Case Name: The County of Giles, and Jack's Cookie Corporation, a Corporation organized under the laws of Ohio, domesticated and doing business in Giles County, Tennessee, Appellants, v. First U. S. Corporation, a Tennessee Corporation, with an office in Shelby County; Bill F. Sutton, a resident of Shelby County; George Lenox, a resident of Shelby County; and Frank L. Milligan, a resident of Jefferson County, Appellees
Court: Tennessee Supreme Court
Jurisdiction: Tennessee
Decision Date: 1969-08-01
Citations: 223 Tenn. 345
Docket Number: 
Parties: The County of Giles, and Jack's Cookie Corporation, a Corporation organized under the laws of Ohio, domesticated and doing business in Giles County, Tennessee, Appellants, v. First U. S. Corporation, a Tennessee Corporation, with an office in Shelby County; Bill F. Sutton, a resident of Shelby County; George Lenox, a resident of Shelby County; and Frank L. Milligan, a resident of Jefferson County, Appellees.
Judges: BurNett, Chief Justice, and Humphreys, Justice, concur.
Reporter: Tennessee Reports
Volume: 223
Pages: 345–364

Head Matter:
The County of Giles, and Jack's Cookie Corporation, a Corporation organized under the laws of Ohio, domesticated and doing business in Giles County, Tennessee, Appellants, v. First U. S. Corporation, a Tennessee Corporation, with an office in Shelby County; Bill F. Sutton, a resident of Shelby County; George Lenox, a resident of Shelby County; and Frank L. Milligan, a resident of Jefferson County, Appellees.
445 S.W.2d 157.
(Jackson,
April Term, 1969.)
Opinion filed August 1, 1969.
D. C. Lee, Pulaski, for Giles County, James 0. Moore, Charlotte, N. C., of counsel.
Moore & Van AlleN, Charlotte, N. C., for Jack’s Cookie Corp.
C. Thomas Cates, Memphis, of counsel,, Burch, Porter & JohNsoN, Memphis, for First U. S. Corp., George Lenox and Frank L. Milligan.
Edward G. Grogan, Memphis, of counsel, Heiskell, Donelson, Adams, Williams & Wall, Memphis, for Bill F. Sutton.

Opinion:
Mr. Justice Dyer
delivered the opinion of the Court.
This cause comes to this Court from the action of the chancellor in sustaining one ground of the demurrer filed by appellees.
The issues of this case arise out of the issuance and sale of industrial bonds by Giles County, Tennessee. These bonds were issued pursuant to two statutes; that is, Chapter 137, Public Acts of 1951, now, as amended, carried as T.C.A. see. 6-1701 et seq., and Chapter 209, Public Acts of 1955, now, as amended, carried as T.C.A. sec. 6-2901 et seq. These statutes declare the relief of conditions of unemployment with the evils attendant thereto to be a public purpose. To carry out this public purpose the statutes provide a scheme whereby the various cities and counties of the State are authorized to issue interest bearing bonds with the proceeds to be used to construct, improve or extend an industrial building to be leased to a private industry thereby creating jobs for the unemployed. This is the sole purpose of these statutes.
On June 3, 1962, Giles County, in order to construct an industrial building to be leased to a private industry thereby creating jobs and relieving conditions of unemployment in the county, pursuant to these statutes authorized the issuance and sale of $2,500,000.00 in interest bearing bonds. On the same day (June 1, 1962), Giles County entered into a contract with Jack's Cookie Corporation whereby Jack's Cookie Corporation agreed to lease said building and operate therein a private industry. Jack's Cookie Corporation further bound itself to pay monthly rental necessary to retire the bonds and interest thereon. Also, on this same day (June 1, 1962), in furtherance of the matter, Giles County entered into a contract with First U. S. Corporation whereby First U. S. Corporation was to act as fiscal agent for Giles County in the preparation and recommendation of the most marketable scheme of financing and assist in the sale of the bonds.
