120 Mo. App. 611 | Mo. Ct. App. | 1906

BLAND, P. J.

(after stating the facts).

1. Appellant, in its brief, assigns three grounds against'the right of respondent to recover.

First. She cannot recover for the reason the contract of October 22, 1897, was not made for her benefit.

Second. Because Albert G. Scheele himself caused the policy to lapse and could not successfully prosecute a suit against the appellant for its failure to pay mortuary dues.

, Third. Because at the date of the institution of the suit, less than ninety days from the date of the death of Albert G. Scheele, respondent could not have recovered anything of the life association, had the policy been in full force and effect, and hence, if entitled to recover at all, her recovery can be for no more than nominal damages.

As we understand, it is not contended by appellant, that if respondent, for a valuable consideration, was made a beneficiary in the contract of October 22, 1897, she cannot sue in her own name, but that the contract Avas. not, in fact, entered into for her benefit, but for the benefit of Albert G. Scheele. Appellant admits, however, that if the covenant to pay future mortuary calls was for the benefit of respondent, she can sue in her OAvn name on a breach of that covenant. Its contention is, that the covenant was only for the benefit of Albert G. Scheele, the insured, and the Life Association, the insurer. In making the contract Albert Scheele had two objects in view: First, to settle the indebtedness of the Scheele Livery & Undertaking Co., to the bank, and thereby prevent a suit by the bank to test the validity of the Scheele Livery & Undertaking Co’s, deed of assignment for the benefit of its creditors, and in which Mary Scheele had been given a preference. Second, to make provision for his daughter, the respondent. The *621bank had but one purpose in view, to-wit, to secure the ultimate payment of the notes the Livery & Undertaking Co. owed it. To accomplish this purpose, in consideration of being substituted as a beneficiary of five-sixths interest in the policy, it agreed that respondent should be designated in the policy as the beneficiary of the remaining one-sixth interest, and that it would “pay or cause to be paid promptly when due, at its own expense, all premiums, dues, assessments, or charges of any kind whatsoever,” which should become payable under the policy from the time it was delivered to it. Tinder the terms of the policy, the obligations to pay the mortuary calls was primarily on Albert G. Scheele. The appellant’s covenant to pay the calls was, therefore, directly for his benefit. If the mortuary calls had been paid in accordance with the terms of the policy, on the death of her father, respondent would have been entitled to receive one-sixth of five thousand dollars from the life association. The payment of the calls according to the terms of the policy Avould, therefore, have benefited her. This interest, however, appellant contends, was only incidental and indirect and not such as to give her a right to sue on the contract.

In Howsmon v. Trenton Water Co., 119 Mo. l.c. 308, 24 S. W. 784, it is said: “The rule (permitting a third party, for whose benefit a contract is made,-to sue on the contract in his own name) is not so far extended as to give a third person, who is only indirectly and incidentally benefited by the contract, a right to sue upon it.” In that case it was held: “A water company which agrees with a toAvn to be liable for damages caused by its failure to supply water sufficient to extinguish all fires cannot be sued on such agreement by a citizen though he and others pay a special tax to the company under the contract.”

Other cases in which it was held, that the party suing could only receive an incidental benefit from a performance of the contract sued on and for that reason *622could, not sue in his own name are St. Louis & T. Packet Co. v. Mo. Pac. Railway, 35 Mo. App. 272; Carpenter v. Reliance Realty Co., 103 Mo. App. l. c. 502, 77 S. W. 1004, and cases cited; National Bank v. Grand Lodge, 98 U. S. 123.

In Markel v. Western Union Tel. Co., 19 Mo. App. l. c. 85, the court said:

“It is settled law in this State that an action lies upon a contract made by a defendant for the benefit of a plaintiff, although the plaintiff was not privy to the consideration. [Rogers et al. v. Gosnell, 58 Mo. 590, and cases cited.] But to give a plaintiff the right to sue for the breach of a contract, the contract itself must be made for his benefit. Where the benefit to the plaintiff would be incidental to carrying out the contract, but was not the cause of malting the contract, the plaintiff cannot maintain an action for its breach.”

In Vrooman v. Turner, 69 N. Y. l. c. 283-4, the court 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 Avould give him a legal or an equitable claim to the benefit of the promise, or an equivalent from him personally.” This case was approvingly cited in Armstrong v. School District, 28 Mo. App. l. c. 181.

Where an agreement is made to “save harmless” another against the claims óf a third person, the latter cannot sue on the agreement as it was not made for his benefit. [State v. Railway, 125 Mo. 596, 28 S. W. 1074.]

