Hubbert v. Borden , 6 Whart. 79 ( 1841 )

The opinion of the court was delivered by

Kennedy, J.

Three questions appear to embrace all that is material in the errors assigned. First; can .this action be maintained in the names of the plaintiffs below, by showing that the written agreement, given in evidence on the trial, was made by the defendant there, with Thomas & Martin, for the benefit of the plaintiffs below; and that Thomas & Martin were employed by them to obtain from the defendant the engagement contained in said agreement on his part to be performed, for the breach of which this action has been instituted 1 Second; supposing the plaintiffs below to have such an interest in the engagement of the defendant, as to enable 'them to maintain the action for a breach of it in their own names, had they a right to commence it before the expiration of the year therein mentioned 1 And third, did the learned judge of the court below charge the jury erroneously or not in regard to the inference, which they might draw, as to the quantity of starch manufactured by the defendant within the year before the commencement of the suit, from the circumstance of his declining to show the actual amount; or in regard to the presumption that the jury might make, as to the price of wheat during the same period, in the absence of direct evidence showing precisely what it was 1

The first question will, it is conceived, embrace all the bills of exception taken to the opinion of the court, -admitting the evidence objected to by the defendant below: for, if the existence of the facts which the evidence was offered to prove, will entitle the plaintiffs below to maintain the action, it would seem to follow clearly, that the evidence was admissible. This, then, would leave nothing in regard to the evidence to be decided on, excepting its competency to establish the facts; which will receive a passing notice.

