Court Opinion

ID: 6734375
Source: CourtListenerOpinion
Date Created: 2022-07-20 23:17:07.260778+00
Date Added: 2024-06-11T16:01:42.911578
License: Public Domain

The opinion of the court was delivered by
Corliss, C. J.
The plaintiff and respondent sold groceries to the defendant Mrs. Hall. The defendant Brandenburg was joined with her in the suit to recover the price of these groceries, the plaintiff basing his right to recover against Bran*475denburg on a written instrument. Tbe plaintiff recovered judgment against Brandenburg in the trial court. As tbe construction of tbis writing is involved, it is necessary to set it forth in full in tbis opinion: “Tbis agreement, made and entered into tbis 29th day of October, A. D. 1887, by and between George Brandenburg, of Wheatland, party of tbe first part, and Mabel E. Hall, of Casselton, D. T., party of tbe second part, witnessetb, that whereas, tbe said party of tbe first part has agreed to guaranty tbe grocery bill of said second party, contracted for use on tbe premises hereinafter described, at any place said second party may select to trade, not exceeding tbe sum of two hundred ($200) dollars in any one season during tbe continuance in force of a certain agreement dated tbis day for tbe purchase of section twenty-two (22) in township one hundred and forty (140) north, and range fifty-three (53) west, tbe said bill not to exceed one hundred dollars ($100) between April 1st and August 1st, and one hundred dollars from August 1st to tbe completion of tbe harvest; and said first party has agreed that be will assist said second party to pay tbe labor bill in seeding and harvesting tbe crop on said land aforesaid, with tbe exception of tbe labor of said Mabel E. Hall and George B- Hall, her husband: Now therefore, in consideration of tbe premises, said Mabel E. Hall hereby agrees to pay to said first party all tbe sums which be pays on said guaranty and advances in pursuance of this agreement, with interest thereon at twelve per cent, from date of such payment by him. Witness my hand and seal, tbis 29th day of October, A. D. 1887. Mabel E. Hall. [Seal.] George B. Hall. [Seal.] Geo. Brandenburg. [Seal.]”
We fail to see bow plaintiff can maintain any action on tbis agreement. He is not a party to it; neither does it appear to be made for bis benefit. It is not a letter of credit. It comes within no definition of such a letter as such letters are defined in tbe cases or in our statute. See §§ 4312-4316, Comp. Laws; 13 Amer. & Eng. Enc. Law, 237, 238. ' There is nothing upon its face to indicate that Mrs. Hall was to take tbis instrument to any person for tbe purpose of securing credit on tbe strength thereof. If there was any ambiguity in tbe contract *476it would be' proper to look into the surrounding circumstances to discover the purpose of the parties, but the meaning of the agreement is too manifest to warrant extrinsic explanation. It is not even an agreement with Mrs. Hall on the part of Brandenburg to guaranty her grocery bill. It merely recites that such a contract has been made with her in explanation and to limit the scope of the agreement which follows, to pay twelve per cent, interest from date of payment on all sums which Brandenburg should pay because of such recited guaranty. There is not a line, word, or syllable in the instrument expressing any present agreement on the part of Brandenburg to do anything; not even an agreement with Mrs. Hall to guaranty the grocery bill, not to mention its failure to express any contract with plaintiff or any one else to guaranty such bill. The instrument, even if it had contained an express agreement on the part of Brandenburg with Mrs. Hall to guaranty her grocery bill, would not be one on which plaintiff could sue, unless it showed upon its face, or, unless the surrounding circumstances demonstrated that the parties intended that Mrs. Hall should use that particular instrument as a means of securing her the necessary credit to make the purchases therein mentioned, or unless it was made for his benefit. The plaintiff, who is a stranger to this contract, can sue on it only on one of two theories. One theory is that the parties, by their conduct, have made that a letter of credit which, upon its face, does not purport to be and is not a letter of credit. Perhaps even then he could not maintain an action on it. The plaintiff was not misled by the paper or by Brandenburg, as he relied on neither in giving the credit, but solely upon Mr. Hall’s statement that his wife had a guarantee from Brandenburg. Plaintiff never saw the paper until after the goods were sold.' Under all the cases it is necessary that the person claiming the benefit of a letter of credit must have relied thereon in making the sale. 13 Amer. & Eng. Enc. Law 238; Pollock v. Helm, 54 Miss. 1. He