The original bill, admitted here on demurrer, alleges First U. S. Corporation and the named personal defendants as officers, shareholders and directors by their wrongful acts, misrepresentations and breach of their duty, illegally retained in excess of $500,000.00, represented by negotiable bearer "supplemental coupons" which accompanied the issue and the taking of certain discounts.
The ground of the demurrer sustained by the chancellor is as follows and presents the only issue here on appeal:
Jack's has no right to sue because Jack's was not in privity of contract with any of the defendants.
T.C.A. sec. 6-1715 provides as follows:
The governing* body of a municipality issuing bonds pursuant to this chapter shall prescribe and collect rentals for industrial buildings and shall revise same from time to time whenever necessary so that the income and revenues to be derived from such rentals will always be sufficient to pay when due all bonds and interest thereon for the payment of which such revenues are pledged, including reserves therefor. T.C.A. sec. 6-2912 provides as follows:
The governing body of a municipality issuing bonds pursuant to this chapter shall prescribe and collect rentals for industrial buildings and shall revise same from time to time whenever necessary so that the income and revenues to be derived from such rentals will always be sufficient to pay when due all bonds and interest thereon for the payment of which such revenues are .pledged, including reserves therefor, and to provide for all expenses of operation, maintenance, and depreciation charges of such industrial buildings. All funds arising under the provisions of this chapter shall be kept separately and apart from other funds of the county, city or town, as the case may be.
The contractual arrangements between Giles County and Jack's Cookie Corporation are governed by the statutes under which the bonds were issued. Under the above copied sections of the Code it is mandatory upon Giles County to prescribe and collect of Jack's Cookie Corporation rentals necessary to pay the bonds and interest thereon, and Jack's Cookie Corporation by the statute is obligated to pay the required amount. These statutes also make it mandatory upon Giles County to revise the rentals whenever necessary to pay the bonds and interest thereon; Jack's Cookie Corporation would also be bound to pay any necessary revision of the rentals. We construe the words "shall revise same from time to time whenever necessary" to mean revision either upward or downward as the payment of the bonds and interest thereon require. It is manifest that this is to be a nonprofit enterprise with the industrial building to be acquired at the least possible cost to both the county and the industry.
Then, under the allegations of the original bill, Jack's Cookie Corporation due to the alleged wrongful acts of First U. S. Corporation and the named personal defendants has already been required to pay monthly rentals all in excess of what otherwise would have been required and unless relieved in this suit will be bound to continue to make said payments.
In Tennessee, the doctrine is firmly established that the beneficiary of a contract, although not an expressly designated party thereto, may maintain an action in his own name against the promisor, where the promise between the promisor and the promisee is made upon sufficient consideration for the benefit of the third party. Ruohs v. Traders' Fire Insurance Co., Ill Tenn. 405, 78 S.W. 85 (1903); Title Guaranty & Trust Co. v. Bushnell, 143 Tenn. 681, 228 S.W. 699, 12 A.L.R. 1512 (1920).
Under the facts as alleged we think Jack's Cookie Corporation would be a third party beneficiary to the contract between First U. S. Corporation and Giles County. By virtue of the statute under which the bonds were issued if there be any recovery by appellants it will accrue to the benefit of Jack's Cookie Corporation, since such will reduce Jack's Cookie Corporation's statutory obligation to pay all the cost of the bonds.
Jack's Cookie Corporaion's suit can also be sustained as a quasi contract action. In his treatise on the law of quasi contracts, William A. Keener, Professor of Law and Dean of the Faculty of the Law at Columbia College (1893), at page 16, in discussing the scope of quasi contracts says:
Quasi contracts may be said in general to be founded, (1) upon a record. (2) upon a statutory, or official, or customary duty. (3) upon the doctrine that no one shall be allowed to enrich himself unjustly at the expense of another.
