Small v. Schaefer

• Decision Date: 03 March 1866
• Citation: 24 Md. 143
• Parties: GEORGE SMALL v. ADOLPHUS C. SCHAEFER.
• Court: Maryland Court of Appeals

24 Md. 143

GEORGE SMALL v. ADOLPHUS C. SCHAEFER.

Court of Appeals of Maryland

March 3, 1866

Appeal from the Superior Court of Baltimore City:

The facts of this case are stated in the opinion of the court.

The cause was argued before BOWIE, C.J., and BARTOL GOLDSBOROUGH, COCHRAN and WEISEL, JJ.

Andrew S. Ridgely and R. J. Brent, for the appellant:

Every contract, written or verbal, not under seal, requires a consideration to support it and give it validity. Smith on Cont. 70, 129. Story on Cont., sec. 426, etc.

Not only must there be a consideration, but a valuable consideration-- emanating from some injury or inconvenience to one party or some benefit to the other party. Story on Cont. sec. 429. 2 Bl. Com. 297. Smith on Cont. 169.

But the performance of an act which it was before legally incumbent on the party to perform, is in law a "worthless and insufficient consideration." For instance: "If the master of a ship promise his crew an addition to their fixed wages in consideration of and as an incitement to their extraordinary exertions during a storm, this promise is nudum pactum--the voluntary performance of an act which it was before legally incumbent on the party to perform, being in law a worthless and insufficient consideration. Chitty on Cont. 51. Newman v Waters, 3 Bos. & Pul. 615. Calligan v. Hallett, 1 Caine, (N. Y.) 104.

Again.--A debtor being bound by law to give up the title deeds of an estate to a purchaser pursuant to a decree of sale, enters into an agreement with the purchaser to deliver them to him on payment of a sum of money, the debtor is not only without any right of action for enforcing such an agreement, but if the money is paid, he is himself subject to an action for the recovery of it back. In all such cases the parties are bound to do the acts in question without compensation or reward. See Addison on Cont. 13, 14, and cases cited. Jones v Waite, 5 Bingham N. C. 191.

The court erred in granting the plaintiff's prayer, and in rejecting the defendant's first, third, fifth and seventh prayers.

1st. Because there was no privity of contract existing between the plaintiff and defendant.

2nd. Because of want of consideration for the alleged promise.

3rd. Because the alleged promise was to pay to the plaintiff a pre-existing debt due to him from another person, and was not in writing, but verbal, and no action can be sustained by the plaintiff on such verbal promise.

What is the object of this action? It is to recover the amount of a check drawn in favor of the appellee on the Franklin Bank of Baltimore, by one McGinn, a stock and bill broker, for the amount of the proceeds arising from the sale of a promissory note intrusted by the appellee to the said McGinn for sale sold by the said McGinn, but the proceeds of which sale instead of being paid over to the said appellee, were by the said McGinn dishonestly appropriated to his own use.

While, for the purposes of the present argument, it is not admitted that there were two distinct considerations which admit of severance, nor insisted on the other hand that the consideration is entire, and must be regarded as wholly good or wholly bad; yet this is a matter for the consideration of the court. Story on Cont. secs. 480-482.

It is at the same time most emphatically urged and contended, that be the condition severable or not, be it wholly good or wholly bad, whatever else it may be capable of, it is not capable of sustaining an action in the name of the appellee. It did not move from him, but passed directly from McGinn. The promise was not made to him, it was made to McGinn--the appellee was in no wise privy thereto. To the signing and delivery of said orders he was a stranger. When he took the check he knew there was no money in bank, but McGinn did not pledge any particular bonds as security for its payment, he simply told the appellee that he "had some State bonds which he would deposit with the bank, or other securities, or something else, to make his check good." The check when presented was dishonored, the bank persistently refused to pay it on the security of said bonds. The delivery of the bonds, therefore, to the appellant on McGinn's order, occasioned no loss, trouble or inconvenience to, or charge upon, the appellee. He neither was present at, nor assented to the agreement made between the appellant and said McGinn, and he cannot recover in this action. Story on Cont. sec. 450, etc. Powell on Cont. 344. Owings v. Owings, 1 H. & G. 487, 488.

