Ius quaesitum tertio [1 ed.] 9783428527205, 9783428127207

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Comparative Studies in Continental and Anglo-American Legal History Vergleichende Untersuchungen zur kontinentaleuropäischen und anglo-amerikanischen Rechtsgeschichte

Band 26

Ius quaesitum tertio Edited by

Eltjo J. H. Schrage

asdfghjk Duncker & Humblot · Berlin

Ius quaesitum tertio

Comparative Studies in Continental and Anglo-American Legal History Vergleichende Untersuchungen zur kontinentaleuropäischen und anglo-amerikanischen Rechtsgeschichte

Herausgegeben von Richard Helmholz, Knut Wolfgang Nörr und Reinhard Zimmermann

Band 26

Ius quaesitum tertio Edited by

Eltjo J. H. Schrage

asdfghjk Duncker & Humblot · Berlin

Printed with support of the Gerda Henkel Stiftung, Düsseldorf

Bibliographic information published by the Deutsche Nationalbibliothek The Deutsche Nationalbibliothek lists this publication in the Deutsche Nationalbibliografie; detailed bibliographic data are available in the Internet at http://dnb.d-nb.de.

All rights reserved # 2008 Duncker & Humblot GmbH, Berlin Typesetting and printing: Berliner Buchdruckerei Union GmbH, Berlin Printed in Germany ISSN 0935-1167 ISBN 978-3-428-12720-7 Gedruckt auf alterungsbeständigem (säurefreiem) Papier ∞ entsprechend ISO 9706 *

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Table of Contents David J. Ibbetson and Eltjo J. H. Schrage Ius quaesitum tertio. A Comparative and Historical Introduction to the Concept of Third Party Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1

Sir John Baker Privity of Contract in the Common Law before 1680 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

35

Jan Hallebeek Ius Quaesitum Tertio in Medieval Roman Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

61

Harry Dondorp Ius Quaesitum Tertio in Medieval Canon Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

109

Neil G. Jones Aspects of Privity in England: Equity to 1680 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

135

Laurent Waelkens Ius Quaesitum Tertio, Dutch Influences on Grotius . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

175

David J. Ibbetson and Warren Swain Third Party Beneficiaries in English Law: From Dutton v. Poole to Tweddle v. Atkinson . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

191

David Deroussin La stipulation pour autrui de l’ancien droit franc¸ais au XIXe`me sie`cle, ou comment se de´barrasser d’une tradition geˆnante . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

215

Martin Pennitz Ius quaesitum tertio: German Legal Doctrine and Practice in the 18th and 19th Century . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

251

Martin J. Schermaier Contracts for the Benefit of a Third Party in German Law . . . . . . . . . . . . . . . . . . . . . . . . . .

289

Warren Swain Third Party Beneficiaries in English Law, 1880 – 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

331

Hector L. MacQueen and W. David H. Sellar Scots Law: Ius quaesitum tertio, Promise and Irrevocability . . . . . . . . . . . . . . . . . . . . . . . .

357

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Table of Contents

Edgar du Perron Third Party Stipulations in Modern Dutch Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

385

Daniel Visser and Samantha Cook Contracts for the Benefit of Third Parties in South Africa – Investigating an Alternative Approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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DAVID J. IBBETSON and ELTJO J. H. SCHRAGE

Ius quaesitum tertio A Comparative and Historical Introduction to the Concept of Third Party Contracts This volume is the third one in this series of publications composed by (more or less) the same working group. In 1995 there appeared a volume under the title Unjust Enrichment: The Comparative Legal History of the Law of Restitution, and in 2001 Negligence: The Comparative Legal History of the Law of Torts. This volume deals with contracts in favour of third parties. The working group has therefore covered a substantial part of the law of obligations, the German Obligationenrecht. These volumes have in common that they aim to continue the tradition of learned scholarship which, working from a historical point of view, aimed to identify the features linking the Common law and the Civil law, notwithstanding the obvious distinctions between them. This is in line with the original intention of the general editors who founded this series, the late Professor H. Coing and Professor K. W. Nörr, looking back a century to the work of the German scholar H. Brunner and his English counterpart F. W. Maitland. Clarifying the fundamental conception of a historical approach to comparative studies between Common law and Civil law, Coing stressed that the legal solutions reached should be set against the background of ‘European civilization’. Although a conception of European civilization can be found from the time of the Carolingian Renaissance, Coing focused on its evolution from the eleventh and twelfth centuries, after which all European nations went through more or less similar political, religious and social stages, albeit some earlier and some later than others. In legal terms, too, it made sense to begin at this time: the Conquest of England by William of Normandy in 1066 was, according to Maitland, “a catastrophe which determined the whole future of English law”, and at about the same time the law of continental Europe underwent its own reorientation with the revival of the study of Roman law in the universities of Italy and elsewhere. In our earlier volumes, therefore, we thought it inappropriate to give a dominant place to (pre-)Justinianic Roman law, making pasing reference to it only in so far as it was indispensable to the understanding of later developments. In the present volume we cannot be so dismissive, for the medieval and post-medieval developments are so heavily rooted in Roman law that it is important to consider the Roman base in some depth in this introduction.

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The papers in the collection examine two distinct but closely related topics. The first is the unfolding and gradual withering away of the Roman law maxim Alteri stipulari non potest, none may stipulate for another. In its original form this was a rule applicable only to the contract of stipulatio, but after the revival of Roman law in the Middle Ages it came to have a wider sphere of application. The second topic is the more general one of the creation of contractual rights in favour of third parties. This too has roots in Roman law, but, partly because of the generalisation of the maxim Alteri stipulari non potest and partly independently of it, it developed a life of its own, remaining a highly controverted subject in modern European legal systems. Behind these themes is the question whether the making of a contract requires that the parties be present together, and cutting across them is the question whether there is any rule restricting contracts to reciprocal relationship. As well as specialist treatments of particular systems or particular periods, two substantial monographs have been devoted to the development of this subject in a European context,1 as well as several specialist treatments of particular systems or particular periods. The present work builds on these studies, but, as well as taking into account more recent legal developments and modern scholarship in legal history, it aims to extend them in three main ways. First, the focus on the learned laws is softened and greater weight given to legal practice. Secondly, it integrates into the European picture the history of the subject in England. Thirdly, going beyond Coing’s initial framework, attention is also focused on the mixed legal systems found in Scotland and South Africa.

Roman Law2 It is a commonplace observation that Roman law had a law of contracts rather than a law of contract, whereas in modern legal systems the reverse holds more or less true. The development of the law relating to contracts for the benefit of third parties has to be understood against this background. So far as the Roman institutional system of contracts was concerned, it was principally in the context of the stipulatio that the question of third-party benefits could be raised directly. A number of distinct considerations came into play here, generating a highly restrictive set of rules which survived into Justinianic law. These rules translated into the medieval Civil law, where they were counterpoised against the leaning of Canon 1 G. Wesenberg, Verträge zugunsten Dritter (Weimar 1949); U. Müller, Die Entwicklung der Directen Stellvertretung und des Vertrages zugunsten Dritter (Stuttgart 1969). Among older works which remain valuable, see J. P. Moltzer, De Overeenkomst ten Behoeve van Derden (Amsterdam 1876), and G. Pacchioni, I Contratti a Favore dei Terzi (Milan 1933). The only substantial history of the rule in England is V. V. Palmer, Paths to Privity: A History of Third Party Beneficiary Contracts at English Law (San Francisco 1992). 2 See Professor Hallebeek’s paper in the present volume.

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law towards the enforcement of seriously-intended promises and against pressure from positive legal orders to recognise and give effect to at least some third-party beneficiary contracts. The running together of these different strands of legal thought – primarily in the sixteenth and seventeenth centuries, when the Roman contract of stipulatio began to provide the spine of a generalised theory of con-tract – produced a clash of principles whose implications remained to be worked out in the nineteenth and twentieth centuries.

Refusal of a Right of Action to Third Parties The Roman framework of contractual liability means that we look in vain for any general conception of the contract in favour of a third party. That said, there is an unmistakeable line running through the texts relating to specific contracts – most notably specificatio, emptio venditio, and mandatum – refusing to allow a person not party to the contract to bring a claim. The contract was a personal bond between the parties, and in late classical law it was stated quite explicitly that no independent third party could bring an action on it: neque stipulari neque emere vendere contrahere, ut alter suo nomine recte agat, possumus.3 Two related but distinct reasons lay behind this: the bilateral nature of contracts, creating a special relationship between the parties to them; and the principle that no-one could acquire through an independent third party. We may usefully divide contracts in Roman law into those which depended on some particular form and those which did not. The informal contracts were in the main strongly bilateral, in the sense that they imposed obligations on both parties to them and also that they depended on the parties’ agreement: the consensual contracts were generated solely by the agreement of the parties, and (later) the innominate contracts by agreement and one party’s performance. It was almost axiomatic that there could be no question of a third party gaining rights in such cases. ‘Real’ contracts might have been different, for here the bilaterality was not so marked. At least in the case of the loan of money, mutuum, where no obligation attached to the lender, it seems to have been established in classical law that a loan might be made by A to B on terms that the money be repaid to C, and in such circumstances C would be able to bring a condictio against B to reclaim the money.4 Nor was there any hint of difficulty in the case of the unilateral pollicitatio, whose typical form was the promise to make a gift to a municipality.5 Here, provided the other (admittedly stringent) requirements were satisfied, the obligation arose as soon as the 3 D.44.7.11 (Paul, 12 ad Sabinum); cf D.50.17.73.4 (Quintus Mucius, 1 Horon), D.45.1. 38.17 (Ulpian, 49 ad Sabinum). 4 D.12.1.9.8 (Ulpian, 26 ad Edictum, citing Julian and Aristo); D.45.1.126.2 (Paul, 3 Quaestionum). 5 The contrast between the bilateral pactum and conventio and the unilateral pollicitatio is made in D.50.12.3 (Ulpian, 4 Disputationum).

