nical notions of the common law, which did not permit a person to sue upon a contract unless he was a party to it, or unless the consideration moved from him, and which especially forbade an action upon a sealed undertaking by a stranger. The courts of some States adhere strictly to this old notion, and utterly repudiate the innovation. The new rule, however, is as convenient as it is just. The objections to it are every way technical and arbitrary, -a repetition of verbal formulas without any convincing reasons. It certainly avoids a circuity of actions, and it enables the only person beneficially interested in the promisethe real party in interest to come into court in the first instance and establish his rights, without being driven to enforce them in a roundabout manner through the intervention of a third person, who, if successful, must account to him for the proceeds of the litigation. The true extent and application of the doctrine, and the proper limitations upon it, have been discussed and fixed by the New York Court of Appeals in very recent cases.2 McIntosh, 23 Ind. 529; Barker v. Bradley, 42 N. Y. 316, 319; Secor v. Lord, 3 Keyes, 525; Claflin v. Ostrom, 54 N. Y. 581, 584; Glen r. Hope Mut. L. Ins. Co., 56 N. Y. 379, 381; McDowell v. Law, 35 Wis. 171. The principle applies to contracts under seal: Emmitt v. Brophy, 42 Ohio St. 82; contra, Woodbury Sav. Bk. v. Charter Oak Ins. Co., 29 Conn. 374. 1 Exchange Bank v. Rice, 107 Mass. 37, per Gray J. 2 Garnsey v. Rogers, 47 N. Y. 233, 240, per Rapallo J.; Merrill v. Green, 55 N. Y. 270, 273; Turk r. Ridge, 41 N. Y. 201, 206. See also Hinman v. Bowen, 5 N. Y. Sup. Ct. 234, which holds that a defence, good as against the immediate promisee, is also available against the beneficiary. (s. c. 3 Hun, 192.) Phillips v. Van Schaick, 37 Iowa, 229. See also Green v. Richardson, 4 Colo. 584; McKinnon v. McKinnon, 81 N. C. 201; Cone v. Niagara Ins. Co., 60 N. Y. 619; Barlow v. Meyers, 64 id. 41; Arnold v. Nichols, 64 id. 117; Simson v. Brown, 68 id. 355; Lake Ontario Shore R. Co. v. Curtiss, 80 id. 219; Dunning v. Leavitt, 85 id. 301; Root v. Wright, 84 id. 72, 74, 75; Pardee v. Treat, 82 id. 385; Vrooman v. Turner, 69 id. 280; Rowe v. Parsons, 6 Hun, 338; Bean . Edge, 84 N. Y. 514; Todd v. Weber, 95 N. Y. 181, 194; Wheat v. Rice, 97 N. Y. 296; Sew- While it is im § 78. *140. Commercial Paper. Action by Legal Promisee. Upon the same principle, the equitable owner of a promissory note is the real party in interest within the statute, and is the proper person to sue upon it, although there may be no indorsement, and possession of the instrument is prima facie evidence of of a firm have no legal interest in a contract with the firm by which the promisor agrees to pay a specified portion of the firm's debts, as it rests entirely with the promisor to designate what creditors shall have the benefit of the promise); see also Edick v. Green, 38 Hun, 202; Weller v. Goble, 66 Iowa, 113. Some acceptance of the promise by the creditor, by word or act, must be shown. Wheat v. Rice, 97 N. Y. 296. On the other hand, the rule as stated in more general terms seems to be recognized in Todd v. Weber, 95 N. Y. 181 (the promise of the father of a bastard child, made to certain persons, on consideration that these persons provide for the child's education and support, to make it up to them" in his will, may be sued upon by the child, as being the party beneficially interested). See also St. Mark's Church v. Teed, 120 N. Y. 583. The question of the acceptance of the promise by C., the third person, has been much discussed in Indiana. Until accepted by C., the contract may, of course, be rescinded by A. and B. Davis v. Calloway, 30 Ind. 112. But where the obligation or sum is specific, and is due at a known or certain time, a demand by C. is not necessary before suit. Rodenbarger v. Bramblett, 78 Ind. 213; distinguishing Durham v. Bischof, 47 Ind. 211 (where A. had made no absolute and specific promise, being assignee of a stock of goods under an agreement "to compromise or otherwise to settle all debts owing by the assignors," it is manifestly just and proper that a demand by C., a creditor, should be required before suit). Bringing the action by C. is usually sufficient evidence of his acceptance of the contract; no averment of acceptance is necessary. Carnahan v. Tousey, 93 Ind. 561, Elliott J. dissenting; Risk v. Hoffman, 69 Ind. 137. Many cases, in addition to those cited from New York, hold that the promise must have been intended to be primarily for C.'s benefit, in order that he may sue upon it. See Dun dee Mortgage, etc. Co. v. Hughes, 20 Fed. Rep. 39; Burton v. Larkin, 36 Kans. 246; Johnson v. Bamberger (Ark. 1892), 19 S. W. 920 (agreement among creditors not to sue debtor without concurrence of a majority of the creditors is not intended for his benefit); Civil Code of California, § 1559; Chung Kee v. Davidson, 73 Cal. 522: "It must appear from the direct terms of the contract that it was made for the benefit of third parties. It cannot be implied from the fact that the contract would, if carried out between the parties to it, operate incidentally to their benefit." For further illustrations, see Waltz v. Waltz, 84 Ind. 403 (contract for