App. Div.] FIRST DEPARTMENT, JULY, 1904. tract, to the foundations, walls or other parts of adjacent buildings or structures. The other provisions of this clause in the contract seem to me to sustain this construction. It is to and with the city that the defendant covenants. He undertakes that during the performance of the work he will safely maintain traffic on all streets, avenues, parks or other public places, and take all necessary precautions to place proper guards for the prevention of accidents, and put up and keep at night suitable and sufficient lights, and indemnify and save harmless the city against and from all damages or costs to which it may be put by reason of injury to persons or property of another or others, resulting from negligence or carelessness in the performance of the work or from guarding the same, or from any improper materials used in its construction, or by or on account of any act or omission of the contractor or his agents. Here the contractor assumes the duty that is imposed upon the city of keeping these streets and avenues in a safe condition for traffic, and the duty of suitably lighting excavations in the streets to avoid injury; and agrees to indemnify and save harmless the city from the damages which may be imposed upon it by reason of negligence or carelessness of the contractor or his agents in the performance of the work or in guarding the same. The defendant assumes the duties and obligations imposed on the city in relation to the construction of the road, and is responsible for the damages caused thereby; but it is to the city that the promise is made, and it is to the city that he is responsible, and there is no obligation or promise in this agreement to be responsible to any one else. The plaintiff was not a party to this contract. He was a stranger to the consideration upon which the promise of the defendant was based. There was no privity between him and the defendant, nor was the city under any obligation to indemnify him against injury that should be occasioned to his property by the negligence of a contractor in the performance of a contract made in pursuance of legislative anthority by officers appointed for that purpose by the Legislature, and over the performance of which the municipal corporation had no control. It is a general rule of the English common law that a stranger to the consideration could maintain no action upon a contract. This was subject to an exception, that where the person to be bene FIRST DEPARTMENT, JULY, 1904. [Vol. 96. fited was the child of the promisee, the child could maintain an action against the promisor upon the contract (Dutton v. Poole, 2 Lev. 210; affd. in Exchequer Chamber, T. Raym. 302), and this exception has also been extended in this State to the case of a contract made by a husband for the benefit of his wife. (Buchanan v. Tilden, 158 N. Y. 109.) It is also established as an exception to this general rule that where a party to a contract undertakes to pay to a third party a sum of money based upon a consideration moving from the other party to the contract, and where the party paying the consideration was under an obligation to pay such sum of money to the third party, the third party can enforce that obligation, although not a party to the contract. This exception was established in this State by Lawrence v. Fox (20 N. Y. 268). To bring a case, however, within this exception to the general rule, there must be a legal or equitable obligation or duty on the part of the promisee to the third party for whose benefit the promise was made. That it would be a benefit to the promisee to have such a covenant enforced, or that there was a moral obligation of the promisee to the third party for whose benefit the promise was made, is not sufficient to allow the third party to maintain an action to enforce the promise. In Durnherr v. Rau (135 N. Y. 222) Judge ANDREWS says, in speaking of the obligation of the promisee to the third party who sought to enforce the covenants: "The most that can be claimed is that the mortgages having (as is assumed) been executed to secure his (the promisee's) debts, and he having procured the wife to join in them and pledge her right for their payment, he owed her a moral duty to pay the mortgages and thereby restore her to her original situation. But according to our decisions no legal or equitable obligation of which the law can take cognizance was created in favor of the wife against the husband or his property by these circumstances. * * There is lacking in this case the essential * relation of debtor and creditor between the grantor and a third person seeking to enforce such a covenant, or such a relation as makes the performance of the covenant at the instance of such third person a satisfaction of some legal or equitable duty owing by the grantor to such person, which must exist, according to the cases, in order to entitle a stranger to the covenant to enforce it. It is not App. Div.] FIRST DEPARTMENT, JULY, 1904. sufficient that the performance of the covenant may benefit a third person. It must have been entered into for his benefit, or at least such benefit must be the direct result of performance and so within the contemplation of the parties, and in addition the grantor must have a legal interest that the covenant be performed in favor of the party claiming performance. The application of the doctrine of Lawrence v. Fox (20 N. Y. 268) to this case would extend it much further than hitherto, and this cannot be permitted in view of the repeated declarations of the court that it should be confined to its original limits." * * * In Vrooman v. Turner (69 N. Y. 280) Judge ALLEN said: “To give a third party who may derive a benefit from the performance of the promise, an action, there must be, first, an intent by the promisee to secure some benefit to the third party, and second, some privity between the two, the promisee and the party to be benefited, and some obligation or duty owing from the former to the latter which would give him a legal or equitable claim to the benefit of the promise or an equivalent from him personally. It is true there need be no privity between the promisor and the