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promise had been made, without the need for any acceptance on the part of the intended beneficiary. Formal contracts were slightly different. Although these took several forms, we may refer simply to the most important of them, the stipulatio. This was unilateral in the sense that it imposed obligations on only one party; none the less, behind it there lay a bilateral transaction. The stipulatio, it was said, was as much rooted in the consensus of the parties as any other contract.6 The stipulator began proceedings with a formal question; for example, ‘mihi decem dari spondesne?’; the promisor replied, necessarily using the same verb, ‘spondeo’, thereby generating the obligation. As a matter of legal form, therefore, the initiative lay with the stipulator, in whose question the details of the obligation were framed. It followed from this that the stipulator was not simply the fortunate beneficiary of a promise, nor even someone who had to be present or signify acceptance of the benefit of the promise, but a highly active participant in the creation of the obligation. In addition, since the stipulatio was an oral agreement, it followed that the parties had to be present together when the agreement was made. The exclusion of third-party beneficiaries from the stipulatio is inextricably tied up with the impossibility of making a stipulatory promise for the benefit of an absentee. Though this focus on the participation and presence of the stipulator seems to have been substantially attenuated in practice by the third century AD, largely as a result of the use of writing as evidence of stipulatory promises, none the less as a matter of theory the stipulatio retained its earlier structure dependent on the stipulator’s active involvement, appearing in this form in Justinian’s Corpus Iuris. Alongside this, Roman law had a general principle that a person could not normally acquire rights through another. For Gaius, it was a commonplace saying that nothing could be acquired for us through a stranger: Et hoc est quod vulgo dicitur, per extraneam personam nobis adquiri non posse.7

Gaius is speaking at this point of the acquisition of property rights, and the general principle appears in the same context in Justinian’s Institutes.8 While it was less firmly rooted when dealing with the acquisition of contractual rights, it was clearly treated in the Codex Justinianus as extending to these too.9 It was a rule which admitted of significant exceptions, notably where the acquisition was through one’s slave or a person in one’s potestas, but its existence is sufficently clearly attested in the Digest that it cannot be ignored. It was used, for example, as a justification for the conclusion that a freedman could not stipulate in such a way as to acquire a right for his patron.10 D.2.14.1.3 (Ulpian, 4 ad Edictum, citing Pedius); D.45.1.83.1 (Paul, 72 ad Edictum). G.2.95. 8 Inst 2.9.5. 9 C. 4.27.1.pr (AD 290). 10 D.45.1.126.2 (Paul, 3 Quaestionum). 6 7

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The effect of the exclusion of third-party rights was most marked in the stipulatio. Since in informal contracts there was no particular form in which the parties’ agreement had to be couched, and no requirement of the presence of the parties, it was relatively easy for individuals to create contractual bonds by the use of messengers, nuntii, to make contracts on their behalf. The role of the nuntius was purely as a mouthpiece, transmitting the agreement of the principal. There was, therefore, no sense here that a contract was being created by one person for the benefit of another: the nuntius was never a party to the contract in the first place. In the stipulatio, by contrast, the requirement that the parties (or their slaves) be present precluded the use of a nuntius. The difficulties flowing from the formal impossibility of creating a contract between absentees would have been alleviated if a third party could have stipulated for the intended beneficiary. Although the formal rule excluding the possibility of third-party claims seems to have been retained into post-classical law, there was some slippage in specific cases. Where a tutor was required to make a formal promise that he would look after his ward’s property, if the ward was absent or too young to stipulate for himself, a slave could do so on his behalf; if he had no slave a servus publicus or the magistrate himself could receive the promise. In the latter situation the ward was not a party to the contract, but he was given an actio utilis to enforce it.11 Another important example is provided by the donatio sub modo, dealt with in a rescript of Diocletian and Maximian in 290. A gave property to B for a fixed period, with a condition that at the end of the period B would transfer the property to C. The old rule, it was said, was that C had no claim against B, but by this time a more benign interpretation had been adopted, granting C an actio utilis against him.12 The same line is taken in another context three years later. A, a non-owner, deposited goods with B on the basis that they should be returned to C. On classical principles the only way in which C could get an actio depositi against B would be if A died and C became his heir; in other cases, conformably with the earlier rescript, an actio depositi utilis would be granted to C.13 It may be that the process of weakening had begun rather earlier than this, for there are hints of it in texts of Paul and Ulpian,14 and perhaps even in a non-legal text of as early as 160.15 Moreover, the Egyptian papyrological evidence suggests that by the beginning of the third century the Roman law practised there followed the Greek model of allowing actions by the third party beneficiary.16

D.27.8.1.15, 16 (Ulpian, 36 ad Edictum). C.8.54.3; Vat. Fr. 286. The two versions of the text, though not identical, are in substance the same. 13 C.3.42.8.1. 14 Coll. 10.7.8 (Paul, 2 Sententiarum); D.13.7.13.pr (Ulpian, 39 ad Edictum). 15 Apuleius, De Magia Liber, 91 – 92; on which see P. Bonfante, “Un Contratto a Favore dei Terzi nell’Era Classica”, in Scritti Giuridici (Torino 1921), III.243. More recent scholarship has not supported Bonfante’s suggestion. 11 12

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Refusal of a Right of Action to the Stipulator The refusal of an action to the third party beneficiary of a stipulatory promise in no way entailed that the stipulator himself should have no action to enforce the promise made to him. Here, though, two different issues came into play. First was a procedural problem which affected promises to pay money or deliver property. Here the appropriate remedy was a condictio, in which the iudex was instructed to condemn the defendant if it was proved that he owed a certain sum of money to the plaintiff. Where the money was owed to a third party rather than to the plaintiff, the action could not lie: alteri dari stipulari nemo potest.17 Secondly, and more generally, where the promise was to do something rather than to pay, a stipulatio facere rather than a stipulatio dare, there was probably no formal reason why the stipulator could not bring an action where the beneficiary of the act was a third party; but since the damages recovered by him reflected the loss which he had suffered by reason of the non-performance it was only if there had been loss to him that he would receive any compensation. The third-party promise gave the stipulator a right to the extent that he had an interest in performance being made to the third party. The breakdown of the formulary system and its supersession by the cognitio extraordinaria did away with these purely procedural difficulties. The different rules applicable to the different forms of stipulatio were run together. The maxim Alteri Dari Stipulari Nemo Potest was generalised as Alteri Stipulari Nemo Potest;18 and the rule that the stipulator could bring an action on a promise made for the benefit of a third party only to the extent that he had an interest in its performance became a rule of general application, not simply a rule applicable to stipulationes facere. It was in this form that it was embedded in Justinian’s Institutes: Si quis stipuletur alii cum eius interesset, placuit stipulationem valere. If any one stipulates for another, having himself an interest in the performance of the promise, the stipulation has been decided to be valid.19

The granting of a right to the stipulator did not in itself help the third-party beneficiary, except in so far as the possibility of an action by the stipulator might have induced the promisor to perform his promise. Classical law did not allow any formal assignment or cession of rights, though in post-classical law at least it was recognised that the creditor might appoint another as a procurator in rem suam, with a power to bring the action in the name of the original creditor and keep the proceeds of the action for himself. Where the promisee had an action, therefore, it was possible for him in effect to manufacture an action for the intended beneficiary. 16 R. Taubenschlag, The Law of Greco-Roman Egypt in the Light of the Papyri (2nd edn., Warsaw 1955), 307 – 312. 17 H. Ankum, “Une Nouvelle Hypothèse sur l’Origine de la Règle Alteri Dari Stipulari Nemo Potest”, in Études Offertes à Jean Macqueron (Aix-en-Provence 1970), 21. 18 Inst 3. 19. 19. 19 Inst 3. 19. 20.

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If the restrictive approach created difficulties, these could be avoided by the use of a penal stipulatio. Instead of the promisor simply undertaking to pay the third party or do something for him, he might undertake to pay a penalty to the stipulator in the event of his not doing so. No problem would then arise if the action was brought by the stipulator: even on the formalistic approach of classical law he could bring a condictio claiming that the money was owed to him. Nor would any problem arise if the stipulator chose to appoint the intended beneficiary as procurator in rem suam, for the action for the penalty would still be brought in the name of the stipulator.

The Foundations of Mediaval Law The Medieval Ius Commune20 In dealing with contracts for third parties, later Roman law was characterised by a tension. On the one hand there were the restrictively formulated general rules which prevented actions by third party beneficiaries and substantially limited actions by stipulators; on the other hand there was a range of exceptional cases in which the third party was given an action in his own right. The resurgence of Roman law from the late eleventh century provided an opportunity to generalise these exceptions, but the opportunity was largely spurned, both by civilians and by canonists. It needs to be stressed that the Roman rule allowing consensual contracts to be made through a nuntius was not questioned; it was outside these situations that the difficulties arose. Of the early civil lawyers, only Martinus Gosia argued for the acceptance of a general rule allowing an action to be brought by the third party beneficiary. According to the gloss Nulla to C.4.27.1, he recognised that as a matter of strict law the third party acquired no rights, but argued that as a matter of equity (aequitas) he did. It is possible that Martinus was here influenced by a strand of canonist thought favourable to the wider enforcement of promises, though this cannot be proved. Whatever the context of his thought, it was not accepted by his successors. Quod Johanni [sc. Bassiano] non placet, says the Accursian gloss, apparently approvingly, while for Azo the approach of Martinus was simply falsum. A very different picture is drawn by the Accursian gloss itself, crystallising the dominant view of the majority of civilians. The gloss Nihil Agit to Inst 3.19.4 adopts the general principle Alteri Stipulari Nemo Potest, but proceeds to list sixteen exceptions to this, all culled from within the Corpus Iuris. The Justinianic analysis was extended by the medieval civilians at two important points. The first was the extension of the notion of interest to include affective interests (e.g. where there was a family relationship between promisee and benefi20

See the papers of Professors Hallebeek and Dondorp in the present volume.

