Pulver v. Skinner — 4 N.Y. St. Rep. 816

Majority

p. 816

Peter Pulver et al., Resp’ts, v. Samuel S. Skinner, App’lt; J. Wright Olmstead, Resp’t, v. Same, App’lt; Erastus Darling et al., Resp’ts, v. Same, App’lt.

(Supreme Court, General Term, Third Department,

Filed November, 1886.)

Headnote

Contract — Action on — By persons not parties to the instrument FOR WHOSE BENEFIT THE CONTRACT WAS MADE.

W V. and B., in 1S82, conveyed to R. C., real and personal property in consideration whereof he assumed and agreed-to pay certain of their debts and save them harmless therefrom. Upon the death of R. C. thereafter, J. C. was appointed his administrator, and an agreement was entered into , between him and this defendant expressing the intention that property conveyed as before stated should be transferred to this defendant, and that he should pay the indebtedness assumed by that conveyance. Subsequently the widow of R. C., and ail his heirs except a minor, conveyed as agreed, and covenanted that the minor should convey, for a valuable consideration, and a bond executed by this defendant. In consideration thereof he executed a bond to J. C., administrator of the estate of R. C„ and attorney, in fact, of the widow and heirs of R. C. This recited and specified certain claims existing against R. C., and that the widow and heirs had conveyed to the obligor certain real estate on the agreement that this defendant should pay the claims, and save the estate harmless. The condition of the bond was that the obligor should pay the claims or cause them to be paid, and save the estate harmless, and within four months deliver to the obligee receipts for such payments. The bond further provides that for the aforesaid consideration lie agreed with the owners of the claims to pay all that was justly due them, not exceeding the amounts before set forth. The heir of R. C., who, at the time of the conveyance by the widow and other heirs, was a minor, subsequently conveyed his interest. In an action brought by the creditors named in the bond to recover their claim: Held, that the bond was not one of mere indemnity to the obligee, but for actual payment to the creditors, and that although not actual parties to the instrument it was but equitable that the creditors should be allowed to have the benefit of the contract.

Appeal from a judgment entered at the special term of Saratoga county.

William and Benjamin Van Vrankin in 1882, conveyed real and personal property to Eobert Clements, in consideration whereof he assumed and agreed to pay certain debts of theirs, and save them harmless therefrom. Upon the death of Eobert Clements, thereafter, John Clements was appointed administrator, and entered into an agreement with Samuel S. Skinner, this defendant described therein as executor, but of no person. This agreement recited the conveyance to Eobert Clements, and the assumption by him of the debts of his grantors, and that the property, both real and personal, should be transferred to Skinner, as executor, upon the assumption by him of the said debts, and further contained an agreement that John Clements would convey the property, or cause it to be conveyed, and that Skinner would pay the indebtedness. This was by the terms of the agreement, to be done within nine months. Thereafter, within that time, and on April 12, 1884, the widow of Eobert Clements, and all of his heirs except one, at that time

p. 817

a minor, conveyed the real estate to Samuel S. Skinner, as executer of Peter Skinner, deceased, in consideration of §11,000 and a bond executed by him, and they covenanted that the minor should convey, which he subsequently did. On that same day Skinner, in consideration thereof, executed a bond in the penal sum of $6,080.28 to John Clements, administrator of Robert Clements deceased, and as attorney, in fact, of the widow and heirs at law.

It is recited in the bond that there are certain claims against the estate of Robert Clements, and they are specified therein; and that the widow and heirs have conveyed to the obligor certain real estate on the express agreement, as a part of the consideration that he would pay those claims and save the estate harmless. The bond is conditioned that the obligor shall pay, or cause to be paid, the aforesaid claims and save the estate harmless, and within four months deliver receipts for the payments to the obligee; it further says that for the consideration aforesaid the party of the first part agrees with the owners of the claims to pay all that is justly due them, not exceeding the aforesaid amounts.

These actions are brought by the creditors named in the bond to recover their claims, the payment of which was thereby assumed by the obligor in the bond.

