Third person em- conveni- Contract can enable one of We now come to the class of cases in which contracting parties have attempted for their own convenience to vest the right of enforcing the contract in a third person. Except within the domain of the stricter rules applicable to parties to actions on deeds and negotiable instruments, ing parties there appears to be no objection to several contracting parties agreeing that one of them shall have power to sue themselves for the benefit of all except the party sued. Thus where partners create by agreement penalties to be paid by any partner who breaks a particular stipulation, they may empower one partner alone to sue for the penalty (o). The application of the doctrines of agency may also lead to similar results (p). It seems doubtful whether a promise to several persons to make a payment to one of them will of itself enable that one to sue alone (q). to sue on behalf of himself and others: But cannot enable But it is quite clear that the most express agreement of a stranger. contracting parties cannot confer any right of action on Attempts the contract on a person who is not a party. Various by unincorporated devices of this kind have been tried in order to evade the companies difficulties that stand in the way of unincorporated assoto appoint a nominal ciations enforcing their rights, but have always failed when plaintiff. attention was called to them. This has happened in the case of actions brought by the chairman for the time being be solicitor to the company and (0) Radenhurst v. Bates, 3 Bing. (p) Spurr v. Cass, L. R. 5 Q. B. 656. (q) Chanter v. Leese, 4 M. & W. 295; in Ex. Ch. 5 M. & W. 698, where both Courts inclined to think not, but gave no decision. In Jones v. Robinson, 1 Ex. 454, 17 L. J. Ex. 36, an action was brought by one of two late partners against the purchaser of the business on a promise to pay the plaintiff what was due to him from the firm for advances. This was declared on as a separate promise in addition to a general promise to the two partners to pay the partnership debts, and the only question was whether there was any separate consideration for the promise sued on. of the directors of a company (r), by the directors for the time being of a company (s), by the purser for the time being of a cost-book company (t), and by the managers of a mutual marine insurance society (u). It will not be necessary to dwell on any instance other than the last. In Gray v. Pearson the reasons against allowing the right of action are well given in the judgment of Willes, J. :— "I am of opinion that this action cannot be maintained, and for the Judgment simple reason, a reason not applicable merely to the procedure of this of Willes, J. in Gray country, but one affecting all sound procedure,-that the proper person. Pearson. to bring an action is the person whose right has been violated. Though there are certain exceptions to the general rule, for instance in the case of agents, auctioneers, or factors, these exceptions are in truth more apparent than real. The persons who are suing here are mere agents, managers of an assurance association of which they are not members; and they are suing for premiums alleged to have become payable by the defendant in respect of policies effected by the plaintiffs for him, and for his share and contributions to losses and damages paid by them to other members of the association whose vessels have been lost or damaged. The bare statement of the facts is enough to show that the action cannot be maintained. 66 It is in effect an attempt to substitute a person as a nominal plaintiff in lieu of the persons whose rights have been violated." Another variety of the same device is a document pur- Notes and porting to be a negotiable instrument payable to the able to treasurer or other officer for the time being of a society. treasurer, Such a document, whether in the form of a promissory time being, &c., for note (x) or of a bill of exchange (y), is invalid, for the invalid. payee must be a person capable of being ascertained at the time of making the note or accepting the bill. There is no doubt that a contract in any other form to pay the (r) Hall v. Bainbridge, 1 Man. & Gr. 42. (s) Phelps v. Lyle, 10 A. & E. 113. (t) Hybart v. Parker, 4 C. B. N. S. 209, 27 L. J. C. P. 120: where Willes, J., suggested that it was trenching upon the prerogative of the Crown to make a new species of corporation sole for the purpose of bringing actions. (u) Gray v. Pearson, L. R. 5 C. P. 568 in the earlier case of Gray v. Gibson, L. R. 2 C. P. 120, a similar action succeeded, the question of the manager's right to sue not being raised. (x) Storm v. Stirling, 3 E. & B. 832, 23 L. J. Q. B. 298; in Ex. Ch. nom. Cowie v. Stirling, 6 E. & B. 333, 25 L. J. Q. B. 335. (y) Yates v. Nash, 8 C. B. N. S. 581, 29 L. J. C. P. 306. Rule 4. Transfer of rights under contract. Right to sue on contract not assignable at common law: probable origin of the rule. treasurer for the time being would be equally inoperative to give any right of action to the person who should from time to time fill the office (≈). But a promissory note payable to "the trustees of the W. chapel or their treasurer for the time being" is good: for it is considered that the trustees existing at the date of the note are the persons ascertained as payees, and that the treasurer is named only as their agent to receive payment (a). Assignment of Contracts. Rule 4. We now come to the fourth rule, which we have expressed thus: Persons other than the creditor may become entitled by representation or assignment to stand in the creditor's place and to exercise his rights under