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ciary) as well as financial interests, thereby allowing the stipulator / promisee to bring an action on a third-party contract in a wider range of circumstances. Taken on its own this would have been of relatively little moment, since it did nothing to give a claim to the intended beneficiary, but the use of the post-classical Roman procuratio in rem suam made it possible for the creditor to assign his right to another. It follows that the medieval expansion of the notion of the promisee’s interest carried along with it an equivalent expansion of the range of cases in which the third party could bring an action. Secondly, the Roman texts which had allowed a beneficiary to bring an action where a promise was made to a servus publicus were held to apply in medieval conditions to promises made to notaries. Given the ubiquity of notaries in medieval Europe, this was a significant shift, providing a generally available mechanism for the creation of enforceable third party rights. These two points of expansion are revealing. They suggest that the orthodox reaction against Martinus’s ‘equitable’ recognition of third-party rights was not brought about by any principled opposition to third-party rights as such, but rather that it was underpinned by a rejection of the willy-nilly creation of such rights. If they were to be created, it had to be done by the right mechanisms. This, perhaps, should not surprise us in so far as we expect the civilian glossators to have regarded fidelity to the Roman texts as a serious goal. More telling, therefore, is the apparent unwillingness of the Canon lawyers to discard the restrictive formalism of the civilians. As Professor Dondorp points out, they were generally inclined towards the belief that men should keep their words; they hence took the view, for example, that nuda pacta should be actionable, contrasting starkly with the civilians’ adherence to the Roman rule of non-enforceability. It would, therefore, have been very easy for them to have adopted a similarly expansive approach to third-party rights. Laurentius Hispanus, apparently, did so, in a comment which came to be incorporated into the glossa ordinaria on Gratian’s Decretum,21 but the main stream of thirteenth- and fourteenth-century opinion was against him, sticking substantially to the Roman base just as the civilians had done. This apparent timidity on the part of the medieval canonists requires some explanation. Like the civilians, they were willing to allow the result that the third party acquired a right of action but they were not willing to follow Laurentius’s line of simply recognising third-party rights. The solution, perhaps, lies in the conception of contract. It involved more than the simple keeping of a word, or even the keeping of a promise; it was the entering into a relationship. And, as with the Romans’ stipulatio, the promisee was not simply a person to whom the promise happened to be addressed, but a central participant in the proceedings. If we think of contract as a mechanism whereby one party acquires rights just as much as it is a mechanism whereby one party takes on duties, then the reluctance to recognise third-party rights becomes wholly comprehensible. It explains, too, why the focus of the canonists’ concerns was on what we would categorise as the question of 21

gl Et Per te to C.1 q.7 c.9.

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agency, whether a promise could be made to the absent third party through one who was present (“per te promitto Sancto Petro”), rather than on the straightforward promise for the benefit of the third party (“promitto tibi me daturum Titio”). This goes some way to making understandable the two significant inroads made by the civilians into the restrictive analysis of the Romans. The expansion of the notion of interest to include the promisee’s affective interests certainly increased the range of situations in which the third party, as procurator in rem suam, could enforce the promise; and there was no problem at all in seeing how it had come about that any rights – here in theory only a right to bring suit in another’s name – had vested in the third party. The case of the notary may have been slightly different; but since it was accepted that a notarised document could pass property to an absent third party,22 the acquisition of rights by the third party was nothing more than a variant case of this.

Iura Propria in the Middle Ages As a matter of theory, neither of the two mechanisms developed by the learned lawyers of the twelfth and thirteenth centuries went so far as to recognise the existence of a direct action by the third-party beneficiary of a promise. One route gave an action to the second-party promisee which could then be assigned to the third party; the other involved the widening of the circumstances in which the intended beneficiary of a promise, though absent at the time the promise was made, would himself be treated as a party to the contract. In practice, though, the effect was to expand the range of situations in which the third party might be able to bring a claim. Iura propria were rather less tentative than the ius commune in recognising explicitly the rights of third parties. This is very clearly visible in the statutes of Italian city-states, though their formulations of the generous rule show an acute awareness of the background of the ius commune. A very early example is the Constitutum Usus of Pisa, dating from around 1160. With overtones of the teachings of Martinus Gosia it was laid down that aequitas should generally prevail over strict law, and that in consequence an action should generally be allowed where a stipu22 G. Louet, Recueil d’aucuns notables arrets, donnez en la cour de parlement de Paris, pris de mémoires de G.Louet et dern. éd., rev., corr., etc. par J. Brodeau, vol. 2, 6th ed., Paris 1620, p. 1153: Ainsi voyons nous en droict, que actio sive stipulatio quae in locum alterius subrogatur, eiusdem potestatis et effectus est, cuius est illa in cuius subrogatur, eius naturam et easdem causas assumit, l. I § Si quis sub condicione, ut leg. seu fideic.nom.cau. [D.36.3.1.14]; l. Si eum.10. § Qui iniuriarum, Si quis cautio. [D.2.11.10.2]; § Fuerat [Inst. 4.6.29] et ibi Ioann. Fab., num.ult. Inst. de act.. More specifically in the edition Paris 1661, p. 453; on which in general: E. J. H. Schrage, Traditionibus et usucapionibus, non nudis pactis dominia rerum transferuntur. Die Wahl zwischen dem Konsens- und dem Traditionsprinzip in der Geschichte, in: M. Ascheri e.a., Ins Wasser geworfen und Ozeane durchquert. Festschrift für Knut Wolfgang Nörr, Köln / Weimar / Wien 2003, p. 813- 858.

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latio was made to a person who was present or absent, and to the intended beneficiary where it was made to one person on behalf of another: Placuit in omnibus causis precipuam esse equitatem, quam stricti usus rationem. Equitati convenire arbitrantes, statuimus, ut si quis alicui presenti vel absenti dari vel fieri sive sibi pro alio, vel eius nomine, aut sibi et alii fuerit stipulatus, etiam is, cui fuerit stipulatus, rem et penam petere possit, nisi stipulatio pene in persona fuerit stipulatoris concepta; tunc solus stipulator penam petere valeat. Hoc constitutum est commune legis et usus.23

Though the consequence appears to be to allow a direct action to a third party, the technique is loosely to do so by constituting the intended beneficiary as a party to the transaction. In purely formal terms it could be said that the prohibition on the creation of third-party rights was being upheld at the same time as it was being subverted by the expansion of the range of circumstances in which a person could be treated as a party to a contract. The same is true, for example, of the Brescia statute of 1252, where it was said that the person or persons in whose name a contract is made should have an action;24 so too in Ferrara it was laid down in 1287 that a person would have an action when a stipulatio was made in his name, even by an extraneus not subject to his potestas.25 Particularly interesting is the Como statute of 1232, which specified that where a promise was made to one person on behalf of another or in another’s name, then that other, and he alone, should be given rights as if the charter or other document had been received by him; moreover, stressing the near total insignificance of the person who had actually received the promise, it was laid down that where the document had said that money had been received by the promisor it was to be presumed in the absence of any express statement to the contrary that it had been received from the intended beneficiary of the promise and not by the actual promisee.26 All of these made it 23 F. Bonaini, Statuti inediti della città di Pisa dal XII al XIV secolo, Vol. II, Firenze 1870, 856. On the question of the role of aequitas in the Pisan legislation, see C. Storti Storchi, Intorno ai Costituti Pisani della Legge e dell’Uso (Naples 1998), 38 – 44. 24 Quod ex omni contractu inito et facto nomine alterius, tam de mercato quam de aliis rebus, acquiratur actio et acquisita sit illi vel illis, quorum vel cujus nomine contractus sive promissio factus est vel facta (Hist Pat Mon XVI (1876) col.1584 (259), 1769). 25 Statuimus ut alter alteri, etiam extraneo et cuius potestati subditus non sit, possit stipulari et acquirere actionem, et omne aliud jus, nomine cujus facta erit tali stipulatio absque alia cessione et ratificatione. [G. B. Pigna, ed.]. Statuta Urbis Ferrariae nuper Reformata. Ferrara, [Francesco Rossi], 1567, II, XCII (p. 87). 26 . . . tantum valeat et prosit illi, ad cujus partem vel cujus nomine facta est vel recepta, ac si illam cartam vel contractum vel obligationem recepisset . . . Item si in aliquo instrumento alicuius contractus, quem aliquis ad partem vel nomine alterius receperit, contineatur illum, qui ipsum contractum recepit ad partem vel nomine alterius, pro illo contractu aliquid dedisse vel solvisse nomine illius, ad cuius partem vel nomine illum contractum recepit, quod illa solutio facta intelligatur de denariis illius, ad partem cuius vel nomine illam cartam vel contractum recepit, et non de denariis suis, nisi in instrumento contineatur, quod de suis denariis propriis et non de denariis illius, ad partem cuius vel nomine illam cartam vel contractum recepit vel illam solutionem fecerit. Et predicta omnia locum habeant vel habere debeant in futuris negociis et factis. (Hist Pat Mon XVI p. 98).

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more or less straightforward to reach the practical result that an absentee gained contractual rights, but all achieved this by making him a party to the contract rather than treating the contract as made between the parties who were present and then going on to recognise that this contract had generated rights for the third party.27 These Italian statutes allow three observations. First, we cannot tell whether they represent a possible borrowing from Byzantine law, a substrate of customary law coming to the surface through legislation, or a deliberate legislative change. The question is an interesting one, but so far as the future development of the thirdparty contract is concerned it is not one with which we need to be concerned. Secondly, the language of the Statutes suggests that they were consciously offset against the Roman civilian rules. Another example, from the same legal-cultural milieu as the Italian statutes, is provided by the relatively limited extension found in s.89 of the Coutume of Toulouse of 1286, which provided that promises for the benefit of third parties were effective to vest rights in them provided they were made in a public instrument (in practice, that is, before a notary) and ratified by the beneficiary.28 Charter evidence suggests that this was a new addition in 1286; and we know that at about this time the learned lawyers in Toulouse were disputing this very issue.29 Thirdly, though the statutes were departing from the rule of the Civil law, they were not following the Canon law; so far as the principles of representation went, by the beginning of the thirteenth century scholars here followed the Civil lawyers’ restrictive approach. Despite the apparent breadth of these Italian statutes, it may be as well to be cautious about the rules’ sphere of application. Philippe de Beaumanoir’s Coutumes des Beauvaisis contains a similar principle giving an apparently wide scope to the enforceability of stipulations for the benefit of another; but as Professor Deroussin points out, the wide provision is immediately followed by a series of examples all of which deal with family relations – a man taking the benefit of a promise made to his wife, his son, or some other member of his household. Timbal’s work on the records of the Parlement of Paris points to a similarly limited scope: by the end of the thirteenth century there are cases which suggest that a les27 N.b. though that not all statutes took such a generous approach. The Liber Consuetudinum of Milan (1216), for example, expressly stated that stipulatory promises for the benefit of third parties were effective only in so far as this was permitted by the leges. 28 H. Gilles, Les Coutumes de Toulouse (1286) et leur Premier Commentaire (1296) (Toulouse 1969), 115: Item, est usus sive consuetudo Tholose quod venditiones, donationes, cessiones, alienationes et promissiones, obligationes de alique peccunie quantitate seu quantitatibus persolvendis et pena et conventiones facta seu facte alique persone seu personis absenti vel absentibus, cum publico instrumento inde confecto, valent tantumdem ac si persone presenti vel presentibus personis facta fuissent sive facte, dum tamen illa persona absente vel persone absentes, cui vel quibus predicta facta erant, vel aliqua de predictis, illa voluerint seu approbaverint postquam facta erant. 29 M. Castaing-Sicard, Les Contrats dans le Très Ancien Droit Toulousain (Toulouse 1959), 425 – 432; cf Responsa Doctorum Tholosanorum q.33 (ed. E. M. Meijers, Haarlem 1938, 72 – 73).

