Seaver v. Ransom

• Decision Date: 01 October 1918
• Citation: 224 N.Y. 233,120 N.E. 639
• Parties: SEAVER v. RANSOM et al.
• Court: New York Court of Appeals Court of Appeals

224 N.Y. 233

120 N.E. 639

SEAVER

v.RANSOM et al.

Court of Appeals of New York.

Oct. 1, 1918.

Appeal from Supreme Court, Appellate Division, Third Department.

Action by Marion E. Seaver against Matt C. Ransom and another, as executors, etc., of Samuel A. Beman, deceased. From a judgment of the Appellate Division (180 App. Div. 734,168 N. Y. Supp. 454), affirming judgment for plaintiff, defendants appeal. Affirmed.

Hiscock, C. J., and Collin and Andrews, JJ., dissenting.

Frederick H. Bryant, of Albany, for appellants.

Le Roy M. Kellas and John P. Kellas, both of Malone, for respondent.

POUND, J.

Judge Beman and his wife were advanced in years. Mrs. Beman was about to die. She had a small estate, consisting of a house and lot in Malone and little else. Judge Beman drew his wife's will according to her instructions. It gave $1,000 to plaintiff, $500 to one sister, plaintiff's mother, and $100 each to another sister and her son, the use of the house to her husband for life, and remainder to the American Society for the Prevention of Cruelty to Animals. She named her husband as residuary legatee and executor. Plaintiff was her niece, 34 years old in ill health sometimes a member of the Beman household. When the will was read to Mrs. Beman, she said that it was not as she wanted it. She wanted to leave the house to plaintiff. She had no other objection to the will, but her strength was waning, and, although the judge offered to write another will for her, she said she was afraid she would not hold out long enough to enable her to sign it. So the judge said, if she would sign the will, he would leave plaintiff enough in his will to make up the difference. He avouched the promise by his uplifted hand with all solemnity and his wife then executed the will. When he came to die, it was found that his will made no provision for the plaintiff.

[1][2] This action was brought, and plaintiff recovered judgment in the trial court, on the theory that Beman had obtained property from his wife and induced her to execute the will in the form prepared by him by his promise to give plaintiff $6,000, the value of the house, and that thereby equity impressed his property with a trust in favor of plaintiff. Where a legatee promises the testator that he will use property given him by the will for a particular purpose, a trust arises. O'Hara v. Dudley, 95 N. Y. 403, 47 Am. Rep. 53;Trustees of Amherst College v. Ritch, 151 N. Y. 282, 45 N. E. 876,37 L. R. A. 305;Ahrens v. Jones, 169 N. Y. 555, 62 N. E. 666,88 Am. St. Rep. 620. Beman received nothing under his wife's will but the use of the house in Malone for life. Equity compels the application of property thus obtained to the purpose of the testator, but equity cannot so impress a trust, except on property obtained by the promise. Beman was bound by his promise, but no property was bound by it; no trust in plaintiff's favor can be spelled out.

[3] An action on the contract for damages, or to make the executors trustees for performance, stands on different ground. Farmers' Loan & Trust Co. v. Mortimer, 219 N. Y. 290, 294, 295,114 N. E. 389. The Appellate Division properly passed to the consideration of the question whether the judgment could stand upon the promise made to the wife, upon a valid consideration, for the sole benefit of plaintiff. The judgment of the trial court was affirmed by a return to the general doctrine laid down in the great case of Lawrence v. Fox, 20 N. Y. 268, which has since been limited as herein indicated.

Contracts for the benefit of third persons have been the prolific source of judicial and academic discussion. Williston, Contracts for the Benefit of a Third Person, 15 Harvard Law Review, 767; Corbin, Contracts for the Benefit of Third Persons, 27 Yale Law Review, 1008. The general rule, both in law and equity (Phalen v. United States Trust Co., 186 N. Y. 178, 186,78 N. E. 943,7 L. R. A. [N. S.] 734, 9 Ann. Cas. 595), was that privity between a plaintiff and a defendant is necessary to the maintenance of an action on the contract. The consideration must be furnished by the party to whom the promise was made. The contract cannot be enforced against the third party, and therefore it cannot be enforced by him. On the other hand, the right of the beneficiary to sue on a contract made expressly for his benefit has been fully recognized in many American jurisdictions, either by judicial decision or by legislation, and is said to be ‘the prevailing rule in this country.’ Hendrick v. Lindsay, 93 U. S. 143, 23 L. Ed. 855;Lehow v. Simonton, 3 Colo. 346. It has been said that ‘the establishment of this doctrine has been gradual, and is a victory of practical utility over theory, of equity over technical subtlety.’ Brantly on Contracts (2d Ed.) p. 253. The reasons for this view are that it is just and practical to permit the person for whose benefit the contract is made to enforce it against one whose duty it is to pay. Other jurisdictions still adhere to the present English rule (7 Halsbury's Laws of England, 342, 343; Jenks' Digest of English Civil Law, § 229) that a contract cannot be enforced by or against a person who is not a party (Exchange Bank v. Rice, 107 Mass. 37, 9 Am. Rep. 1). But see, also, Forbes v. Thorpe, 209 Mass. 570, 95 N. E. 955;Gardner v. Denison, 217 Mass. 492, 105 N. E. 359,51 L. R. A. (N. S.) 1108.

