In New York the right of the beneficiary to sue on contracts made for his benefit is at present confined to: 1) cases where there is a pecuniary obligation running from the promisee to the beneficiary; 2) cases where the contract is made for the benefit of the wife, affianced wife or of a party to the contract; 3) public contract cases where the municipality seeks to protect its inhabitants by covenants for their benefit and; 4) cases where, at the request of a party to the contract, the promise runs directly to the beneficiary although he does not furnish the consideration.
Respondent niece brought suit in contract to recover property that her late aunt contracted with her late uncle to deliver. It appears that the late aunt asked the late uncle (her husband), to prepare a will for her. A will was prepared, which included, among others, a provision that the use of a house is being left to the decedent uncle for life. The aunt expressed that she wanted the house left to respondent niece. However, since she was very infirm with the possibility that she could not live long enough for the revised will, the uncle convinced his wife to sign the will and promised to make up for it in his own will by giving the niece $6,000, which is the value of the house. Both the uncle and the aunt died with both wills making no provision for the respondent niece. The trial court found for respondent niece, that the right of a third party to recover upon a contract made by other parties for the third party's benefit was determined by the circumstances of the particular case.
Is the promise made by the aunt to her niece an enforceable contract?
Respondent was entitled to recover the property that the decedent uncle had contracted with the decedent aunt to deliver to respondent. Where a legatee promises the testator that he will use property given him by the will for a particular purpose, a trust arises. The uncle received nothing under his wife's will but the use of the house in for life. Equity compels the application of property thus obtained to the purpose of the testator, but equity cannot so impress a trust except on property obtained by the promise. The uncle was bound by his promise, but no property was bound by it; no trust in respondent’s favor can be spelled out. If the aunt had left her husband the house on condition that he pay the respondent $ 6,000 and he had accepted the devise, he would have become personally liable to pay the legacy and respondent could have recovered in an action at law against him, whatever the value of the house. That would be because the testatrix had in substance bequeathed the promise to respondent and not because close relationship or moral obligation sustained the contract. The distinction between an implied promise to a testator for the benefit of a third party to pay a legacy and an unqualified promise on a valuable consideration to make provision for the third party by will is discernible but not obvious. The tendency of American authority is to sustain the gift in all such cases and to permit the donee-beneficiary to recover on the contract. The equities are with the respondent and they may be enforced in this action, whether it be regarded as an action for damages or an action for specific performance to convert the defendants into trustees for plaintiff's benefit under the agreement.