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sor of land could effectively provide that the rent be paid to a third party, but nothing to suggest that there was any wider scope to the principle.30 Clearly there was no implacable opposition to third-party beneficiaries, but equally clearly there seems to have been no widely applied general principle. In the light of this we should consider the apparently all-embracing rule permitting actions by third parties introduced in Castille by the ley Paresciendo, cap. 29 of the Ordenamiento de Alcalà, in 1348.31 A century earlier the Siete Partidas had substantially followed the glossators in allowing only a limited expansion from the Roman law rules, in particular through the use of notaries or court officials.32 The Crown and other public authorities could take the benefit of promises made to their attorneys (personeros), but private individuals could do so only when authorised to do so by the attorney, an obvious analogue of the appointment of a procurator in rem suam in Roman law. If, however, the attorney did not assign the right, the third party would have a claim against him personally, and if this claim turned out to be worthless the beneficiary would be granted an action on his own behalf against the promisor.33 While this did go some way towards allowing the creation of third party rights, it did not go very far. Most importantly, the personero had to be a properly constituted as an attorney to enter into the contract on behalf of his principal; where there was no such formal creation – no carta de personero – the third party beneficiary would not have an action, though the actual promisee himself might do so.34 With its focus on the problem of the absent promisee and the extension of agency, the approach of the Partidas is in line with that of the Italian statutes of the twelfth and thirteenth centuries. The ley Paresciendo of 1348 was rather different: If it appears that someone intends to bind himself to another through a promise, or through a contract, or in any other manner, he is obligated to perform what he promised to do, and he cannot bring as a defence that no stipulation had taken place, i.e. no promise was made in conformity with the formalities of the law, or that the obligation was entered into or the contract was concluded between absent persons. Neither can he bring the defence that between absent persons the promise to give to the other was made in the presence of a public clerk or someone else, a private person, or that he promised to one person to give something or to do something for another person. Beyond doubt the contract is valid, no matter 30 P.-C. Timbal, Les Obligations Contractuelles d’après la Jurisprudence du Parlement (Paris 1973), vol. 1, 315 – 316. 31 As well as the remarks of Professors Hallebeek and Dondorp in the present volume, see their “Grotius’ Doctrine on ‘Adquisitio Obligationis per Alterum’ and its Roots in the Legal Past of Europe”, in: O. Condorelli, ed., Panta Rei: Studi Dedicati a Manlio Bellomo (Rome 2004), II.205. 32 P.5.11.7 (described explicitly as a legislated introduction). 33 P.5.11.8. 34 P.5.11.10. The example given in the Partidas, the promise of payment of a debt owed by B to C, is a clear situation in which the promisee would have had a financial interest in the performance of the promise.

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the way it was entered into, if it appears that someone intended to bind himself to some other person by concluding a contract with him.35

The primary consideration here, clearly visible in the last part of the provision, is more broadly the enforceability of promises. So far as the third-party beneficiary problem is concerned, although recognising the distinction between the case where a promise was said to be made to the beneficiary through a representative and the case where a promise was made to one person for the benefit of another, it does not treat them as different in their results. It therefore marked a substantial break from the Justinianic base which had characterised both the ius commune and the iura propria of the thirteenth century; effectively it was applying the moral principle of pacta sunt servanda to the third-party contract and reaching the more or less natural conclusion that the action should lie at the suit of the intended beneficiary. It is not insignificant that these statutory provisions expressly allowing thirdparty rights are found in regions where the influence of the ius commune was strong; it was in these places that the contrast between ius proprium and ius commune needed to be stressed.36 Outside this region the question seems largely to have been ignored. This does not mean that third-party rights were not recognised elsewhere; on the contrary, we find passing mention of them, but without any suggestion that they were remotely worth remarking upon. A provision of the Très Ancienne Coutume of Brittany, for example, refers to the creation of an obligation by the delivery of property to another on the terms that he should restore it to the deliveror or to another;37 the failure to treat this as noteworthy contrasts with two lengthy passages expressly concerned with the impositions of obligations on third parties.38 Similarly in Flanders the thirteenth-century Livre Roisin displays so little concern for the question that it is easy to gloss over its reference to a citizen undertaking a debt to another citizen either for that other citizen or for an outsider.39 Thirteenth-century Swedish charters provide evidence of sales or gifts of land with a provision that someone other than the donor might redeem the land on the occurrence of some condition or simply on the payment of a certain sum of money.40 We cannot tell whether situations like this were conceptualised in terms of the establishment of third-party rights, but the important point may be that this was not a question which would have occurred to anyone in thirteenth-century Sweden; the Adopting the translation of Hallebeek and Dondorp, “Grotius’ Doctrine”, at 208 – 209. In a different context Mayali came to a similar observation. L. Mayali, Droit savant et coutumes. L’exclusion des filles dotées xiième – xvéme siècles [Ius Commune Sonderhefte 33], Franfurt am Main 1987, p. 15 – 16. 37 M. Planiol, ed., La Très Ancienne Coutume de Bretagne (Paris 1984), 301, § 327. 38 Ibid., 303, § 329; 307, § 333. 39 R. Monier, ed., Le Livre Roisin: Coutumier Lillois de la Fin du XIIIe Siècle (Paris 1932), 51, § 70. 40 K. von Amira, Nordgermanisches Obigationenrecht (Leipzig 1882), 1.363 n.1. See for example Diplomatarium Suecanum (Stockholm 1829 –), 1.642 no.786, 1.672 no.816, 2.231 no.1192. 35 36

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analogous case in thirteenth-century England was no less ambiguous.41 Other examples can be found from Sweden and the Baltic ports of situations which might conceivably have been analysed in terms of third-party contracts; but in none of them is there any hint that such an analysis was in fact adopted.42 Ecclesiastical practice, it appears, would have followed a similar line. Despite the restrictive approach of the formal law, Professor Dondorp shows that from the fourteenth century the procedure of the denunciatio evangelica could provide a mechanism which allowed the effective enforcement of promises at the suit of the intended non-party beneficiary. The failure to perform the promise, whether or not there was any legal remedy, was a sin, and the church might therefore intervene at the suit of any interested party in order to protect the soul of the promisor.

The Early Modern Synthesis of Theory and Practice The complex of changes in the law in Europe between the late fifteenth century and the early seventeenth, once referred to rather crudely in terms of the Reception of Roman law, left its mark on the question of the enforceability of third-party rights. One aspect of this was the willingness of writers in the tradition of the learned laws both to depart from the framework of Justinian’s Corpus Iuris and to mingle almost indiscriminately arguments from Canon law and Civil law. This was especially important in so far as Canonist writers of the late fifteenth century had begun to move away from their earlier conservative position, in which the thirdparty beneficiary was treated as getting no rights, towards a position derived from the gloss of Laurentius Hispanus in which third-party rights enforceable by denunciatio evangelica were expressly recognised. Professor Dondorp identifies Felinus Sandeus (1444 – 1503) as a prime mover in this shift, with its effects visible in the writings of Alciatus and Covarruvias by the middle of the sixteenth century. A second aspect was the confluence of the iura propria with the learned laws of the later Middle Ages. At about the same time as Felinus Sandeus was writing, as Professor Hallebeek shows, Jason de Mayno was arguing that the Civil law recognised thirdparty rights when municipal legislation had provided for this.43 These aspects were not independent of each other. Professor Waelkens, for example, points both to the increasing recognition of third party rights in the forensic practice of courts in the Netherlands in the second half of the sixteenth century and to the mixture of ideas taken from Civil law and Canon law as early as the Topica of Nicolas Everaerts at the beginning of the sixteenth century, arguing that 41 42 43

See Professor Baker’s paper, at n.25. von Amira, Nordgermanisches Obigationenrecht, 1.362 – 363. In Secundi Digesti Novi Partem Commentaria, ad D.45.1.38.17 (ed Turin 1592, p. 74).

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both strands played their part in the formulation of Grotius’s approach in the early seventeenth century. The same mixing can be seen in Spain in the middle of the sixteenth century in the approach of Diego Covarruvias y Lleva, whose most substantial treatment of the law relating to pacts moved seamlessly from Canon law, through Civil law, to the ley Paresciendo of Castille.44 These shifts had a marked effect on the law of contract; the formal stipulatory requirements withered away, to be replaced by a theoretical model of contract depending on the simple agreement of the parties. Time and again in the sixteenth century, writers around Europe contrasted the Roman rules with contemporary practice. The position in Castille, derived from the ley Paresciendo, was made abundantly clear by Antonio Gomez: Hodie tamen de jure Regio nulla requiritur stipulatio in aliquo actu, vel contractu.45

Gomez would go further than this, and not even require a bilateral agreement; in his view, the ley Paresciendo should be interpreted as creating liability out of the unilateral act of the promisor. The Ordenamiento de Alcalà (and hence the ley Paresciendo) had no effect in Valencia, but there too the stipulatory formalities had disappeared by the time of Gomez. His near-contemporary Bartolome de Albornoz, in his work dealing with the practice of contracts, made no mention at all of the stipulatio, defining contract simply in terms of the joint will of two parties and treating their consent – consentimiento – as in itself sufficient to generate a legal obligation. This was not merely a Spanish phenomenon. In the middle of the sixteenth century Charles Dumoulin was quite explicit in his description of the law in France: Hodie in praxi, hae et omnes leges et theoriae de formulis stipulationum supervacuae sunt.46

So too was the Southern Netherlander Matthaeus Wesenbeck, whose Paratitla in Pandectarum Iuris Civilis (1568) gained considerable popularity: Etsi autem hac de re plura subtiliter disputari possunt, tamen modus aliquis adhibendus est, maxime cum hae iuris veteris subtilitates hodie non sint in usu. Nam primum iure pontificio ex quolibet pacto oritur actio . . . Deinde hodie idem obtinet in omni foro ubi ex aequo et bono et ex suprema potestate iudicatur, ut sunt curiae summorum principum, arbitratorum, mercatorum et similium.47

Wesenbeck’s work was influential in Germany, and in the seventeenth century his thesis of the general enforceability of pacts became orthodoxy there too.48 44 Relectio c Quamvis Pactum de Pactis in VI, II.4.2 – 5 (in Opera Omnia (Cologne 1679), 1.396 – 397). Contrast his Variarum Resolutionum, I.14.13 (Opera Omnia 2.98), where the transition from learned law to Castillian law is explicitly marked. 45 Variarum Resolutionum, II.9.3 (ed. Madrid 1794) 2.630). 46 J. Bart, “Pacte et Contrat dans la Pratique Française”, in: J. Barton, ed., Towards a General Law of Contract (Berlin 1990), 125. 47 R. Feenstra, “Pact and Contract in the Low Countries”, in: J. Barton, ed., Towards a General Law of Contract (Berlin 1990), 197, 199 n.11.