In New York the right of the beneficiary to sue on contracts made for his benefit is not clearly or simply defined. It is at present confined: First. To cases where there is a pecuniary obligation running from the promisee to the beneficiary, ‘a legal right founded upon some obligation of the promisee in the third party to adopt and claim the promise as made for his benefit.’ Farley v. Cleveland, 4 Cow. 432, 15 Am. Dec. 387; Lawrence v. Fox, supra; Garnsey v. Rogers, 47 N. Y. 233, 7 Am. Rep. 440;Vrooman v. Turner, 69 N. Y. 280, 25 Am. Rep. 195;Lorillard v. Clyde, 122 N. Y. 498, 25 N. E. 917,10 L. R. A. 113;Durnherr v. Rau, 135 N. Y. 219, 32 N. E. 49;Townsend v. Rackham, 143 N. Y. 516, 38 N. E. 731;Sullivan v. Sullivan, 161 N. Y. 554, 56 N. E. 116. Secondly. To cases where the contract is made for the benefit of the wife (Buchanan v. Tilden, 158 N. Y. 109, 52 N. E. 724, 44 L. R. A. 170, 70 Am. St. Rep. 454; Bouton v. Welch, 170 N. Y. 554, 63 N. E. 539), affianced wife (De Cicco v. Schweizer, 221 N. Y. 431, 117 N. E. 807, Ann. Cas. 1918C, 816), or child (Todd v. Weber, 95 N. Y. 181, 193,47 Am. Rep. 20;Matter of Kidd, 188 N. Y. 274, 80 N. E. 924) of a party to the contract. The close relationship cases go back to the early King's Bench case (1677), long since repudiated in England, of Dutton v. Poole, 2 Lev. 211 (s. c., 1 Ventris, 318, 332). See Schemerhorn v. Vanderheyden, 1 Johns. 139, 3 Am. Dec. 304. The natural and moral duty of the husband or parent to provide for the future of wife or child sustains the action on the contract made for their benefit. ‘This is the farthest the cases in this state have gone,’ says Cullen, J., in the marriage settlement case of Borland v. Welch, 162 N. Y. 104, 110,56 N. E. 556.

The right of the third party is also upheld in, thirdly, the public contract cases (Little v. Banks, 85 N. Y. 258;Pond v. New Rochelle Water Co., 183 N. Y. 330, 76 N. E. 211,1 L. R. A. [N. S.] 958,5 Ann. Cas. 504;Smyth v. City of New York, 203 N. Y. 106, 96 N. E. 409;Farnsworth v. Boro Oil & Gas Co., 216 N. Y. 40, 48,109 N. E. 860;Rigney v. N. Y. C. & H. R. R. R. Co., 217 N. Y. 31, 111 N. E. 226;Matter of International Ry. Co. v. Rann, 224 N. Y. 83, 120 N. E. 153. Cf. German Alliance Ins. Co. v. Home Water Supply Co., 226 U. S. 220, 33 Sup. Ct. 32, 57 L. Ed. 195,42 L. R. A. [N. S.] 1000), where the municipality seeks to protect its inhabitants by covenants for their benefit; and, fourthly, the cases where, at the request of a party to the contract, the promise runs directly to the beneficiary although he does not furnish the consideration (Rector, etc., v. Teed, 120 N. Y. 583, 24 N. E. 1014;F. N. Bank of Sing Sing v. Chalmers, 144 N. Y. 432, 439,39 N. E. 331;Hamilton v. Hamilton, 127 App. Div. 871, 875,112 N. Y. Supp. 10). It may be safely said that a general rule sustaining recovery at the suit of the third party would include but few classes of cases not included in these groups, either categorically or in principle.

The desire of the childless aunt to make provision for a beloved and favorite niece differs imperceptibly in law or in equity from the moral duty of the parent to make testamentary provision for a child. The contract was made for the plaintiff's benefit. She alone is substantially damaged by its breach. The representatives of the wife's estate have no interest in enforcing it specifically. It is said in Buchanan v. Tilden that the common law imposes moral and legal obligations upon the husband and the parent not measured by the necessaries of life. It was, however, the love and affection or the moral sense of the husband and the parent that imposed such obligations in the cases cited, rather than any common-law duty of husband and parent to wife and child. If plaintiff had been a child of Mrs. Beman, legal obligation would have required no testamentary provision for her, yet the child could have enforced a covenant in her favor identical with the covenant of Judge Beman in this case. De Cicco v. Schweizer, supra. The constraining power of conscience is not regulated by the degree of relationship alone. The dependent or faithful niece may have a stronger claim than the affluent or unworthy son. No sensible theory of moral obligation denies arbitrarily to the former what would be conceded to the latter. We might consistently either refuse or allow the claim of both, but I connot reconcile a decision in favor of the wife in Buchanan v. Tilden, based on the moral obligations arising out of near relationship, with a decision...