Court Opinion

ID: 7046822
Source: CourtListenerOpinion
Date Created: 2022-07-24 06:55:57.069821+00
Date Added: 2024-06-11T16:11:34.157004
License: Public Domain

Dissenting Opinion.
Elliott, C. J.
— I think that upon principle as well as upon authority, it should be held that a promise made for the benefit of a third party can not be sued upon until it has been accepted or acted upon by the person for whose benefit it was made.
The acceptance or adoption of the promise must precede the action. The adoption is an essential element of the right of recovery. Without this element the right of action is not complete, and it is only upon a complete right that an action can be maintained. I quote from a text-writer a statement of this familiar elementary rule: “In the first place, then, the party proposing to sue should satisfy himself that he has a complete cause of action against the defendant; for at the trial, he will have to show that a right of action existed and was vested in him before he commenced his suit.” Broom Com. 111. If an acceptance or adoption of the promise is necessary to entitle the beneficiary to maintain an action it must have been made before the action was instituted. It can not, as it seems to me, be possible that an element in the cause of action can be supplied by the action. I have always understood that the action is to enforce, not to create, in whole or in part, a cause of action. I think Lord Coke’s definition, “An action is a legal demand of a man’s right,” fairly indicative of the purpose of a civil action. It seems to me that the only right which a man can demand is one complete when the action was commenced.' If this be not so, then we must assign to a civil action a double office, that of *567aiding in creating a cause of action, and then enforcing what it Ras assisted into existence.
The decisions of this court sustain the proposition that a promise for the benefit of a third person must be accepted in order to entitle him to maintain an action. In Davis v. Calloway, 30 Ind. 112, it was decided that before acceptance by the immediate parties the contract might be rescinded. “Until the acceptance by Davis of the promise of Calloway, the parties to the agreement had the right to rescind.” If a right of action existed in favor of the third person it is very certain that others could not by rescission deprive him of it. In Miller v. Billingsly, 41 Ind. 489, it was said; “ It is not necessary that the person for whose benefit the promise was .made should have been aware of the promise when it was made. It is sufficient if such person, when informed thereof, accepts of, and acts upon, such promise.” In the case of Durham v. Bischof, 47 Ind. 211, it was said: “The complaint alleges a demand of payment of Durham before the commencement of .the action. In such a case, a.demand is necessary. There was no proof showing an acceptance by the appellees, or a demand upon Durham. The court should have granted a new trial.” The language just quoted very clearly show's that the court regarded an acceptance as essential -to the cause of action. But we are not left in doubt, for the language above quoted from Miller v. Billingsly, supra, is made part of the opinion by incorporation. The question, then has been directly decided by this court, and unless at least three cases are direcfly overruled it must, be held that acceptance is an essential element in the cause of action. The doctrine of these cases has not been questioned by any of the subsequent cases, for in none of them was the question of acceptance presented or discussed! Our decided cases ought to be adhered to unless there is some good reason for disregarding the rule stare decíais. Not only ought we to adhere to them upon the rule stated, but we ought to adhere to them because they are sound in principle, and well supported by authority.
*568The doctrine that the parties to a contract made for the benefit of a third may rescind it before acceptance, is a very old one. An English author says, in commenting upon some of the old cases: “ The general law as to strangers in blood, steangers to the contract, is the same at this day, to this extent at least, that the parties to the contract may at their pleasure abandon the contract, and mutually release each other from its performance.” 2 Spence Eq. Jur. 280. It is upon this principle that it was held that an assignment for the benefit of creditors was revocable until assented to by the beneficiaries. 2 Story Eq. Jur., section 973, n. 2. The principle is recognized in many other cases. It is expressly decided in the well considered case of Kelly v. Roberts, 40 N. Y. 432, that the parties may rescind the contract at any time before acceptance by the beneficiary. But it is not necessary that I should review the cases holding that there may be a rescission before acceptance, for this has been done by a late writer who thus sums up: “ But after the mortgagee has adopted or accepted the agreement of the purchaser for his benefit, he is brought into privity with him, becomes a party to the agreement, is entitled to insist upon the performance of it, and can not afterwards be deprived of his right of action by any act of the mortgagor in releasing or discharging the purchaser.” In another seetion'the same author says, in speaking of some cases holding that there may not be a rescission : “ It has been suggested * that this statement is subject to the qualification, that the assumption of the mortgage becomes irrevocable as to the mortgagee only after he has knowledge of the agreement, and has by his acquiescence and acceptance made himself a party to it.” 1 Jones Mort., sections 764,763. Among other cases cited in support of this proposition is that of Durham v. Bischof, supra. It seems to me that this construction and endorsement of our own decision by a writer of such, standing supplies strong reasons for adhering to it.
It is very difficult, if not impossible, to perceive how two parties can make, and yet not unmake, a contract to which *569they alone are parties, and upon which no one else has acted. I confess my inability to understand how it can be maintained that a contract may be enforced by a stranger who has done no act upon the faith of its existence. What possible right has he in the agreement to which he is an entire stranger? There is, it is conceded, no trust, and there can be no tort, and excluding these grounds of action, there is only one other conceivable one, and that is upon contract. Until the mortgagee in some legal method has made himself a privy to the contract he can have no action. The .necessity for this privity of contract is recognized by one of our standard writers, and among the cases cited as sustaining the text is our own case of Davis v. Galloway, supra;' 1 Story Con., section 574, auth. n. The case of McLaren v. Hutchinson, 18 Cal. 80, decides the precise question, for it is there held that acceptance is essential to the right of action., '
Reliance is placed upon the case of Douglass v. Wells, 57 How. Pr. 378. The decision in that case is not entitled to very great weight. It is the decision of a divided court; it is not the decision of a court of high authority. The decision is in diametrical opposition to the highest court of the State of New York; it is in flat conflict with the well reasoned case of Kelly v. Roberts, supra; it flics in the face of the decision in Simson v. Brown, 68 N. Y. 355, where Kelly v. Roberts, supra, is directly approved; it is in utter hostility to the still later case of Moore v. Ryder, 65 N. Y. 438, where it was said, and said in expressing the opinion of an unanimous court: “ While they could adopt and enforce such a promise made upon a valuable consideration for their benefit, within the rule laid down in the case of Lawrence v. Fox, 20 N. Y. 268, they did not do it, and until they did adopt it, * and accept the new debtor in the place of the old one as their principal debtor, the original parties to the promise could rescind or modify it; and the obligation of the promisor to the party for whom the promise was made remained imperfect.”
It is settled that where there is a contract of assumption, *570the party who assumes the debt becomes the principal debtor, and the original debtor is but the surety.
Filed April 20, 1882.
If it be held that the beneficiary may enforce the promise without having adopted it, then we shall have' the strange anomaly of a stranger becoming the creditor of a principal debtor; while the party with whom he did contract, and with whom he is in privity as principal debtor, sinks into the position of surety. I can not believe that such a transformation can take place without the participation of the creditor. Until he adopts the contract made for his benefit there is no change in the relationship of his debtor. . Can a principal be metamorphosed into a surety without the acquiescence of the creditor'?
I do not, I add to prevent misunderstanding, place my opinion' upon the ground that a demand is necessary aá a condition precedent to the right to sue ; on the contrary, I do not believe any demand is necessary. I put my opinion upon the ground that there is no cause of action until the beneficiary has accepted or adopted the promise made for his benefit.
I am compelled to refuse assent to so much of the prevailing opinion as holds that no adoption or acceptance before suit is necessary.