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Equally in Italy, in his edition of decisions from Mantua in the late sixteenth century, Joannes Petrus Surdus makes the general point of the actionability of pacts, quoting with unqualified assent Baldus in Rubr. Extra de constit. in prin. [X.1.2]: quod verbum illud, pacta servabo, processit de ore Dei.49 This broadening of the law was, in general, the work of doctrinal writers; though in some places, for example Scotland and Catalonia, it was achieved directly or indirectly by legislation.50 Although the move towards simple consensuality as the basis of contractual liability was found generally in continental Europe, it was the Spanish neo-scholastics who provided the most sophisticated framework for the analysis of what was meant by consensus, explaining it terms of the making of a promise and its acceptance. While hints of their approach can be found in the writings of the glossators and commentators, with yet deeper roots in the Roman pollicitatio, the real source of them was the treatment of the nature of promises in the Summa Theologica of Thomas Aquinas.51 A central question discussed by the Spanish writers was whether the promise was sufficient in itself to generate a legal obligation, or whether it was necessary that the promise should have been accepted. Different writers took different positions on this, and it was only in the early seventeenth century, in the De Iustitia et Iure of Leonard Lessius, that the requirement of acceptance became firmly fixed. Alongside this departure from the Roman formalities of the stipulatio in the practice of courts, the sixteenth century witnessed a similar move away from the strictness of the alteri stipulari nemo potest rule.52 Professor Waelkens makes reference to this in Holland, demonstrating the link between the two changes. The same was true in the southern Netherlands, where in the early seventeenth century the Coutumes of Antwerp and Roermond explicitly contrast the customary rule allowing third-party stipulations with the learned law’s prohibition of them.53 In France, Mornacius was highly critical of the Roman approach, especially in the convoluted form in which they had been discussed in the writings of the glossators 48 K.-P. Nanz, Die Entstehung des Allgemeinen Vertragsbegriffs im 16. bis 18. Jahrhundert (Munich 1985), 100 n.33. 49 J. P. Surdus, Decisiones Sacri Mantuani senatus, Venetiis 1597, Decisio 260 (p. 592); I Birocchi, “Tra Tradizione e Nuova Prassi Giurisprudenziale: la Questione dell’Efficacia dei Patti nella Dottrina Italiana dell’Eta’ Moderna”, in: J. Barton, ed., Towards a General Law of Contract (Berlin 1990), 249, 294. 50 Scotland: W. D. H Sellar, “Promise” in: K. Reid and R. Zimmermann (eds), A History of Private Law in Scotland (Oxford 2000), 2.252, 261 – 262; Catalonia: Birocchi, “Tra Tradizione e Nuova Prassi Giurisprudenziale”, 288, 297 n.243. 51 J. Gordley, Philosophical Origins of Modern Contract Doctrine (Oxford 1991), 45 – 49, 71 – 73, 79 – 82. 52 H. Coing, Europäisches Privatrecht, 1500 – 1800 (Munich 1985), 421 – 430, esp. at 426. 53 P. Godding, Le Droit Privé dans les Pays-Bas Méridionaux du 12e au 18e Siècle (Brussels 1987), 420 (as cited by Professor Waelkens).

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and their successors,54 and attributed some departure from the rigours of its rules to a pair of decisions in the Parlement of Paris in 1598 and 1609,55 while Bernard de l’Automne noted that C.4.27, where the Roman exclusion of the acquisition of rights by third parties was most explicitly stated, was no longer law in France: hic titulus abrogatus est.56 So too generally in Spain, both within Castille (where the ley Paresciendo provided for such rights) and outside.57 The shift in the law in practice, coupled with the theorisation of liability in terms of simple agreements or promises independent of form, had substantial implications for the theoretical reconstruction of the law relating to third-party rights. The main thrust of humanist scholarship was against their recognition;58 and when they were recognised, as by Francis Hotman, they were justified by nothing more sophisticated than an approval of Martinus Gosia’s preference for aequitas over strictum ius.59 Again, it is the Spanish writers who seem to have provided a more properly theorised underpinning. For those writers who had a purely promissory theory with no general requirement of acceptance, the problem of third-party rights vanished entirely; the only relevant party was the promisor himself, and he could choose to confer rights on whomsoever he willed. But the requirement of agreement, or of promise and acceptance in the favoured terminology, locked in place a two-party model of contract. Such a model did not define the question of thirdparty rights out of existence, and while it provided a terminological framework within which the question could be addressed it did not generate any obvious answer. Of central importance is that the analysis of contract in terms of agreement, especially in its deconstructed form of promise and acceptance, removed any requirement that the parties should have been present together when the contract was made. In so far as the problem of the constitution of third-party rights in Roman law and the ius commune flowed from the requirement of the parties’ presence at the making of a stipulatio, the problem simply dissolved away once this requirement disappeared. A person who wanted to undertake an obligation to confer a benefit on an absentee could simply make a promise to that person, and on 54 Mornacius, Observationes in Quatuor Priores Libros Codicis (ed. Paris 1654), ad C.4.50.6: Percucurri scripta omnium, sed nihil profeci. 55 Ibid, ad C.4.27.1. 56 La Conférence du Droict François avec le Droict Romain, Civil et Canon, ad C.4.27 (1615 ed., p. 663). 57 e.g. Gomez, Variarum Resolutionum, 2.11.18 (Castile); de Albornoz, Arte de los Contractos, I.2.8 (f.4v) (Valencia); Alfonso Azevedo, Commentariorum Iuris Civilis in Hispaniae Regias Constitutiones tomi 6, Libro V, Titulo 16, l. 2 (ad Recopilacion 5.16.2 no. 32), Madrid 1612: hodie tamen lege nostra attenta alteri per alterum stipulari permittenti, haec non requiritur cessio, sed directe poterunt agere creditores. 58 Müller, Entwicklung, 73 – 95. 59 Müller, Entwicklung, 96; note also the reference to aequitas as the basis of a claim in the Grand Conseil de Malines, below, at footnote 63.

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acceptance by this beneficiary the contract would be perfected. Moreover, there was far greater scope for direct representation than had been possible in Roman law or in the earlier ius commune, so that the absentee beneficiary could mandate any other person to accept on his behalf and hence make it yet easier to construct a two-party agreement for the benefit of an absentee. What though of the situation where the promise was made to one person for the benefit of another, where the promisee was not simply a representative of the beneficiary? One line of argument, adumbrated by Covarruvias and Molina,60 was that the contract between promisor and promisee was perfected on acceptance by the promisee, but that the beneficiary obtained rights only when he had himself accepted or ratified the promise. Looked at from the beneficiary’s standpoint, it might be thought that since his rights against the promisor derived from his acceptance of the promise it followed that the true source of his rights was the relationship between him and the promisor, and that the contractual nexus between the promisor and the original promisee was analytically irrelevant. This would not be quite true. The contract between promisor and promisee had the important consequence that – as against the beneficiary as well as against the promisee – the promisor was unable unilaterally to revoke his promise. Hence, although the rights of the third-party beneficiary were not yet fully constituted and were vulnerable to revocation by the joint act of promisor and promisee, the promisor’s hands were substantially tied. It was not simply that a second contract was created between promisor and beneficiary collateral to that between promisor and promisee; the original contract was a pactum in favorem tertii, requiring only the consent of the beneficiary to make it fully enforceable. Although the roots of this analysis lay in the learned laws, and more particularly in the Canon law, Covarruvias translated it across into Castilian law through his interpretation of the ley Paresciendo. The question was whether it would give rights to the absentee without any acceptance of the promise on his part; and the answer to this question was that it would not.61 So too where a promise was accepted by one person but the benefit accrued to another; here, although the acceptance perhaps made the promise irrevocable, the beneficiary was held to be 60 D. de Covarrubias y Leiva, Comm. in Cap. Quamvis pactum de pactis, Libro VI, secunda pars relationis § 4, num. 2 and 9: et secuta absentis acceptatione; Variarum Relationum lib. I, cap. 14, n. 12: ubi absenti per alterum actio queritur sine cessione, necessaria est ipsius absentis ratihabitio. L. Molina, De contractibus Tract. II, Disp. 264 (De iustitia et iure opera omnia Tom 2), Coloniae Allobrogorum 1733, p. 32: Inde etiam concessum est ut quidam in particulari stipulari possint pro aliis, acceptareque proinde promissiones et donationes aliais effectas. Et quamvis id operetur, ut donans post eam acceptationem revocare non possit donationem, semper tamen a ratihabitione et consensu donatarii pendet, ut firma omnino sit. (§ 18) Quando stipulanti aut accepienti interest dari aut fieri aliquid, alteri absenti, valida est stipulatio qua ipse id illi alteri stipulatur. (§ 19) Stipulari valide potest in Castella quivis pro alio quando promittens intendit se absenti obligare, non posse revocare promissionem, nostra quidem sententio disputatione praecendente explicata esto nulullus omnino eam promissionem nomine illius acceptasset. 61 Variarum Resolutionum, 1.14.13 (Opera Omnia, 2.98).

