Case Name: Alexander H. Revell & Company, Plaintiff in Error, v. C. H. Morgan Grocery Company, Defendant in Error
Court: Illinois Appellate Court
Jurisdiction: Illinois
Decision Date: 1919-07-02
Citations: 214 Ill. App. 526
Docket Number: Gen. No. 24,394
Parties: Alexander H. Revell & Company, Plaintiff in Error, v. C. H. Morgan Grocery Company, Defendant in Error.
Judges: 
Reporter: Illinois Appellate Court Reports
Volume: 214
Pages: 526–532

Head Matter:
Alexander H. Revell & Company, Plaintiff in Error, v. C. H. Morgan Grocery Company, Defendant in Error.
Gen. No. 24,394.
1. Contracts, § 206a —rights of third person for whose benefit contract was made. Where a contract is entered into by two parties for the benefit of a third, the third party’s rights are subject to the ..equities between the original parties.
2. Contracts, § 349*—when third person for whose benefit contract was made cannot recover. Where a grocery company had entered into a contract with a contractor to furnish, do work and install fixtures in one of the company’s stores, and the contractor purchased the fixtures from a third party, and where, after the work had been found unsatisfactory, the grocery company and the contractor made a written agreement regarding, the completion of all work in consideration of the grocery company paying a stated balance, which included the amount due to such third party from the contractor, such third party could not recover from the grocery company the amount due it from such contractor, where the contract was not carried out by the contractor.
Taylor, J., dissenting.
Error to the Municipal Court of Chicago; the Hon. Harry P. Dolan, Judge, presiding. Heard in the Branch Appellate Court at the October term, 1918.
Affirmed.
Opinion filed July 2, 1919.
Edwy Logan Beeves and Ernest Kasisohke, for plaintiff in error; Ernest Kasisohke, of counsel.
Allen, Whipple & Ward and James A. 0 ’Callaghan, for defendant in error; S. M. Myers and Leslie A. Gilmore, of counsel.
See Illinois Notes Digest, Vols. XI to XV, and Cumulative Quarterly, same topic and section number.

Opinion:
Mr. Justice O'Connor
delivered the opinion of the court.
Plaintiff brought suit in the Municipal Court of Chicago against the defendant, and in its final state ment of claim sought to recover $671.80. There was a finding and judgment in favor of the defendant, to reverse which this appeal is prosecuted.
So far as it is necessary to state them, the facts are these: The defendant, C. H. Morgan Grocery Company, entered into a contract with one William Lidke, whereby he was to perform certain work and furnish and install certain fixtures in one of defendant's stores. Lidke proceeded with the work and purchased the fixtures from plaintiff and installed them in the store. The work was not done by Lidke satisfactorily to the defendant, and on May 22nd they entered into a written agreement which plaintiff makes the basis of its claim in this suit. The contract provided:' "As per our recent agreement regarding the completion of all work as per contract with you, I will do as follows: (Item specified.) In return you are to pay the balance of Eleven Hundred ($1,100) Dollars due me in full, as follows: To Alexander H. Eevell & Co., the sum of $671.80," etc. Lidke did not do any part of the work which he agreed to do. Afterwards plaintiff brought this suit to recover the $671.80.
Plaintiff's position, as we understand it, is that Lidke's promise to do the work was the consideration for the defendant's promise to Lidke to pay the $671.80 to plaintiff, and that plaintiff may maintain an action on the defendant's promise, although Lidke did not fulfil his part of the contract by doing the work specified. In support of this contention the cases of Gage v. Lewis, 68 Ill. 604; Newton v. Clarke, 138 Ill. App. 196; Western Pine Lumber Co. v. Nelson, 189 Ill. App. 41, and Cohn v. Cohen, 204 Ill. App. 405, are cited.
Whatever may be said as to what those cases hold, we think they are inapplicable here. In the instant case, the promise to the defendant to pay the money to plaintiff was upon condition that Lidke would perform certain work. This condition, it is conceded, was not carried out by Lidke. It would be a strange rule of law that would permit the plaintiff to recover in this case. Plaintiff admits,, as of course it must since the contract on which liability is claimed is in writing, that Lidke was to do certain work for the defendant, and in consideration defendant was to pay plaintiff the amount specified, and it is admitted that Lidke did not do any part of the work, and yet in the face of this admission plaintiff maintains that it is entitled to the $671.80. It is obvious that this contention is ag'ainst all sense of justice and fair dealing—contrary to common sense. Of course Lidke could not recover without performing the work. Davis v. Wiley, 4 Ill. 234; Hungate v. Rankin, 20 Ill. 639; McCormick Harvesting Machine Co. v. Haug, 88 Ill. App. 674; International TextBook Co. v. Mackhorn, 158 Ill. App. 543. And all the authorities hold that where a contract is entered into by two parties for the benefit of a third, the third party's rights, are subject to the equities between the original parties. Dunning v. Leavitt, 85 N. Y. 30; Malanaphy v. Fuller & Johnson Mfg. Co., 125 Iowa 719; Ellis v. Harrison, 104 Mo. 270; Hargadine-Mc-Kittrick Dry Goods Co. v. Swofford Bros. Dry Goods Co., 65 Kan. 572; Fish v. First Nat. Bank of Seattle, 150 Fed. 524; Trimble v. Strother, 25 Ohio St. 378; Commercial Nat. Bank v. Kirkwood, 172 Ill. 563.
In speaking of such a contract in the Dunning case, supra, the court said (35): "There is no justice in holding that an action on such a promise is not subject to the equities between the original parties springing out of the transaction or contract between them. It would be contrary to justice and good sense to hold that one who comes in by what Judge Allen, in Vrooman v. Turner [69 N. Y. 280], calls 'the privity of substitution,' should acquire a better .right against the promisor than the promisee himself had."
To the same effect is. the Malanaphy case, supra, where the court said: "Among other limitations, the party to be benefited becomes subject to all inherent equities arising out of the contract affecting the principal parties one with the other. This follows from the relation of privity which the law implies."
In the Ellis case, supra, it was said: "It is clear that on principle such right cannot be broader than the party to the contract (through whom the right of action is derived) would have in the event of its breach. Such beneficiary cannot acquire a better standing to enforce the agreement than that occupied by the contracting parties themselves." The judgment of the Municipal Court of Chicago is affirmed.
Affirmed.