Story Case

George "Williams was the San Francisco representative of Counselman and Bingham, bankers. When Counselman and Bingham placed an issue of California public service bonds on the market, Williams realized that the bonds were an excellent source of investment, and attempted to purchase three-fourths of the entire lot placed with him to sell.

He signed and mailed the following order blank to the New York office:

January 15, 1915.

This day, I George Williams, have purchased of Counselman and Bingham fifty Western Hydro Electric Bonds for which I agree to pay $5,500.

(Signed) George Williams, Accepted:

George Williams, Western Manager of Counselman and Bingham.

When Counselman and Bingham received this order, they appreciated more fully the value of the bonds and refused to deliver them; the banking firm contended, among other reasons, that no contract existed since there were not two parties to the agreement. Is this a good defense to a suit on contract brought by Williams?

Ruling Court Case. Burditt Vs. Colburn, Volume 62 Vermont Reports, Page 231; Volume 13 Lawyer's Reports Annotated, Page 676

Rollins Meacham, was administrator of the estate of Angeline Gorham. A large amount of money, in-trusted to him as administrator, he used for his own personal wants and needs, instead of administering it for the benefit of the estate, as was his duty.

In order to secure the estate for the amount of money he thus converted to his own use, he made a promissory note, payable to himself as administrator, and signed by himself personally. In like manner he executed a mortgage on his home to himself as administrator, signed by himself personally. The note and mortgage were kept by Rollins Meacham, and after his decease, they were found with the other papers belonging to the estate of Angeline Gorham, deceased.

After Meacham's death, Charles Colburn, the defendant in this action, was appointed his administrator. Burditt, the plaintiff herein, was appointed to continue the administration of the estate of Angeline. Colburn turned over to Burditt the note and mortgage in question. Then Burditt sued the defendant Colburn upon this note, and sought to have the mortgage foreclosed. It was contended by the defendant that neither the note nor the mortgage was a valid obligation because neither was made between two or more parties.

Decision

The mortgage and the note were invalid as obligations of the deceased person. They lack a fundamental element of a binding obligation - two or more contracting parties.

Mr. Justice Tyler said in part: "The mortgage must be held invalid for want of contracting parties. A contract necessarily implies a concurrence of intention in two parties, one of whom promises something to the other, who, on his part accepts such promise. One person cannot by his promise, confer a right against himself. Until the concurrence of two minds of two parties there is no contract.

So judgment was given for the defendant, Colburn.

Ruling Law. Story Case Answer

An examination of the general nature of a contract and an attempt to discover the essential elements thereof at once reveals the fact that the most fundamental essential is the presence of two or more contracting parties. Although any other supposition, at first thought may seem absurd, yet often cases arise where one who is acting as agent, or trustee, or administrator, attempts to contract with himself individually. This cannot be done because the law requires that, on the one hand, there be a contracting party who receives a certain right by the contract and and, on the other, a different party from whom the right is secured. Thus, in the Story Case, George "Williams as an individual obtained no right under the contract, because there was only one person in the agreement.