This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
Whether the promisee may bring an action on a contract made by him for the benefit of another, is a question on which there is some difference of opinion. In some jurisdictions the original promisee may maintain an action for the breach of such a contract. Thus A agreed with B to care for B's infant daughter, C as his own. Instead of so doing he had her committed to the county asylum for common paupers. It was held that B could sue on such contract.1 So where a city makes a contract with a gas company, requiring it not to charge private consumers more than a specified rate, it is held that in case of breach the city, though not a consumer, may have an injunction and may recover nominal damages.2 Under statutes authorizing a party in whose name a contract is made with another to sue thereon in his own name, the obligee of such bonds may sue thereon. Thus a contestee to whom a bond in an election contest is made payable,3 or a sheriff to whom a forthcoming bond is made payable,4 may sue in his own name. On the other hand, it has been held that the covenant in a deed, by which grantee assumes and agrees to pay the mortgage debt of grantor, is a written promise to the creditor, not to the grantor.5 Recovery in quasi-contract has been allowed. Thus B furnished board and lodging to A, under an oral contract by which A was to pay therefor by transferring certain realty to B's children. The contract could not be enforced by reason of the Statute of Frauds. It was held that B could recover a reasonable compensation for such board from A.6
Bayless, 43 111. App. 603; Home Library Association v. Witherow, 50 111. App.
2 Fellows v. Gilman, 4 Wend. (N. Y.)
3 Illinois. Webster v. Fleming, 178 111. 140, 52 N. E. 975.
Missouri. Rogers v. Gosnell, 51 Mo. 466.
New York. Coster v. Albany, 43 N. Y. 399.
Ohio. Emmitt v. Brophy, 42 O. S. 8-2.
Oregon. Hughes v. Navigation Co., 11 Or. 437, 5 Pac. 206.
Wisconsin. McDowell v. Laev, 33 Wis. 171; Bassett v. Hughes, 43 Wis. 319; Stites v. Thompson, 98 Wis. 329, 73 N. W. 774.
"The cases in which one not a party to a contract may sue upon a promise in it for his benefit were at one time limited to contracts not under seal, and this court in stating the law on the subject in Follansbee v. Johnson, 28
Minn. 311, 9 N. W. 882, expressed that limitation; but the distinction in this respect between contracts by specialty and simple contracts has not in the later authorities been adhered to and may now be regarded as abandoned." Jefferson v. Asch, 53 Minn. 446, 448, 39 Am. St. Rep. 618, 25 L. R. A. 257, 55 N. W. 604.
4 Huntington v. Knox, 61 Mass. (7 Cush.) 371; Flynn v. Ins. Co., 115 Mass. 449.
1Vancleave v. Clark, 118 Ind. 61, 3 L. R. A. 519, 20 N. E. 527.
The grantor may maintain an action for breach of an agreement by the grantee to discharge a mortgage debt for which the grantor is personally liable. Keller v. Aahford, 133 U. S. 610, 33 L. ed. 667.
2Muncie Natural Gas Co. v. Muncie, 160 Ind. 97, 60 L. R. A. 822, 66 N. E. 436.
3Hilliard v. Brown, 103 Ala. 318, 15 So. 605.
4 Clark v. Horn, 99 Ga. 165, 25 S. E. 203; Romero v. Wagner, 3 N. M. 167, 3 Pac. 50.
5 It is an implied contract to pay the grantor whatever he may be obliged to pay thereon; and the statute of limitations applicable to written contracts does not control. Poe v. Dixon, 60 O. S. 124, 71 Am. St. Rep. 713, 54 N. E. 86.
See also, Fanning v. Murphy, 126 Wis. 538, 105 N. W. 1056.
6 Gay v. Mooney, 67 X. J. L. 687, 52 Atl. 1131 [affirming without opinion, Gay v. Mooney, 67 N. J. L. 27, 60 Atl. 596].