If A makes a promise to B, to discharge an obligation which B owes to C, in consideration of property or some other thing of value, which B furnishes to A, the question of A's right in an action brought by 0 against A upon such promise, to interpose a defense which B might have made against C, is frequently presented. Since the right of 0 to bring an action upon this contract is recognized for the purpose of giving effect to the intention of A and B, the solution of the question as to A's right to interpose such defense against 0 should turn upon the question of the mutual intention of A and B, as set forth in their contract; and this is the test which is generally adopted by the courts. If A's promise to B is to pay a certain amount of money to C, or to do some specific act for C's benefit, B eventually intended performance of such contract for the benefit of C; and, accordingly, A can not interpose defenses against C which B could have interposed.1 If A has promised to B to assume and pay a specific sum of money or a specific existing debt which is described and identified in the contract between A and B, A can not, in an action by C, set rip defenses as to the existence, validity or amount of such debt which B might have set up as against C.2 In an action by C, A can not set up want of consideration as between B and C,3 nor can he set up the defense of usury as between B and C.4 It is said that the grantee, A, can set up usury as a defense against the mortgagee, C, only if the grantor, B, unites with him in such defense or unless he consents upon the record to A's making such defense.5 If A and B are partners, and B assigns his interest in the partnership to A, in consideration of A's paying the partnership indebtedness, A can interpose the defense of usury as to the portion of the debt for which he was originally liable, and as to usury exacted after he assumed the debt; but he can not interpose the defense of usury as to the portion of the debt for which B was originally liable.6 A grantee who has assumed and agreed to pay a mortgage can not interpose, as a defense to an action upon such contract by the mortgagee, the fact that the mortgagee might have recovered part of his debt from some source other than the mortgaged realty.7 If B assigns to A the amount due to A from X, and in consideration thereof A agrees to pay to C the amount of X's indebtedness to Y. A can not set up as against C the fact that B's indebtedness to C arose out of an illegal transaction.8 A can not set up failure of consideration between B and C as a defense against C.9 If A, a grantee of certain realty, agrees to pay "all * * * assessments whatsoever created by C, existing in consequence of any improvements of the streets or avenues touching such realty," A can not set up as the public corporation any irregularities in the levy of such assessments which B might have set up.10 While this result is sometimes explained on the theory of estoppel,11 and while such theory may be invoked where the covenant is contained in a deed which A has accepted from B, the result can be better explained on the theory that since A has promised to B for value to pay a certain amount of money to C, B's liability to C is of no legal effect as between A and C. Even in jurisdictions in which the opposite theory is sometimes adopted, A can not avoid liability to C if the. transaction was one by which B entered into such contract with A in order to make a gift to C. The fact that B is under no legal obligation or moral obligation to make such payment to C, is not regarded in most jurisdictions which recognize fully and completely the right of the beneficiaries to sue, as a defense which A may interpose as against C.
Missouri. Crone v. Stinde, 156 Mo. 262, 55 S. W. 863, .16 S. W. 007.
Nebraska. Hare v. Murphy, 45 Neb. 809. 20 L. R. A. 851. 64 N. W. 211.
Virginia. Cnsselman's Administratrix v. Gordon, 118 Va. 553, 88 S. E. 38.
16Heim v. Vogel. 60 Mo. 529; Rogers v. Gosnell, 08 Mo. 580.
17Howsmon v. Water Co.. 119 Mo. 304, 41 Am. St. Rep. 654, 23 L. R. A. 146, 24 S. W. 784; Kansas City, etc., Co. v. Thompson, 120 Mo. 218. 25 S. W. 522.
18St. Louis v. Von Phul. 133 Mo. 561, 54 Am. St. Rep. 605, 34 S. W. 843.
19 Hicks, v. Hamilton, 144 Mo. 405, 66 Am. St. Rep. 431, 46 S. W. 432.
20"The consideration passing between the two contracting parties by which one of them promises to pay to a third is just as available as. if he himself had paid the consideration." Crone v. Stinde, 156 Mo. 262, 269. 55 S. W. 863, 56 S. W. 007.
1 California. Washer v. Independent Mining & Development Co.. 142 Cal. 702. 76 Pac. 654.
Illinois. Harts v. Emery. 184 111. 560. 56 X. E. 865.
Kansas. Green v. Houston, 22 Kan. 35.
Michigan. Crawford v. Edwards, 33 Mich. 354.
Minnesota. Alt v. Banholzer, 36 Minn. 57, 29 N. W. 674.
Nebraska. Hannan v. Rihner, 80 Neb. 521, 114 N. W. 605.
Ohio. Union Bank v. Bell, 14 0. S. 200: Cramer v. Lepper, 26 O. S. 59; Caldwell v. Columbus, 56 O. S. 759, 49 N. E. 1108 [memorandum opinion in both reports; but see case as explained in Walsh v. Sims, 65 O. S. 211, 62 N. E. 120]; Wateh v. Sims, 65 0. S. 211, 62 N. E. 120.
West Virginia. Chenoweth v. National Bldg. Ass'n, 59 W. Va. 653, 53 S. E. 559; Stuckcy v. Middle States, etc., Con. Co., 61 W. Va. 74, 123 Am. St. Rep. 977, 8 L. R. A. (N.S.) 814, 55 S. E. 996.
2 California. Washer v. Independent Mining & Development Co., 142 Cal. 702, 76 Pac. 654.
Illinois. Harts v. Emery, 184 111. 560, 56 N. E. 865.
