Union Railway Storage Co. v. McDermott

Dickinson, J. This is an appeal from an order sustaining demurrers of the defendants to the complaint. The cause of action set forth in the complaint may be briefly stated as follows: The defendant McDermott entered into a written contract with the United States, an assistant quartermaster of the army making the contract in behalf of the government, by the terms of which McDermott undertook to erect certain buildings for the government at Ft. Snelling, he to furnish the material and labor therefor. It was specifically expressed by article three (3)_of the contract that he-shonld “be responsible, for and pay all liabilities incurred for labor and material in fulfillment of this contract.” In article six (6) it was agreed that “all rights of action, however, for any breach of this contract by the said John R. McDermott are reserved to the United States.” In connection with the making of this contract the defendant McDermott as principal, and the other defendants as his sureties, executed their bond to the United States in the penal sum of $5,000, conditioned that McDermott should perform all the covenants, conditions, and agreements contained in the contract, to which the bond specifically referred, “including the covenant that the said John R. McDermott shall be responsible for and pay all liabilities incurred for labor and material in fulfillment of said contract.” The plaintiff, in reliance upon the terms and conditions of the contract and bond, furnished to McDermott at an agreed price a [411] large quantity of brick, which was used in the construction of the buildings, but for which payment was never made. The plaintiff now seeks to recover therefor in this action on the bond. The legal question here presented — as to the right of the plaintiff, a stranger to the contract, to sue upon 'it — has recently been considered in Jefferson v. Asch, post, p. 446, (55 N. W. Rep. 604,) and the rule there declared is decisive of this case. The plaintiff has no right of action on the bond. He was a complete stranger to it. There was no privity between him and the promisee, — -the United States. The latter rested under no duty or obligation to him upon which he could assert any legal or equitable right to avail himself of the benefit of, and enforce, the promise made by the defendants to the United States. Nor was the promisee — the United States — interested in having this part of the contract performed. It would be no benefit to the United States if the contractor should pay. his own debts for material purchased by him. It would be in no way prejudiced if he should not pay. Its property could not be subjected to a lien therefor. In brief, the right of the plaintiff to sue upon this bond has no other legal foundation than the bare fact that the defendants had by that instrument entered into an obligation towards a mere stranger to the plaintiff that his debt should be paid. In such a case the stranger to the contract cannot sue upon it. Our decision above cited is decisive. Orders affirmed. Yanderburgh, J., did not participate. (Opinion published 55 N. W. Rep. 606.)