Though the engagement of the defendant is reduced into writing, yet it is considered in law nothing more than a parol agreement; that is, the same as if it had been made verbally, without writing. And where such an agreement has in fact been made for the benefit of a third person, whose name is not mentioned in it, I apprehend it has never been doubted that parol evidence was admissible to show that the fact was so; as also the name or names of persons for whose benefit it was intended. It is every day’s practice to admit parol evidence for the purpose of establishing a use, and showing who is the beneficiary, where it does not appear upon the face, of the instrument containing the grant or creating the obligation: and this may be done even where the instrument is under seal, unless it relates to lands, and the admission of such evidence should be thought to contravene the act of assembly against frauds and perjuries. It is a great misapprehension to suppose that the admission of parol evidence for such purpose trenches upon the general rule which prohibits the admission of such evidence for the purpose of altering a written agreement, by either adding to or taking any thing from it. To prove, by such evidence, the interest of a third person in the written agreement, does not in general vary or contradict it in any respect whatever; but is effected by proving another agreement or understanding between the beneficiary and one of the parties to the written instrument; which is perfectly reconcilable therewith, or at most, never prejudices the rights or increases the obligation of the other party thereto. So far, therefore, as the evidence offered by the plaintiffs below, tended to prove their interest in the contract made with the defendant by Thomas & Martin, by showing that it was made by Thomas & Martin, under the authority of the plaintiffs, and for their benefit, it was clearly admissible. But Whether the establishment of this fact be, in law, sufficient to enable the plaintiffs below to maintain such an action as the present, in their owp names, for a breach of the engagement of the defendant, made to Thomas & Martin personally, without any mention of them as agents for the plaintiffs, might probably at one time in England have been a question upon which judges, and courts, possibly, would have differed in opinion. For on the question, where a promise is made to one for the benefit of another, whether, in case of a breach of such promise, the action ought to be brought in the name of the promisee or the beneficiary, we have decisions that seem to be irreconcilable with each other. According to 1 Rolle Abr. 30 L. 44, 31 L. 15, it was ruled, that the action of assumpsit might be maintained by him, to whom the promise was made, notwithstanding the benefit accrued' to another; as if a man promise A. to give money to his daughter, when she mames, A. may have the action. See also 1 Com. Dig. tit. Action upon the Case upon Assumpsit, (E). So in Taylor v. Foster, (Cro. Eliz. 807,) where the defendant, in consideration that the plaintiff would marry his daughter, assumed to pay for hinr to J; S., to whom he was indebted, 100/.; and held, that the action would lie. But in Scott v. Hawes, (Cro. Eliz. 619. 652,) it was held, that the father could not maintain assumpsit on a promise made to him by the defendant to pay -200?. to the son of the plaintiff, in consideration that the son would marry the defendant’s kinswoman; and that the father would assure to her bonds of 3 0Z. per annum, for her jointure; but that the action ought to have been brought by the son. Likewise Rippon v. Norton, (Cro. Eliz. 849,) was decided in conformity to the same principle. ' So upon a promise to B. to pay 20Z. to an infant at his full age, and to educate him in the mean time, it was held that.the infant should have the action. 1 Rolle Abr. 31. L. 35. Or if money be given to A. to deliver to B., B. may have the action. 1 Roll. Abr. 7. 1. 10. 32 1. 30. Hardr. 321. See also 1 Vin. Abr. 333 to 337, tit. Actions of Assumpsit, (Z) where all the old cases are collected on this subject and brought together. Ultimately, however, in Dutton v. Poole, (2 Lev. 210; 1 Ventr. 318,) the point seems to have received great consideration, and to have been solemnly decided. There the father of the plaintiff’s wife being seised of a wood, which he intended to sell to raise fortunes for his younger children, the defendant being his heir, in consideration thát he would forbear to sell it, promised to pay his daughter, the plaintiff’s wife, 1000Z.; for the non-payment of which the action was brought, and held by the King’s Bench, that the plaintiff might maintain it. . This decision was afterwards affirmed upon writ of error by the Exchequer Chamber. Some stress, it is true, was laid upon the nearness of the relationship between the plaintiff’s wife and her father, to whom the promise was made. But in the later case of Martin v. Hinde, (Cowp. 437,) the principle of it was fully sustained, where no relationship of any sort existed. And in Marchington v. Vernon, (1 Bos. & Pull. 101, in notis,) Buller, Justice, says, “ If one person makes a promise to another for the benefit of a third, that third may maintain an action upon it.” Accordingly, the late Mr. Justice Duncan, in delivering the opinion of this court in Strohecker v. Grant, (1 Serg. & Rawle, 241,) lays it down, that the person, for whose benefit the promise is made, may support an action of assumpsit for a breach thereof; but not so in the case of a covenant made under seal to one for the benefit of another. There the action must be covenant, and brought in the name of the person with whom the covenant is made: and the same rule as in covenant may also be applicable to promissory notes and bills of exchange, where the plaintiffs in their actions declare upon them. See as to the distinction in this respect, De Bollé v. Penn. Ins. Co. (4 Wharton’s Rep. 74.) In Blymine v. Boistle, (6 Watts, 183,) the rule which governs now in the case of parol contracts, and determines by whom the action shall be maintained, seems to be accurately stated and laid down by Mr. Justice Sergeant : and upon it that case was determined. The distinction taken there is, that “ If one pay money to another for the use of a third person, or having money belonging to another, agree with that other to pay it to a third, action lies by the person beneficially interested. But where the contract is for the benefit of the contracting party, and the third person is a stranger to the contract and consideration, the action must be by the promisee.” In other words, whenever such third person must be the loser or party injured by the non-peformance of the promise, justice would seem to require that he should be permitted to maintain the action; and more especially in those cases where the consideration for making such promise is to come from him. It is true that in most of the cases stated or referred to above, if not in all, the party for whose use or benefit the engagement was made, was mentioned or named at the time; but that can make no material difference to the promiser, because generally it must be a matter of indifference to him whether the promisee or a third person is to be benefitted by the fulfilment of his promise. And it will be found in many cases of contracts, made by factors for their employers, that the contracts were made by them, without their making known their principals; and that the same rule, in regard to the maintenance of actions for the breach of such contracts, has been held to obtain, as when the contracts have been made in the .names of the principals or employers, excepting in some few instances; for example, where there is a debt owing by the factor to the party promising; in which case the latter would have a right to set it off, whether the suit was brought in the name of the factor or the principal, where the factor contracts, as it were in his own right without disclosing that he has a principal. The factor is regarded as the instrument merely by whom the principal acts. He may, it is true, maintain an action in his own name, for a breach of the contract made by him for the benefit of his principal; but still the principal may, notwithstanding, take the matter into his own hands out of that of the factor; and may maintain a suit in his own name if the contract should"be broken by the other party. Girard v. Taggart, (5 Serg. & Rawle, 27-8.) We also have the case of Livingston et al v. Swanwick, (2 Dall. 300,) where Samuel Anderson, a broker of this city, entered into a written contract with the plaintiff of New York in the following terms: “ I do hereby engage to deliver to John R. Livingston, Esq., the engagement of John Swanwick, Esq., of Philadelphia, to deliver to John R. Livingston, Esq., aforesaid, one hundred shares of the bank stock of the United States, on the 5th of January next ensuing, upon receiving from the said J. R. Livingston payment for the same, at the rate of twenty-one shillings and sixpence in the pound.

