PHILLIPS, Circuit Judge.
The Watkins Bank and the Lawrence Bank had been engaged in the general banking business at Lawrence, Kansas, for many years prior to October 20, 1928. For some time prior to that date the Watkins Bank had been desirous of discontinuing the banking business and arranging for the payment of its deposit liabilities in full upon demand without sacrificing its non-liquid assets. The Lawrence Bank was desirous of securing as many as possible, of the accounts of the Watkins Bank when the latter discontinued business.
On October 20, 1928, the banks entered into a contract wherein the Watkins Bank was referred to as First Party, and the Lawrence Bank as Second Party. The material portions of the contract read as follows:
“That whereas, the Board of Directors and shareholders owning more than two-thirds of the capital stock of First Party have expressed, by resolutions duly adopted, * * * authority for all of the liabilities to creditors to be trans[29]*29ferred to and assumed by Second Party. ^ ^
“That whereas, the Second Party is willing to assume and pay all of the liabilities hereinafter set forth of First Party to its creditors, * * *.
“Now, therefore, * * * it is hereby mutually agreed by and between them as follows:
“1. First Party shall cause to be prepared a statement of its condition as of the close of business on October 20, 1928, showing in detail its resources and liabilities as of said date as appearing on the general ledger or daily statement of First Party, * * *.
“2. Said Second Party shall, as of the close of business on October 20, 1928, take over, assume, and become liable for the payment of the following liabilities of First Party, in the amounts respectively shown by the aforesaid statement referred to in paragraph No. 1 hereof, and as the same appear on the books of First Party:
“a. The amount of all demand, time and other deposits, together with interest, if any, then accrued thereon.
“b. The amount of all outstanding cashier’s checks and certified checks.
“c. The amount then owing to the Federal Reserve Bank of Kansas City, Missouri, on loans or rediscounts, for which First Party is liable, together with interest, if any, then accrued thereon.
“The aforesaid liabilities and obligations so enumerated shall constitute the sole and only liabilities and obligations of First Party which Second Party shall assume.
“3. The First Party, in consideration of the premises and of the assumption of and agreement to pay all of its liabilities and obligations to creditors, as above enumerated, by Second Party, shall concurrently therewith, execute and deliver to Second Party its note bearing date of October 22, 1928, in the sum of Five Hundred Eighty-nine Thousand Eight Hundred Twenty-three and 59/100 Dollars ($589,823.59) payable to order of Second Party on or before two years after its date with interest from date at the rate of six per cent (6%) per annum, payable December 10, 1928, and quarterly thereafter.
“4. Contemporaneously with the execution of this agreement and for the purpose of securing the debt and obligation of First Party to Second Party, evidenced by the note of First Party above mentioned, First Party agrees to sell, assign, transfer, convey, set over and deliver to Second Party, its successors and assigns, by and good and sufficient endorsement or conveyance, all of its property of every kind and character and wheresoever situated, except office furniture and fixtures * * *.
“5. It is agreed that all sums realized by Second Party for the liquidation of the assets transferred by First Party hereunder shall be deposited in a special account with Second Party to be designated, ‘Watkins National Bank Liquidation Account.’ Second Party shall allow interest on the average daily balance of said account at the rate of six per cent (6%) per annum, to be credited thereon December 10, 1928, and quarterly thereafter. From said account there shall be paid on December 10, 1928, and quarterly thereafter, the following items in the following order: First, any amounts properly paid or advanced by Second Party under the terms of this contract and agreement;1 second, the interest on said principal note of First Party, to be computed to said date; and third, the balance shall be paid and credited upon said principal note in amounts of One Hundred Dollars ($100.00) or multiples thereof.
“6. Second Party, after the transfer and delivery of all the assets of every kind and character belonging to First Party as above specified, shall apply on the debt and obligation of First Party, as a credit, the amount of all cash on hand, drafts shall be drawn payable to Second Party for all balances owing to First Party by banks, bankers and trust companies, and the amounts thereof shall be applied on said debt and obligation when such drafts are paid. * * *
“7. * * * First Party shall transfer and deliver to Second Party, without cost to Second Party, all of its books, records, supplies on hand, signature cards, filing cabinets and stationery, * * *.