can connect himself with the letter of credit only by showing that it was on the strength of the promise therein contained that he made the sale. Said the court in Pollock v. Helm: “The very pith and marrow of the plaintiff’s right to recover is *477that he was induced to put out his money on Mrs. Willis’ bill on the faith of the defendant’s letter of credit; and it does not appear by direct evidence that the letter was shown to Pollock or its contents reported to him.” The contents of this contract were not reported to plaintiff, Mr. Hall placing his own construction on the paper, stating to plaintiff that Brandenburg bad guaranteed to pay a certain sum for groceries. When a letter of credit is given, the person to whom it is addressed, in case it is a special letter, or any one to whom it is presented, in case it is a general letter, connects himself with .the letter, and becomes a party thereto by accepting the promise of the writer to be liable, because he sells on the strength of that promise. But there must be something on the face of the instrument showing that the party sought to be charged intended that some one should sell to the bearer of the paper, relying on the promise of the one who has signed it to pay. It is also significant that this paper is signed not merely by Brandenburg, as is usual in the case of a letter of credit, but by Mrs. Hall and her husband also. Can the plaintiff recover on the ground that the case is brought within the principle of those decisions which allow a stranger to an agreement to sue upon it as having been made for his benefit? The paper does not show that either the plaintiff or any other stranger to it was intended to be benefited by it. The mere fact that one not a party to an agreement may be benefited by its performance does not bring him into contractual relations with the promisor in the agreement. He must have been the party intended to be benefited by the promise, and there must have existed at the time thereof such an obligation on the part of the promisor towards the third person as gives him at least an equitable right to the benefits of the promise. This is the rule under the cases. What change, if any, our statute has made in it, is not necessary to decide. Mrs. Hall was under no obligation to the plaintiff at the time this agreement was made.
Without attempting to lay down any general rule which shall mark the line between cases where a stranger to a contract may and cases where he may not sue upon the agreement to which he is not a party, we are clear that under all the anthor*478ities the plaintiff could not maintain an action upon this written instrument. Gurnsey v. Rogers, 47 N. Y. 233; Merrill v. Green, 55 N. Y. 270; Vrooman v. Turner, 69 N. Y. 280; Lorillard v. Clyde, 122 N. Y. 498 ; 25 N. E. Rep. 917; Wright v. Terry, 23 Ela. 160; 2 South. Rep. 6. Our statute is explicit on this subject. It provides that “a contract made expressly for the benefit of a third person may be enforced by him at any time before the parties thereto rescind it.” Comp. Laws, § 3499. The case does not fall within this statute. Referring to a statute couched in this same language, the court say in Chung Kee v. Davidson, 73 Cal. 522, 15 Pac. Rep. 100: “The general .rule applicable to cases of this kind is that ‘when two persons, for a consideration sufficient as between themselves, covenant to do some act which, if done, would incidentally result in the benefit of a mere stranger, the stranger has not a right to enforce the covenant, although one of the contracting parties might enforce it as against the other.’ Railroad Co. v. Curtiss, 80 N. Y. 222.”
It is urged that Brandenburg, by his statements and conduct, has himself construed this paper as a letter of credit. It is not and cannot be contended that- he has by his actions or by his words estopped himself from insisting that the instrument is not such a letter. The plaintiff, in selling the groceries to Mrs. Hall, did not rely upon the declarations or conduct of Brandenburg inducing belief that he had given a letter of credit, or anything equivalent to it. The plaintiff did not even rely upon the paper itself. He never saw it until all the goods had been sold. He sold on the statement of Mr. Hall' as to what Brandenburg had agreed to do. We have examined the evidence, and are clear that Brandenburg has not by his conduct or words transmuted this mere agreement of Mrs. Hall to refund moneys advanced with 12 per cent, interest into a general letter of credit from Branbenburg, or an agreement on his part for the benefit of the plaintiff. We would hesitate long before holding, in the absence of facts constituting an estoppel, that the obvious meaning of a plain contract could in this manner be so radically changed. The judgment of the district court is reversed.