Court Opinion

ID: 4012460
Source: CourtListenerOpinion
Date Created: 2016-07-06 11:16:42.849838+00
Date Added: 2024-06-11T13:48:06.392398
License: Public Domain

ON PETITION FOR REHEARING
A petition for rehearing has been filed herein.
We stated in the original opinion that the plaintiff in error agreed to erect the building in question for $23,000.00. That was, of course, an error, and we should have said that Robinson, for whom the plaintiff in error was surety, agreed to do so. The point, however, is immaterial.
Before proceeding to discuss the next point urged in the petition for rehearing, a few facts should be stated not mentioned in the original opinion. On May 24th, 1924, Broadway Improvement and Investment Company, herein briefly called the Improvement Company, the defendant in error, entered into a written contract with Van Sant, leasing him the building in question and the lot on which it stood for the period of five years, at a monthly rental of $395.83 for the first year and a somewhat reduced rental for the following years. The same instrument gave Van Sant the option to purchase the premises for $15,500.00 plus any additional amount which the Improvement Company might be compelled to pay for lien claims against the premises, the option to run during the whole term of the lease, the usual forfeiture clause in leases in case of default being inserted. The Improvement Company having already paid out more than $15,500, it made arrangements with Van Sant to pay the amount of $5408.14 mentioned in the original opinion, this amount being paid, as Van Sant testified, "as rent and toward the purchase price." It was the contention of counsel for the surety company on the original hearing and it is their contention now, that Van Sant was obligated, under the lease and option agreement above mentioned, to pay the amount which he paid as above mentioned, that the amount is greater than the amount of the judgment herein, that Van Sant, under the foregoing contract, had no legal action against the Improvement Company to be reimbursed for the amount which he paid, and that hence that company sustained no damages whatever. We *Page 215 
held that this contention could not be sustained. The point was given more than careful consideration when the original opinion was written. We were unable to see any ground upon which the surety company could claim any release from liability under such conditions, and we are unable to see any now, even if the reason given in the original opinion is wrong. No cases so holding have been cited, and none, we think, to that effect can be found. Counsel for the surety company summarizes our holding on that point as follows: "The obligee (in a bond) need not prove that he has suffered any damages in fact. It is sufficient if he is either under an equitable or moral obligation to a third party for moneys expended by such third party. Legal liability need not be proved." We did not mean to go that far in our holding. Aside from what we said as to the equitable or moral claim that Van Sant might have, we meant to hold substantially to the effect that when the Improvement Company made arrangements with Van Sant to pay the amount above mentioned, Van Sant acted as its agent, and that the surety company is not in position to question or inquire into the liability of the parties to the lease and option agreement above mentioned inter se. This was held on the theory that the surety company was not a party to that agreement, nor privy thereto, nor was it made for its benefit, and that, accordingly, it could not derive any incidental benefit therefrom; for the rule appears to be general that unless a contract is entered into for the benefit of a third party, the latter cannot sue thereon (13 C.J. 703-705), which would seem to imply that he cannot derive any benefit therefrom; and it is indeed said by Elliott on Contracts, Sec. 1406, that "it is a familiar rule that no one but the parties to a contract can be bound by it or obtain rights under it." And this would seem to be at least partially on the theory that to hold otherwise would deprive parties of the right to contract among themselves as they please. And if this is the law, then the bond sued on herein must necessarily be construed in the light of that *Page 216 
rule; and in that event the evidence as to the lease and option agreement was wholly improper and could not be taken into consideration in this case whatever. In fact the very rule that no person not privy to a contract can derive any benefit therefrom is sought to be applied by counsel for the surety company, when they assert that the Improvement Company cannot sue for damages sustained, though at its request, by Van Sant. We may, however, withhold our definite decision on that point, and withdraw from the original opinion the portion which deals with the equitable or moral claim of Van Sant, and leave these matters for future consideration, for the reason that it clearly appears, we think, that the Improvement Company sustained a loss, that the amount paid by Van Sant must be taken into consideration in that connection, and that the assumption of counsel that there was no legal liability on the part of the Improvement Company toward Van Sant on account of such payment is wholly wrong. The amount paid by the latter kept his lease and option good for the period of approximately fourteen months. The Improvement Company was under binding obligation, in return for the payment by Van Sant, to let him use and occupy the premises for that period of time, and the value of such use and occupancy, and with which the Improvement Company parted, was worth, as fixed by the contract, the exact amount paid by Van Sant. Hence it is clear that the contention of counsel on this point cannot be sustained. The situation would, perhaps, be somewhat different, in case Van Sant exercised his option and paid out the whole purchase price; but the option extended over a period of five years; whether he would exercise it or not was, as recognized by counsel for the surety company, wholly within his exclusive power and discretion, was speculative and conjectural at the time when this action was brought and tried, even though Van Sant may have so thought at the time of the trial that he would exercise it — as he seems to have thought according to some of his testimony — and because of these facts, we *Page 217 
cannot take that matter into consideration in this case. Pacific Wyoming Oil Company v. Carter Oil Co., 31 Wyo. loc. cit. 460; Martel v. Hall Oil Company, 36 Wyo. loc. cit. 177.
We may look at the matter from another standpoint. We do not think that there can be any doubt that the amount of the liens paid by Van Sant entered into the purchase price. It is similar to a case in which a man sells land to another with a mortgage against it, which the purchaser assumes.
Counsel further state in their brief on rehearing that we held that "damages can be proved by producing receipts and certificates." We need not say whether they can be or not. We do not, in any event, believe that anything contained in the original opinion can be so construed. We merely held that in view of the oral evidence and other facts in the case, the admission in evidence of receipts and certificates was not prejudicial.
Not perceiving any reason for a rehearing, the same is denied.
Rehearing Denied.