supervision of an agent whose technical knowledge is sufficient to enable upon it to do that which it could not do at all, and which those whom it employed could do well; it would have been negligence in defendant if it had undertaken to do that for which it was wholly unfit. Surely, in sound reason, if it would have been negligence to employ known incompetent mechanics, it would have been no less negligence. for the manager, conscious of his own ignorance, to attempt, on personal examination, to make the repairs himself."

The review of the cases collected in § 1055 of Labatt's Master & Servant may also be consulted. The New York cases there mentioned seem to be inconsistent with an earlier ruling in the same state, to the effect that error would have been predicable if the trial judge had refused to charge that the defendant could not justify on the sole ground that he had purchased the boiler from reputable manufacturers, and that this circumstance is merely one which the jury may properly consider as tending to exculpate him from the charge of negligence. Losee v. Buchanan (1873) 51 N. Y. 476, 10 Am. Rep. 623.

5 In James McNeil & Bros. Co. v. Crucible Steel Co. (1904) 207 Pa. 493, 56 Atl. 1067, where the plaintiff's mill was injured by the explosion of certain boilers, which had been inspected and repaired by a mechanic sent by a firm, the grounds upon which the company owning the boilers was held liable were thus stated: "Here the representative of defendant, Williams, was an engineer of more than twenty years' experience as an inspector of boilers in this plant; . . it was his especial duty to inspect them, to have them cleaned, to pronounce on re

was evidence that a proper examination by a competent man like Williams would have disclosed this unsafe condition and the necessity of condemning or replacing these boilers, as they were very old. From Williams's own statement, he was an expert for the very purpose of examination and repair of boilers. He was not a mere mechanic employed to do a particular job of work; he was the defendant, supervising and caring for one very important part of defendant's machinery, and if he neglected his duty his neglect was that of defendant. This is the obvious distinction between this case and that of Anderson v. Hays Mfg. Co. (Pa.). [See note 4, supra.] . . . If it be argued that it was Donlan's neglect that caused the accident, and that he was a mechanic employed by Munroe & Sons, the answer is that Donlan worked under the direction and supervision of Williams, who knew what Donlan did and what he neglected to do. argument based on the assumption that Munroe & Sons, as independent contractors, inspected and repaired the boilers, and then turned them over to defendant as safe, loses its force in the face of the evidence that their mechanic worked under the direction and supervision of Williams, who in that particular was the defendant corporation." C. B. L.

V.

The

2. The statutory periods of limitation are not excluded by a statutory provision that a contract made expressly for the benefit of a third person may be enforced by him at any time before the parties thereto rescind it.

ly and unnecessarily extend the bringing of the suit by deferring such demand or acceptance, but must make it within a reasonable time.

[See 17 R. C. L. 757.] Contract for benefit of strangers necessity of acceptance.

-

The facts are stated in the opinion

Messrs. Knight, Boland, Hutchinson, & Christin, and Alan C. Van Fleet, for appellants:

The only purpose of § 1559 of the Code was to give the third party beneficiary a right of action which did not exist at common law. It did not have the effect, nor was it intended to have the effect, of exempting such a contract from the operation of the Statute of Limitations.

of the court.

Wald's Pollock, Contr. p. 267; Daniels v. Johnson, 129 Cal. 415, 79 Am. St. Rep. 123, 61 Pac. 1107; Roberts v. Fitzallen, 120 Cal. 482, 52 Pac. 818; Williston, Contr. § 398; Washer v. Independent Min. & Development Co. 142 Cal. 703, 76 Pac. 654; Robertson v. Stuhlmiller, 93 Iowa, 326, 61 N. W. 986; Anguish v. Blair, 160 App. Div. 52, 145 N. Y. Supp. 392; Kuhl v. Chicago & N. W. R. Co. 101 Wis. 42, 77 N. W.

they present no real conflict with the rules announced in the More Case.

On August 5, 1905, George K. Porter executed and delivered to O. H. Bogart, plaintiff's assignor, the note here sued on, which is for the sum of $2,575.20. The instrument The instrument is made payable eighteen months from the date thereof, to wit, March 5, 1907. After the execution of the note, and about September 10, 1906, Porter caused the incorporation of the George K. Porter Company. This company was formed principally to take over, hold, own, manage, and control the properties of Porter. In pursuance of this plan Porter a few days thereafter granted and conveyed to the company all of his real and personal property wheresoever situated. The company, as part of the consideration for this conveyance and transfer, agreed to and did assume the payment of all the outstanding indebtedness of Porter existing at the time of said conveyance. This agreement was never rescinded. Shortly thereafter, on November 16, 1906, Porter died. The claim of Bogart upon the note was duly presented within the statutory period to the executors of the estate of Porter. It was rejected, and a suit was duly commenced upon the note, which action is still pending and undetermined.

