Court Opinion

ID: 8031709
Source: CourtListenerOpinion
Date Created: 2022-09-09 03:16:17.956243+00
Date Added: 2024-06-11T16:36:59.586531
License: Public Domain

.Cornish, J.,
dissenting.
The fact that the beneficiary is a laborer or material-man can, I take it, make no difference. If public policy or the status of laborers or materialmen is to give them rights superior to other beneficiaries under similar circumstances, the opinion should make that clear and tell the reason why.
What right can an entire stranger to a contract have in it? The English and Massachusetts courts say none. The contractual relation requires a meeting of minds and a consideration. Hence, only the parties or privies to a contract can enforce it, say they.
When the contract’s promise is to save the promisee from a possible loss, it may easily happen that its enforcement will be directly beneficial to a third person, because the promisee’s loss, provided against, may be the promisee’s liability to the third person. Many courts, including this, have, in such case, enforced the contract at the suit of the third party (beneficiary), the same as if he were a promisee or obligee named in the contract. They have likened the case to novation. Really, the right comes to the stranger to the contract by a sort of unexpected grace. The liability of the obligor to him can hardly be said to be contractual. The courts See in the situation and relation of the parties a duty- which the promisor ought not to refuse to perform, and they permit to be done by direct means the *209thing that would ordinarily come about anyhow by indirect means. ' '
Just as the stream can never rise higher than its source, nor the less include the greater, nor the accidental be more regarded than the intentional, nor one reap where he has not sown, so the promisor is never bound to more than his promise, and the stranger to the contract can have no better nor higher rights in the contract than the parties to it. He gets any possible right he may have through the promise made to the obligee, and that is the promise that must be left as made and only as made.
Such has been the holdings of these courts.
In this opinion we are announcing the law to be: That an entire stranger to a contract, who (probably) did not know of it when made, for whose fortunes neither of the parties eared except as his own interest might be affected, who never did a thing in reliance on the contract (save commencing this action), who paid no consideration for a promise, to whom none was made and who made none himself, may, notwithstanding these facts' (undisputed), not only recover on the contract, but recover regardless of its conditions.
Is there any precedent for this? None. In Getchell & Martin Lumber & Mfg. Co. v. Peterson & Sampson, 124 Ia. 599, cited, the promise was made in words to the third party as well as to the principal obligee, and the opinion states that material was furnished in reliance upon the promise.
In statutory bond cases the law makes the laborer and materialman, in terms, a party to the contract in his own, separate and independent right.
Municipal bond cases are distinguishable in this: The officials act in a representative capacity; the laborer or materialman has no lien for his protection. He should be protected by the municipality who gets the benefit of his work. It does no extreme violence to the contract to say that the parties must have in*210tended his protection as the main purpose of the bond, that the city was acting as his agent, and that a promise was made to him, just as subsequently enacted statutes provide. 21 R. C. L. p. 1016, sec. 64.
In the instant case, no contention can be made but that the contract is a private contract, the parties at the time owing no duty to any third person.
Under the rule announced, if A, having faith in the character and ability of young Mr. B, who is seeking employment under C, promises C that, if he employs B, B will make the payments of funds coming into his hands from time to time to the persons to whom the funds should go, on the perfectly reasonable condition, however, that when C learns of a default of B he will inform A, and, if afterwards C neglects to give A the information of B’s default, which he knows, so that A is released from his promise to C, still A is liable to the persons to whom the payments should have been made by B. When one of such persons sues as beneficiary, and A sets up the promise that he should be notified of defaults, and shows that, with notice, he could have saved half, or all, of the loss, we are holding that the third person (beneficiary) makes a good reply as follows: “How could you expect me to give you notice? I never knew of your contract with B until immediately before commencing this action. ’ ’
It seems to me that the reasoning is unsound and the conclusion unjust. No court will adhere to the rule in its general application. The entertaining of doubts about a proposition, plain and simple in itself, always invites confusion. We should pray to be delivered from temptation to do so. Hard cases make bad' law.
.. When the meaning of a valid contract is plain, that is the law of the contract. When courts go contrary to its intent, they legislate. Once we agree that the promise defendant made to. the obligee was that the *211contractor would make the payments, and that promise was on condition that defendant should be notified by the obligee of defaults, there is no need for discussion.
But is there room for good-faith dispute that such ■was the promise made in terms only to the obligee and that notice was not given? One might, with some show of equity, argue (as has been held in certain insurance cases) that the condition precedent ought not to defeat plaintiff’s recovery unless the obligee’s breach damaged defendant. This contention, however, is not made. The defendant can complain: “I am held, contrary to the only promise I made, which was to the obligee, to save him harmless upon condition.”
The argument by analogy quoted in the opinion from Doll v. Crume, 41 Neb. 655, can have no possible application here. Here the promise, that “$10 which he owed to C” would be paid is unquestionably coupled with a condition, and is not absolute as in the supposed case. Besides, in the analogy quoted, the argument assumes A’s promise to C, made to the municipality as his agent or representative. In the case in hand, it cannot be said that more than one contract, more than one promise (which is what the opinion probably means), or more than two parties to the contract, were contemplated.
The right of the citizen to freely contract, and to be held' only in accordance with his promise as made, is one of' the foundations and safeguards of civil liberty.