It is when the rights of the promisee are considered that the difficulties in the American law become apparent. It seems obviously unfair to subject the promisor to suits both by the creditor and the promisee, and on the other hand the doctrine that a promisee in a contract made upon good consideration furnished by him cannot sue upon it is hard to reconcile with principle. In cases where the third person is the sole beneficiary the injury to the promisee in depriving him of a right of action is purely technical, because breach of the promise causes him no pecuniary damage; but in the case of a promise to pay a debt the promisee is vitally interested in the performance of the promise. The results reached by the courts are various. In Alabama, in a case of the latter type, the court said: "The promise enured to the benefit of the creditors and prima facie they alone can claim payment or sue for the breach of the agreement," 82 and in Maine, it was said in an early case, "the promisee can recover only nominal damages since the defendant may be liable to the beneficiary," 83 but this case has been overruled.84 In Nebraska the consignor cannot sue on a bill of lading, though the contract is with him, in the absence of proof that he was the owner of the goods, that he was liable for their loss, or that he had sustained special damage.85 In Nevada, also, it was held that a promisee without pecuniary interest in the performance of a promise could not sue upon it.86 In Rhode Island the rule is the same.87 In New York if the third person can sue, it seems the promisee cannot. A more complete somersault than the New York court has made on this subject when dealing with mortgages cannot be imagined. In the days before Lawrence v. Fox88 was decided it had been held that the mortgagee, though not entitled to sue directly a grantee who had assumed the mortgage, might, be "subrogated" to the right of the mortgagor - the promisee. Now the court holds that the promisee cannot sue, but upon paying the mortgage debt he is entitled to be subrogated to the right of the mortgagee to sue upon this promise.89 Ohio has reached the same conclusion 90 though it is in conflict with an earlier Ohio decision which was not cited.91
80 Thomas Mfg. Co. v. Prather, 65 Ark. 27, 44 S. W. 218; Morgan v. Overman Co., 37 Cal. 534; Whitney v. American Ins. Co., 127 Cal. 464, 59 Pac. 897; Williamson Stewart Co. v. Seaman, 29 111. App. 68; Brenner v. Luth, 28 Kan. 581; Ballard v. Home Nat. Bank, 91 Kan. 91, 136 Pac. 935; Saylora v. State Bank, 99 Kan. 515, 163 Pac. 454; Bell v. Mendenhall, 71 Minn. 331, 73 N. W. 1086; Gaffney v. Bederberg, 114 Minn. 319, 131 N. W. 333; State v. St. Louis & S. F. Ry. Co., 125 Mo. 596, 615,28 S. W. 1074; Glen-coe Lime Co. v. Wind, 86 Mo. App. 163; Johannes v. Phenix Ins. Co., 66 Wis. 50, 56, 37 N. W. 414, 57 Am. Rep. 249;
Lent v. Chicago, etc., Ry. Co., 1ll Wis. 198, 86 N. W. 607. Many other decisions might be added. Dow p. Clark, 7 Gray, 198, decided when the Massachusetts court was disposed to restrict the creditor's right of action, seems to be the only contrary decision. In Gunn v. McAlpine, 125 Minn. 343,147 N. W. 1ll, where there was a partial failure of consideration the court held that from each creditor's claim there should be deducted the same proportion that the portion of the consideration which failed bore to the total agreed consideration. 81 See supra, Sec. 350.
82 Dimmicfc v. Register, 92 Ala. 468, 460, 9 So. 79; North Alabama Development Co. v. Short, 101 Ala. 333, 13 So. 386.
83Burbank v. Gould, 16 Me. 118.
84 Baldwin v. Emery, 89 Me. 496, 36 All. 994. In Martin v. Ętna Ins. Co., 73 Me. 25, 28, it was held in a case of the sole beneficiary type that the promisee might sue as trustee for the beneficiary.
85 Union Pacific Ry. Co. v. Metcalf, 50 Neb. 452,69 N.W. 961. See, contra, Snider v. Adams Express Co., 77 Mo. 623, where consignor was allowed to recover as trustee for consignee. See 4 Elliott on Railroads, Sec. 1692.
86 Ferris v. Carson Water Co., 16 Ner. 44, 40 Am. Rep. 486. It is to be observed that the promisee has a very marked pecuniary interest in a promise to discharge his debts.
87Adams v. Union R. R. Co., 21
R. I. 134, 42 Atl. 616, 44 L. R. A. 273.
88 20 N. Y. 268.
89Miller v. Winchell, 70 N. Y. 437, 439;Ayersv.Dwan,78N.Y.318. For the earlier New York decisions, see supra. In Claflin v. Ostrom, 54 N. Y. 681, 684, it was held that the promisee or his assignee might sue upon a promise to assume the debts of a firm, and in Ward v. Cowdrey, 61 Hun, 641, 5 N. Y. S. 282, affd. 119 N. Y. 614, 23 N. E. 1143, it was held that a promisee might sue in the absence of proof that the third person knew of or acquiesced in the arrangement. The beneficiary in these cases could not have sued. A grantor who had paid the debt was held not entitled to sue on the promise as the land was the principal debtor in Keller v. Lee, 66 N. Y. App. Div. 184, 72 N. Y. S. 948.
The idea behind the cases which deny the promisee a right of action is that by the assent of the third person a novation is created;92 but as has been already shown, a contract with a debtor to pay his debt, even though the creditor assents, does not amount to a novation.