On January 27, 1909, Bogart assigned, transferred, and set over to his wife, the plaintiff herein, all of his right, title, and interest in and to the said note and in and to the action based thereon for its collection, then pending against the executors of Porter's estate. About this time the affairs of the George K. Porter Company became involved and litigation resulted. A settlement was effected, under which a division of the assets of the corporation was made among its stockholders. In pursuance of this settlement the company conveyed all the real property located in the county of Los Angeles, valued at the sum of $750,000, in equal parts, to its three principal stockholders, Kate C. Boruff, one of the defendants, and Estelle C. Christin

and Benjamin F. Porter, interveners herein. At this time there still remained in the company undistributed certain lands situated in different counties of the state, which, together with certain personal prop erty, amounted in value to about $65,000. On September 30, 1911, this property was transferred and conveyed to the Merchants' Bank & Trust Company, a corporation, now the Hellman Commercial Trust & Savings Bank, defendant herein, for the purposes of sale, and for the payment out of the proceeds thereof of the taxes thereon and other incidental expenses connected therewith, and also for the payment of all the indebtedness of the Porter Company. Thereafter this last-named company failed to pay its license tax and forfeited its charter, and its directors, Kate C. Boruff, Fred L. Boruff, Louis P. Boardman, and J. E. Pearce, became its trustees by operation of law. Under all of these circumstances, and upon the promise of the Porter Company to pay all of the outstanding indebtedness of George K. Porter, this action was commenced January 20, 1917, against the George K. Porter Company, its trustees, above named, and against the Hellman Commercial Trust & Savings Bank, as the holder of certain assets of the Porter Company charged with the payment of its indebtedness under the conveyance, as above indicated. The facts, as above stated, are interpreted in the light most favorable to respondent's contentions and in support of the judgment.

Appellant's contend that, whether the gist of plaintiff's actions be considered to be upon the original note which matured in 1907, or upon the assumption thereof by the George K. Porter Company in 1906, or upon the implied assumption thereof by the bank in 1911; in either event it is barred by the Statute of Limitations, this action having been commenced more than four years subsequent to all of those dates. Respondent contends that her cause of action rests upon the agreement of the George

K. Porter Company in 1906, whereby it assumed and agreed to pay all of the outstanding indebtedness of the said George K. Porter; that under the well-recognized rule of equity, which has been enacted as a rule of law in § 1559 of the Civil Code, providing that "a contract made expressly for the benefit of a third person may be enforced by him at any time before the parties thereto rescind it," her right of action is exempted from the operation of any of the Statutes of Limitation. Her position is that the phrase "at any time before the parties thereto rescind it" expresses the only limitation upon her right to maintain her action, and that all statutes of limitation are excluded thereby. We cannot accept this

Limitation of

actions-contract for benefit of third person.

view.

The rule of law there expressed is a rule of substantive law, and is not adjective or procedural. It means that the cause of action arises in favor of the third person upon the making of such a contract, and that such a cause of action subsists until the parties thereto rescind their contract. It does not mean that the right to commence and maintain an action upon such cause of action is exempted from the Statutes of Limitation. This conclusion is fortified by a consideration of the various provisions of title 2, pt. 2, of the Code of Civil Procedure, relating to the time of commencing civil actions. The legislature has there specified the limitations applicable to a wide variety of actions, and then, to rebut the possible inference that actions not therein specifically described are to be regarded as exempt from limitations, it has specified a four-year limitation upon "an action for relief not hereinbefore provided for" (§ 343); and where it has intended that an action shall be exempt from limitations it has said so in clear and unmistakable language. Code Civ. Proc. § 348; Civ. Code, § 309.

It is the theory of some of the decisions that the right of action thus

recognized finds its source in the agreement of the immediate parties thereto (George K. Porter and the George K. Porter Company), from which the law, operating upon the acts of the parties, creates the duty, establishes a privity, and implies the promise and obligation on which the action is founded. Washer v. Independent Min. & Development Co. 142 Cal. 703, 76 Pac. 654. Other cases proceed upon the theory:

"When a grantee contracts with his grantor to pay the latter's debt or obligation in payment, or in part payment, for the conveyance, the creditor or obligee may accept and appropriate that contract to himself and maintain a suit in equity to enforce it. In that event the grantee becomes the principal debtor and the grantor the surety, and the creditor's suit stands on the equitable doctrines that the creditor may have the benefit of any security or obligation given by the principal debtor to the surety. Silver King Coalition Mines Co. v. Silver King Consol. Min. Co. 122 C. C. A. 405, 204 Fed. 169, Ann. Cas. 1918B, 571; 3 Pom. Eq. Jur. 4th ed. p. 2891; Williams v. Naftzger, 103 Cal. 438, 440, 37 Pac. 411; Daniels v. Johnson, 129 Cal. 415, 418, 79 Am. St. Rep. 123, 61 Pac. 1107.

"In fact, the relief granted is merely the application towards the payment of the debt by a court of equity of the mortgagor's property, consisting of the promise running to him from the grantee of the mortgaged premises." 1 Williston, Contr. p. 724.

Under the rule of the cases which hold that the right of action "finds its source in the agreement of the immediate parties thereto," it is apparent that the obligation from the promisor (grantee) to the third person (creditor) arises at once upon the making of the agreement. The law instantly "creates the duty, establishes a privity, and implies the promise and obligation on which the action is found." The cause of action therefore arises at once, and the right of action thereon accrues