Court Opinion

ID: 6140442
Source: CourtListenerOpinion
Date Created: 2022-02-05 14:38:02.89478+00
Date Added: 2024-06-11T08:54:37.179080
License: Public Domain

Labbemobe, J.
On the 11th of August, 1870, one Chas. Moran, together with the firms of Congreve & Son and J. S. Kennedy & Co., agreed to sell, and the defendant agreed to purchase the first mortgage land grant bonds of the Texas & New Orleans Railroad Co. upon certain terms and conditions. It was also understood and agreed between said parties that all holders of said bonds, duly registered, should have the option of accepting the same price and terms provided for in said agreement.
On September 1st, 1870, plaintiff, as the holder of three of such bonds, notified defendant that he (plaintiff) had exercised his option, as secured by said agreement. This was followed by a tender of said bonds, and a demand of payment thereof at the price stipulated in said agreement, which was refused. Plaintiff then sued for the recovery of the value of said bonds as stipulated. The complaint was dismissed on the trial, and the exceptions taken were ordered to be heard at the general term.
It is difficult to perceive upon what ground plaintiff’s claim rests. He was not a party to the original agreement, nor has he become such by novation or assignment.
The defendant obligated himself to purchase these bonds in a particular manner. Morgan, Congreve & Son, and Kennedy & Co. agreed to sell the bonds of said company, and defendant agreed to purchase from them. He made no covenant or promised to pay any person other than those named in the agreement, and for whose benefit it was made. Moran and his asso*337ciates had incurred liabilities and advanced moneys for said company, which the sale of its bonds was intended to liquidate.
This case is not within the ruling of Lawrence v. Fox (20 N. Y. 268). There it was held by a divided court that the defendant, having expressly promised to pay the sum loaned him by a third party, to the plaintiff, the latter could maintain an action for the recovery of such sum, because such promise was made directly for his benefit. To the same effect is Barker v. Bradley (42 N. Y. 316), where there was an express promise by the defendant to pay the note (in dispute) to the plaintiff (see Turk v. Ridge, 41 N. Y. 206).
The option reserved to the bondholders generally by defendant’s agreement created no such privity of contract on their part or liability on his as would sustain this action. The exceptions are therefore overruled, and judgment ordered for a dismissal of the complaint.
Charles P. Daly, Ch. J., and Robinson, J., concurred.
Ordered accordingly.