Sec 786a

On the principle of novation, also, may be explained the numerous cases in which the owner of mortgaged property sells it under an agreement with the vendee, by which the latter assumes the mortgage debt, and the mortgage creditor accepts the substitution. In such case the substituted debtor is liable to the creditor on the novation.1 " Even a verbal promise by a purchaser to assume and pay a mortgage is valid, and may be enforced in equity not only by the grantor, but by the holder of the mortgage."2 Such a promise may be inferred from the terms of the document by which the purchaser takes title. "Where land is conveyed subject to a mortgage, the grantee does not undertake or become bound by a mere acceptance of the deed to pay the mortgage debt; but if the grantee takes a deed containing a recital that the land is subject to a mortgage which the grantee assumes, or agrees to pay, a duty is imposed on him by the acceptance, and the law implies a promise to perform it, on which promise, in case of failure, assumpsit will lie."3 But a party acquiring an interest in the lands after making the promise, cannot sue as plaintiff;l and to entitle the third party to sue, there must be either a new-consideration or a prior relationship such as would sustain the promise.2 On the other hand, in Massachusetts and New Jersey, it is held that no action at law lies by the mortgagee against the purchaser on an implied promise by the latter that he will pay the mortgage.3 But where there is a contractual relation instituted between the mortgagee and the purchaser, the better view is, that the latter should be liable to the former in assumpsit for the mortgage debt. As a purchaser of mortgaged property, for instance, I admit my liability to the mortgagee. The concession of acceptiug me as a debtor is a sufficient consideration to bind me; the additional security he ha3 in the investment is a sufficient consideration to bind him.4 sec 787. Putting aside, however, cases of novation and of trust, it needs only a glance at some of the more conspicuous agreements for the benefit of third parties to see that to allow third parties on principle to sue on all contracts for their benefit would not only be inconsistent with rational jurisprudence, but would impose an intolerable burden on business. If no restriction on this be applied, (1) any stranger might interfere in any suit;

Illustrated in case of purchases of mortgaged property.

1 Infra, sec 852 et seq.; Halsey V. Reed, 9 Paige, 446; Burr V. Beers, 24 N. Y. 178; Dingeldein V. R. R., 37 N. Y. 575; Ricard V. Sanderson, 41 N. Y. 179; Campbell V. Smith, 71 N. Y. 26; Calvo V. Davies, 73 N. Y. 211; Girard Ins. Co. V. Stewart, 86 Penn. St. 89; Merriman V. Moore, 90 Penn. St. 78; Thompson V. Thompson, 4 Oh. St. 333; Helms V. Kearns, 40 Ind. 124; Fowler V. Fay, 62 Ill. 375; Snell V. Ives, 85 Ill. 279; Ross V. Kennison, 38 Iowa, 396; Jordon V. White, 20 Minn. 91; Mason V. Hall, 30 Ala. 599; Meyer V. Lowell, 44 Mo. 328; Rogers V. Gosnell, 58 Mo. 589; see, however, contra, Mel-len V. Whipple, 1 Gray, 317; Pettee V. Peppard, 120 Mass. 522; Prentice V. Brimhall, 123 Mass. 291; cf. Jones on Mortgages, sec 748 et seq.

2 Jones on Mortgages, sec 750; citing Bolles V. Beach, 2 Zab. N. J. 680; Wilson V. King, 23 N. J. Eq. 150; Conover V. Brown, 29 N. J. Eq. 510; and see to this effect, cases cited infra, sec 809. That the agreement may be outside of the conveyance, see Schmucker V. Sibert, 18 Kans. 104. In New York, the cases are put on the ground that a third person may maintain a suit on a contract made for his benefit. Thorp V. Coal Co., 48 N. Y. 253; Lawrence V. Fox, 20 N. Y. 268; Campbell V. Smith, 8 Hun, 6; 71 N. Y. 26.

3 Hough, J., Heim V. Vogle, 69 Mo. 535; Fitzgerald V. Barker, 70 Mo. 685; see Jones on Mort. sec 748; Pike V. Brown, 7 Cush. 133; Braman V. Dowse, 12 Cush. 227; Jewett V. Draper, 6 Allen, 434; Furnas V. Durgin, 119 Mass.

Importance of thus restricting right to sue.

500; Atlantic Dock Co. V. Leavitt, 54 N. Y. 38; Crawford V. Edwards, 33 Mich. 354. 1 Miller V. Winchall, 70 N. Y. 437.

