Court Opinion

ID: 5585731
Source: CourtListenerOpinion
Date Created: 2022-01-11 01:52:55.822918+00
Date Added: 2024-06-11T08:36:14.197037
License: Public Domain

Hill and Gilbert, JJ.,
dissenting. We are of the opinion that the court did not err in sustaining the demurrer and in dismissing the petition, as to the defendant Whisenant. The Civil Code, § 5516, provides that “As a general rule the action on a contract whether express or implied, or whether by parol or under seal, or of record, must be brought in the name of the party in whom the legal interest in such contract is vested, and against the party who made it in person or by agent.” In the instant case Whisenant made no contract with Reid. So far as the allegations of the petition show, Reid, at the time Whisenant assumed the loan, was not known in the contract, and there is nothing in the deed from Dodd *511to Eeid which could have the legal effect of an assignment of Dodd’s rights under his contract with "Whisenant. It is recited in the deed from Dodd to Eeid that the loan against the land had been assumed by Whisenant. While this might be a warranty as between Dodd and Eeid that the incumbrance on the title would be removed, we fail to see how such reference to the contract between Dodd and Eeid could bind Whisenant. The contract between Dodd and Whisenant, ip which Whisenant assumed the indebtedness, is a very different thing from the contract between Dodd and Eeid, to which Whisenant was not a party, and in no way became bound, so far as the petition discloses. Whether Whisenant is liable to Dodd, or vice versa, is not now for consideration; neither is the question presented as to whether Dodd is liable in damages to Eeid under his warranty involved in the present case, inasmuch as Eeid prays no judgment or decree against Dodd, or his wife, who joined Dodd in the deed. In the present suit Eeid seeks to obtain a judgment against Whisenant to answer for the failure of Dodd’s title, without a written or even a parol agreement upon a consideration between Eeid and Whisenant to do so. In the deed from Dodd to Eeid there is only a recital that there is a loan upon the property which Whisenant has agreed to pay. As between Whisenant and Eeid there is no express or implied agreement. The agreement which Whisenant made was not for the benefit of Eeid, but for the benefit of Dodd and his wife and Pennington-Evans Co. Appeal of May’s Estate, 218 Penn. 64 (67 Atl. 120, 122).
In 9 Cyc. 380 (2) it is said: “In many of the cases the doctrine is stated broadly that a person may maintain an action on a promise made for his benefit, although not a party to the contract; but this statement of the doctrine is too broad. By the weight of authority the action can not be maintained merely because the third person will be incidentally benefited by the performance of the contract; but he must be a party to the consideration, or the contract must have been entered into for his benefit, and he must have some legal or equitable interest in its performance.” See also Shropshire v. Rainey, 150 Ga. 566 (104 S. E. 414); Gunter v. Mooney, 72 Ga. 205; Cooper v. Claxton, 122 Ga. 596 (50 S. E. 399). The Gunter and Cooper cases, supra, were suits at law by a child to recover, for breach of contracts made by the parents with a stranger, the agreed compensation for the child’s services. All *512the Georgia cases of which we are aware, in which it is held that a suit may be brought where a third party has an equitable interest in the subject-matter of the suit, are founded upon the fact that there exists, at the time that the obligation is assumed, some debt owing to a third party who seeks to enforce such rights growing out of such equitable interest as between the promisor and such • creditor. The present suit brought by Reid against Whisenant, and Dodd as a mere nominal party, is separate and distinct, in our opinion, from any cause of action which Dodd might have against Whisenant, for the reason that the measure of damages, if any, would be different in each ease. See Williams v. Moody, 95 Ga. 8 (22 S. E. 30).
On the proposition that no person can maintain an action respecting a subject-matter in reference of which he has no interest, see Baxter v. Baxter, 43 N. J. Eq. 82 (10 Atl. 814). A promise made by one person to another for the benefit of a third person, a stranger to the consideration, will not support an action by the latter. Rogers v. Union Stone Co., 130 Mass. 581 (39 Am. R. 478); Bank of St. Louis v. Rice, 107 Mass. 37 (9 Am. R. 1).
So far as the petition discloses, Reid was not known to the contract at the time it was entered into between Dodd and Whisenant, by which Whisenant assumed the prior indebtedness. There was no intent to benefit Reid, and could not have been under the terms of the deed, and any allegation in the petition to that effect would be a mere conclusion of the pleader.