“8. It is further understood and agreed, and one of the considerations of this contract is, that Elizabeth M. Watkins shall [30]*30by a separate instrument in writing to be executed and delivered concurrently herewith, indemnify said Second. Party against any loss by reason of the execution of this agreement and on account of the liabilities and obligations imposed upon or resulting to the Second Party hereunder. Said instrument shall further provide that if, at the maturity of the note of First Party to Second Party, liquidation of the assets which are pledged as collateral to the payment of said note shall not have produced an amount sufficient to pay the principal of said note and interest thereon, together with any payments made by Second Party under Paragraphs 13, 15 and 16 hereof, said Elizabeth M. Watkins agrees thereupon to pay to Second Party an amount equal to the balance remaining unpaid to Second Party, and all of the assets pledged to Second Party as collateral security then .remaining shall be turned over and delivered to her by due, proper and legal endorsement and assignment and thereupon all obligations of the Second Party hereunder shall cease and determine. * * * In the event said note and interest, together with any payments made by Second Party under Paragraphs 13, 15 and 16 hereof, shall be fully paid prior to the final maturity thereof from the proceeds of pledged assets, then, unless otherwise mutually agreed by and between First Party and Second Party, all remaining assets shall be redelivered to the liquidating committee of the First Party by due and proper endorsement and assignment, and thereupon all obligations of the Second Party hereunder shall cease and determine.
“9. Second Party shall, within thirty days from the date of the execution and delivery of this instrument, sell all bonds transferred to it hereunder, except bonds securing circulation, subject to the approval of First Party, and shall 'apply the purchase price received therefor on the debt and obligation due to Second Party in the manner set out in Paragraph 5 hereof. * * *
“11. With respect to all other assets transferred hereunder, Second Party shall at all times, until it has been repaid the full amount of the debt and obligation of First Party, with interest thereon as aforesaid, have the right to become the sole and absolute owner of any of the property and assets of First Party, or of any particular asset or property, by applying upon said debt and obligation of First Party the value or worth of such assets or property or the part thereof which is purchased and acquired, and such purchase shall be deemed to have been made when credit for the amount, thereof has been given to First Party in Watkins National Bank Liquidation Account. The term ‘value or worth’ as used herein shall mean the amount of principal and interest represented by such asset or part thereof so purchased and acquired. With respect to real estate, the value thereof shall be determined by joint agreement of Second Party and the liquidating committee of the First Party. * * *
“13. No charge shall be made by Second Party for its expenses and services in liquidating the assets of First Party transferred hereunder except such legal and other expense as may be incurred in the collection of notes and assets by suit, if such suits shall' be found necessary or proper by Second Party. Legal and other expenses of the liquidating committee shall be borne by First Party. By mutual consent, proper items of expense may be paid by Second Party out of the liquidation account. * * *
“15. First Party hereby expressly represents that there are no outstanding obligations of any nature whatsoever not shown in its statement of condition as of the close of business on October 20, 1928, hereto attached, save and except sundry accounts and taxes payable, and it further warrants and guarantees the genuineness of all assets according to said statement and the existing collateral security. First Party agrees that if Second Party is compelled to pay and satisfy any sundry accounts or obligations for taxes accrued or any obligation of any nature whatsoever not shown in said statement such disbursements shall constitute a lien against the assets of First Party transferred hereunder and Second Party shall have the right and authority to make such payments and reimburse itself before any credits are made upon the debt and obligation of First Party to Second Party.
“16. Interest on time deposits, savings accounts and other interest bearing accounts shall be paid by Second Party as it becomes due. The amount of any interest payments so made shall be prorated between First Party and Second Party as of October 22, 1928, the pro[31]*31portion of interest accruing after said date being charged to Second Party and the proportion accruing up to October 22, 1928, being charged to First Party. Second Party shall have the right to reimburse itself for the First Party’s proportion out of the transferred assets before any credits are made upon the debt and obligation of First Party to Second Party. * * *
“18. It is expressly understood and agreed that Second Party does not assume any obligation or liability in connection with the liquidation of First Party other than as specified and provided herein. It is no part of its duty to enforce the collection of assets held it as security hereunder, but only to receive payments thereon and to make proper application of the proceeds as collected. Second Party may, however, take any or all proper steps to enforce such collections, at its discretion, as hereinbefore provided, and in such cases shall only be responsible for failure to exercise reasonable diligence in connection therewith.”
In accordance with the contract, the Watkins Bank executed its note to the Lawrence Bank, and delivered to the Lawrence Bank, a statement of the liabilities to be assumed by the latter, the aggregate amount of which equaled the principal sum of the note.
