Court Opinion

ID: 9857128
Source: CourtListenerOpinion
Date Created: 2023-09-24 07:16:43.193711+00
Date Added: 2024-06-11T09:38:02.994569
License: Public Domain

SMITH, Justice
with whom
PORTER, Justice concurs (dissenting).
I dissent from the views expressed and conclusions reached in the majority opinion.
Appellant commenced this action as an alleged third party beneficiary to recover damages from respondent, based on respondent’s failure to cause release of a judgment of record against appellant and others. The facts are fairly stated in the majority opinion.
Appellant’s assignment of error that the court erred in sustaining the demurrer to the amended complaint and in dismissing the action, raises the principal question involved. That question is whether appellant sufficiently pleaded himself to be an express third party beneficiary under the statute (I.C., sec. 29-102) entitled to maintain the action.
I.C., sec. 29-102 reads:
“A contract, made expressly for the benefit of a third party, may be enforced by him at any time before the parties thereto rescind it.” (Emphasis supplied.)
“Expressly” is defined to mean: “In an express manner; in direct or unmistakable terms; explicitly, definitely, directly;” Webster’s New Intern! Dictionary, 2nd Edition; “With definitely stated intent or application; exactly or unmistakably; in direct terms; as, the condition was expressly named;” Funk and Wagnalls New “Standard” Dictionary. To the same effect see also 35 C.J.S. Expressly, p. 284.
California Civil Code, sec. 1559 is identical with I.C., sec. 29-102. In Shell v. Schmidt, 126 Cal.App.2d 279, 272 P.2d 82, 89, the Court, in construing said section *300of the California statute, also defined the word “expressly” as follows:
“ * * * Of course, the beneficiary must be more than incidentally benefited by the contract. An incidental beneficiary cannot successfully main- • tain an action. (Citations) Whether the beneficiary is or is not an incidental one, or a beneficiary for whose express benefit the contract, was entered into, is a question of construction. (Citation) It is not required that the third party beneficiary be specifically named as a beneficiary. All that section 1559 requires is that the contract be ‘made expressly for the benefit of a third person’, and ‘expressly’ simply means ‘in an express manner; in. direct or unmistakable terms; explicitly; definitely; directly.’ (Citation) .”
Third party beneficiaries under a contract, hot parties to it, are classified into three classes by Williston on Contracts, Revised Edition, Vol. 2, sec. 356, which reads:
'“Third persons beneficiaries under a contract, although not parties to it, may be divided into three classes: (1) Such person is a donee beneficiary " if the purpose of the promisee in ob- . taining the promise-of-all or- part of ^the performance thereof, is to make a c -gift tof the beneficiary,- or to confer ^.ijpon him a right against the.promisor to some performance neither due (nor supposed) or asserted to be due from the promisee to the beneficiary; (2) such person is a creditor beneficiary if no intention to make a gift appears from the terms of the promise, and performance of the promise will satisfy an actual (or supposed) or asserted duty of the promisee to the beneficiary; (3) such person is an incidental beneficiary if the benefits to him are merply incidental to the performance, of the promise and if he is neither a donee beneficiary nor a creditor beneficiary.”
And at Section 402 appears the following:
“It sometimes happens that a' person who is neither the promisee of a contract nor the party to- whom performance is to be rendered will 'derive a benefit from its performance. Such a person is neither a - donee beneficiary nor a creditor beneficiary, but belongs to the third type — the incidental beneficiary. ‘An incidental beneficiary acquires by virtue of the promise no right against the promisor or, the promisee.’ ”
American Law Institute, Restatement of the Law of Contracts, Vol. I, Chap. 6, and particularly sections 133 and 137, are to the same effect.
•. Appellant contends that his pleading shows him to be, not an incidental beneficiary,, but an- express third party benefici.ary. Appellant therefore,, in , order to *301recover, must be shown to be either a donee beneficiary or a creditor beneficiary.
Appellant in his amended complaint shows the joint and several liability of appellant and three other judgment debtors under the Harrison judgment; also, that R. L. and Addie M. Jones, two of the judgment debtors, sold and by their warranty deed conveyed to respondent, and respondent purchased from them, certain real property upon which the judgment had become a lien in its full amount and in its joint and several aspects; that in consummation of the contract of sale and purchase of the real property, respondent, as a part of the purchase price, agreed to pay the judgment; and that although respondent did not pay the judgment as agreed, the judgment became paid by appellant judgment debtor, pursuant to his several liability for the payment thereof.
In German Alliance Ins. Co. v. Home Water Supply Co., 226 U.S. 220, 33 S.Ct. 32, 35, 57 L.Ed. 195, the presumption is stated to be “that a contract is only intended for the benefit. of those who made it.” Quoting from said case:
“Before a stranger can avail himself of the exceptional privilege of suing for a breach of an agreement to which he is not a party, he must, at least, show that it was intended for his direct benefit. For, as said, by this court, .speaking of the right of bondholders to sue a third party who had made an agreement with the obligor to discharge the bonds, they ‘may have had an indirect interest in the performance of the undertakings * * but that is a very different thing from the -privity necessary to enable them to enforce the contract by suits in their own names.’ (Citations.)”
