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Contract Cannot Confer Rights on a Third Party


CONTRACT CANNOT CONFER RIGHTS ON A THIRD PARTY. As a general rule it is stated that a contract between two or more persons cannot confer rights on a third person any more than liabilities, unless the contract amount to a declaration of trust. (Anson on Cont.) This rule, which is thus positively stated on English authority, is modified by a number of exceptions re sulting from the nature of the contract, the relationship of the third person to the promisee, and the statutes requiring actions to be prosecuted in the name of the real party in interest. So if the defendant has money in his possession which equitably belongs to the plain tiff, it is not a defense to the suit that the consideration did not move from the plaintiff, or that there is want of privity between the parties. (Lewis v. Sawyer, 44 Me. 332; Hosford v. Kanouse, 45 Mich. 620.) The principle that nearness of relationship between the promisee and the person to take a benefit under the contract will allow such third person to bring an action, though overruled in England, is followed by some cases. (Exchange Dank v. Rice, 107 Mass. 42.) The statutory or code provision, requiring actions to be prosecuted in the name of the real party in interest, gives the party for whose benefit a contract is made the right of action. So where a promise is made to a third party, and accepted by him, though he is not a party to the contract, he can yet assert his right under such contract. (Emmitt v. Brophy, 42 Ohio St. 82.) Under the old rule the promisee would have been trustee for the party to be benefited. It is now quite generally held, and independent of code provisions, that a person may maintain an action on a parol promise made to another for his benefit. (Kimball v. Noyes, 17 Wis. 71; Flirt v. Cadenasso, 64 Col. 83; Hendrick v. Lindsey, 93 U. S. 143.)

person, benefit and action