Before the plaintiff in the present case could maintain his action at law, there must be alleged facts showing a privity of contract between Whisenant and Reid, some legal obligation owing from the former to the latter, thereby creating some equitable claim or interest which inures to the benefit of Reid. Durnherr v. Rau, 135 N. Y. 219 (32 N. E. 49); Kramer v. Gardner, 104 Minn. 370 (116 N. W. 925, 22 L. R. A. (N. S.) 492); Ramsdale v. Horton, 3 Pa. 330.
But able counsel for the plaintiff argues, that, while the question here involved has never been before this court directly for decision, “it is well settled in this State that a person has the right to sue on and enforce in equity a contract between others, made for or inuring to his benefit, or where he has the right to benefit thereunder; and that the Code, § 5516, providing that as *513a general rule the action on a contract must be brought in the name of the party in whom the legal interest therein is vested, applies only to actions at law and not to suits in equity.” Counsel further argues that this ease must be determined by the principle ruled by this court in such eases as Sheppard v. Bridges, 137 Ga. 615 (74 S. E. 245); Morgan v. Argard, 148 Ga. 123 (95 S. E. 986); Carruth v. Ætna Life Ins. Co., 157 Ga. 608 (122 S. E. 226). But we are of the opinion that the principle ruled in those cases does hot apply to a case like the present. Those were cases where a purchaser of property agreed to pay certain debts; and the principle involved was analogized to a trust relation, where the purchaser was in effect a trustee in receiving the property bought for the benefit of the creditors. This ease, therefore, is not controlled by the principle ruled in the above-cited cases. It may be that Whisenant would be trustee for the benefit of Pennington-Evans Co., having obligated himself, in accepting the deed from Dodd, to pay the loan due that company; but there is no such obligation in the instant case with reference to Beid. There are numerous authorities to the effect that one in the position of Pennington-Evans Co. can sue, but none, so far as we are aware, which would authorize Beid to sue in the circumstances of this case. See note in 21 A. L. R. 439-498.
The plaintiff cites a decision from an outside jurisdiction (Wilcox v. Campbell, 106 N. Y. 325, 12 N. E. 823), which holds as follows: “Where A, who is the owner of a tract of land which is subject to mortgage, sells a part to B, who assumes and agrees to pay as part of the purchase-price the amount of the mortgage, and thereafter A sells the remainder of the tract to C, C or his assignee may, on the foreclosure of the mortgage through the failure of B to pay the same, and the sale of his lands therefor, maintain an action against B to recover damages.” In that case the suit was not brought by the vendee in the deed to the other piece of land, but was brought by the vendor of both tracts of land; the person who brought suit in that case corresponded to Dodd in the present case. Of course no one could question the right of Dodd to sue Whisenant on his contract to pay the incumbrance on the land which he purchased. It is true that in the Wilcox case, supra, the writer of the opinion expressly states that the vendee of the other piece of land, who corresponds to Beid in the present case, had a *514right of action by reason of his conveyance from his grantor. There the grantee executed an assignment of his right of action and claim of damages to his vendor. But this does not alter the fact that the suit was actually brought by the vendor, to whom the promise to pay the incumbrance was made. Even if the distinction above pointed out be entirely disregarded, and it should be considered that the New York case was brought alone on the right of the grantee of the separate tract of land to sue, we are of the opinion that that case stands without any foundation in law, and without the support of any authority of which we are aware. No authority is cited in the opinion, and we therefore decline to follow that case.
The plaintiff in error also cites the case of Cooley v. Murray, 11 Colo. App. 241 (52 Pac. 1108). In that case it was held: “The agreement of the grantee of one of two lots owned by the grantor, 'subject to a mortgage, to assume and pay it as a part of the purchase-price, inures to the benefit of the subsequent grantee of the other lot, in case the mortgage is not paid and the second lot is sold to satisfy it.”- In the Cooley case, the complaining party paid off the incumbrance which had been assumed by the grantee of the other part of the land, and of course in such case he was subrogaled to the rights of the creditor, and could maintain an action against the party assuming to pay, but who failed to pay. The Cooley case, therefore, is not authority contrary to the opinion expressed in this case.
