court, St. Louis County; Bert Fesler, Judge.
Action on a contract by Henry E. La Mourea against Jens O. Rhude and others, copartners doing business as Rhude, Fryberger and MacDonell. From an order overruling a demurrer to the complaint, defendants appeal.
Affirmed.
Abbott, MacPherran, Dancer, Gilbert, Doan & Zuger, of Duluth, for appellants.
M. J. McKeon and Whipple, Atmore & Lyons, all of Duluth, for respondent.
The one question is whether plaintiff may recover on a contract, to which he was not a party, between the city of Duluth and defendants whereby the latter obligated themselves to do certain work of sewer construction. Plaintiff seeks recovery for consequential damage to his nearby real estate caused by the blasting operations of defendants.
The contract contemplated excavation in solid rock, and that the work could be done only "by the use of heavy charges of explosives * * * the use and effect of which might, and very probably would be felt and cause damage * * * in the immediate vicinity." In consequence it made defendants "liable for any damages done to the work or other structure or public or private property and injuries sustained by persons" in the operations.
The claim for defendant is that this promise was one to indemnify the city and nothing more. So, the conclusion is, plaintiff has no cause of action against defendants. That argument we consider unsound.
The question of when and under what circumstances the beneficiary of a contract, not himself a party thereto, may recover thereon has been the subject of much and conflicting decision law. For long it was held that a stranger to a contract between others, in which one of the parties promises to do something for the benefit of such stranger, there being nothing but the promise, no consideration from such stranger, and no duty or obligation to him on the part of the promisee, cannot recover upon it. Jefferson v. Asch, 53 Minn. 446, 55 N.W. 604, 25 L.R.A. 257, 39 Am.St.Rep. 618.
That rule recognized that the "stranger" could recover if the promisee owed him a duty against which he, the promisee, undertook to protect himself by the contract. In such case, the beneficiary could recover even though not a party to the contract. Even with the qualifications stated, the doctrine of Jefferson v. Asch has been subject to so much attrition in succeeding cases* that, in the interest of accuracy, it is in need of restatement.
1. That restatement is found in Restatement of the Law of Contracts, §§ 133-147. The rule is there declared that donee and creditor beneficiaries may recover, but an incidental beneficiary cannot. The incidental beneficiary is illustrated by a contract such as that where "B contracts with A to buy A a new Gordon automobile." The Gordon Company is an incidental beneficiary without right of recovery.
2. It is no bar to recovery by the beneficiary, if he be donee or creditor of the promisee, that the promise in his favor is conditioned, as here, upon a future event, such as damage to his property. id. § 134.
3. Neither is it essential to the right of donee or creditor beneficiary that he be identified when the contract containing the promise is made. id. § 139.
4. All that fits this case. The city exacted from the defendants a promise that they should be "liable for any damages done to * * * private property" in connection with the work. It is immaterial that the obligation was also in effect one to indemnify the city against claims for such damage.
Such promises, made to a municipality for the benefit of its citizens, are put in a special category by the Restatement, § 145. Provisions of that section would allow recovery in the instant case. The comment states the obvious conclusion that it is but a special application of the principles of § 133 concerning the rights of donee and creditor beneficiaries. The courts of Michigan and Arizona have expressly adopted the rules of § 145. Bator v. Ford Motor Co., 269 Mich. 648, 257 N.W. 906; Cole v. Arizona Edison Co., Inc., 53 Ariz. 141, 86 P.2d 946. And two lower New York courts have indicated approval, Wilson v. Oliver Costich Co., Inc., 231 App. Div. 346, 247 N.Y.S. 131; Creedon v. Automatic Voting Machine Corp., 243 App. Div. 339, 276 N.Y.S. 609, following a line of earlier cases in that state which allowed recovery in situations covered by that section and analogous to the instant case. Little v. Banks, 85 N.Y. 258; Smyth v. City of New York, 203 N.Y. 106, 96 N.E. 409; Rigney v. New York Central Ry. Co., 217 N.Y. 31, 111 N.E. 226; Schnaier v. Bradley Contracting Co., 181 App.Div. 538, 169 N.Y.S. 88.
We affirm plaintiff's right to sue as a beneficiary of the contract. An opposite holding would defeat obligation where obligation is not only intended but also expressed and paid for. Implicit in such holding would be the indefensible hypothesis that, although a party to a contract may stipulate for such benefits to himself as he wants and the other party will allow, yet the two of them by the same process and for the same consideration cannot secure similar benefit to a stranger. In the contractual promise for the benefit of one not a party, there is nothing illegal or contrary to public policy. The promise is within the right of one party to exact and the other to make. No reasonable ground can be suggested for its not being enforceable according to its expressed intent.
The contrary doctrine, now altogether if not quite outmoded, was put in the main upon factors of consideration and privity. Jefferson v. Asch, 53 Minn. 446, 55 N.W. 604, 25 L.R.A. 257, 39 Am.St.Rep. 618; Kramer v. Gardner, 104 Minn. 370, 116 N.W. 925, 22 L.R.A.,N.S., 492; Clark v. Clark, 164 Minn. 201, 204 N.W. 936. Consideration for a promise is demanded by the law solely as a test of actionability. It is determinative of the presence of enforceable obligation but ordinarily not of its quantity or the identity of obligee. For the latter two, we usually look not to source of consideration but exclusively to the terms of the contract. It is common to find enforceable obligation in favor of a contracting party who has furnished no consideration. So it is no objection ...
To continue reading
Request your trial