Court Opinion

ID: 6557452
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:00:52.640411+00
Date Added: 2024-06-11T15:56:23.659532
License: Public Domain

Terry, J.,
dissenting.
The great weight of authority under the English cases as of the date of the adoption of our first Constitution in 1792 unquestionably denied to a third party beneficiary a *395right to maintain an action at law on an instrument under seal impliedly made for his benefit, but to which he was not a party. Williston on Contracts, Rev. Ed., vol. 2, p. 1053; Halsbury’s Laws of England, 2d Ed., vol. 7, p. 79; Green v. Horne, 91 Eng. Reprint 177; Berkley v. Hardy, 108 Eng. Reprint 132; Bradford v. Stuckey., 129 Eng. Reprint 995; Southampton v. Brown, 108 Eng. Reprint 615; Mellen v. Whipple, 1 Gray 317, 67 Mass. 317; Crowe v. Rogers, 93 Eng. Reprint 719; In re Empress Engineering Co., 1 English Ruling Cases 686. The majority cite the case of Dutton v. Poole, 2 Lev. 210, and say, “During the Seventeenth Century, the English Courts apparently allowed a third party beneficiary to recover.” A reading of the Dutton case discloses that the action was in assumpsit. The case is viewed as exceptional, and, as stated by Williston, vol. 2, Rev. Ed., p. 1053, professes not to deny that only a party to a contract can sue upon it. The action was by a child on a promise made to her father. The Court held that the child might be so far identified with the parent on account of the nearness of relationship as to be regarded as a party to the contract. See also Tweedle v. Atkinson, 121 Eng. Reprint 262, decided in 1861, wherein the Court held in an action in assumpsit upon a marriage contract that a third party beneficiary could not recover, as no action could be maintained by the person from whom no consideration moves.
The English Rule has been foTowed in this State for upwards of one hundred years. In the case of Townsend v. Townsend, 5 Harr. 127, decided between 1848 and 1855, the rule was clearly stated and followed. The Court said that the right follows the interest, and the party who has the legal interest in a covenant must sue though the beneficial interest is in another; and, if a deed be inter partes as between (a) of the first part and (b) of the second part, (c) if not expressly named as a party, cannot sue thereon *396though the contract purport to have been made for his sole advantage and contain an express covenant with him to perform an act for his benefit. Merchants’ Union Trust Co. v New Philadelphia Graphite Co., 10 Del. Ch. 18, 83 A. 520, affirmed 10 Del. Ch. 481, 92 A. 1084; Jones v. Buck, 4 Boyce 546, 90 A. 86; Board of Public Education v. Aetna Casualty & Surety Co., 4 W. W. Harr. 355, 152 A. 600; 1 Williston on Contracts, 716, Rev. Ed., 1104; 13 C. J. 703; 17 C. J. S., Contracts, § 519.
It is also stated in the majority opinion that in the case of Jones v. Buck, supra, the Superior Court suggested a method of breaking away from the English Rule by indicating that a third party beneficiary can sue where he is especially given that right by the terms of the instrument. The significance that I gather from the opinion is that the Court merely modernized the rule to some extent by interpretation or construction without renouncing its basic principle, in that it was held that we may look for a party with a legal interest in some other part of the contract than in the premises, and, if found, that party, whether or not he be the person beneficially interested, may bring an action at law to enforce his interest. The legal right, however, must be conferred by clear expression and not by implication. This decision is readily understood in the light of the fact that Courts of this State have consistently looked upon the common law as a living, thing, and at all times have endeavored to make it flexible — even at times, under the theory of interpretation or construction, have tested to the limit its elasticity.
In the case of Glanding v. Industrial Trust Co., 45 A. 2d 553, 555, we said, “Upon the immigration of our ancestors to this country from England they adopted as a safe rule of conduct the common law of England, which they considered to be their birthright. They cherished it, and for them it *397represented, so to speak, a charter of liberty.” The common law thus referred to was administered by our Colonial Courts, and was indelibly written into our first Constitution 1792 under Section 10 of Article 8 thereof. “Section 10. All the laws of this State, existing at the time of making of this constitution, and not inconsistent with it, shall remain in force, unless they shall be altered by future laws; and all actions and prosecutions now pending shall proceed as if this constitution had not been made.”
The substance of Section 10, aforesaid, has appeared in all our Constitutions subsequent to 1792, and appears in our present Constitution under Section 18 of Article 16 thereof. Thus, the common law of England as of 1792 forms the very backbone of our legal concepts, and, except where altered or changed by legislative authority, the principles and rules as laid down in the early English Reports form an integral part of our jurisprudence. These rules should be recognized and followed to the same extent as statutory law. Of course, during the passing of time we have progressed, and whenever it is found that a common-law rule in force as of the date of the adoption of our first Constitution has outgrown its usefulness, or where it is found to be archaic, and contrary to modern practice and a desire is present for the adoption of a more up-to-date philosophy, the Legislature at all times in the exercise of its wisdome is vested with the power to act.
The question presented is narrow: Should this Court renounce the English Rule and adopt in its place the American view, Restatement of the Law of Contracts, Vol. 1, Section 133, etc., under which a third party beneficiary is permitted to recover upon a sealed instrument impliedly made for his benefit, but to which he is not a party?
I concur with the majority in the thought that a more rational philosophy should be adopted. In fact, I approve of *398the American view that permits a third party beneficiary an action upon a sealed instrument where it is clearly designated that it was made for his benefit even though he is not expressly included therein. My dissent relates solely to the method in which such a change should be made.
The majority say that in practically all of the States, except Massachusetts, the American view has been accepted. This statement I do not challenge. However, I do not find in the Constitutions of those States a provision such as appears under Section 10 of Article 8 of our Constitution of 1792, which said provision has been carried into all of our subsequent Constitutions. In other words, the common-law rule as of 1792 is without question the law in this State until the Legislature, by enactment, changes the same. The function is clearly legislative and not judicial.
Of course, if I be in error as to the state of the English Rule as of 1792, and, if in fact the case of Dutton v. Poole, supra, changed the English Rule as of the date of that case, 1677, then such a change would not be binding upon this Court; rather the effect would be persuasive only. It seems to make little difference to me whether or not we are bound by the state of the English Rule as I have determined it to be as of 1792, or whether the rule should be considered persuasive only. The fact remains that the law in this State is so well settled concerning an instrument or contract under seal that I feel we are bound by the doctrine of stare decisis. Necessity does not require that I deal with the cases concerning the right of action on the part of a third party beneficiary relative to a contract not under seal. Williston on Contracts, vol. 2, Sec. 401, p. 1152. “None of the earlier cases which allowed a right of action to one who was not a party to the contract related to contracts under seal, and where statutes have not taken away the importance of the distinction between sealed and paroi contracts the rule that *399one who is not a party to a contract under seal cannot sue upon it is still applied to contracts to benefit or pay a debt to a third person; But in some states the rules of the common law distinguishing contracts under seal from other written contracts have been abolished or diminished, so that it is not surprising that the distinction as to the right of a third person to sue has often been disregarded.”
No penalty in this case should be set for compliance with existing standards. A statute is normally prospective in operation. It does not overthrow pre-existing rights. If the English Rule is an anachronism, it should be changed. The majority have renounced the English Rule, and by so doing they have trespassed upon the domain of legislative authority.