Page:Harvard Law Review Volume 8.djvu/121

RIGHT TO SUE UPON A CONTRACT. I05 New York in a similar case, because the court, instead of abiding by the common-law rule of privity of contract, assumed it to be a broad principle that if one person make a promise to another for the benefit of a third person, that third person may maintain an action upon it. This rule had been declared in Farley v. Cleve- land,^ and Lawrence v. Fox,^ and in Burr v. Beers,^ and Denio, J , applying the rule (which he did not approve of), felt obliged to hold that an action at law might be maintained by a mortgagee against one who had assumed the payment of the mortgage. No injustice was done in the particular case because the defendant was in fact liable in equity; but in the next case of the kind that came before the court it appeared that the deed in which the mortgage debt was assumed was itself a mortgage which had been paid, so that the defendant was not liable in equity to the plaintiff nor to any one else, and the court had great difficulty in reconciling the doctrine of Burr v. Beers with the justice of the case, and was obliged to say that the doctrine did not apply to such a case.* Again, in Vrooman v. Turner,^ where the person to whom the agree- ment of assumption was made was not himself liable on the mort- gage, the court held that the doctrine must be confined to cases where there is " first, an intent by the promisee to secure some benefit to a third person ; and secondly, some privity between the two, the promisee and the party to be benefited," In New Jersey, w'here the doctrine of Lawrence v. Fox and But- ton V. Poole had been casually recognized by the Supreme Court,^ the Court of Chancery was urged to apply it to the case of the assumption of a mortgage after the person assuming it had con- veyed the premises back again to the original debtor, who had again assumed the payment of the mortgage debt,'^ The court avoided any criticism of the Supreme Court by saying that the rule that a third person may sue upon a contract did not apply to contracts under seal, and that the liability of the grantee of a deed was regarded in New Jersey as a liabilit>' under a sealed instru-^, ment,^ and the vice-chancellor put the liability of the person who assumes a mortgage entirely upon equitable grounds. This deci- 1 4 Cow. 432 (1825) ; id. 639 (1827), 8 24 N. Y. 178. 2 20 N. Y. 268 (1859). * Garnsey v. Rogers, 47 N. Y. 233. 6 69 N. Y. 280. 6 Joslin V. New Jersey Car Spring Co., 36 N. J. L. 141. ■^ Crowell V. Currier, 27 N. J. Eq. 152. 8 Finley v. Simpson, 2 Zab. (22 N. J. Law) 311.