(Signed) Samuel Anderson.”

New York, 15th July, 1791.”

On the trial of the cause, the plaintiffs produced a correspondence between Anderson and the defendants in relation to the contract after it was made, and then offered Anderson himself as a witness, to prove that he had received a verbal authority to make the contract for the defendant; that he had accordingly executed the foregoing; and that there had been a punctual compliance with the stipulations on the part of the plaintiffs. The defendant objected that Anderson was not competent to prove his own authority; and that he was interested in the question, as he had an action actually depending for his own commission on making the contract. The court, however, overruled this objection, saying, “ that he was competent to prove every part of the transaction; that he was not interested in the event of the suit; nor could the verdict, in that action, be given in evidence upon the trial of the action for his commission.” It was also objected then that the written contract was variant from the one declared on, inasmuch as the written contract was to deliver to J. R. Livingston only, but the action was in the names of'Brockholst and J. R. Livingston; which was also overruled by the court, who said the objection to the form of the action ought not to prevail; that the contract was proved by the testimony of Anderson; and the written paper was merely corroborative; that it was understood at the time of making the contract, that Mr. Brockholst and J. R. Livingston were jointly concerned; and that of course it was made for their joint benefit. This case would seem to meet and to overrule the most, if not all, of the exceptions taken to the opinion of the court below, admitting evidence, and likewise to the charge given to the jury in the case now under consideration. It shows, first, That the written • engagement of the defendant below was properly admitted in evidence. Second, That the conversation between the defendant and Thomas & Martin, before the contract was entered into, was rightly admitted, for the purpose of showing that the defendant was informed by Thomas & Martin, that it was sought to be made for the benefit of the plaintiffs, Third, That the conversation between the defendant and Stokes, who was directed by Thomas & Martin to call on the defendant in order to ascertain from him whether be had been making and disposing of his starch otherwise than to the plaintiffs, or the orders of Thomas & Martin, was not only proper, but was the very best evidence to prove what was indispensably requisite, in order to maintain the action; that is, a breach of the contract on the part of the defendant, and a determination -not to fulfil it. Fourth, That the correspondence between the plaintiffs and Thomas & Martin was properly admitted, because it showed the authority which the latter had from the former to make the contract on their behalf, and likewise the terms and conditions upon which it was to be made with the defendant. Fifth, That Mr. Martin was a competent witness to prove every part of the transaction, as also his authority to act in it for the plaintiffs. Sixth, That the variance alleged by the counsel for the defendant, to exist between the contract and the declaration, was wholly imma-. terial in point of either law or fact. For the declaration was not drawn upon the written contract, as in the case of an action founded upon a deed, specialty, or promissory note. But the yuiften agreement, in connection with the evidence showing that it was made for the benefit of the plaintiffs, was all admissible, and went to prove very fully the contract set out in the, declaration. And “ it would be,” as the learned judge of the court below said, “ a misapplication of the general rule, which prohibits the admission of parol evidence to destroy, control, add to, or alter a written instrument,” to exclude oral evidence from showing that the party named in the instrument, to whom the promise is made, was in reality the agent or factor of the plaintiff, and -that he obtained the promise for the benefit of such plaintiff. In no case will such evidence, though admitted, be suffered to prejudice the rights of the promiser; .and generally it is for his advantage that it should be admissible, because it will increase his security, by making the principal as well as the agent liable to him for what he will be entitled to receive in consideration of his having fulfilled his engagement. For instance, in the present case, Thomas & Martin by taking the written engagement of the defendant below to themselves personally, impliedly at least, become bound thereby to pay the defendant for the starch, as it should be delivered by him to them, according to his undertaking: and had the defendant gone on and fulfilled his engagement, and Thomas & Martin had failed to pay him, he, by showing that they were the factors or agents of the plaintiffs in the transaction, would have had a right to have demanded payment from the plaintiffs, and to have compelled it by suit if necessary.