Upon the question whether a person can sue upon a promise, even though it be professedly for his benefit, where he is an entire stranger to the consideration, that is, has taken nothing of trouble or charge upon himself, or occasioned any benefit to the promisor, but such trouble has been sustained or advantage conferred by a third person, the cases seem to have been contradictory, though it is a recognized rule of law that the consideration for a promise must move from the plaintiff. The contract is in such cases binding, there being sufficient consideration, and the difficulty is, who should be made the plaintiff--the party with whom the agreement was made, and from whom the consideration moved, or the party meant by him to be benefited, and for whose advantage the act stipulated for is to be performed? It is clear that if the promisee be a mere agent for the person to be benefited, the latter may sue upon the agreement, though not known at the time to be interested therein. But if no such agency exists, there seems to be great difficulty in permitting an entire stranger to the consideration to enforce the performance of the contract by action in his own name. Chitty on Cont. 53, 54. Addison on Cont. 940, 941.

From the case of Price v. Easton, cited in illustration of the above examples, it may be seen that not only must there be a consideration moving from the plaintiff to the defendant, but there must be shown a privity between them, the plaintiff must have known of the arrangement, and the promise must have been made to him. Price v. Easton, 4 Barn. & Adol. 433, (24 Eng. C. L. 96.) Addison on Cont. 940. Very slight circumstances are, however, sufficient to connect the consideration with the promise so as to enable the promisee to maintain an action thereon. If the act or service, for example, forming the consideration for the defendant's promise to the plaintiff, has been rendered to the defendant at the instance and request, and through the instrumentality or procurement of the plaintiff, it has been held that the consideration moves from the plaintiff so as to enable him to maintain an action upon the promise. Addison on Cont. 491. Eastwood v. Kenyon, 11 Adol. & Ell. 452.

If there is a benefit to the defendant and a loss to the plaintiff consequential upon, and directly resulting from the defendant's promise in behalf of the plaintiff, there is a sufficient cause or consideration moving from the plaintiff to enable the latter to maintain and action to recover compensation. Addison on Cont. 492. Schemerhorn v. Vanderheyden, 1 John. 139. Blymire v. Boistle, 6 Watts, 182. Owings v. Owings, 1 H. & G. 484.

If there be a privity between the parties, either party, indifferently, may bring the action. Thus, where the plaintiffs were creditors, and the defendants were debtors of T., and by consent of all parties an arrangement was made that the defendants should pay to the plaintiffs the debts due from them to T., it was held that the agreement was for a sufficient consideration. Story on Cont. sec. 450. Wilson v. Coupland, 5 Barn. & Ald. 228. So a privity of contract will be implied when the promise or agreement is made in the presence of the third person, with his assent. Lilly v. Hays, 5 Adol. & Ell. 550. Story on Cont. secs. 450, 454. And while it is contended as a general rule to be unquestionably true that no person can maintain an action on an agreement to which he is not a party, it is at the same time acknowledged that there are certain exceptions to the rule. If a contract be made with an agent or attorney, or one holding towards the plaintiff a position analogous to that of agent or attorney, the principal may sue in his own name. Chitty on Cont. 54, and note T; also p. 615. If money is delivered by A to B for the purpose of being paid over to C, the latter may maintain an action against B for the money; or, if goods are so delivered with the understanding that they are to be turned into money, and the proceeds applied in the same way, this would be an exception to the general rule. Story on Cont. secs. 451, 454. Or, if the promise is not special, but general in its character, the assent of the third party may make him constructively a party thereto. Treat v. Stanton, 14 Conn. 445. Or, if the promisee be not beneficially interested in the performance of the promise, and the party beneficially interested therein be the party to whom it is to be performed, the last may maintain the action--or, if he be the meritorious cause of the promise. 1 Ch. Pl. 2, 4.

These, it is apprehended, are all the material exceptions that can fairly be deduced from the adjudged cases; and the only difficulty consists in not carefully considering and fully analyzing the cases which are within the rule, and those which are within the exceptions, and comparing the one class with the other. See Lawrence v. Fox, 20 N.Y. 268. Hind v. Holdship, 2 Watts, 104. Hall v. Marston, 17 Mass. 579. Carnegie v. Morrison, 2 Met. 401. See also Lilly v. Hays, 5 Adol. & Ell. 550. Story on Const. 451. Dutton v. Poole, 1 Vent. 318. Treat v. Stanton, 14 Conn. 446. Blymire v. Boistle, 6 Watts, 182. 2 Am. Le. Ca. 165. Owings v. Owings, 1 H. & G. 485. Mellen v. Whipple, 1 Gray, 317. 2 Am. Le. Ca. 167.

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