The intention of Albert G. Scheele and the bank can only be ascertained by taking into view both the contract of October 22, 1897, and the reissued policy. The contention of appellant is, that the contract of October twenty-second was completed Avhen it was executed, and as the policy was not delivered until something like two *623months afterwards, the contract cannot be aided or interpreted by it. Among other things, the contract provided that Albert G. Scheele should cause to be made out, in the name of the bank, a five-sixths interest in and to the policy. Nothing is said as to the beneficiary for the remaining one-sixth. After the contract was signed the bank furnished Albert G. Scheele with a blank application for a change in the name of the beneficiary in the policy. The change was made on this application, designating the bank (creditor) as beneficiary of five-sixths and Lizzie Scheele as beneficiary of one-sixth of the amount of the insurance, and was then delivered to the bank and retained by it without objection or protest. Until the policy was reissued the bank was not obligated to do anything. Its issuance, according to the terms of the contract, was essential, therefore, to put that instrument into operation — to complete it as a contract —and it was of no effect until the reissuance of the policy. As was said by Lord Mansfield, in Alderson v. Temple, 4 Burr. 2239, “A contract shall be presumed complete upon any distinction where the justice of the case requires it.” That contracts, especially of this character, may take effect in the future is settled by the case of Beattie Mfg. Co. v. Gerardi, 166 Mo. 142, 65 S. W. 1035; Street & Johnson v. Goodale, Barger & Co., 77 Mo. App. 318. In none of the cases holding the party plaintiff had no beneficial interest in the contract sued on, was he definitely named as a party in interest, nor was the sum he was to receive stated. Whereas, in the contract here (as we hold that it takes both the contract of October twenty-second and the policy to make out the contract), the respondent is specially named as a beneficiary and the sum she should receive stated, and though her interest in the contract was contingent on keeping the policy alive and on the death of her father, it was not a remote or incidental interest. But it is argued, that as respondent could not compel Albert Scheele to pay the mortuary calls, she cannot complain *624of the bank’s failure to pay them, and there is no privity of contract between her and the bank. Where, upon sufficient consideration, a promise is made by one to another for the benefit of a third, the promise is deemed in law to be made to the latter though not a party to or cognizant of the contract. [Berly v. Taylor, 5 Hill 584 et seq.; Rogers v. Gosnell, 58 Mo. l. c. 590, and cases cited.] Appellant concedes that if respondent had been contemplated as a beneficiary in the contract of October twenty-second, then her acceptance of the contract as such would furnish the privity. As we construe the contract, all this was done. In respect to the argument, that as respondent could not compel her father, Albert Scheele, to pay the mortuary calls and pervent a lapse of the policy, she has no ground to complain that the bank failed to pay the calls and thus suffered the policy to lapse, suffice it to say, that her father was under a moral obligation to make some provision for her and this obligation was a sufficient consideration to support the contract in her behalf, if a consideration was necessary. But no consideration moving from her father to respondent was necessary, and if she adopted the contract and there Avas a valuable consideration moving. from her father to the bank, she may avail herself of its benefits. [Crone v. Stinde, 156 Mo. l. c. 269, 55 S. W. 863, 56 S. W. 907.] We conclude that respondent had such an interest in the contract as to entitle her to sue in her own name for the breach alleged in the petition.

2. It is contended that as the notice of mortuary call No. 100 was mailed to and received by Albert Scheele, his failure to notify the bank released the latter from its obligation to pay the call. It is nowhere stipulated in the contract that Scheele should give the bank notice of the calls as made. The policy held by the bank notified it that the “mortuary premiums Avere payable at the home office of the association, in the city of New York, Avithin thirty days from the first week day of February, April, June, August, October and December of *625each and. every year.” This was sufficient notice and it was the duty of the bank to make periodical inquiries of the association as to the amount of the premiums in time to pay them as they became due. It made no inquiry and took no steps looking to a payment of these premiums, but let them go by and permitted the policy to lapse, thereby depriving respondent of her right, to receive one-sixth of the face of the policy on the death of her father.

3. The policy provided that it should become payable ninety days after the death of the insured. The suit was brought September 20,1901, in less than ninety days from the death of the insured, and the'contention is that the suit was prematurely brought. As soon as Albert Scheele died, the right of respondent in the policy would have vested, had appellant performed its contract by paying the mortuary premiums. Respondent’s right of action, therefore accrued on the date of her father’s death.

It is finally contended that the damages are excessive, that respondent’s recovery should be restricted to nominal damages only. It is the general rule for the measure of damages arising out of a breach of contract, that the injured party is entitled to recover such losses as were reasonably within the contemplation of the parties at the time they entered into the contract, and that he shall be put in as good condition as if the contract had been performed. [Shouse v. Neiswaanger, 18 Mo. App. l. c. 244.] Had the bank performed its contract, on the death of her father, respondent would have received one-sixth of five thousand dollars or $833.331-3. This amount plus interest, the learned trial judge awarded her.

In Bailey v. Am. Deposit & Loan Co., 52 N. Y. App. Div. 402, a suit by the beneficiary in a life insurance policy against the defendant, to whom the policy had been pledged to sucure a debt and who had wrongfully *626surrendered tlie same, it was ruled the measure of damages was the difference between the amount of the loan and the amount which would have been received from the insurance company, if the defendant had not wrongfully surrendered the policy.

In Toplitz v. Baur, 161 N. Y. 325, a policy of insurance, in which the insured’s daughters were beneficiaries, was pledged as security for the payment of a note. Defendant permitted the policy to be cancelled by the insurance company, in violation of his contract. On the measure of damages, the court said the beneficiaries were entitled to complete indemnity for the loss sustained, which was the face value (the insured having died) less what it would have cost to carry the policy to the date of the death of the insured.

No offset was pleaded and there is no evidence or stipulation in the record as to the amount of premiums that would have become due up to the time of the death of Albert Scheele, and hence they cannot be taken into consideration to diminish the damages. We think the finding of the learned trial judge is eminently just, and affirm the judgment.

All concur.
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