Lawrence v. Fox Case Brief

Summary of Lawrence v. Fox
Ct of App NY [1859]

Historical Development of 3rd Party Beneficiaries

Relevant Facts: Holly loaned the Df, Lawrence $300. Df agreed to pay the $300 to the Pl Fox, for a debt that Holly owed to Pl, the next day.

Legal Issue(s): Whether privity of K must exist between Df and Pl in order for the Pl to seek recovery against the Df?

Court’s Holding: No

Procedure: Tr Ct Judge denied Df’s nonsuit; Df Excepted; then jury returned verdict for Pl, Df Appealed; then Sup Ct affirmed verdict, Df appealed; Ct of App affirmed.

Law or Rule(s): Where one person makes a promise to another for the benefit of a third person, that third person may maintain an action upon that promise.

Court Rationale: The promise was made to Holly and not expressly to the Pl; but in this case the Df, upon ample consideration received from Holly, promised Holly to pay his debt to the Pl; the consideration received and the promise to Holly made it his duty to pay the Pl as if the money had been remitted to the DF for that purpose, and as well implied a promise to do so as if he had been made a trustee of property to be converted into cash. “That a promise made to one for the benefit of another, he for whose benefit it is made may bring an action for its breach,"has been applied to trust cases. The Pl did not release the Df from his promise. No one can doubt that the Df owes the sum of money demanded of him, or that in accordance with his promise it was his duty to have paid it to the Pl.

Plaintiff’s Argument: The Df agreed with Holly to pay Holly’s indebtedness to Pl the next day in consideration of receiving $300. Holly nor Pl released the Df from this promise and Df did not pay.

Defendant’s Argument: The Df was not in privity w/ the Pl, who was not a party to the agreement, paid no consideration, and the Df was not a trustee of the property of Holly.

DISSENT: The Pl had nothing to do with the promise, it was not made to him, or did the consideration proceed from him. There must be privity of K. The party who sues upon a promise must be the promisee, or he must have some legal interest in the undertaking.



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