Cox v. W. R. Aldrich & Co.

McCALEB, Justice.

Certiorari was granted herein to review a decision by the Court of Appeal, First Circuit, which affirmed the district court’s judgment dismissing plaintiff’s claim for damages against W. R. Aldrich and Company for $8,000 plus $65 per month from 1956 until full restitution is made, as the consequence of an alleged breach of a stipulation in her favor contained in a contract between defendant and the State, through the Department of Highways.

We find the salient facts of the case to be as follows: Plaintiff is the owner of certain property (the East half of Lots Nos. 8 and 9 of Square 106 of the Sokoloski Addition to Abbeville) located at the intersection of Charity Street and Gertrude Avenue in Abbeville, Louisiana, which has a frontage of 60 feet on the South line of Charity Street by a depth of 100 feet along the West side of Gertrude Street. There is a frame building located on Lot 8 owned by plaintiff which was formerly used as a filling station and garage and had two gasoline pumps situated in the front thereof near the South curb line of Charity Street with a canopy extending from the building to the gasoline pumps. Plaintiff’s residence is located on the East half of Lot 9 and is situated immediately in the rear of the filling station and garage. Before 1956, the portion of Charity Street devoted to vehicular traffic was 40 feet in width and formed part of State I-Iighway 14. During 1955 the Department of Highways planned the improvement of State Highways 14 & 82 and, to this end, it let a contract to defendant in 1956 to furnish the labor and material necessary to construct State project Nos. 194— 07-15 & 55-06-13 for $451,180.67. This contract, among other things, contemplated the widening of the vehicular portion of Charity Street from 40 to 70 feet. In connection with the preparation of the plans and specifications for this work, the Department sent its agent, a Mr. McGee Moss, to contact the property owners along the route of the proposed project to secure grants of rights-of-way wherever necessary. During the negotiations with plaintiff, it was determined that the widening of Charity Street would place the South line of the street within four or five feet in the front of plaintiff’s garage and she requested that, in order to allow her more room between the front of her building and the street, the Department cut ten feet off the front of the building and' add it to the rear thereof. Mr. Moss agreed to this request and plaintiff signed the grant of right-of-way on May 3, 1956.

In the contract, which was later let t0‘ defendant company by the Highway Department, the only reference to plaintiff’s, property is found under Item 5-28-1, entitled “Removal and Relocation of Buildings and Miscellaneous Structures”. Under this heading among other references, the particular reference to plaintiff’s property reads ■ as follows:

“STATION: 47 + 25; DESCRIPTION: Alter Garage; SIDE of C/L: RT.; SIZE 58 feet; ITEM 5-28-1 AMOUNT: $2,000.00”.

And a footnote under Item 5-28-1 specifies that the alterations indicated on the plans are to he as directed by the State Highway Engineer; that any new materials required for the alterations were to he furnished by the contractor and that such costs were to be included in the respective unit prices bid ($2,000 as to the particular alteration here involved) and no additional payment would be made therefor.

When the work under the contract had progressed to a point near the property of plaintiff, certain employees of defendant called on plaintiff and advised her that they were ready to proceed with the alteration of her garage. However, it appears that a dispute arose as to the nature and extent of the alteration, plaintiff contending that, in keeping with her understanding of the agreement she had with Mr. Moss of the Highway Department, she was entitled to have certain specified work performed and defendant’s employees insisting that defendant would comply only with the specifications of its road building contract with the Highway Department. As a result, plaintiff refused to permit performance of the alteration contemplated by defendant and also refused to accept $2,000 offered her by defendant, representing the amount of its bid for the work to be done at Station 47 + 25 under its contract with the Highway Department. In these circumstances, the defendant reported the matter to the Department of Highways and the latter, being desirous of having the project completed at an early date, instructed defendant to delete the particular item in the construction contract pertaining to plaintiff’s property and proceed with the work. This was done.

In September of 1958, plaintiff filed the instant suit against Aldrich and Company for the above alleged damages for failure to make the alteration to her garage building, allegedly, as provided in the contract. The latter resisted the demand and, thereafter, impleaded the Department of Highways as third party defendant.