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entitled to an action only when he had himself accepted the promise or ratified the initial acceptance. 62 Luis de Molina was attracted by the position taken by Covarruvias, but ultimately dissented from it; for him, since the ley Paresciendo had abrogated all the formal requirements of the stipulatio there was no reason to suppose that there remained a need for acceptance by the beneficiary.63 The difference of opinion about the result is less important than the fact that both saw the question in the same terms, the terms of the learned laws. Although it was in Spain that these ideas were worked out most rigorously, the same phenomenon is seen elsewhere. This easy slippage from the recognition of pacts to the recognition of rights vesting in an absent party is well illustrated by a decision given in Leipzig in 1574. By written instrument, a group of noblemen undertook to one man (who was present) to pay money to another; it was held that it was the intended beneficiary who was the proper person to bring an action for the money. Neque enim spectandum est cum quo quis loquatur: sed in quem voluntatis intentio dirigatur.64 Marking the culmination of these continental European movements of the sixteenth century were the works of Hugo Grotius. As Professor Waelkens argues, it is likely that Grotius was influenced by knowledge of the practice of the courts in the Netherlands in his easy recognition of third-party rights. This may perhaps be seen in his Inleidinge tot de Hollandsche Rechtsgeleerdheid, where the departure from the firm Roman rules is justified in terms of a preference for billickheid over scherpheid van rechten, reflecting Martinus Gosia’s favouring of aequitas over strictum ius and also the aequitas canonica used to ground a third party’s claim in the Grand Conseil of Malines in the sixteenth century.65 By contrast, the treatment of the subject in the De Iure Belli ac Pacis was strongly influenced by the analysis of Covarruvias, whose Relectio on the Sext 1.18.2 was cited by Grotius in the margin of his text.66 The normal rule, as for Covarruvias, was that a contract was created by the acceptance of a promise, and it did not matter whether the acceptor was present or absent. Against this background Grotius dealt with three distinct situations raising the controversial issue of third-party rights. First was the simple pactum in favorem tertii, where one person accepted a promise in his own name for the benefit of another. Roman law would have said that the acceptor obtained a Ibid. Disputatio 263 no.9 (in Opera Omnia (ed. Cologne 1733), 2.27. Contrast the more traditional analysis of Gomez (who saw liability in unilateral promissory terms): where the promise was directed towards an absent person, the ley Paresciendo generated an action in him immediately; where the promise was directed towards one person for the benefit of another, the promisee was granted an immediate right but the beneficiary would have a claim only after this had been assigned to him (Variarum Resolutionum, 2.11.18). 64 J. Thomingius, Decisiones Quaestionum Illustrium (Leipzig 1579), dec. 34 no. 3 (p. 483). 65 A. Wijffels, Qui Millies Allegatur (Amsterdam 1985) 1.249, as cited by Waelkens. 66 De Iure Belli ac Pacis, 2.11.18 (ed. B. J. A. de Kanter – van Hettinga Tromp, with additional annotations by R. Feenstra and C. E. Persenaire, Aalen 1993, 337). 62 63

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right only if he had an interest, but Grotius stated that this was no longer the law. The acceptor therefore received a right which he could transfer to the third-party beneficiary, provided that he also accepted it. In the meantime, the promisor could not unilaterally revoke the promise, though the acceptor (in whom the right was vested) had the power to release it. Second was the case of direct representation, where a person had been mandated to accept a promise in another’s name. Roman law had restricted direct representation to slaves and others in the potestas of the beneficiary, but, said Grotius, this restriction no longer existed and anybody might be authorised by another to accept a promise on their behalf. In such a case the right vested immediately in the person on whose behalf the promise had been accepted. Third was the situation where acceptance was made in the name of the beneficiary, but by a person acting without authorisation. No right vested in the beneficiary until he had himself accepted the promise, but neither, it seems, did any right vest in the acceptor. None the less, until the beneficiary had accepted or rejected the promise the promisor had no power to revoke the promise, nor did the acceptor have any power to release it – he had not received the promise for his own benefit or on his own behalf, and it would be contrary to good faith were it to be released. Alongside this, Grotius dealt with the donatio sub modo, applying the same principle as he had identified as lying behind the pactum in favorem tertii and saying that a burden placed on the donee of a gift in favour of a third party could be revoked so long as it had not been accepted by the third party.67

Post-Grotius Grotius’s treatment of the question of contracts for the benefit of third parties in the De Iure Belli ac Pacis, complemented by that in the Inleidinge, can be seen as marking a watershed in the thinking on the topic, at least in the sense that he summarised in a few brief sentences the developments of the previous century or more. In the Netherlands, Johannes Voet, Arnold Vinnius, Simon Groenewegen van der Made, D. G. ven de Keessel and Johannes van der Linden all straightforwardly accepted the actionability of contracts in favour of third parties; and case law, such as no. 2792 of Cornelius van Bynkershoek’s Observationes Tumultuariae, shows the application of the same line. That said, his successors did not simply adopt his framework of analysis and build on it. While his work was a recurrent point of reference for lawyers in the following two centuries, it was just a point of reference rather than a starting point. Professor Deroussin, writing primarily about French law in the eighteenth century, refers to ‘une relative confusion’ between subtly different legal institutions, particularly between notions of representation and thirdparty benefit contracts; the same point could probably be made about the law in any continental European legal system. 67

De Iure Belli ac Pacis, 2.11.19 (ed. cit. 337 – 338).

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By the time of Grotius European legal practice generally recognised three points which differed from Roman law: informal pacts were generally actionable; there were no restrictions on the enforceability of contracts made between absentees; and there was a broad principle of direct representation allowing one person to be mandated to enter into a contract in the name of (or on behalf of) another. With these three points in place, many situations which would have been problematic in Roman law fell easily within the general principles of contractual liability. Outside these principles, Grotius had recognised in the De Iure Belli ac Pacis two distinct situations: unauthorised agency, where one person accepted a promise in the name of another without any mandate or other legal authority to do so; and the ‘true’ third-party benefit contract in which a person accepted a promise in his own name but for the benefit of another. In both of these cases the third party could obtain an enforceable right, but only when he had accepted or ratified the promise. The only difference between the two situations, apart from their logical form, was that in the latter case the person accepting the promise had the power to release it before acceptance by the third party, whereas in the former case he did not. It was hardly a very substantial difference, and it is easy to see why later lawyers tended rather to gloss over it. The development in the German territories, as described by Professor Pennitz, provides a clear example of the confusion. In the first generation of scholars of the Usus Modernus, Schilter, Brunnemann and Stryk went little further than to say that it was no longer the law that one could not acquire a right for another. In so far as they provided a source for this change from the Roman rule it was a decision of 1656 from the supreme tribunal of Wismar reported by David Mevius, itself referring back to a case of 1571; but these, as Professor Pennitz shows, were dealing with the more straightforward situation in which a loan of money made by one person was specified to be repaid to another, a situation in which even classical Roman law had allowed an action to the third party. Schilter, Brunnemann and Stryk seem to be thinking in terms of unauthorised agency, with the rights of the beneficiary vesting when he ratifies the act done in his name by the acceptor. Their successors, by contrast, seem to have thought more in terms of the pactum in favorem tertii, where the acceptor accepted in his own name but for the benefit of the other: the beneficiary did not ratify the act done in his name, but accepted the promise made for his benefit. None the less, they still allowed that the promise be remitted by the acceptor before the beneficiary had accepted it, applying Grotius’s analysis of unauthorised agency to the genuine third-party benefit contract. Complementing this uncertainty, there was no consistency in the codifications of the late eighteenth and early nineteenth centuries; the fact that the codes of Bavaria (1756), Prussia (1794) and Austria (1811) were rooted in broadly the same Natural law theory did not mean that they adopted broadly the same approach. In Bavaria the third party gained a right when he accepted the contract or ratified it; in Prussia the third party’s right depended on his adherence to the original contract, with the consent of the original contracting parties; and in Austria all that was necessary

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was that the third party be given notice by the promisor or promisee. To add to the confusion, as Professor Pennitz shows, even where there was a clear line taken in the code of some state it did not follow that the case-law would follow the same route. It might have been expected that Grotius’s influnce might have prevented this degree of confusion in Holland, but it did not.68 Simon Groenewegen, for example, stated simply that contemporary practice – mores hodierni – allowed obligations to be acquired by stipulating for others, without specifying precisely when or how this occurred.69 He justified this proposition by reference to both the De Jure Belli ac Pacis and the Inleidinge of Grotius, and also to the Spaniards Covarruvias, Gomez and Gutierrez and to the Savoyard Antoine Faure (Antonius Faber), going on to relate it to the commercial practice of allowing third parties in possession of mercantile documents to bring actions on them. Vinnius was little better. Like Groenewegen, whose De Legibus Abrogatis he cites alongside Grotius’s De Jure Belli ac Pacis, his Commentary on the Institutes goes little further than saying that modern practice followed the Canon law rule in allowing obligations to be acquired through third parties.70 As his reasoning proceeds from the Roman servus publicus and the medieval notary public, we might guess that he is moving outwards from an analysis dependent on agency; but this is not made explicit, and there is no indication that it might be important to know whether the agent was authorised to act or not, nor whether rights could be acquired independently of agency. Alongside this Vinnius also stated that a stipulatio in favour of a third party would be valid if it was attached to a natural act, such as the handing over of property, thereby moving together the Roman lawyers’ donatio sub modo and mutuum nomine alterius.71 Elsewhere he adopted a rather different analysis of the donatio sub modo, seeing it as a sort of fideicommissum, but one created by contract rather than will, by analogy with the testamentary gift to one person with a gift over to another.72 Voet, in his treatment of the stipulatio, simply follows Groenewegen in saying that modern law recognised the stipulatio in favour of a third party, allowing the principal to bring an action on the promise made to his procurator.73 That he too is probably thinking in terms of agency is rather confirmed by his making the same point in the context of his discussion of mandate: where the mandatee acted in the name of the principal, the latter was granted an action in his own right without any assignment; where the mandatee acted in his own name the principal could claim against the promisor only if the right was assigned to him.74 68 Moltzer, De Overeenkomst ten Behoeve van Derden, p. 239 – 240; 249 – 251; Müller, Entwicklung, 98 – 110. 69 S. Groenewegen, De Legibus Abrogatis, ad Inst 3.20.19. 70 A. Vinnius, Institutionum Imperialium Commentarius, ad Inst 3.20.4 no.3. 71 Ibid, ad Inst 3.20.4 no.4. 72 Vinnius, Tractatus de Pactis, 15.11. 73 J. Voet, Commentaria ad Pandectas, ad D.45.1 no.3. 74 Ibid, ad D.17.1 no.9.