the contract. We need say nothing here about the right of personal representatives to enforce the contracts of the person they represent, except that it has been recognized from the earliest period of the history of our present system of law (b). With regard to assignment, the benefit of a contract cannot be assigned (except by the Crown) at common law so as to enable the assignee to sue in his own name (c). The origin of the rule was attributed by Coke to the "wisdom and policy of the founders of our law" in discouraging maintenance and litigation (d): but there can be little or no doubt that it was in truth a logical consequence of the primitive view of a contract as creating a strictly personal obligation between the creditor and the debtor (e). Any (z) Pigott v. Thompson, 3 Bos. & P. 147. (a) Holmes v. Jaques, L. R. 1 Q. B. 376. (b) Subject to some technical exceptions which have now disappeared: see notes to Wheatley v. Lane, 1 Wms. Saund. 240 sqq. and for early instances of actions of debt brought by executors, Y. B. 20 & 21 Ed. 1, pp. 304, 374. (c) Termes de la Ley, tit. Chose in Action. (d) Lampet's ca. 10 Co. Rep. 48 a. For exposition of the rule in detail see Dicey on Parties, 115. (e) Spence, Eq. Jurisd. of Chy. 2. 850. An examination of the earlier authorities has been found to confirm this view. The rule is how, it has been long established that the proper course at common law is for the assignee to sue in the name of the assignor. It appears from the Year Books that attempts were sometimes made to object to actions of this kind on the ground of maintenance, but without success. The same rule is very distinctly stated by Gaius as prevailing in the Roman law (ƒ). may sue. In equity the right of the assignee to sue in his own In equity name has been recognized for some considerable time; it assignee is perhaps impossible to say precisely for how long, but at any rate since the rules of equity have been at all systematic (g). The Supreme Court of Judicature Act, 1873 (s. 25, Legal right of sub-s. 6), creates a legal right modelled on the equitable assignee right, but confined to cases where the assignment under Juis absolute, and by writing under the hand of the Act, 1873. assignor, and express notice in writing has been given to the debtor. dicature extensive: These restrictions are but partly known in equity. By In equity the Statute of Frauds (29 Car. 2, c. 3, s. 9) "all grants and more assignments of any trust or confidence" must be in writing how far governed signed by the assignor, and by s. 7, equitable interests by Stat. of in land must be created by writing. S. 9 does not Frauds, require writing for the creation in the first instance by assumed as unquestionable, and there is no trace of Coke's reason for it. The objection of maintenance was set up, not against the assignee suing in his own name, which was never attempted so far as we can find, but against his suing in the name of the assignor: see Note G in Appendix. (f) Gai. 2. 38, 39. Quod mihi ab aliquo debetur, id si velim tibi deberi, nullo eorum modo quibus res corporales ad alium transferuntur, id efficere possum: sed opus est, ut iubente me tu ab eo stipuleris: quae res efficit ut a me liberetur et incipiat tibi teneri. quae dicitur novatio obligationis. Sine hac vero novatione non poteris tuo nomine agere, sed debes ex persona mea (g) There is a curious case in Y. qu. In other special cases by statute. Limita tion of the legal owner or creditor of an equitable interest in personal property or a chose in action: and it may be argued perhaps that its operation is altogether confined to interests in land by the context in which it occurs. The writer is not aware of any decision upon it (h). As for the notice to the debtor, the rule of equity is that it must be express but need not be in writing (i). There remain, therefore, a great number of cases where the right is purely equitable, although the enlarged jurisdiction of every branch of the Supreme Court makes the distinction less material than formerly. Several partial exceptions to the common rule have been made at different times by modern statutes, on which however it seems unnecessary to dwell (k). In ordinary cases rights under a contract derived by assignee's assignment from the original creditor are subject, as already stated, to the following limitations: rights. 1st. Title by assignment is not complete as against the debtor without notice to the debtor, and a debtor who performs his contract to the original creditor without notice of any assignment by the creditor is thereby discharged. 2nd. The debtor is entitled as against the representatives, and, unless a contrary intention appears by the (h) See 1 Sanders on Uses (5th (i) Re Tichener, 35 Beav. 317. East India Bonds, 51 Geo. 3, Mortgage debentures issued by land companies under the Mortgage Debenture Act, 1865, 28 & 29 Vict. c. 78, amended by 33 & 34 Vict. c. 20. Policies of life assurance: 30 & 31 Vict. c. 144. Policies of marine assurance: 31 & 32 Vict. c. 86. Things in action of companies (Companies Act, 1862, s. 157) and bankrupts (Bankruptcy Act, 1883, ss. 56, 57, and see definition of 66 property," s. 168) assigned in pursuance of those Acts respectively. As to the effect of registration under the present Acts of previously existing companies, &c., in transferring the right to sue on the contracts made by the company or its officers in its former state, see the Companies Act, 1862, s. 193, Lindley 1. 492, note (g). Local authorities (including any authority having power to levy a rate) may issue transferable debentures and debenture stock under the Local Loans Act, 1875, 38 & 39 Vict. c. 83. |