Aldrich Company contends, first, that plaintiff has no cause of action since the provision, anent Station 47 + 25, in its contract with the Department of Highways is not a stipulation pour autrui; that, moreover, even if it be held otherwise, plaintiff is not entitled to recover because she never accepted the stipulation in the contract and that, at all events, none of her property is within the 70-foot right-of-way of Charity Street.

The district judge upheld defendant’s last two contentions and his opinion was adopted by the Court of Appeal. See Cox v. W. R. Aldrich and Company, 162 So.2d 18.

After a review of the record, we think the factual conclusions reached by the district judge are amply supported by preponderating evidence. However, it is not essential that our decision rest on a factual basis for it is clear, as we shall hereinafter demonstrate, that the contractual provision on which plaintiff must necessarily bottom her cause of action is not a stipulation pour autrui within the contemplation of Article 1890 of our Civil Code. The Article reads:

“A person may also, in his own name, make some advantage for a third person the condition or consideration of a commutative contract, or onerous donation; and if such third person consents to avail himself of the advantage stipulated in his favor, the contract can not be revoked.” (Italics ours)

This Article is to be considered in connection with Article 1902 of the Civil Code, dealing with the effect of obligations, which provides:

“But a contract, in which anything is stipulated for the benefit of a third person, who has signified his assent to accept it, can not be revoked as to the advantage stipulated in his favor without his consent.” (Italics ours).

It is the position of counsel for defendant company that the construction contract which defendant agreed to perform for the Department of Highways does not contain a benefit stipulated in favor of plaintiff and, consequently, as plaintiff is not a party to the contract, she has no right or cause of action against it.

The point is well taken. At the outset, it would seem from a literal reading of the two Articles of the Civil Code on which plaintiff’s action is founded that they envision and apply only in cases in which the contract contains an express stipulation in favor of a third person. There-is nothing in the construction contract under which plaintiff sues to indicate that the work to be done by defendant at Station 47 + 25 was for her benefit or even that the Highway Department had a contractual obligation to her of any sort.

Third party beneficiary obligations have a long history in the Civil Law. The articles of our Code stem from the French Civil Code (Art. 1121) which has been the subject of much discussion and varient views by commentators on the Roman and French law. See excellent review of the doctrine by Professor J. Denson Smith of Louisiana State University in 11 Tulane Law Review, 18-58. However, the needs of this case do not exact a detailed discussion of the different theories that have been advanced as to when, and the circumstances under which, third party stipulations exist and will he enforced. Suffice here to say that, viewing’ plaintiff’s case in its most favorable light, she has no cause of action against this defendant. For the well-settled jurisprudence requires that there be a contractual intent on the part of the parties to the agreement to establish a stipulation pour autrui, albeit such benefit in favor of a third party beneficiary may be implied from a consideration of the agreement as a whole, as well as by express stipulation.¹

As above stated no such intention is apparent in the case at bar. Indeed, there is not the slightest indication in the contract that any part of the work to be performed by the defendant is for any person other than the Department of Highways. Compare Mallet v. Thibault, 212 La. 79, 31 So.2d 601 and First State Bank v. Burton, 225 La. 537, 73 So.2d 453.

For the foregoing reasons, the judgment of the Court of Appeal is affirmed.

SANDERS, J., concurs in the result.

1 . In Allen & Currey Mfg. Co. v. Shreveport Waterworks Co., 113 La. 1091, 37 So. 980, 68 L.R.A. 650 (1905), Mr. Justice Provosty, speaking for the court in disposing of defendant’s contention that, under Article 35 of the Code of Practice of 1870 (which, incidentally, has been omitted from our present Code of Civil Procedure) there cannot he a stipulation pour autrui in the absence of express words to that effect in the contract, stated:

“We do not agree entirely with that view, for we do not think that mere form is sacramental in the matter; and we agree with the learned counsel for plaintiffs that the question of stipulation pour autrui, vel non, is a question of lohat was the intention of the parties, and that that intention must be gathered, just as in the case of any other contract, from reading the contract, as a whole, in the light of the circumstances under which it was entered into. But inasmuch as people usually stipulate for themselves, and not for third persons, a strong presumption obtains in any given case that such was their intention; and we do not agree with counsel for defendant to this extent — that the implication to overcome that presumption must be so strong as to amount practically to an express declaration.” (Italics ours).