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But nowhere is it made explicit in precisely what circumstances the third party might acquire the action. Independently of this discussion, Voet also dealt with the modern equivalent of the donatio sub modo, analysing it as a fideicommissum inter vivos in much the same way as Vinnius had done in his De Pactis.75 In the eighteenth century the broad and imprecise formulations of the seventeenth-century writers were being tightened up: as a general rule, in the absence of a mandate contractual rights could be obtained for third parties only if they themselves consented.76 The French law described by Professor Deroussin is no model of clarity, though there is perhaps more coherence in its lines of development than we see in either Holland or the German territories. The central idea, stated explicitly by Domat and finally embedded in Art 1119 of the Code Civil, is that contractual rights depend on the joint consent of the parties, so that in principle an independent third party could not directly gain rights under a contract.77 Claude Serres’ treatment of the topic, in his Institutions du Droit François, holds true to this line. The basic rule is that one cannot stipulate for another, but French law does recognise the act of an agent; hence a person is a party to a contract when it is made by someone mandated by him (his procureur fondé) or recognised by law as having the power to contract (e.g. a parent for a child), or when it is made in his name by some unauthorised person and subsequently accepted and ratified by him.78 This is very much the agency analysis of Grotius – though stated more precisely than by the later Dutch writers – but it is not Grotius who is cited as the source of it: Serres goes back before him, to the early seventeenth-century commentary of Antonius Mornacius, who had signalled the departure from the Roman rules in French practice.79 Pothier’s treatment, as described by Professor Deroussin, was broadly the same if rather more sophisticated; though unlike Serres he does refer explicitly to Grotius’s analysis in the De Jure Belli ac Pacis.80 As well as this strongly agreement-based approach to contracts, French lawyers also discussed the donatio sub modo, though in terms rather different from the Dutch writers. Though the topic had been covered by Grotius in the De Iure Belli ac Pacis, the French development in no way stemmed from this; its independent roots can be traced back to Bartolus’s commentary on D.45.1.122.2 (which Grotius himself had cited in the margin 75 Ibid, ad D.36.1 no.9. See too S. van Leeuwen, Censura Forensis, 4.12.18: ‘quasi ad fideicommissum vergat’. 76 D. van der Keessel, Theses Selectae, no.510; J. van der Linden, Institutes of Holland, 1.14.3. 77 CC Art 1119: On ne peut, en général, s’engager, ni stipuler en son propre nom, que pour soi-même; and cf Art 1165. Domat, Loix Civiles, 1.1.2.3; Locré, La Legislation Civile, Commerciale et Criminelle de la France (Paris, 1827 – 1832), 12.321 (Bigot-Préameneu), 12.554 – 5 (Mouricault). 78 Institutions du Droit François, ad Inst 3.20.4. 79 Mornacius, Observationes in Quatuor Priores Libros Codicis, ad C.4.50.6. 80 Traité des Obligations, 1.5.1, § 55.

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of his text), through the mid-sixteenth-century French jurist André Tiraqueau, to the Pisan Andreas Fachinaeus who had brought together the divergent opinions of the learned lawyers on the subject.81 By the beginning of the seventeenth century, discussion was being framed in terms of the question whether a provision in a gift to one person that another person should be substituted in his place on the occurrence of some condition was recognised in French law, and if so whether the first donee could effectively alienate the property and defeat the second gift.82 It was still in this form that the question was being discussed in the eighteenth century, especially in terms of its interaction with the Ordonnance des Donations of 1731 and the Ordonnance Concernant les Substitutions of 1747. Pothier devoted considerable space to it,83 giving the arguments on both sides of the controversy (and using the fideicommissary language of the Dutch writers), himself coming down in principle in favour of the recognition of the rights of the substitute.84 The drafters of the Code Civil took this line too, enshrining it in Art 1121 with a requirement that the substitutionary gift would become irrevocable only when the beneficiary had declared his intention to accept it.85 They were closely followed by the eventual drafters of the Dutch Civil Code of 1838, who preserved an almost literal translation of Art. 1121 C.C. They thus departed from from the old Dutch indigenous law dating from before the French Revolution: they did not adhere to the doctrine of the validity of the contract in favour of a third party flowing solely from an offer and acceptance between the parties to the contract, nor did they follow the opinion in which the acceptance by the third party was both a necessary and sufficient condition for the binding force of the contract. The difference between the decision of the Dutch Supreme Court of 27 October 1733, reported by van Bynkershoek, and a very similar case decided in 1924, is very striking. Titius and Maevius, as van Bynkershoek called the parties to the contract, had reached an agreement, that Titius would pay periodical instalments to three aunts, living abroad. Upon the death of Maevius Titius refused to continue his payments, but the Supreme Court gave judgment for the aunts. In 1924 a brother and sister divided the inheritance of their father and agreed to make monthly payments to his sisters. The Dutch Supreme Court declared the agreement not actionable, since the parties had not contracted for themselves, nor had the beneficiaries declared their intention to accept the payments. Generally speaking, the Dutch case law under the Dutch Civil Code of 1838 was slightly more generous to the beneficiaries, but Controversiae, 8.89. Louet, Recueil d’aucuns Notables Arrests donnez en la Cour du Parlement de Paris, S 9, Des Substitutions Contractuelles. 83 Traité des Obligations, 1.5.3, § 73; Traité des Substitutions. 84 The point was more or less academic in practice, since the Ordonnance Concernant les Substitutions (1747), part 1, arts. 11 & 12, had already enacted this prospectively. 85 On peut pareillement stipuler au profit d’un tiers, lorsque telle est la condition d’une stipulation que l’on fait pour soi-même ou d’une donation que l’on fait à un autre. Celui qui a fait cette stipulation ne peut plus la révoquer, si le tiers a déclaré vouloir en profiter. 81 82

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legal practice encountered similar problems to French law, such as the actionability for the party to the contract (point d’intérêt, point d’action) and the moment from which the remedy lies. The New Dutch Civil Code, however, returned to the Grotian system, as DuPerron’s contribution to this volume shows. Although there is a degree of confusion in all of these developments, they share a pattern. All depended on a bilateral analysis of contracts, with the requirement of promise and acceptance; all recognised some departure from the stipulatio alteri non potest rule of Roman law, gravitating towards an agency-based treatment of third-party rights to justify this; and all adopted some different mechanism for dealing with the donatio sub modo. Scotland, though belonging substantially to this world, took a rather different course.86 Here, by the end of the sixteenth century it was clearly recognised that liability could arise out of a simple promise without any need for acceptance; hence an agreement between two parties that a benefit be conferred on a third could be interpreted simply as a promise in favour of the third which could be effective without any acceptance on his part. Though the theorised version of this is found most strongly in Viscount Stair’s Institutions , the rule is not dependent on him; it was already found in the case-law from the 1590s. Given the strength of the Canon law in Scotland in the later sixteenth century it is possible that there was some influence from the continental ius commune, but this is nowhere stated: the only source stated by Stair, Disputatio 263 the De Iustitia et Iure of Luis de Molina, was not really in point – it dealt generally with the need for acceptance of a promise, not with third-party rights, and may in fact be a blind reference lifted straight from the De Iure Belli ac Pacis – and it was not published until 1599, a few years after the first decision on the point which has been traced. Moreover, although Stair’s line was followed right into the twentieth century, from not long after his time there is as well a contradictory stream of authority denying rights to third parties, or limiting them to particular circumstances. The arguments and decision in Hill v. Hill 87 may provide a pointer towards some reason for this: in a case involving family relations there was far greater concern with the social question of paternal power over children than with the niceties of legal doctrine. But practical considerations of this sort are only a partial explanation. Lord Kames, for example, was far more influenced by theoretical issues in the third edition of his Principles of Equity, where he adopted an analysis similar to that found in continental Europe at the time, normally allowing legally enforceable third-party rights only if there was a situation of agency but recognising also the donatio sub modo as a form of fideicommissum or trust. There may, too, have been some influence from England, where Equity and the law of trusts had a considerable part to play.

86 87

See the contribution of Professor MacQueen and Mr Sellar in this volume. (1755) Mor 11,580.

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England English law had to face the same problems as other European systems, though it reached rather different solutions. There are three main reasons for these differences: its approach to formal contracts, which continued to occupy an important place right up to the eighteenth century; its remedial structure for informal contracts; and the intervention of the Court of Chancery and the rules of Equity. English law in the Middle Ages had a strong parties-only principle, but it was a principle whose home was in the law of sealed deeds rather than the law of contract. Professor Baker traces this at least as far back as Bracton’s treatise in the second quarter of the thirteenth century; it was to remain firmly in place as a rule specific to the law of deeds until the nineteenth century. However, since most important contracts until the eighteenth century were made by use of a sealed deed, it followed that the law relating to deeds played a very significant part in the moulding and operation of contractual remedies more generally. On a superficial reading, therefore, so far as contracts under seal are concerned the medieval English Common law might seem to have stuck more closely to the Justinianic law which lay behind Bracton’s analysis than those regions in which the ius commune had a greater influence. This is largely a matter of appearances. Since English law knew no rule that the parties to a deed had to be present together, there was no difficulty in constituting a deed in favour of an absentee beneficiary. In the case of deeds inter partes, i.e. where the document itself specified who the parties were, all that was needed was that the intended beneficiary be named as a party. While the person undertaking the obligation had to put his seal on the document, there was no such requirement in the case of the beneficiary: naming was sufficient. Deeds poll, i.e. unilateral documents in which only the person obliged was named, were yet more flexible. Here, by the end of the thirteenth century, any person named as a beneficiary was interpreted as a party. Paradoxically, it was precisely because the Common law differed from the ius commune in not requiring the physical presence of all parties to the contract that it was possible for it to retain the strictness of the ius commune rule that non-parties were unaffected by it. Informal contracts were more problematic. In the Middle Ages we find no clear rule here that third-party contracts were ineffective, but, as Professor Baker shows, the abstract idea of contract was so fuzzy that it would be wrong to put too much weight on this. In practice, the structure of remedies would have made it very difficult, and perhaps impossible, to construct a remedy for a third party. The writ of debt, the principal remedy on informal contracts after about 1300, was sufficiently closely tied to relations of reciprocity that there was little scope for its use outside narrowly bilateral transactions. There may have been situations in which the Common law gave a remedy which a civilian or canonist would have thought of in terms of third-party contractual rights, but they were not so analysed by the Common lawyers. Where one person gave goods to another to be transmitted to a third, the third might have a writ of detinue against the recipient; but detinue occupied a

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place straddling the learned lawyers’ categories of property and contract, and the claim of the beneficiary here could more straightforwardly be justified as being based on his being the owner of the goods than his having a claim on the contract between donor and donee. If it was money that was given, the third party’s remedy would be a writ of account; but this too was substantially based on quasi-proprietary reasoning. As elsewhere in Europe, the sixteenth century marked a substantial change in English contract law. At a general level, changes in the nature of pleading and the legal process brought about an increasing focus on substantive legal doctrine rather than simply on the forms of action. More specifically, the development of the action of assumpsit created a general remedy for the breach of informal contracts. There are some suggestions by the end of the sixteenth century that the English Common law was moving towards the adoption of a parties-only rule for informal contracts as well as formal ones; but the action of assumpsit was, at least in form, based on a unilateral promise, and – exactly as happened in Spain and in Scotland – it was not easy to reconcile a rejection of third-party rights with such a promissory model of contract. In the specific conditions of the Common law, as Professor Baker argues, even if there had been such a rule it would have been easily avoided in practice simply by alleging that the promise had been made to the person bringing the action and leaving it to the sense of the jury to give a verdict for the plaintiff if justice so demanded. Alongside this, or instead of it, the Common law used a rather different rule to limit the range of the action of assumpsit, a rule that the proper person to bring the action was the person who had provided the consideration, or, more accurately, the person from whom the consideration had moved. Such a rule is found stated as early as 1575, and it appears with increasing firmness through the seventeenth century. It would be a purely semantic question to ask whether it was an alternative to the parties-only rule or a version of it, in which the contractual link was constructed between the promisor and the person from whom the consideration had moved; in practice, they amounted to the same thing. The case-law shows a degree of uncertainty through most of the seventeenth century, but after the watershed decision in Dutton v. Poole in 1679 – 80 it was the rule that the consideration must move from the plaintiff which came to predominate, so much so that by the early years of the eighteenth century judges and legal writers were beginning to take a very relaxed approach to the purely formal question of third-party actions. There was still a degree of confusion – the doctrine of consideration was not itself wholly straightforward, and there remained a question whether family members who had not themselves provided the consideration could be ‘brought within the consideration’ provided by another member of the family – but the contrast between the relative mass of the case-law described by Professor Baker for the seventeenth century and the relative paucity of the case-law described by Professor Ibbetson and Dr Swain for the eighteenth strongly suggests that the rules were working more or less smoothly after Dutton v. Poole.