Jacob W. Clute and L. Varney, for the app’lt; James Van Voast, for the resp’t.

The first point is, that the first action is by Wait, Pulver & Rockwell, while the creditors named in the bond were Wait & Pulver. But evidence was given tending to show that the claim in question was contracted in dealings under the name of Wait & Pulver. The amount of the claim is that stated in the bond, and the claim itself is traced from its origin in an indebtedness of William and Benjamin Van Vranken. The obligation assumed by defendant was not that of a mere guarantor. He was to pay the debts, and as between him and the estate of Robert Clements he became principal debtor. It was enough to show that this was one of the claims he became liable to pay.

Some stress was laid by the defendant on the fact that the conveyance was executed to him as executor. But that is immaterial. He chose to take the conveyance in that form. Even if it had been made, at his request, to a third party, still the consideration for his bond would have been sufficient. Nor is it material that the minor heir did not convey at the time when the bond was given. The defendant accepted the covenant of the other heirs, and that covenant has been performed.

p. 818

The next, and the principal point, is whether this is a case in which these creditors can sue upon an agreement to which they are not actual parties.

We do not think it necessary to go over all the cases bearing on this point to show the distinctions which run through them. It is enough to call attention to the position of the parties. The widow and heirs of Robert Clement held this property. Robert Clement, in his life-time, was personally bound to pay these Van Vranken debts, and the property was probably liable therefor also in equity. At any rate, on his death this property became hable to pay his debts. It is not necessary to say that the debts were strictly a hen, but they could through proper proceedings be enforced out of the property. At the same time the widow and heirs were not personally hable for the debts.

Under this condition of affairs they transfer this property to the defendant, on his express agreement, not merely to appropriate the same to these debts, but himself to pay the debts and to save the estate harmless. For this he has received and retains an ample consideration. If the obligee had been liable for the debts the case would have been plainly within Barlow v. Myers ( 64 N. Y., 41 ). But it is urged that, as the widow and heirs were not personally liable, Skinner is not by the bond hable to the creditors, under the rule laid down in Vrooman v. Turner ( 69 N. Y., 280 ). In the opinion given in that case, the right of the third party to have an action upon the promise is said to depend first, on the intent of the promisee to secure some benefit to the third party, and second, on some privity between the two, the promisee and the third party, and some obhgation or duty owing from the former to the latter.

There can be no question, in this case, of the intent of the promisee to secure a benefit to these creditors. The last clause of the bond is an express agreement of the defendant, “to and with the owners of these claims, to pay all that is justly due them.” The bond was not one of mere indemnity to the obhgee. It was for actual payment to the creditors.

We must then inquire whether there was a privity between them, and an obhgation or duty owing from the promisee to the creditors.

As administrator and as widow and heirs of Robert Clement, the parties named in the bond were in privity with the creditors of Robert Clements. There was not, it is true, a personal obligation on them to pay the debt. But we think that there was some obhgation or duty resting on the administrator and on the heirs in respect to the creditors. It was the duty of the administrator, in default

p. 819

of sufficient personal property, to cause the'real estate to be applied to the debts. And the heirs themselves might be sued by the creditors in respect to any land of the deceased in their possession, and might be made personally accountable for any which they had sold. Code, § 1843, et seq.

Thus, heirs do not stand in a position simply like that of the owner of an equity of redemption who is not liable for the mortgage debt. He clearly has no duty towards the mortgagee. If he sells the property, he does not become liable for the debt. The hen is fixed, and he cannot disturb it. But the heir who sells may, in some cases, become personally hable. It may then be justly said that the heir is under some obligation or duty to the creditor of the deceased, within the principle applicable to these cases.

When, therefore, in performance of that obhgation, the heirs have thus provided for the payment of these debts, it is equitable that the creditors should be allowed to have the benefit of that arrangement, although not actually parties to the instrument.

Here the heirs have made a specific appropriation of this land as a consideration for the payment of these debts. And the principle that a third party may have an action on a contract made for his benefit could seldom have a more beneficial application.

The judgment should be affirmed, with costs.

Bocees and Landon, JJ., concur.