In support of the second proposition Inhabitants of Milford v. Commonwealth, 144 Mass. 64, 10 N.E. 516, is cited. In that opinion, the court said:
A contract may be expressly made; or a contract may be inferred or implied, when it is found that there is an agreement of the parties, and an intention to create a contract, although that intention "has not been expressed in terms of contract. In either case there is an actual contract. But a contract is sometimes said to be implied when there is no intention to create a contract, and no agreement of parties, but the law has imposed an obligation which is enforced as if it were an obligation arising ex contractu. In such a case there is not a contract, and the obligation arises ex lege.
In selections from Williston on Contracts (Rev.Ed.), Williston & Thompson, in Section 3, page 10, it is said:
It is also true that quasi contractual obligations are not so universally based on unjust enrichment or benefit as is sometimes supposed. There are many cases where the law enforces in a contractual action a duty to restore the plaintiff to a former status — not merely to surrender the benefit which the defendant has received. This is true wherever the plaintiff has a right to the rescission of a transaction and restitution because of the defendant's wrong, whether fraud, duress, or breach of contract .
So, since under T.C.A. sec. 6-2912 Jack's Cookie Corporation, pursuant to the statutory scheme, has the right to have the rent it must pay determined on the basis of actual cost, free from illegal, false, or fraudulent padding, it has an interest in the subject matter which it has the right to call on equity to protect.
Again, since the statutory schemes under which the evidences of indebtedness were issued, give Jack's Cookie Corporation an actual interest in the subject matter, the chancellor should have looked through the form to the substance and should have held that defendants hold the evidences of indebtedness sued for, and the money already received as on a trust in invitum or a trust ex maleficio.
It is a maxim that equity delights to do complete justice, and not by halves. This maxim has grown out of the desire of the chancery court to so completely decide every matter involved in the litigation that there will be no roots of controversy left out of which other suits may spring. Hence, the Court requires that all persons interested, either legally or beneficially, in the subject matter shall be made parties to it, either as complainants or as defendants, so that there may be a decree that will bind them all. By this means, the court is enabled to make a complete decree between all the parties interested in the controversy, and thus not only to prevent future litigation by taking away the necessity of a multiplicity of suits, but to make it perfectly certain that no injustice has been done to any party interested in the subject mat ter of the suit. 1 Gibson's Suits in Chancery, Section 47, p. 58, and eases there cited.
This generally is qualified by certain well recognized rules which, as applicable are: (1) that one must ordinarily be possessed of the remedial interest in the cause of action asserted which the law or the forum may recognize and enforce in order to be a party-complainant to a suit. This interest must be a real, direct, present and substantial right or interest in the subject matter of the controversy, though remote and relatively small. The test is, of course, the interest or claim of interest. A leading principle for determining the proper parties to a suit is, that if the decision of any part of the subject matter of the suit will affect the present or contingent rights or interests of any person or persons, or, if a complete decree cannot be made upon all the matters involved without having the particular parties before the court, they are proper parties.
Since under the statutory schemes under which this entire transaction arose, Jack's Cookie Corporation has a real, present interest in the rent cost of the building, and the right to have that cost determined upon a consideration of only legitimate items of expense, it certainly has such an interest in the subject matter as sustains its right to be a party.
Consider what the situation might be if Jack's Cookie Corporation were not allowed to continue in the suit as a party. Giles County could possibly recover and then decline to give Jack's Cookie Corporation the benefit of the recovery. This would, of course, necessitate another lawsuit, a suit whose issues could be disposed of in the present action. Or, suppose Giles County were to decide that since the real beneficiary of the action is Jack's Cookie Corporation, and that it is going to get nothing out of any recovery which may be made, that it does not care to go on with the suit, would anyone say under such circumstances that although Jack's Cookie Corporation has the statutory right to have its rent determined on the basis of actual and not fraudulent cost, still it has no such interest as would enable it to maintain a suit against both Giles County and the present defendants? Of course not. Then, why cannot Jack's Cookie Corporation interest in the subject matter be settled now, once and for all? We think it can and accordingly reverse the chancellor and remand the case for further proceedings.
BurNett, Chief Justice, and Humphreys, Justice, concur.
CresoN and Chattin, Justices, dissent.