Kansas. Green v. Houston, 22 Kan.
35. Michigan. Crawford v. Edwards, 33
Minnesota. Alt v. Banholzer, 36 Minn. 57, 29 N. W. 674.
Pennsylvania. Industrial Savings & Loan Co. v. Hare, 216 Pa. St. 389, 65 Atl. 1080.
3 Parkinson v. Sherman, 74 N. Y. 88, 30 Am. Rep. 268.
4 Iowa. Spinney v. Miller. 114 Ia. 210, 89 Am. St. Rep. 351, 86 N. W. 317.
Minnesota. Scanlan v. Grimmer, 71 Minn. 351, 70 Am. St. Rep. 326, 74 N. W. 146.
New Vork. Hartley v. Harrison, 24 N. Y. 170.
Ohio. Union Bank v. Bell, 14 O. S. 200; Cramer v. Lipper, 26 O. S. 59.
Pennsylvania. Industrial Savings ft Loan Co. v. Hare, 216 Pa. St. 380, 65 Atl. 1080.
West Virginia. Harper v. Middle States Loan, Building ft Construction Co., 56 W. Va. 149, 46 S. E. 817; Chen-oweth v. National Bldg. Assn., 59 W. Va. 653, 53 S. E 559; Stuckey v. Middle States Loan, Bldg. ft Const. Co., 61 W. Va. 74, 123 Am. St. Rep. 977. 8 L. R. A. (N.S.) 814, 55 S. E. 996.
Wisconsin. Thomas v. Mitchell, 27 Wis. 414.
5 Harper v. Middle States Loan, Building & Construction Co., 55 W. Va. 149, 46 S. E. 817.
The rule that A can not set up as against C a defense which B might have set up. is in force in jurisdictions in which A is personally liable, if he received a consideration from B, whether B was liable personally to C or not;12 but it is not in force in jurisdictions in which A is liable to C personally, only if B was liable to C personally.13
6 Williams v. Eagle Bank. 172 Ky. 541. 189 S. W. 883.
7Hannan v. Rihner. 80 Neb. 521. 114 N. W 605.
8 Owens v. Davenport. 39 Mont. 555, 104 Pac. 682.
9 Brannin v. Richardson, 108 Tex. 112, 185 S. W. 562. (This case is complicated by the fact that the notes which A had assumed to pay were in the hands of a bona fide holder before maturity.)
10 Caldwell v. Columbus. 56 O. S. 759, 49 N. E. 1108 [memorandum opinion in both reports, see explanation in Walsh v. Sims, 65 O. 8. 211. 62 N. E. 1201.
11 Caldwell v. Columbus, 56 O. S. 759, 49 N. E. 1108 [memorandum opinion in both reports, see explanation in Walsh v. Sims, 65 O. S. 211, 62 N. E. 120].
If A has not agreed with B to pay for the property by discharging B's obligation to C, A is not prevented from setting up as against C any defense which B might have set up as against C.14 If B conveys property to A gratuitously, A may set up usury as against C, who holds a mortgage upon such property.15 If A has accepted a conveyance from B, which is in form an absolute deed, but which is intended as security for a debt which B owes to A, A is not liable personally to the prior mortgagee, C.16
If A's promise to B is in legal effect to pay to C whatever is due from B to C, A may set up, as against C, any defense which B might have set up as against C,17 since A has not agreed to pay a specified sum of money, but has only agreed to discharge whatever obligation B may owe to C. If A enters into a contract with B, by which A is to pay an account which B will owe to C in the future, A is bound to pay the amount which is actually due upon such account.18 If A assumes whatever amount B may owe to C, A may set up the defense of usury as against C.19 If A accepts a deed from B, which contains a provision to the effect that "all street assessments and sewer assessments are to be paid by the said purchaser and grantee," and the record does not show that the amount of the assessment was known or that the amount thereof was deducted by the grantee from the purchase price, and if the deed does not identify the assessment specifically, A may set up any defect in such assessments which B could have set up as against C, the public corporation.20
12 See Sec. 2397.
13 See Sec. 2397.
14 First National Bank v. Drew, 228 111. 622, 117 Am. St. Rep. 271, 10 L. R. A. (N.S.) 857, 80 N. E. 1082.
15 First National Bank v. Drew, 226 111. 622, 117 Am. St. Rep. 271, 10 L. R. A. (N.S.) 857, 80 N. E. 1082.
16 Root v. Wright, 84 N. Y. 72, 38 Am. Rep. 495; Ahrens v. Kelly, 88 N. J. Eq. 119, 101 Atl. 571.
17Malanaphy v. Fuller & Johnson Mfg. Co., 125 la. 719, 106 Am. St. Rep. 332, 101 N. W. 640; Runkle v. Kettering. 127 la. 6, 102 N. W. 142; Cobe v. Summers, 143 Mich. 117, 106 N. W. 707: Beals v. Lewis, 43 O. S. 220, 1 N. E. 641; Walsh v. Sims, 65 O. S. 211, 62 N. E. 120.
18 Runkle v. Kettering, 127 Ia. 6, 102 N. W. 142.
19 Cobe v. Summers, 143 Mich. 117, 106 N. W. 707 (A's liability enforced in equity). Beals v. Lewis. 43 O. S. 220, 1 N. E. 641.
20 Walsh v. Sims, 65 O. S. 211, 62 N. E. 120.