Enos v. Sanger

37 L.R.A. 862, 70 N.W. 1069, 96 Wis. 150, 1897 Wisc. LEXIS 259

• Court: Wisconsin Supreme Court
• Decided: April 30, 1897
• Status: Published

Opinion

Makshall, J.

The decisions of the various courts are by no means uniform, either in respect to the binding effect of a covenant by a grantee of land to pay the consideration therefor to a third person, or the ground upon which the-obligation rests, if sustained. It is useless to review and try to harmonize the various adjudications. In fact, it is difficult to find a line upon which they can be harmonized respecting the ground of the liability. In this state the liability rests upon the doctrine that where one person, for a valuable consideration, engages with another to do some act for the benefit of a third person, the latter may maintain an action against the promisor for the breach of the agreement. Such doctrine is the settled law in this state. Bassett v. Hughes, 43 Wis. 319; Hoile v. Bailey, 58 Wis. 434; Grant v. Diebold S. & L. Co. 77 Wis. 72; Kollock v. Parcher, 52 Wis. 393, and many other cases that might be cited. All that is required to render such rule applicable is for the-obligor, for a sufficient consideration to support the promise, to agree to do some act for the benefit of a third person.. No question of subrogation or novation is involved. Such, third person, whether sustaining any relation to the person< with whom the agreement is made or not, or to the person from whom the consideration moves, may adopt such promise made for his benefit, and thereby bring himself into privity with the obligor, and enforce the promise. While the incidental effect of the execution of such promise is to-discharge the debt of another to such third person, such promise is really to pay the debt of the promisor, to pert-form his own contract, entered into for a sufficient consideration to support it. Kollock v. Parcher, supra; Hoile v. Bailey, supra.

In Bishop v. Douglass, 25 Wis. 696, the liability of the-grantee to pay the mortgage debt was placed on the ground that he received the conveyance subject to a condition, and thereby became bound to perform it, which, as applied to-the facts of that case, is only another way of stating the rule-before referred to. In Palmeter v. Carey, 63 Wis. 426, the-liability was based on the same principle, though, as in Bishop v. Douglass, supra, the rule was hot distinctly stated other than by saying that “ the grantee became liable for payment of the mortgage debt by making a valid promise-to pay it.” In Brewer v. Dyer, 7 Cush. 337, the principié-is stated in the language of Mr. Justice Oeaig as follows: “ Thus, upon the principle of law long recognized and clearly established, where one person, for a valuable consideration, engages with another to do some act for the benefit of a third, the latter, who would enjoy the benefit of the act, may maintain an action for the breach of such agreement. It does not rest upon the ground of any actual or supposed relationship between the parties, as some of the earlier cases-seem to indicate, but upon a broad and more satisfactory basis that the law, operating upon the acts of the parties, creates the debt, establishes the privity, and implies the-promise and obligation on which the action is founded.” In most, if not all, jurisdictions where the liability of a grantee to pay a debt secured upon the property conveyed to him, because of *his promise in the conveyance, is sustained on the ground stated, the fact of whether the grantor was liable for the debt or not is held immaterial. Dean v. Walker, 107 Ill. 540; Bay v. Williams, 112 Ill. 91; Merriman v. Moore, 90 Pa. St. 78; Dare v. Murphy, 45 Neb. 809.

From the foregoing authorities which more directly state the doctrine that has long prevailed in this state, applicable to this class of cases, than any case in our own court, and from the general principle upon which such cases rest, that has long been the settled law here, we deduce the following: Where a grantee, in the conveyance to him, assumes and ■agrees to pay the debt of a third person as part of the consideration for his purchase, there is no necessity for any consideration to pass from such third person or his creditor to such grantee to support such agreement; a portion of the ■consideration for the purchase being left in such grantee’s hands, appropriated by the grantor to the payment of the ■debt which such grantee agrees to pay in consideration of the conveyance and of such appropriation of the purchase money, he cannot be heard to object to the performance of iiis contract because his grantor was not liable for such debt. When the grantor makes such an appropriation, and the grantee, for a sufficient consideration, promises to pay the ■amount so appropriated to the creditor of such third person, such grantee thereby becomes liable to such creditor; and rsuch liability rests solely on such consideration and such .promise.

By the Oourt.— The judgment of the superior court is reversed, and the cause remanded for further proceedings in ^accordance with this opinion.

The general question of the right to sue upon a contract made between other parties for the benefit of the plaintiff is the subject of an extensive note to Jefferson v. Asch (53 Minn. 446), in 25 L. R. A, 257.— Rep.