Where one person makes a promise to another for the benefit of a third person, that third person may maintain an action upon it.
A debtor, who owed plaintiff money, loaned defendant money. Defendant, in return, promised to repay plaintiff that sum of money on the debtor's debt. Plaintiff sued defendant for the sum of money. Judgment was entered in favor of plaintiff. The court affirmed because (1) the evidence sufficiently established the existence of a debt between the debtor and plaintiff, (2) defendant's promise to repay plaintiff for the debtor in return for the loan from the debtor was sufficient consideration to make the contract enforceable, and (3) since defendant promised the debtor he would repay plaintiff in return for consideration advanced by the debtor, it was unnecessary for defendant to make a promise to plaintiff because upon proof of the promise made to the debtor to pay plaintiff, a promise to plaintiff was implied.
Is it possible for an action to be maintained by a third party with regards to the enforcement of a benefit promised to him in a contract which was not made by him?
In this case the defendant, upon ample consideration received from Holly, promised Holly to pay his debt to the plaintiff; the consideration received and the promise to Holly made it as plainly his duty to pay the plaintiff as if the money had been remitted to him 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 with which to pay. The fact that a breach of the duty imposed in the one case may be visited, and justly, with more serious consequences than in the other, by no means disproves the payment to be a duty in both. The principle illustrated by the example so frequently quoted (which concisely states the case in hand) "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, not because it was exclusively applicable to those cases, but because it was a principle of law, and as such applicable to those cases. It was also insisted that Holly could have discharged the defendant from his promise, though it was intended by both parties for the benefit of the plaintiff, and therefore the plaintiff was not entitled to maintain this suit for the recovery of a demand over which he had no control. It is enough that the plaintiff did not release the defendant from his promise, and whether he could or not is a question not now necessarily involved.