benefit of promisee's heirs); Western Development Co. v. Emery, 61 Cal. 611 (contract of subscription); Baker Bryan, 64 Iowa, 561; Jordan r. Kavanaugh, 63 Iowa, 152. Promisor assumes promisee's debts, and creditors of the latter sue. Stariha v. Greenwood, 28 Minn. 521; Ellis v. Harrison, 104 Mo. 270; Knott v. Dubuque & S. C. R. Co. (Iowa, 1892), 51 N. W. 57; compare Anderson v. Fitzgerald, 21 Fed. Rep. 294. Persons whose property in a city was destroyed by fire were allowed to sue a water company for breach of its contract to supply the city with water, in Paducah Lumber Co. v. Paducah Water Supply Co., 89 Ky. 340; contra, Davis v. Clinton Water Works, 54 Iowa, 59; Ferris v. Carson Water Co, 16 Nev. 44; s. c. 40 Am. Rep. 485. The principle under discussion was stated without any limitation in Hecht v. Caughron, 46 Ark. 132; Chamblee v. McKenzie, 31 Ark. 155; Talbot v. Wilkins, 31 Ark. 411; Green . Morrison, 5 Colo. 18; Lehow v. Simonton, 3 Colo. 346; Dodge's Adm. v. Moss, 82 Ky. 441; Kaufman v. U. S. Nat. Bk, 31 Neb. 661; Shamp v. Meyer, 20 Neb. 223; Miliani v. Tognini, 19 Nev. 133; Schneider v. White, 12 Or. 503; Bassett. Hughes, 43 Wis. 319. [See note 1, p. 106, supra.] じ。 such ownership.1 In fact, wherever the spirit of the reformed system is carried out, and this is now very generally, if not universally, the case, the equity rule as to parties is freely applied to all legal actions, and this one principle will easily solve all particular cases of difficulty or doubt. But, as has been shown in preceding paragraphs, the law as to commercial paper has not been changed in several of the States by this provision of the statute in reference to the parties plaintiff; and in those States, therefore, the indorsee, and, a fortiori, the payee of a negotiable note or bill may maintain an action upon it, even though there may be relations between himself and third persons which give them a right of action over against him for the proceeds. As, for example, if A., having in his hands money belonging to B., should loan it, and take a note from the borrower payable to himself, he could sue upon it; however much B. might have been interested in the original money, and however valid a demand he may have against A., he is not a party to the note nor the holder of it.3 In the class of cases already mentioned, where an express contract is made with one for the benefit of another, and the person thus beneficially interested is permitted to sue in his own name, the one to whom the promise was expressly given may, in general, also' maintain an action. The promise being actually made to him, and the consideration moving from him, he is legally the contracting party, and is clothed with the legal right; indeed, he falls under the definition of trustee of an express trust given in another section of the codes.5 1 Garner v. Cook, 30 Ind. 331; Compton v. Davidson, 31 Ind. 62. In the latter case, the answer denied that the plaintiff was "the legal owner of the note in suit." This was held no defence, as it was sufficient if he was the equitable owner. 2 Conyngham v. Smith, 16 Iowa, 471; Tate v. Ohio & Miss. R. Co., 10 Ind. 174; Swift v. Ellsworth, 10 Ind. 205. 8 Robbins v. Cheek, 32 Ind. 328; Robbins v. Dishon, 19 Ind. 205. * [Held in Dorr Cattle Co. v. Jewett (1902), 116 Ia. 93, 89 N. W. 109, that one who sells property to another under an agreement that its value shall be credited on the note of a third person, may, on failure of the purchaser to make the credit as agreed, maintain an action against the purchaser for the value of the property.] 5 See Rice v. Savery, 22 Iowa, 470, 477; Cottle v. Cole, 20 Iowa, 481, 485. In the former of these cases Dillon J. said: "If the promise is made for the benefit of another, who is the real party in interest, the latter may sue, though the contract was made to an agent or trustee; or the agent or trustee, or person in whose name a contract is made for the benefit of another, may sue without joining the party for whose benefit the suit is prosecuted." This subject is treated at large in a subsequent section. See also Tinkler r. Swaynie, 71 Ind. 562; Ward v. Cowdrey, N. Y. S. 282, affirmed 119 N. Y. 614; and Albere v. Kingsland, 13 N. Y. S. 794; Ley v. Miller, 28 Neb. 822. Actions on § 79. *141. Instances of Real Party in Interest. Bonds, Actions by Principals and Agents, etc. The following are additional examples of actions maintained by the real party in interest, and in which the equity doctrine on this subject has been freely applied, although the rights to be protected and the remedies to be obtained were legal. After a judgment had been obtained in an action of ejectment prosecuted according to the old form by John Doe as the fictitious plaintiff, the succeeding action to recover the mesne profits of the land should be brought in the name of the actual owner of the fee, the lessors of the plaintiff in the ejectment, they being the real parties in interest.1 An undertaking given to the sheriff by the defendant in an action for the recovery of chattels, in order to procure a return of the goods, should be prosecuted by the plaintiff in that action, since he is the real party in interest;2 and it is said to be a general rule in Iowa that when a bond or