#### John S. Trimble *v.*Alexander R. Strother.

3. In an action to recover a debt which the defendant agreed with a third party to pay the plaintiff, it is a good defense to show that before tha plaintiff assented to, or acted on the promise made in his favor, the agreement had been rescinded.

2. In such case, where the plaintiff has not been induced to alter his position by relying, in good faith, on the promise made -in his favor, the defendant is not estopped from setting up any defense which he could have set up against the enforcement of the contract by the other contracting party.

Motion for leave to file a petition in error, to reverse the judgment of the District Court of Van Wert county.

The defendant in error, Alexander R. -Strother, being a creditor of the firm of Rockwell, Dong & Co., sued Trimble, the plaintiff in error, to recover the amount due him from Rockwell, Dong & Co. His cause of action against Trim*379ble is founded upon a written agreement, entered into between Trimble and Rockwell, Long & Co., whereby the-former, in consideration of the sale and transfer of the firm assets, assumed to pay the liabilities of the firm.

The answer set up two defenses.

The substance of the first defense is, that at the time of the-making of the agreement, and for the purpose of inducing Trimble to enter into it, Rockwell, Long & Co., made a statement to him of the persons to whom they were liable, and the several amounts of such liabilities; that Strother was not. among the persons thus named, and that they represented to Trimble that Strother held no claim against them; that these-representations were false, and were made with intent to deceive Trimble, and to induce him to enter into the agreement, and that, relying on the truth of such representations, he was induced to sign the agreement.

The second defense is, in substance, that before Trimble had notice of the claim of Strother against Rockwell,. Long & Co., the agreement by which Trimble assumed to pay the liabilities of Rockwell, Long & Co., had, by the consent of all the parties to it, and upon certain considerations in the answer set forth, been rescinded.

A general demurrer was filed to the answer. The demurrer was sustained by the Court of Common Pleas, and, without further- pleading, judgment was rendered on the-■petition.

On error the judgment was affirmed by the District-Court.

To reverse these judgments, application is now made for leave to file a petition in error.

*T. H. Wiggins,*and *Geddes, Dickey,*and *Jenner,*for the motion :

I. Trimble, if his contract with Rockwell, Long & Co. had not been rescinded was only bound to pay the debts, that were mentioned to him as being the debts of Rockwell, Long & Co.

The rule laid down in *Thompson*v. *Thompson,*4 Ohio St. *380333, is prevented from operating by a proper application of the doctrine of estoppel. *7*Ohio St. 105 ; 8 Ohio St. 281; 14 Ohio St. 414; 5 Ohio, 194.

Strother, by operation of law, is privy to the contract of Rockwell, Long & Co. He is trying to enforce their contract made for his benefit, as he alleges, and is subjected to all the consequences of their fraudulent acts and representations. *Judson*v. *Gray,*17 How. Pr. 289.

II. The contract between Trimble and Rockwell, Long & Co. was rescinded before Strother had knowledge of it, accepted it, or .acted upon it, and hence Strother has no rights under the rescinded contract. *Auburn City Bank*v. *Leonard,*40 Barb. 119 ; 4 C. & P. 93; 1 Parsons on Contracts (ed. of 1860), 190 and note; 24 Wend. 260; 1 Swan’s Pr. & Pr. 37, 38; 16 Barb. 561; *Butterfield*v. *Hartshorn, 7*N. H. 345. And there was no fund in Trimble’s hands, to pay over. 3 Barb. 209; 1 Gray, 317.

*Isaac N. Alexander*and *G. M. Saltzgaber,*contra:

Strother had a clear right of recovery in this case. Chitty on Pl., 8 Am. ed. 4 et seq.; *Crumbaugh*v. *Kugler,*3 Ohio St. 549; *Brewer*v. *Dyer, 7*Cushing, 337, and cases there cited; *Thompson*v. *Thompson,*4 Ohio St. 333; *Bagley*v. *Waters, 7*Ohio St. 367; 17 Mass. 400; *Starkie*v. *Starkie,*Styles, 296; *Green*v. *Hoen,*Campb. 219.

The doctrine of estoppel does not apply. 2 Smith’s Leading Cases, 6 Am. ed. 665; Stevens on Pl. 239; Coke Litt. 352a.

White, J.

We think the court erred in sustaining the demurrer to the answer. Had the demurrer been to the defenses, separately, it should have been overruled as to both.

The plaintiff brought his action to recover a debt which the defendant agreed with Rockwell, Long & Co., to pay the plaintiff. Before the plaintiff assented to or acted on the promise thus made in his favor, the agreement had been rescinded. This, surely, constituted a good defense.

We do not question the former rulings of this court, that *381a party may maintain an action on a promise made for his-benefit, although the consideration moved from another, to whom the promise was made. But this rule must be understood and applied with its proper qualifications. *Bagley*v. *Waters,*7 Ohio St. 359; *Thompson*v. *Thompson,*4 Ohio St. 333; *Miller & Co.*v. *Florer,*15 Ohio St. 151; see also, *Pike*v. *Brown,*7 Cush. 133; *Brewer*v. *Dyer,*Id. 337; *Millen*v. *Whipple,*1 Gray, 317; *Butterfield*v. *Hartshorn,*7 N. H. 345; *Owen*v. *Bowen,*4 Car. & P. 93.

The plaintiff was a creditor of Rockwell, Long & Co. He-had not surrendered his claim against them, nor had he assented to the provision which they had made for its payment. He was not bound to accept it, and, until he did so,, there was certainly nothing to prevent the parties to the-agreement from rescinding it.

The plaintiff’s right rests solely on the agreement. He-claims under Rockwell, Long & Co. In such ease, if he-has not been induced to alter his position by relying in> good faith, on the promise made in his favor, the defendant is not estopped from setting up any defense which he could have set up against the enforcement of the promise by the other contracting party.

Leave to file the petition is granted; and under section-515 of the code as amended (72 Ohio L. 173), all the judges concurring, the judgment of the District Court, as-well as that of the Court of Common Pleas, is reversed ;-, the demurrer to the answer overruled; and the cause remanded for further proceedings.

McIlvaine, O. J.; Welch, Rex, and Gilmore, JJ., concurred.