Court Opinion

ID: 9641368
Source: CourtListenerOpinion
Date Created: 2023-08-22 17:30:03.607136+00
Date Added: 2024-06-11T18:10:36.892061
License: Public Domain

HUTCHESON, Circuit Judge
(Dissenting-) •
The opinion of the majority according,, but restricting1 to the vanishing point, the right to sue, while it keeps the promise to> the ear, breaks it to the hope of the appellees. Looked at practically it in effect decides that the United States is not suableon the cause of action appellees have brought. If, then, the only matter involved here were the practical question whether in the suit appellees have brought the-United States can be held substantially liable, though I am convinced that appellees have no right whatever to sue the-United States, that is that the United States has not consented to be sued by by them, I should content myself with merely noting my dissent.
The opinion, however, in holding that appellees, as third parties for whose benefit it was made, have a right to sue on the contract between the government and the land owners, is based upon premises and. reasoning completely opposed to what I believe not only is, but ought to be, the settled law not only in Texas but generally. I shall, therefore, without unduly laboring the matter, point out what I believe to be the underlying fallacies in the-opinion, and setting briefly down the controlling principles, refer to the supporting authorities.
On page 723 of 165 F.2d, the opinion states:
“Appellant contends that the appelleesnot being parties to the lease cannot sue upon the contract. We think the lease was drawn with the double purpose of benefiting both the owners of the lands in ques-*727lion and their tenants, appellees. * * * But the paragraph in question provides for replacement of the fences following the passage of the troops, and we think the inescapable conclusion must be that the agreement was intended by the parties also to benefit the tenants in their business of raising livestock.”
In thus holding that merely because the existence of the tenants and their use of the land was known to the United States, and they did derive some incidental benefits from it, the contract was made for the benefit of the tenants as third parties and the United States had consented to be sued upon it, the opinion runs counter to settled principles of law as they are set out in text books, treatises and cases.
In 12 Am.Jur., Contracts, beginning with Sec. 273 and running through Sec. 294, the question of the rights of third parties to enforce promises made for their benefit is fully and thoroughly discussed. Laying down the general principles under which, by the American majority rule, a third person may enforce a promise made for his benefit, beginning with Sections 279 and running through 293, the text sets down with clarity and precision the conditions and limitations upon such right. Among the limitations pointed out, these seem to be outstanding: (1) The contract must have been intended for the benefit of the third person in order to entitle him to enforce it, i. e., it must have been made with the intention of conferring on the third party a right to sue;2 (2) a third person for whose direct benefit a contract was entered into may sue for breach of it, but if the benefit is only incidental, he may not.3 “Where the contract is primarily for the benefit of the parties thereto, the mere fact that a third person would be incidentally benefitted does not give him a right to sue for its breach”. Sec. 282, American Jurisprudence. American Law Institute Contracts, Sec. 147, “An incidental beneficiary acquires by virtue of the promise no right against the promisor or the promisee”.4
In Sec. 283, American Jurisprudence, it is said: “The view has been taken by federal courts that one not a party to a contract may enforce the promise or obligation only where he is the beneficiary solely interested in the promise and the contracting parties intend to recognize him as a primary party in interest.”
Among cases supporting these views may be cited Long v. Reiss, 290 Ky. 198, 160 S.W.2d 668; Sachs v. Ohio National Life Ins. Co., 7 Cir., 148 F.2d 128, 158 A.L.R. 688; United States ex rel. Harges v. Maryland Cas. Co., D.C., 64 F.Supp. 522. The decisions of the courts of Texas are to the same effect. In Knox v. Ball, 144 Tex. 402, 191 S.W.2d 17, 21, 164 A.L.R. 1453, the court said:
“It is the rule that a person not a party to a contract may enforce it if it appears that it was made for his benefit, however, the presumption is that parties contract only for themselves and a contract will not be construed as having been made for the benefit of a third party unless it clearly appears that such was the intention of the parties, * * * 17 C.J.S. [Contracts § 519] 1129.”
Another important principle which is of peculiar application here is set out in Sec. 145 Contracts, Restatement:
“A promisor bound to the United States or to a State or municipality by contract to do an act or render a service to some or all of the members of the public, is subject to no duty under the contract to such members to give compensation for the injurious consequences of performing or attempting to perform it, or of failing to do so, unless
“(a) an intention is manifested in the contract, as interpreted in the light of the *728circumstances surrounding its formation, that the promisor shall compensate members of the public for such injurious consequences, * * *”
Texas Annotations, citing House v. Houston Waterworks Co., 88 Tex. 233, 31 S.W. 179, 28 L.R.A. 532, City of Wichita Falls v. Swartz, Tex.Civ.App., 57 S.W.2d 236, declares, “This clause is followed in Texas.”
These principles, if this were an ordinary suit between private ■ parties, would be potent enough to defeat appellees’ suit, but when, as here, the third party contract theory is resorted to to hold the United States liable under a consent to sue, it must be made crystal clear that the United States in contracting with the landlords was expressly consenting with the tenants to be sued. In the face of the settled law as to the strictness with which the consent of the United States to sue is construed,5 and in the face of the very careful attempt of the United States, in dealing with the landlords, to limit its liability to injuries caused from negligence, there is, I think, no ground for holding that the United States contracted with these tenants to allow them to sue it for injuries to their stock from the failure of the United States to keep its contract with the landlords for replacing their fences. I, therefore, dissent from the holding that the contract was made with the intention of consenting with the tenants to be 'sued.
But if I could agree with the majority that the tenants have the same right to sue that the landlords have, I still could not agree, in the face of the express statement of the contract, that the government would “not be liable for loss of, or damage of any nature to livestock, save and except the loss of, or damage to said livestock due to negligence”, that a cause of action for damages to stock, suable under the Tucker Act, has arisen out of this contract to restore the fences. This for the simple reason that no agent of the United States can give a cause of action for negligence suable under the Tucker Act by merely contracting to do so. If, therefore, which I do not believe, the contract could be construed as intending to give a cause of action for negligence for damages “sounding in tort”, it would be invalid as beyond the power of an officer of the government to consent to suits where Congress has refused to do so.6 I think it plain, however, that the above quoted clause of the contract was intended not to confer but to completely deny to any and everyone a right of suit on the contract for damages to livestock arising from negligence. The majority opinion in sending the cause back for the recovery of damages, if any, from the United States, damages arising from negligence, and, therefore, "sounding in tort” in effect converts what is a denial of a right to recover damages to livestock by suit on the contract into a consent to sue for them. I think this may not be done. Instead of reversing the judgments and remanding the causes for new trial, the causes should have been reversed with directions to dismiss them.

