Court Opinion

ID: 5587767
Source: CourtListenerOpinion
Date Created: 2022-01-11 01:58:39.726196+00
Date Added: 2024-06-11T08:36:19.810365
License: Public Domain

Beck, P. J.,
dissenting. The determination of one controlling question decides the case upon its merits, That question is whether Brewton and the intervenors who joined with him, and for whose benefit he brought his petition, occupy the place or the relation of beneficiaries in the provision contained in the security deed executed on May 19, 1928, by S. G. Galloway to Glendale Terrace Inc., in consideration of $2100, to secure the repayment of which the deed was executed, which provision is in these words: “Glendale Terrace Inc. agrees that S. G. Galloway shall have the right to place a permanent loan on the above lot and a house to be erected thereon, not to exceed 60% of the appraised value of said house and lot.” Brewton and the other defendants in error insist that they in equity should be treated as the beneficiaries of this part of the contract contained in the deed just referred to. The plaintiffs in error take the contrary position. The defendants in error urge the contention that by the reservation of the right on the part of S. G. Galloway to be allowed to place a permanent loan in the sum of 60 per cent, of the appraised value of the improved property, the rights of Glendale Terrace, of J. T. Williams, or of any one who claims under them by virtue of the transfer of this loan deed, would be subject to the claims of Brewton or the *172materialmen or workmen whom he represented in this suit; that if this provision in the deed set forth above did not have the effect which the defendants in error claim for it, there was no necessity for placing such phraseology in the deed, and the clause is mere surplusage. In other words, it is insisted that this contract, or the portion of the contract under consideration, was made for the benefit of a third party, which the latter could enforce in a court of equity; and it is urged that the issue here presented falls within the ruling in Sheppard v. Bridges 137 Ga. 615, 621 (74 S. E. 245), where'this court said: "In New York, which was the leading State in establishing the American rule, it was said that it was not every contract for the benefit of a third person which could be enforced by him; but that two things must concur, — the intent to benefit the third party, and the owing of some obligation by the promisee to the third party. When this combination occurs, it has been considered sufficient to create a right or interest in the beneficiary, which has sometimes been analogized to a trust, sometimes called an equity, and sometimes treated under other legal heads. In a full and valuable note to Baxter v. Camp, 71 Am. St. R. 169, 175 et seq. (71 Conn. 245, 41 Atl. 803, 42 L. R. A. 514), both rules are discussed, and the modifications of them in different jurisdictions. On page 187 (referring to the American rule) it is said: The rule has been variously stated as resting upon: 1. A trust relationship; 2. The equitable right of subrogation; 3. Agency; 4. Privity of contract by substitution; and 5. The broad equity of the transaction/” And it is insisted further that this particular issue in the case is also covered by what was said by this court in Crawford v. Wilson, 139 Ga. 654 (78 S. E. 30, 44 L. R. A. (N. S.) 773), where it was held that "The rule which obtains most generally in America is, that a person not a party to the contract may maintain an action on it if he is a party to the consideration, or the contract was entered into for his benefit; and if the person for whose benefit a contract is made has either a legal or equitable interest in the performance of the contract, he need not necessarily be privy to the consideration.”
I can not agree that the question for decision is settled by either of these decisions. There is a clear distinction to be made between those two cases and the instant case. In the first of the two cases cited there was an agreement on the part of the obligor or promisor *173to pay a certain, amount of money to a certain named party; and it was held that while this agreement was made with one party it was for the benefit oE the third party to whom the money was to be paid, and that the latter in an equitable suit could enforce this part of the contract. In the latter case the third party was a beneficiary because distinctly and individually named, and the thing to be done was specified for the benefit of the third party. Here there is no contract or covenant on the part of the grantor in the loan deed (Galloway) to do anything for any particular party, but the effect of the part of the contract under consideration was to give Galloway the right or privilege “to place a permanent loan” on the property conveyed, and to make the grantee’s claim based upon the purchase-money notes inferior to the claim of the party making “the said payroll loan,” and “the payroll loan is to be liquidated and paid out of the proceeds of the permanent loan.” In this contract Brewton is not specified, nor the intervenors who adopted his equitable petition, nor is the benefit of the payroll loan confined to them; and I do not think that the amount which Galloway might have obtained as a loan is to be treated as having actually been made and as being a trust fund for the benefit of Brewton and the intervenors who adopt his petition. The court below must have taken an opposite view of this question in fixing the priorities of the claims. The equities of the defendants in error may be broad, but they are not sufficiently definite to make well-founded the claim which they assert; and the judgment allowing their claim should be reversed. I am authorized to say that Mr. Justice Atkinson concurs in this dissent.