In W. D. Anderson & Sons v. Samedan Oil Corp., 5 Cir., 1954, 210 F.2d 600, 602, the rule is succinctly stated, adopted from the Texas Supreme Court and supported by a wealth of authorities, as follows:
“The controlling rule of construction, we think, has been well expressed by the Texas Supreme Court as follows :
“ ‘ * * * 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. Citizens Nat. Bank in Abilene v. Texas & P. Ry. Co., 136 Tex. 333, 150 S.W.2d 1003; 12 Am.Jur. 833, sec. 281, 17 C.J.S. Contracts § 519, p. 1131.’”
12 Cal.Jur.2d, Contracts, sec. 268, p. 500, construes California Civ.Code, sec. 1559, and the requisite intent thereunder to benefit a third party; such section reads in part:
“A third.party who is only incidentally benefited by a contract that is not made expressly for his benefit cannot *302recover on the contract. It is incumbent, therefore, on one who would recover upon a contract as a third party-beneficiary to allege and to show affirmatively that the contract was made expressly for his benefit. * * * There must have been an intent clearly manifested on the part of the contracting parties to make the obligation inure to the benefit of the third party.”
And Corbin on Contracts, Vol. 4, sec. 779C, p. 41, in distinguishing the three classes of beneficiaries, has this to say concerning intent:
“If in buying the promise the promisee expresses an intent that some third party shall receive either the security of the executory promise or.the benefit of performance as a gift, that party is a donee of either the contract right or of the promised performance or both.. If, on the other hand, the promisee’s expressed intent is that some third party shall receive the performance in satisfaction and discharge of some actual or supposed duty or liability of the promisee, the third party is a creditor beneficiary. All others who may in some way be benefited by performance have ho rights and are called incidental beneficiaries * * * defined only by a statement that negatives the existence of gift and debt * *
In Smith v. Anglo-California Trust Co., 205 Cal. 496, 271 P. 898, 901, certain lien claimants sought to recover from funds deposited to the account of the decedent, pursuant to an agreement to erect improvements on certain lots, which sums remained in said account after the death and at the time when the improvements had been substantially completed. The California Court stated:
“Nor do we think the lien claimants can assert such right solely by virtue of the agreement of the securities company to advance the full sum of $20,000, for it is now well settled in this state that to give a third party, who may derive a benefit from the performance of a promise, an action thereon, there must have been an intent clearly manifested by the promisor to secure some benefit to the third party. In other words, the promise or contract must have been one ‘made expressly for the benefit of a third person.’ Section 1559, Civ.Code, 6 Cal.Jur. 473, § 280, and authorities there cited.”
In Burton v. Larkin, 36 Kan. 246, 13 P. 398, 399, quoting with approval from Simson v. Brown, 68 N.Y. 355, is the following:
“ ‘It is not every promise made by one to another, from, the performance of which a benefit may inure to a third, which gives a right of action to such third person, he being neither privy to. *303the contract nor to the consideration. The contract must he made for his benefit, as its object, and he must be the party intended to be benefited.’ ”
See also Hendrix Mill & Lumber Co. v. Meador, 228 Ky. 844, 16 S.W.2d 482; Harvey v. Lowry, 204 Ind. 93, 183 N.E. 309; Isbrandtsen Co. v. Local 1291 etc., 3 Cir., 1953, 204 F.2d 495; Hamill v. Maryland Cas. Co., 10 Cir., 1954, 209 F.2d 338; Thomas Mfg. Co. v. Prather, 65 Ark. 27, 44 S.W. 218; Haines v. Pacific Bancorporation, 146 Or. 407, 30 P.2d 763; Shutes v. Cheney, 123 Cal.App.2d 256, 266 P.2d 902.
The purpose of R. L. and Addie M. Jones in obtaining respondent’s promise of payment of the Harrison judgment was to release their real property from the lien of such judgment and, in so doing, to relieve themselves of liability for payment thereof. Nowhere in the contract does it appear that the purpose of R. L. and Addie M. Jones, the promisees, in obtaining respondent’s promise of performance, was to make a gift to appellant or to confer upon him a right against respondent to some performance not due or asserted to be due from R. L. and Addie M. Jones to appellant. Neither does it appear from the contract that the performance of respondent’s promise would have satisfied any actual or asserted duty of the promisees, R. L. and Addie M. Jones, to appellant. Therefore, appellant cannot be considered as either a donee beneficiary or a creditor beneficiary under the contract. The fact that the contract points to appellant as an incidental beneficiary thereunder does not afford him a right of action against respondent. The trial court properly sustained respondent’s demurrer to appellant’s amended complaint.
Appellant by his remaining assignment asserts error of the trial court in granting respondent’s motion to strike portions of the amended complaint. Appellant’s principal contention in that regard is that the court struck from the complaint his allegation to the effect that the contract for the payment of the judgment was made expressly for the benefit of the judgment debtors, including appellant. Such statement constituted a conclusion and, as hereinbefore pointed out, is unsupported by allegations of fact.
“The pleading should allege facts as distinguished from mere conclusions.” Ayers v. General Hospital, 67 Idaho 430, 182 P.2d 958, 960. See also I.C., sec. 5-605; Hurt v. Brandt, 37 Idaho 187, 192, 215 P. 842; Bancroft’s Pleading, Vol. 1, sec. 43, p. 90.
The judgment of the trial court should be affirmed.