Seaver v. Ransom

Appellate Division of the Supreme Court of New York · Contracts

ContractsThird-Party Beneficiariesthird-party beneficiaryLawrence v. Foxintent to benefitmoral dutyequitable dutypromise to make testamentary provision

Facts

Mrs. Beman, while on her deathbed, wanted to leave her house or its equivalent to her niece and foster daughter, the plaintiff, because the plaintiff was in broken health and she did not want her to have to work for a living. Judge Beman drafted a will that instead gave the plaintiff only limited benefits and gave the husband a life use of the house with remainder to an animal-protection society; when Mrs. Beman objected, he promised that if she signed the will he would leave enough in his own will to make up the difference, and she signed in reliance on that promise. Disinterested witnesses, the physician and nurse, corroborated that Mrs. Beman was dissatisfied because the plaintiff was not receiving enough and that Judge Beman promised to correct that deficiency. Judge Beman later failed to provide for the plaintiff in his own will.

Issue

May the plaintiff, who was not a party to the agreement between Mr. and Mrs. Beman, enforce Judge Beman's promise where the agreement was made solely to benefit her and Mrs. Beman had a moral or equitable duty toward her? More specifically, can a third-party beneficiary recover on a promise made by one spouse to another concerning testamentary provision for the beneficiary?

Rule

To enforce a contract as a third-party beneficiary, it must appear from the contract that it was made for the benefit of the plaintiff, and there must be some equitable or moral duty from the contractee to the plaintiff. Where the promisee acted solely for the plaintiff's benefit, the plaintiff may also treat the promisee as her agent and ratify the act by bringing suit.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Rochester, New York, Lena Ortiz, gravely ill, told her husband Paul Ortiz that she wanted her condo to go to her niece Ava Morales, whom she had raised for years and who was unable to support herself because of chronic illness. Paul drafted a will giving the condo to a wildlife charity instead, but promised Lena that if she signed, he would leave Ava enough in his own will to make up the difference; Lena then signed, and Paul later died without providing for Ava.

If Ava sues Paul's estate on the promise, what is the strongest basis for recovery?

Explanation. The majority rule permits a third party to enforce a contract when the contract shows it was made for that plaintiff's benefit and the promisee owed the plaintiff some equitable or moral duty. Here the promise was undertaken solely to secure Ava the provision Lena wanted for her, and Ava was not merely incidental. The opinion does not require a preexisting legal duty; a moral or equitable claim is sufficient. (Derived from Seaver v. Ransom (n.d.).)