Kelly v. . Roberts ( 1869 )

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.]

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.]

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.]

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.]

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] Had the debtors and the defendant Roberts, made it a condition of the sale of the goods of the former to the latter, that the defendant should pay a designated part of the consideration of the sale to Arnold, Constable Company, and a part to Cumming, Simpson Armstrong, the cases of Berly v. Taylor (5 Hill, 533); Williams v. Fitch (18 N.Y., 546); Lawrence v. Fox (20 id., 268); Gridley v. Gridley (24 N.Y., 130); and Lowry v. Steward (25 N.Y., 239); would seem to warrant the proposition that a trust was created for the benefit of those two firms, which they might affirm and enforce, and that a suit in equity would lie in their favor for that purpose. And those and other cases in this State affirm the more general proposition, that where a promise is made upon a valid consideration to one person for the benefit of another, the latter may maintain an action thereon. See above cases, and the Delaware and HudsonCanal Company v. Westchester County Bank (4 Denio, 97);Dingeldien v. Third Avenue R.R. Co. (37 N.Y., 575), and cases cited.

But here the sale of the goods was consummated by a transfer thereof, under the hands and seals of the parties thereto, and the covenant by the defendant was express to pay the price to the vendors, Everett Jones. On the completion of the inventory, the precise relation between the defendant and Everett Jones, was that the latter were creditors of the defendant, to the amount of the purchase money. There was no trust and no condition annexed to the sale. The defendant owed Everett Jones the price of the goods.

The question presented therefore by this case is whether a verbal agreement between creditor and debtor, upon no new consideration, that instead of paying the debt to the creditor, the debtor will pay it to a third person, the debtor himself having no interest in the question to whom the money shall be paid, is final and irrevocable by the creditor, although such third person has given no assent thereto, nor received any notice of such agreement. It is not enough to claim in answer to this question, that the third person, on receiving notice thereof, may accept the promise and sue thereon, the original creditor still assenting. Cases which hold that if money be paid to A, to be paid over to B, the latter may sue for and recover the same, as money had and received to his use by A, do not answer this question.

It would be a very liberal extension of these cases if it should be held that, if A hand money to his own servant or agent, with instructions to carry and deliver it to B, which the servant or agent agrees to do, such instructions are irrevocable, and, although A should change his mind before his agent or servant sets out on his errand, he could not countermand the instructions and take back his money. Until such instructions have been acted upon in some manner, the servant continues servant of A, and only his servant. So, where one hands money to his servant, agent or friend, with a request that he visit the city and therewith pay a note due or about to become due, can it be seriously questioned that, if before anything further is done, such one concludes to use the money for some other purpose, or to pay some other debt, he may do so? I think not. And the cases above referred to do not hold the contrary nor anything like it.

Privity of contract was once deemed of some importance in testing the right of one who sought to enforce an agreement; and, although where a trust has been created for the benefit of a third person assented to by him, it has been held to create an implied contract in equity or at law, according to circumstances, and to be irrevocable, the mere agreement of third persons, without consideration, not acted upon by either, nor communicated to him in whose apparent favor it is made, is as much the subject of revocation or release as if the latter was not named therein. The present case, however, is not one of trust or delivery of money or property to one to be paid or delivered to another; it is not, therefore, necessary to open or discuss the question, whether, in the cases supposed, an assent of the third person is to be presumed, or whether he has an indefeasible right to accept and sue for the benefit.

The proof and the report of the referee in this case do not, in terms, state the time when the parol agreement by the defendant to pay the debt due Arnold, Constable Co., and others was made. It would seem to have been not only after the actual assignment and the covenant by the defendant to pay Everett Jones therefor, but at or after the taking of the inventory and the ascertainment thereby of the amount which, by such covenant, the defendant was bound to pay, upon which the amounts were apportioned and his notes, for so much as he gave notes for, were made.

But the inquiry for the precise date is not material, for if the verbal agreement be assumed to have been prior to or cotemporaneous with the written covenant under the hand and seal of the defendant, Roberts, to pay the amount of the purchase money to Everett Jones, then the rule that all prior or cotemporaneous parol negotiations and agreements are merged in the written instrument, forbids its operation. Such negotiations and agreements cannot be permitted to control the covenant. If Everett Jones had sued the defendant upon that covenant for the price of the goods, he could not defend by proof of such prior or cotemporaneous parol agreement. He would be debtor to them according to the terms of his covenant, and his debt to them was subject to attachment.

If, on the other hand, it be assumed that after the making of the covenant and the ascertainment of the price, the vendors and the defendant agreed that a part of the price should be paid to Arnold, Constable Co., and others, to satisfy debts of the vendors, the case is not altered; this did not constitute a delivery of money or property to the defendant to be paid to others. There was no trust, no acceptance of anything to create what has been in some cases deemed an agency for such others. It was purely and simply an executory contract without consideration to pay what the defendant owes Everett Jones, to their creditors. This was in effect a license; if he paid it, very well, he would thereby have satisfied so much of his debt to Everett Jones.

The simple enquiry whether if a creditor directs his debtor to pay his note to a third person, and he assents, such creditor can revoke the direction, has never been decided in the negative, and I think it cannot be so decided on any principle.

There is no trust; there is no new consideration; such debtor has no interest in the appropriation. If in reliance on the instruction he pays, or places himself in any new position, then indeed, he is protected. But while nothing is done, the debt he owes is the property of the creditor.

Suppose, for example, the debtor having received such a direction and agreed thereto, nevertheless neglects to pay to any one. Can it be doubted that the original creditor could maintain an action for the original debt? It would be a good defence that he had paid it to a third person, pursuant to such an agreement; but the mere agreement unperformed and not acted upon at all, would be no defence.

In this case, Roberts had done nothing, he had not performed the agreement, or acted in any manner on the license he therefore still remained debtor to Everett Jones, as he was before the verbal agreement was made.

If these views are correct, then the debt due from the defendant, when the attachment was issued in favor of creditors of Everett Jones, was a debt due as matter of law to them, and the attachment was operative.

I think the service of the attachment sufficiently identified it, and that the judgment herein should be affirmed.

GROVER, J., WOODRUFF, MASON, JJ., were for affirmance, on the ground stated in opinion of JAMES, J. LOTT, J., was also for affirmance, on the ground that the fair inference from the report was that the verbal agreement was made at the same time with the bill of sale, and therefore merged into it and was void.

HUNT, Ch. J., and DANIELS, J., were for reversal.

Judgment affirmed.