But we have considered this case from other angles. Was the agreement of Whisenant to pay off the mortgage incumbrance on the land to Pennington-Evans Co. a covenant running with the land, which Reid would have notice of at the time he bought, and which would inure to his benefit ? Let us consider, then, what is a covenant running with the land. In Muscogee Mfg. Co. v. Eagle & Phenix Mills, 126 Ga. 210 (54 S. E. 1028, 7 L. R. A. (N. S.) 1139), this court held that “To constitute a covenant running with the land, the covenant must have relation to the interest or estate granted, and the act to be done must concern the interest created or conveyed. A covenant running with the land relates directly to the land and follows it into the hands of assignees; a personal covenant does not do so.” In 19 R. C. L. 379, § 149, it is stated that “By the weight of authority a provision in a deed *515whereby the grantee assumes and agrees to pay an existing mortgage does not create a covenant which runs with the land, although such provision is inserted in connection with the covenants of seizin and against incumbrances.” And see Scholton v. Barber, 217 Ill. 148 (75 N. E. 460). There can be no covenant running with the land in the instant case, because Whisenant has made no covenant as to the particular tract of land in. controversy, for the reason that he was not a party to the contract between Dodd and Beid; and as to the contract between Whisenant and Dodd, that does not involve the land in question. In order to bind Whisenant on this-theory of the case, there must be a covenant running with the land, and this covenant must have begun with Whisenant, and run on down through the conveyance of the particular land which he conveyed to the person who seeks to enforce the covenant. But such is not the case here. Whisenant agreed to assume the mortgage indebtedness to Pennington-Evans Co., but there is no covenant beginning in Whisenant whereby he agrees to pay off the incumbrance as between him and Beid; and therefore there can be no covenant running with the land beginning with Whisenant and running on down to Beid. See, on the general subject of covenant running with land, Willcox v. Kehoe, 124 Ga. 484 (52 S. E. 896, 4 L. R. A. (N. S.) 466, 4 Ann. Cas. 37); Horne v. Macon Tel. Co., 142 Ga. 489 (83 S. E. 204, Ann. Cas. 1916B, 1212); A. K. & N. Ry. v. McKinney, 124 Ga. 929 (53 S. E. 701, 6 L. R. A. (N. S.) 436, 110 Am. St. R. 215).
Plaintiff in error cites Civil Code § 4192, which provides that “The purchaser of lands obtains with the title, however conveyed to him, at public or private sale, all the rights which any former owner of the land, under whom he claims [italics ours], may have had by virtue of any covenants of warranty of the title, or of quiet enjoyment, or of freedom from incumbrances, contained in the conveyance from any former grantor, unless the transmission of such covenants with the land is expressly negatived in the covenant itself.” It is argued that while Whisenant was not the grantor of Dodd, yet Whisenant was in the equivalent position of a grantor of Dodd, in so far as his covenant of assumption of the debt ran to Dodd, with respect to the portion of the land which Dodd retained, when he sold the other portion to Whisenant, and Whisenant’s covenant was in the nature of one for quiet enjoyment, or of free*516dom from incumbrances, so far as tbe debt assumed was concerned. There are at least two reasons why this section of the code is not applicable to the case at bar. In the first place, we have held that this is not a case where the covenant runs with the land; and in the second place Whisenant was not the grantor of Dodd, and therefore it can not be said that Eeid claims under Whisenant.
We have also considered this petition on the idea that it is a suit in tort, either purely ex delicto or for a tort arising from the breach of a contract. We are of the opinion that the suit can not stand on either of these propositions. There was no damage alleged either to the person or property of the plaintiff, unless it can be said that the failure to pay the mortgage debt to Pennington-Evans Co., and allowing the property which was security for the debt, to be sold, was a tort. In 38 Cyc. 426 (f), the rule as to suits in tort is thus stated: “As has likewise been seen, tort consists in the violation of a right given, or the omission of a duty imposed by law. Therein it differs from contract, where the right is granted and obligation assumed by agreement of the parties. Hence, to determine the form in which' redress must be sought, it is necessary to ascertain the source or origin. If it be found that right or duty was created independent of the consent of the parties concerned, the action is tort; if because 'of such consent, it is on contract. Where the only relation between the parties is contractual, the liability of one to the other in an action of tort for negligence must be based upon some positive duty which the law imposes because of such relationship, or because of the negligent manner in which some act which the contract provides for is done. The question in all cases is whether, if the allegation as to the contract was stricken out, any ground of action would remain.”
Neither do we think that the doctrine of subrogation, either conventional or equitable, applies to a case like the present. Had Eeid taken up the claim of Pennington-Evans Co., then he would have been subrogated to the rights of Pennington-Evans Co.; but such is not the case here. See Civil Code (1910), § 3567.