 “On retrial the evidence should be limited to evidence of damages proximately caused by breach of the contract by failure to repair the fences. All other evidence of damages arising either out of the Army’s use of the land consistent with the purposes of the lease (e. g., pollution of the water), or out of negligence independent of the contract to-maintain the fences, should be excluded.”-

 Byram Lumber & Supply Co. v. Page, 109 Conn. 256, 146 A. 293, 294, wbero it is said: “that it is in this sense of intent to create a direct obligation to the third party that we spoke of the intended benefit to him, rather than in the sense of a desire to advance his .interests.”

 Robins Dry Dock v. Flint, 275 U.S. 303, 48 S.Ct. 134, 72 L.Ed. 290; German Alliance Co. v. Home Co., 226 U.S. 220, 33 S.Ct. 32, 57 L.Ed. 195, 42 L.R.A.,N.S., 1000.

 Texas Annotations to Contracts shows that this is also the law of Texas. Cf. Nalle v. Costley, Tex.Civ.App., 174 S.W. 625; City of Wichita Falls v. Swartz, Tex.Civ.App., 57 S.W.2d 236.

 Maryland Cas. Co. v. United States, 4 Cir., 155 F.2d 823; United States v. Sherwood, 312 U.S. 584, 61 S.Ct. 767, 85 L.Ed. 1058; Eastern Transportation Co. v. United States, 272 U.S. 675, 47 S.Ct. 289, 71 L.Ed. 472.

 Bigby v. United States, 188 U.S. 400, 23 S.Ct. 468, 47 L.Ed. 519; United States v. Shaw, 309 U.S. 495, 60 S.Ct. 659, 84 L.Ed. 888; Stanley v. Schwalby, 162 U.S. 255, 16 S.Ct. 754, 40 L.Ed. 960; Wilbur v. United States, 294 U.S. 120, 55 S.Ct. 362, 79 L.Ed. 798; Coleman v. United States, 6 Cir., 100 F.2d 903.