Among the deposit accounts in the Watkins Bank, on October 20, 1928, were certain inactive accounts aggregating $16,-023.38, which were carried in a card index and single ledger account, designated the “morgue” account.
The above mentioned statement included the inactive, or “morgue,” accounts, as well as the active accounts of the Watkins Bank.
All of the books and records of the Watkins Bank, including the card index and the ledgor sheet of the “morgue” account, were turned over to the Lawrence Bank.
On December 22, 1928, and once each week for sixty days thereafter, the Watkins Bank published in the Daily Bond News, New York City, and the Lawrence Democrat the following notice:
“The Watkins National Bank, located at Lawrence in the State of Kansas, is closing up its affairs. All note-holders and others, creditors of said association, are hereby notified to present the notes and other claims against the association for payment.
“E. F. Huddleston, Cashier.
“Dated At Lawrence, Kansas, December 12, 1928.”
The desire of the Lawrence Bank to secure the transfer to it of the deposit accounts of the Watkins Bank, was an important inducement to the Lawrence Bank to enter into the contract. A member of the liquidating committee testified as follows:
“It was then determined that the bank could not continue at a profit, although not insolvent, and the directors and officers thought it advisable, after talking over several methods of liquidation, to liquidate through another bank, to save the overhead expense and of course the, other bank would be recompensed by the business it gained through the liquidation; * * * a part of the compensation to any bank that took over the obligations of the Watkins National Bank was the getting of the business of those deposits and all the activity that flows from them, and that was a part and parcel of the consideration flowing from the Watkins National Bank to the Lawrence National to induce the Lawrence National to enter into the agreement.”
On October 23, 1928, the Lawrence Bank published an advertisement in the Journal World, a newspaper published at Lawrence, Kansas, stating that the Lawrence Bank had taken over the deposit-accounts of the Watkins Bank and soliciting the business of the customers of the Watkins Bank.
The Lawrence Bank sent out letters to many of the customers of the Watkins Bank, which, except as to amounts of the deposits, were in substantially the following tenor:
“Dear Customer:
“Your account with the Watkins National Bank close of business October 20th, showed $45.20. You also had on deposit with the Lawrence National Bank at that time the sum of $421.52. Owing to the fact that these two well ‘known banks have merged their business we are taking the liberty to combine your two accounts and at present your account shows a balance of $466.72.
“We indeed hope that our method of handling this matter meets with your entire approval, since we have been advised [32]*32by Bank authorities that this is the best and only way of handling the matter.
“Anticipating an early call from you we beg to remain,
“Yours very truly,
“Lawrence National Bank,
^ “By Cashier.”
. , .. ,,, ,, • x, , , j The assets of the Watkins Bank pledged .; T with the Lawrence Bank were collected an ime 0 1D?e.. p£ .j . j note. The note was fully liquidated on September 10, 1930. All of the pledged assets or proceeds thereof in the hands of the Lawrence Bank, which had not been applied on the' note were then returned to the liquidating committee. This left in the hands of the Lawrence Bank, cash or its equivalent, derived from payments on the note, equal to the then unpaid deposit liabilities of the Watkins Bank, the exact amount of which the record does not disclose.
, , The Lawrence Bank paid many of the deposit liabilities of the Watkins Bank including those embraced m the morgue account, from time to time, as they were demanded.
On August 16, 1932, the liquidating committee of the Watkins Bank made demand upon the Lawrence Bank to account for an amount equal to the unpaid amount of the “morgue” account, The demand was refused and the liquidating committee brought this suit for an accounting. On the date of the trial $735.-52^ of the ‘ morgue account had been paid out on checks of customers, and $1,-658.16 had been ^ charged off for service charges, leaving a balance of $13,-629.70.
