Opinion ID: 1518197
Heading Depth: 1
Heading Rank: 4

Heading: Does the Plaintiff have standing to enforce the contract?

Text: The contract was one for the purchase of real estateexcept for some personal property incidental to the buildings and our Court had adopted the generally accepted principle that a contract for the sale of real estate is specifically enforceable. Handy v. Rice, 98 Me. 504, 57 A. 847 (1904); Dunham v. Hogan, 143 Me. 142, 56 A.2d 550 (1948); 49 Am.Jur. Specific Performance § 92; 81 C.J.S. Specific Performance § 63. In Maine, as in most American jurisdictions, a third person may sue in his own name to enforce a contract which was made for his benefit even though he was not a party to the contract and no consideration moved from him. Hinkley v. Fowler, 15 Me. 285 (1839); Frothingham v. Maxim, 127 Me. 58, 141 A. 99 (1928); Verrill v. Weinstein, 135 Me. 126, 190 A. 634 (1937); 17 Am.Jur.2d, Contracts § 302. The Restatement of Contracts, § 133(1)(a) describes one of the third parties included under the American rule as a donee beneficiary and defines his status in this manner: (1) Where performance of a promise in a contract will benefit a person other than the promisee, that person is, except as stated in Subsection (3): (a) a donee beneficiary if it appears from the terms of the promise in view of the accompanying circumstances that the purpose of the promisee in obtaining the promise of all or part of the performance thereof is to make a gift to the beneficiary or to confer upon him a right against the promisor to some performance neither due nor supposed or asserted to be due from the promisee to the beneficiary. (Emphasis supplied.) While the agreement between Loew and Laskey was primarily for their benefit, the benefit to the Plaintiff was more than incidental. The agreement contemplated that other persons were to have the right to submit sealed bids and that the highest qualified bidder was to receive a conveyance of the property by the promisee. Loew and Laskey were each both promisor and promisee, each being entitled to insist upon performance by the other. In order to accomplish their own mutual purposes, they intended to confer upon the highest bona fide bidder a right to performance of their agreement to sell. Each promised to cause the corporation to carry out the terms of their personal agreement. Forbes v. Wells Beach Casino, Me., supra. It is not necessary that the contract be exclusively for Plaintiff's benefitor that it was made primarily for his benefit; he has standing to enforce it if he is a member of a class of beneficiaries entitled to some performance under the contract. 17 Am.Jur.2d, Contracts §§ 306, 307; 17A C. J.S. Contracts, § 519(4) a. While the early Maine cases which established the rights of the third party beneficiary were actions in assumpsit and this Court has not been called upon to approve of equitable type relief to the non-contracting beneficiary, we find nothing in our decisions tending to confine its use to the law side. Particularly in view of the merger here of law and equity and our recognition of one form of civil action there appears to us to be no justification for denying, as such, equitable type of relief to the beneficiary who is entitled to enforce the contract. Shaw v. E. I. DuPont De Nemours & Co., 124 Vt. 304, 204 A.2d 159 (1964); 17 Am.Jur.2d, Contracts § 319; 17A C.J.S. Contracts § 523(1) f. Such is the rule recommended by the Restatement of Contracts, § 138: § 138. Allowance of Specific Performance. If specific enforcement of a duty owed to a donee beneficiary or to a creditor beneficiary is possible and in accordance with the rules of equity, a suit for such enforcement can be maintained. The suit may be brought either by the promisee or by the beneficiary. Quite apart from the analogy that can be drawn from the rule statutorily established as to auction sales of personal property, the standing of the Plaintiff as the alleged highest bona fide bidder is supported by application of the principle of equitable estoppel. Our Court has frequently interposed this doctrine to prevent the injustice which would result if a party's own fraud could create a situation which would defeat another's just claim. Hallowell National Bank v. Marston, 85 Me. 488, 27 A. 529 (1893); Caswell v. Fuller, 77 Me. 105 (1885). Here, Loew and Laskey agreed that the property would be sold to the highest good-faith bidder. If, as Plaintiff has alleged, each submitted a fraudulent bid, while Plaintiff's bid was made in good faith, the Defendants cannot now contend successfully that Laskey's fraudulent bid prevents Plaintiff's good-faith bid from being the highest qualified bid. The Single Justice rejected Plaintiff's contention that Loew's purchase of the corporation property in his own name was an abuse of his fiduciary position and that he should be declared to hold the corporation property as a constructive trustee for the benefit of all interested parties and especially for the Plaintiff. The Justice concluded that any right Plaintiff might have to relief under this theory must be based upon 1) his standing as a person entitled to purchase the property, and/or 2) his right as the now owner of the Laskey stock to seek relief as upon a stockholder's derivative action for the benefit of the Corporation. The Justice's conclusion that Plaintiff was not entitled to purchase the property which we have found to have been error led him to disregard the first basis for that particular equitable relief. We consider that it, alone, would entitle Plaintiff to such equitable relief.