party claiming the benefit of the undertaking, neither is it necessary that the latter should be privy to the consideration of the promise, but it does not follow that a mere volunteer can avail himself of it. A legal obligation or duty of the promisec to him will so connect him with the transaction as to be a substitute for any privity with the promisor, or the consideration of the promise, the obligation of the promisee furnishing an evidence of the intent of the latter to benefit him, and creating a privity by substitution with the promisor. A mere stranger cannot intervene and claim by action the benefit of a contract between other parties. There must be either a new consideration or some prior right or claim against one of the contracting parties, by which he has a legal interest in the performance of the agreement." In Wheat v. Rice (97 N. Y. 296), one Stotenburgh sold to the plaintiffs an undivided fourth of certain property, and in consideration thereof the plaintiffs agreed to pay a sum of money and "to assume and pay one-quarter of the present incumbrance on the property" and one-quarter of all the indebtedness of the firm of Stotenburgh, Root & Co., of which the said Isaac Stotenburgh was FIRST DEPARTMENT, JULY, 1904. [Vol. 96. a member, as the same became due and payable. It was held that no creditor of Stotenburgh could maintain an action to recover the amount of the indebtedness, as there was no promise made to pay any single one of such creditors, or for the benefit of any one of them. It is evident, therefore, that this covenant with the city by which the defendant covenanted at his own expense to make good any damage that should in the course of the construction of the rapid transit railroad be done to the foundations, walls or other parts of adjacent buildings or structures, is not an obligation that can be enforced by this plaintiff under the exception to the general rule established by Lawrence v. Fox (supra) and the other cases based upon that decision; for here there is no covenant to pay to the property owners any sum of money and the covenant is not one by which the defendant undertakes to discharge any legal or equitable obligation of the city to the owners of property abutting on the streets through which this railway was constructed. There is another class of cases, however, upon which the plaintiff relies to maintain this action illustrated by Little v. Banks (85 N. Y. 258). In that case the defendant was a law book publisher who entered into a contract with the State by which he was to publish and sell the reports of the New York Court of Appeals. The contract provided that the defendant should at all times keep the volumes published for sale at retail at a price named, in one or more law book stores in the city of Albany and the city of New York, and it provided that "should any other law book seller in either of said cities apply to purchase any of said volumes, the same shall be supplied to such law book seller upon application," and that for a failure on the part of the defendant "to keep on sale, furnish and deliver the aforesaid volumes, or any of them, at the price and as hereinabove provided" the defendant" shall forfeit and pay * * * the sum of $100 hereby fixed and agreed upon not as a penalty, but as the liquidated damages suffered by the person or persons aggrieved thereby, the same to be sued for and recovered by the person or persons so aggrieved." It appeared that the plaintiffs applied on six different occasions for copies of some of the volumes published at the book store of the defendant, which the defendant refused to furnish, and the plaintiffs brought an action for six different sums App. Div.] FIRST DEPARTMENT, JULY, 1904. of $100 each by reason of such refusal. Judge MILLER, in delivering the opinion of the court, said: "The effect of the contract was that, in consideration of doing the work, the defendant would sell and deliver the books as provided to the persons who were entitled thereto, and if he failed to do so, as required, when demanded, he would pay to the person injured the damages." The ground of the liability of the defendant is said to be that "contractors with the State, who assume for a consideration received from the sovereign power by covenant, express or implied, to do certain things are liable, in case of neglect to perform such covenant to a private action at the suit of the party injured by such neglect, and such contract inures to the benefit of the individual who is interested in its performance," and it was held that this principle, without invoking the rule established in Lawrence v. Fox (supra), was applicable to a contract of the description of the one in controversy where the officers enter into it for the advantage and welfare of the public, and where such a provision constitutes a material portion of the agreement which is essential to carry it into effect. It will be seen that, in this case, the liability of the defendant is placed, not upon the principle which authorizes a person not a party to an agreement to enforce a covenant in the agreement for his benefit, but upon the distinctly different proposition that where an individual by contract with the State assumes to perform a duty beneficial to the public, and fails to perform that duty, any one of the public injured by a failure to perform the obligation entered into with the State is entitled to maintain an action to recover the damages caused by a breach of the obligation assumed in the contract with the State-a position which is essentially different from a right to enforce such a covenant as is here in question. In this contract this defendant agreed that the plans, specifications and contract were sufficient, when properly carried out, to build this road without injury to abutting property; and he covenanted that he would, at his own expense, make good any damage that should in the course of construction be done to such abutting property. If this cause of action was based upon the fact that these plans, specifications and contract were such that doing the work without fault or negligence on the part of the contractor would cause injury to APP. DIV.-VOL. XCVI. 15 |