undertaking is given to an officer, in the course of some judicial proceeding, for the security of any particular person, such person may sue upon it in his own name without the formality of an assignment. If a levy by virtue of an execution is made upon chattels by a deputy sheriff, and the goods are wrongfully taken from his possession, an action against the wrong-doer should be brought by the sheriff; he is the real party in interest, since the deputy sheriff acted simply as his agent. An injunction bond having been given to two obligees, defendants in the action, one of them only was injuriously affected by the injunction and suffered any damage therefrom; he alone, it was held, could maintain an action on the undertaking, as he was the only party in interest, and a suit in the names of both united as plaintiffs was declared to be improperly brought under the code. A plaintiff in a pending suit having moved for the 1 Masterton v. Hagan, 17 B. Mon. 325. It must be understood that the new system had gone into effect after the commencement of the ejectment, and before that of the second action for mesne profits. 2 McBeth v. Van Sickle, 6 Nev. 134. See also, as to actions on attachment bonds, National Park Bank v. Goddard, 131 N. Y. 494 (the person at whose instance an officer levies an attachment is the proper plaintiff); Munzesheimer v. Byrne (Ark., 1892), 19 S. W. 320 (action on attachment bond for witness fees). 8 Moorman v. Collier, 32 Iowa, 138. 4 Terwilliger v. Wheeler, 35 Barb. 620. 5 Summers v. Farish, 10 Cal. 347. [A contrary conclusion was reached by the Supreme Court of Montana in Montana Mining Co. v. St. Louis Co. (1897), 19 Mont. 313, 48 Pac. 305, where it was held that in an action on an injunction bond, all of the obligees are necessary parties to the action, and the fact that some of the obligees have no interest in the subject of the suit, does not change the rule. The court said, "But, say counsel, the code appointment of a receiver, the application was denied on condition that the defendant give a bond or undertaking to account himself as though he were a receiver for all assets which might come into his hands, and in pursuance of this order he gave a bond in form running to the State; the plaintiff having recovered judgment, and the defendant failing to account, the action on the undertaking was properly brought at once by the plaintiff in his own name, without any assignment to him by the State.1 A person, in whose name a business was secretly carried on by the defendant and others in order to conceal their property and interest from their creditors, was permitted to recover the value of assets received in the course of the business, which had been taken by the defendant and converted to his own use.2 Where several persons were owners of a chattel, but for purposes of convenience the title stood in the name of one of them alone, and he executed a bill of sale of it in his own name to a purchaser who supposed that his immediate vendor was solely interested, it was held that all the owners might join as plaintiffs to recover the price; they were the real parties in interest under the provision of the code.3 This case is a particular instance of a general rule: It is now provision that the suit shall be brought in the name of the real party in interest has changed the common-law rule, and any party shown to have no interest in a recovery sought would be improperly joined. This is true; but, considering what we have said, is the argument correctly invoked in this instance? The action should be brought in the name of the real party in interest, but as the bond, on its face, declared them to be the real parties in interest, in order to ascertain the truth of the matter alleged, that one obligee alone was damaged, it was necessary to join all the obligees as plaintiffs, or make them defendants" In support of the text: Pilger r. Marder (1898), 55 Neb. 113, 75 N. W. 559, where the action was on a replevin bond. In Gyger v. Courtney (1900), 59 Neb. 555, 81 N. W. 437, it was held that "a trustee of an express trust, who was restrained with respect to matters concerning the trust estate, may maintain an action on the bond given in the injunction suit in which he is named as obligee."] 1 Baker v. Bartol, 7 Cal. 551. [In Curry v. Gila County (1898), Ariz., 53 Pac. 4, it was held that a county for whose use and benefit a bond is executed, may sue upon it, although the bond is executed to the Territory of Arizona. But in Myers v. Baughman (1901), 61 Neb. 818, 86 N. W. 507, it was held that the prosecutrix in a bastardy proceeding could not sue on the bastardy bond in her own name, but the action could be brought only in the name of the State, which was named as obligee, for the use of the prosecutrix as her interest might appear, the State being in fact a beneficiary under the bond as well as the prosecutrix.] 88. 2 Paddon v. Williams, 2 Abb. Pr. N. s. 3 Silliman v. Tuttle, 45 Barb. 171. [In Chamberlain v. Woolsey (1903), Neb., 95 N. W. 38, it was held that one having legal title and the right of possession to personal property may maintain an action for its wrongful conversion by a stranger, without joining a party who may have a beneficial interest therein."] |