Having shown that the interest and connection, which it was proved, the plaintiffs had with the contract, made with the defendant by Thomas & Martin, were such as to enable them to maintain a suit against the defendant, in their own names, for a breach of it, we come now to the consideration of the second question. Had they a right to commence it before'the expiration of .the year! From the nature of the contract, and the evidence given on behalf of the plaintiffs, on the trial below, it is impossible to doubt of their right to maintain this action at the time they brought it, and indeed, as it would seem from the evidence, might have brought it long before, notwithstanding the year was not up. Although the plaintiffs were to have all the starch which should be manufactured by the defendant within the year, yet, according to a fair interpretation of the contract, the defendant was bound to let the plaintiffs or Thomas & Martin for them, have it as it should be made. That such was the intention of the parties, is most clearly indicated by the terms of the contract, and the subject-matter of it. It is the universal practice of the manufacturers of such article to dispose of it as soon as convenient after being made; and the evidence goes to show that such was the practice of the defendant; for shortly after making the contract he delivered to Thomas & Martin, for the plaintiffs, forty-eight barrels; but instead of continuing thereafter to deliver it as made by him, he, in direct violation of his contract, sold and delivered it to other persons. The instant that he thus disposed of any portion of the starch manufactured by him within that year, he broke his engagement with the plaintiffs, and became liable to be sued by them. By disposing of his'starch to other persons than the plaintiffs, he not only deprived the latter of it, when they, according to his engagement, were entitled to have it, but put it out of his power to deliver it to them at any subsequent time whatever; and it would seem, from the evidence, that he avowed his determination to deliver no more to them than what he had done. It therefore appears that he has not even the least shadow of pretence for saying that the action was brought prematurely.

Then as to the third question. Did the court err in directing the jury that, “as he (the defendant) alone was cognizant of what he really made, the burthen of proof, on that point, was thrown upon him; and in the absence of all explanation, the jury would be justified in assuming that 1000 barrels were manufactured: if a small quantity be shown to have been all that was manufactured, then the actual quantity will be assumed by the jury 1” This action was commenced a month and twenty days before the expiration of the year; but probably after, that portion of the year, most favourable for making starch, had passed by; and when the defendant might possibly have manufactured 1000 barrels of it. It must be presumed that he knew the quantity which he had made within the year, anterior to the commencement of the action, and that he could have shown on the trial, had he pleased, what it was; a thing which it would have been difficult, if not impossible, for the plaintiffs to have done. If the quantity actually manufactured by the defendant within the year, had been less than 1000 barrels, as it would have been for his benefit to have shown it, it may fairly be presumed that he would have done so; but not having' done so, we think the court was right in leaving it to the jury to assume the fact, if not contradicted by the evidence given, that he had made that quantity.

We also think that the court was correct in the instruction given to the jury in regard to the price of wheat. If the change in the price of that article created and placed any difficulty in the way of the defendant’s fulfilling his contract, it certainly rested with him to show it. But if he did not choose to do so, no presumption in regard to it could be made in his favour; on the contrary, we think the jury were-at liberty to presume most strongly against him, keeping within the limits of the contract and the evidence on that point before them. The prosperity and peace of society depends' greatly upon an honest and faithful observance of contracts: the individual, therefore, who wilfully refuses to fulfil his contract, when able to do. so, has no claim to favour at the hands of a jury when brought before them for a breach of it. If, however, he alleges any extenuating circumstances, he must make proof of them, otherwise his allegation ought to be disregarded. The judgment is affirmed.

Judgment affirmed.