2 Vrooman V. Turner, 69 N. Y. 280; Cushman V. Henry, 5 How. N. Y. Pr. 234.

3 Mellen V. Whipple, 1 Gray, 317; Pettee V. Peppard, 120 Mass. 522; Prentice V. Brimhall, 123 Mass. 291; Crowell V. Hospital, 27 N. J. Eq. 650. In a Massachusetts case, in 1882, the holder of a mortgage, which had been foreclosed and the property sold at a price less than the mortgage debt, acquired the entire interest in the same property at the same price. It was held by the supreme court that he could not bring an action of contract to recover the balance due on the mortgage in the name of the mortgagor, against his grantee, who in the deed to him had assumed the payment of the mortgage against the mortgagor's consent. An action of law upon the stipulation in a deed poll, by which the grantee assumes and agrees to pay as his own debt a previous debt of the grantor, secured by mortgage of the granted premises, must be brought, so it was held, in the name of the grantor only. Coffin V. Adams, 131 Mass. 133. 4 Supra, sec 505. A reconveyance from the substituted debtor to the original debtor, before the perfection of the novation, vacates the substituted debtor's liability to the original creditor. Crowell V. Hospital, 27 N. J. Eq. 650.

(2) innumerable warring claims might be brought together for the same thing. But this is not all. There are few banking associations that do not undertake to furnish currency for persons of a particular district; there are no charitable associations that do not undertake to raise funds for the benefit of certain designated classes; there are no literary or educational organizations that do not rest on a contract between the parties to supply books or instruction to specified classes; there is no subscription for religious or other purposes that does not have a similar object in view;1 and if the principle here contested is true, in each of these cases a suit could be maintained by each of the parties to be benefited by the association in question against the persons so associating. No bargain can be conceived of, no matter how confidential, on which strangers could not bring suit; no duty, no matter how delicate, which strangers could not interfere to enforce. There could be no claim on which there could not be as many conflicting suits brought as there are persons interested no matter how remotely; and in the face of the fact that when A. tells B. to hold money for C., A. may revoke this direction at any time before payment to C, it could not be held that C, on such a cause of action, could maintain suit against B. - But the hardship in such cases does not stop with the defendant, who thus is exposed to liabilities he did not assume. The position of the plaintiff, if the view here contested be sound, is also entitled to grave consideration. It may be said that it is a very good thing for me, of which I have no right to complain, to find that somebody has been depositing $1000 for me at a bank; and that I ought at once to be entitled to bring suit for the deposit. But it may be a very bad thing for me on which I may have serious ground for complaint, since as there is no contract without two parties, if I can sue the new debtor thus put upon me without my assent, he can sue me for failure of consideration or for money paid by mistake.2 And aside from this, supposing the money to be a gift, gifts are not always necessarily disinterested. There may be many-reasons why I may be unwilling to accept a gift from a person to whom I may not desire to be under obligation. If the depositary, also, by this process becomes my debtor, I by the same reasoning become his creditor, and even supposing I give no pecuniary consideration for what I receive, I may be compromised seriously in some other way. Either there is, or there is not a contractual relation between me and a depositary with whom money is deposited for my benefit. If there is not, then there is no basis for the contention that C. can sue B. for money deposited by A. with B. for C. If there is, then I am contractually bound to every depositary with whom funds may be placed to my credit. The depositary may be a party open to grave exception. I may be credited with a share in some speculation in which my name may be supposed to be of use, and to which, thereby, my influence is pledged, or in some investment in which membership may involve serious future liability. Am I to be bound by such burdens simply because other parties, for reasons satisfactory to themselves, choose to present to me property on which these burdens are imposed ? - It may be said, in reply, that although the parties making the provision are bound to me, I am not bound to them. But if they are bound to me, I am bound to them; if I am not bound to them, they are not bound to me.1 - It may also be objected that permitting an assignee of a debt to sue is open to the same criticism as permitting a stranger to sue; and that if there is a contractual relation between me and the assignee of the debt of my creditor, so there is a contractual relation between me and parties who undertake to make a contract for my benefit. But there is thi3 fundamental difference, that in the first case I part with a portion of my liberty to my creditor knowing the law to be that he can assign his claim over me to a stranger; in the second case I do not part with my liberty at all. - It is also to be remembered that if A. and B. intend to establish a contractual relation with C, the proper way to exhibit that intention would be for them to see C, and to get him to join in the contract. That he is not appealed to, when it would be easy to obtain his assent if really desired, affords a strong inference that the parties did not desire his assent.

1 Supra, sec 528. 2 Supra, sec 2.

1 Payne V. Cave, 3 T. R. 148; Cooke V. Oxley, 3 T. R. 653; Head V. Diggon,.

3 Man. & R. 97; Martin V. Mitchell, 2 Jac. & W. 413; supra, sec 2.