The trial court found that the Lawrence Bank 'should account to the liquidating committee for the sum of $15,287.-86, with interest from December 12, 1931, at 6% per annum, and entered its decree accordingly. The Lawrence Bank has appealed. •
The contention of the liquidating committee is, that the proceeds of the note were deposited with the Lawrence Bank, as agent of tlie Watkins Bank, as a liquidating fund with which the Lawrence Bank was to discharge the specified obligations of the latter Bank; that the liabilities of the Watkins Bank for the unpaid “morgue” account, became barred by the statute of limitation on, Decernher 12, 1931; and that the Lawrence Bank should account to the liquidating committee for the unused portion of the liquidating fund,
The contention of the Lawrence Bank is that the contract was made between the two banks for the benefit of certain creditors of the Watkins Bank; and that the Lawrence Bank, by the terms , , , ’ L , , of the contract, assumed and agreed to pay ^ liabilities of the Watki^ Bank to such creditors; and that it is still lia- , ’ *le t0 pay the , po*on °f the mor^ue account on demand
By the express terms of the contract, the Lawrence Bank agreed to "take over, assume, and become liable for the payment” of all demand, time and other deposits, and any accrued interest thereon, all outstanding cashier’s checks and certified checks, and the amount due the Federal Reserve Bank of Kansas City, Missouri, on loans and rediscounts. The note of.the Watkins Bank was given in considerafion “of the assumption of and agreement„ by the Lawrence Bank «to pay» such depositS; checkS; loanS; and redis_ countS- The contract provided that the Lawrence Bank should assume and pay tire interest accruing after October 22, 1928, on time deposits and savings accounts. These provisions of the contract strongly indicate it was the intent of the parties, unqualifiedly to obligate the Lawrence Bank to pay the enumerated liabilities of the Watkins Bank,
The amount of the note was not set up on tke kooks 0f die Lawrence Bank j-q ^.ke cred¡f of fke Watkins Bank as a liquidating fund; on the contrary, the Lawrence Bank set up on its records, the note as an asset, and the assumed debts as liabilities. It is true, provision was made in paragraph 5, for a liquidation account, but it was to liquidate the note, not the assumed liabilities, from the moneys realized from the pledged assets; and when the note had been paid, the balance of the pledged assets were to be redelivered and the account closed,
The contract made no provision for setting up the amount of the note as a credit to the Watkins Bank, no provision for a report by the Lawrence Bank of its disbursements in discharging the assumed liabilities, and no provision for an accounting by the Lawrence Bank. It is reasonable to assume the parties would have incorporated such provisions in the contract, had they intended the relation [33]*33between the banks to be that of principal and agent.
Counsel for appellees predicate their contention, in part, on the provisions of paragraph 8, that upon payment of the note by Elizabeth M. Watkins “all of the assets pledged to Second Party as collateral security then remaining shall be turned over and delivered to her * * * and thereupon all obligation of the Second Party hereunder shall cease and determine”; and that upon the payment of the note by the Watkins Bank “all remaining assets shall be redelivered to the liquidating committee * * * and thereupon all obligations of the Second Party hereunder shall cease and determine.”
It will be noted that under paragraphs 5, 9, 11, 13 and 18 of the contract, the Lawrence Bank assumed certain duties and obligations with respect to the pledged assets. We think it was those obligations that were to cease and determine upon the redelivery of the remaining pledged assets, and not the obligation of the Lawrence Bank to pay 'the liabilities which it assumed. The parties have so construed the contract. The note was paid and the remaining pledged assets redelivered to the liquidating committee on September 10, 1930. If all obligations of the Lawrence Bank, under the contract, then ceased and determined, the liquidating committee would have then demandcd an accounting for the difference between the amount of the note and the amount the Lawrence Bank had paid out in discharge of the liabilities assumed by it. No such demand was made.
The language of the Supreme Court in Brooklyn Life Insurance Company v. Dutcher, 95 U.S. 269, 273, 24 L.Ed. 410, is apposite:
• , ¡~ , . There is no surer way to find out what parties meant, than to see what they have done. Self-interest stimulates the mind to activity, and sharpens its perspicacity. Parties in such cases often claim more, but rarely less, than they are entitled to.
The Lawrence Bank continued to carry the unpaid assumed debts as its liabilities and to discharge them on demand. The demand made on August 16, 1932, almost two years after the note was paid, was not for an accounting of unpaid assumed debts, but only of the unpaid “morgue” accounts. It was not predicated on the theory that all obligations of the Lawrence Bank had ceased and determined when the note was paid, and the remain-mg pledged assets redelivered, but upon the theory that the liability of the Watkins Bank on the unpaid “morgue” deposit account had become barred by the statute of limitations on December 12, 1931.
Furthermore, as stated above, the securing of the deposit accounts of the Watkins Bank was an important inducement to the Lawrence Bank to enter into the contract. This benefit to the Law- “ Ballk Tcould onl7 be ,fuUy effectua1> ed ^ the Ba™ce B,ank taking over as lts, own liabilities, the deposit liabilof th® Watkins Bank. It would have substantially impaired the value of such beneflt’ clf tke Lawrence Bank, on the pay“ent of thc notf and the «delivery of the .remaining pledged assets had been required to turn back to the Watkins Bank’ tker ^discharged deposit liabilities of the Watkms Bank,
We think it clear that the parties intended the obligation of the Lawrence Bank, to pay any unpaid liabilities assumed by it, should continue after the note was paid and the remaining pledged assets redelivered.
Continuously since the contract was entered into, the Lawrence Bank has treated the liabilities as its liabilities. It set them up on- its books as such. It no-tilled many of the depositors of the Watkins Bank of that fact by letter. It published a notice to that effect. The Watkins Bank, at no time objected to the course pursued by the Lawrence Bank until the demand of August 16, 1932.
Where the language of a contract is ambiguous, the practical construction which the parties have placed upon it is entitled to great weight in determining its proper interpretation.3
We concju(je tjlal ^y tjje (-erms 0f the contract, the Lawrence Bank assumed, and agreed to pay the liabilities of the Watkins Bank, stipulated in the contract, including the “morgue” account deposit liabilities.
[34]*34A contract in which a promisor engages to the promisee to render some performance to a third person is generally-called a contract for the benefit of a third person.
While the right of a third person to maintain an action on such a contract is in a sense remedial, it depends upon his substantive rights under the contract; it goes to the obligation of the contract; it involves an interpretation of the contract. Federal Surety Co. v. Minneapolis Steel & Machinery Co. (C.C.A.8) 17 F.(2d) 242, 244; Brown v. Ford Motor Co. (C.C.A.10) 48 F.(2d) 732, 734.
The law of the place where the contract is made governs its nature, obligation and interpretation, unless the parties, when entering into the contract, intend to be bound by the law of some other state. Federal Surety Co. v. Minneapolis Steel & Machinery Co., supra; Brown v. Ford Motor Co., supra; Mutual Benefit H. & A. Ass’n v. Baldridge (C.C.A.10) 70 F.(2d) 236, 239.
Hence we turn to the Kansas decisions. In Burton v. Larkin, 36 Kan. 246, 13 P. 398, 399, 59 Am.Rep. 541, the court said:
“It is unquestionably true that in this state a person, for whose benefit a promise to another upon a sufficient consideration is made, may maintain an action on the contract in his own name against the promisor. * * *
“But there are limitations upon this rule; or, rather, the rule is not so far extended as to give to a third person, who is only indirectly and incidentally benefited by the contract, a right to sue upon it. In the case of Simson v. Brown, 68 N.Y. 355 et seq., the following language is used: ‘It is not every promise made by one to another, from the performance of which a benefit may inure to a third, which gives a right of action to such third person, he being neither privy to the contract nor to the consideration. The contract must be made for his benefit, as its object, and he must be the party intended to be benefited.’ We think this is a correct statement of the law.”3
It is not necessary that the third person'be expressly named in the contract; it is sufficient if he is so described therein that his identity is ascertainable; and where the contract is for the benefit of a class definitely described in the contract, it is sufficient if he is a member of the class.4
It is not essential that the third person know of the contract at the time it is made.5
No express assent or formal acceptance by the third person is necessary.6 [35]*35His assent and acceptance will be presumed from the fact of benefit without burden.7 To rebut this presumption the third person’s dissent must be shown.8 We have found only one Kansas decision on the question of assent or acceptance by the third person. Wellman v. Knapp, 126 Kan. 473, 268 P. 817. It indicates the Kansás Supreme Court is in accord with the above rules.
Where an action has been brought, upon the promise of a third person to assume and pay the debt of the promisee, within the statutory period after such promise was made, the fact that the original debt had become barred by the statute of limitations when such action was commenced, is no defense thereto.9
Under the principles announced and applied in the Kansas decisions hereinbefore cited, we conclude that the contract was made for the benefit of the depositors of the Watkins Bank, that it was the intention of the contracting parties the depositors should be directly benefited thereby, that the Lawrence Bank is still liable, under the contract, to pay the unpaid depositors included in the “morgue” account, and that, each of such depositors may enforce the obligation to him by an action in his own name.
The decree is reversed with instructions to dismiss the bill. The costs will be assessed against the Watkins Bank.