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There were three main reasons for the stability of the English Common law in the eighteenth century, and for the differences between it and the other European legal systems which has been examined. First was that the rules were workable, and if they lacked doctrinal subtlety it was only in the late eighteenth century that English lawyers began to concern themselves with this. Second was the continued vitality of the contract under seal, whose rules were sufficiently flexible that it was very easy to make an intended beneficiaries party to the contract simply by naming them as such. Third, and most important, was the role of the Court of Chancery and the principles of Equity. As Dr Jones shows, Equity was beginning to play its part alongside the Common law as early as the fifteenth century. Where one person had made a contract with another for the benefit of a third, without naming the third as a party, the Court of Chancery might provide a remedy to the third against the second to force him to bring an action at Common law; alternatively, it might force the second to execute a warrant of attorney to allow the third to bring the action in the name of the second; most radically, it might simply grant the third party an action on the contract against the first in his own name. We can see in these latter cases genuine examples of contractual claims by third-party beneficiaries. The other two forms would in practice have had the same consequences, so long as the promisee (in whose name the action at law would be brought by the third party) was entitled to substantial damages. Here, in the absence of a sealed deed creating a debt, there was a potential difficulty, for the aim of damages in the action of assumpsit was to compensate the plaintiff for his losses and if the promise had been to do or give something to a third party there would have been no losses to compensate. Whether the difficulty was more than potential we cannot know, for until the middle of the nineteenth century the assessment of damages was peculiarly a matter for the jury and we have no way of knowing whether or not they followed the rule strictly; and by the time that the rule became both fixed and effectively enforceable its strictness was being undermined by a whole set of exceptions.88 We should, though, be wary of saying that there was any general Chancery rule granting remedies to third parties, since it was not until the end of the seventeenth century that the practice of the Chancery began to harden into fixed rules at all. In fact, the cases analysed by Dr Jones suggest that there might rather have been discrete situations in which the Chancery might intervene, most notably promises of marriage settlements and ‘Dutton v. Poole’ cases where an heir promised to make provision for other members of the family out of property descending to him from his ancestor. These two situations came by the eighteenth century to be analysed in terms of the law of trusts, falling straightforwardly within the core jurisdiction of the Chancery; in the former case the person making a promise of a marriage settlement could be seen as a trustee of the property promised, in the latter the heir received property from his ancestor burdened with a trust in favour of the other family members. No longer need these situations be seen as 88 D. J. Ibbetson, A Historical Introduction to the Law of Obligations (Oxford 1999), 244 n.167.

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examples of third-party beneficiaries bringing claims on contracts; they could be re-analysed in the proprietary language which came to be characteristic of the eighteenth-century law of trusts. There remained a residuary type of case in which the language of trusts was not appropriate, though only one example, Tomlinson v. Gill, has been found in the whole of the eighteenth century. Yet even cases of this sort could be squeezed into the straitjacket of the language of trusts: nineteenthcentury lawyers would say that the promisee was a trustee of the promise on behalf of the beneficiary. There was now little or no place for Equitable rules expressed in terms of the granting of contractual rights to third-party beneficiaries. In the nineteenth century English law discovered its general principle of not allowing contractual actions to third-party beneficiaries. The classic statement of the rule has normally been attributed to Tweddle v. Atkinson in 1861, though careful comparison of the different reports of the case suggest that it might not have been quite as clear-cut as might once have appeared. But the change in perception did not depend on a single case so much as on a reorientation of the law. From the second half of the eighteenth century English lawyers had come to analyse the law in terms of substantive categories rather than the forms of action. We begin, therefore, to find a ‘law of contract’. Writers on this law of contract, most visibly Charles Greenstreet Addison, dealt primarily with formal contracts when discussing the question of the rights of third-party beneficiaries, and allowed the rules to seep across from here into the section dealing with informal contracts, thereby generalising and strengthening the rule that no action lay to a non-party beneficiary. The practical effect of this was most marked on informal contracts. So far as formal contracts were concerned it was still as easy as it always had been to turn a person into a party simply by naming them as such; but informal contracts had now come to be seen as bilateral relations, based on offer and acceptance, rather than as unilateral promises, and as a result the only way in which an intended beneficiary could be made a party was by directing an offer to them and their accepting it.

The Modern Law By the middle of the nineteenth century European legal systems generally recognised a principle of agency which enabled one person to enter a contract in the name of another. This was straightforward where the agent had been authorised to act in advance, but most systems recognised too that a person might gain enforceable contractual rights when another had acted in his name without being authorised to do so, provided that he had subsequently accepted or ratified the contract for himself. What was not accepted – except, perhaps, in Scotland – was any general rule that a third party might gain contractual rights where a promise had been made to another in his own name but for the benefit of a third. This is not to say that third-party rights were never recognised, but rather that when they were recognised it was as an exception to the general rule. The French Code Civil, and

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following it the Dutch Code of 1838 and the Italian Code of 1865, provided that a third party’s rights should be given legal effect where they were formulated as a condition of the rights of a true party to the contract,89 reflecting and generalising the old law of the donatio sub modo. In Germany it was said that customary law allowed that a condition in favour of a third party could effectively be attached to an alienation of rural property, to an agreement to partition family property, to an annuity contract and to a range of other cases. In England by this time a good deal of work was being done by the law of trusts: where identifiable property was involved either by a declaration of trust or by the transfer of the property subject to a trust, and where there was no property by allowing the beneficiary to claim that the promisee was trustee for him of the right arising under the promise. As Professor Pennitz argues, the turning point came in 1869, with the publication of a highly influential article by the Austrian Josef Unger, though his article was to some extent prefigured in Windscheid’s Lehrbuch des Pandektenrechts, the first edition of which had appeared in 1865. Departing from the orthodox dogmatism, Unger argued that an agreement between two parties might have the immediate and automatic effect of creating a right in a third party, without the need for any acceptance or ratification on his part. Only a few years after this, in 1881, the Swiss Obligationenrecht adopted at least the primary conclusion of Unger in recognising that the third party might get an enforceable right if this was the intention of the contracting parties or if it was the custom that he should do so.90 It did not go the whole way, though, for it was only after the third party had indicated his intention to take advantage of his right that the promisee ceased to be able to release the promisor. After the publication of Unger’s article the German Reichsgerichts began to recognise independent rights in third parties, i.e. rights dependent neither on agency nor on assignment. More important, perhaps, was Windsheid’s support, which gave publicity to the theory and also ensured that it was at the centre of the debates on the topic leading to the enactment of the BGB in 1896. § 328 gave full force to Unger’s theory: an agreement in favour of a third party might validly be created, the existence and precise terms of that right depending exclusively on the intentions of the original contracting parties. The influence of Unger’s theory extended into his own homeland too: in 1916 the original Art 881 of the Austrian Civil Code, which had refused rights to third parties, was replaced by a clause expressly permitting them. Professor Deroussin shows a similar reversal occurring in France, though there the lead might have been taken by legal practice. From about 1850, most notably in the context of life insurance contracts,91 legal practice began to move in the CC Art 1121 (France); BW Art 1353 (Holland); CC Art 1128 (Italy). OR Art 128 (= OR 1911 Art 112). 91 M.-L. Izorche, “Les Effets des Conventions à l’Égard des Tiers: l’Expérience Française”, in: L. Vacca, ed., Gli Effetti del Contratto nei Confronti dei Terzi nella Prospettiva Storico-Comparatistica (Turin 2001), 71, 84 n35. 89 90

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direction of the recognition of third-party rights, notwithstanding the apparently rigid language of CC Arts 1119 and 1165. By the end of the nineteenth century, legal scholars were arguing in favour of a reversal of the orthodox rule; especially influential here was the thesis of the comparatist Édouard Lambert.92 None the less, the degree of flexibility was limited as a result of the provisions of the Code Civil. A degree of loosening was achieved by the rediscovery of the Justinianic principle that a contract in favour of a third might be valid if the stipulator himself had an interest in the promisor’s performance, a principle formally enacted into the Italian Codice Civile in 1942.93 But beyond this the rules of the Code Civil remained formally intact, leaving contemporary scholars to continue the debate about the rationale behind them. At the same time, French law did come to recognise a considerable range of situations in which third parties might gain rights, most notably in life insurance contracts and in liability insurance contracts taken out by employers in favour of their employees (a situation, we might note in passing, which had been explicitly introduced into the redrafted Swiss Code of Obligations in 191194). The development of the law in England (and also in Scotland after 1920, when the House of Lords in Carmichael v. Carmichael’s Executrix went a long way towards approximating Scots law to English law) was in many ways similar to the French. As Dr Swain shows, until the enactment of the Contract (Rights of Third Parties) Act of 1999 the Common law maintained its stance against third-party rights, though scholars through the nineteenth and twentieth centuries continued to dispute about the desirability of the rule and even about exactly what the rule was. But, as in France, against this background of a restrictive attitude to thirdparty rights the law developed a number of exceptions – especially, though not exclusively, in the context of insurance contracts – whose effect was to ensure that in those situations where it was commercially necessary to allow actions by third parties the law provided a mechanism to do so. In addition, the effects of the restrictive stance of the Common law continued to be mitigated by the law of trusts, by the relative simplicity of making the intended beneficiary of a contract a party to it without the need for any acceptance on his part, and by a host of other procedural devices which allowed actions on the specific facts of some particular case.

92 93 94

E. Lambert, La stipulation pour autrui, Thèse Droit, Paris, 1893. CC Art 1411. OR 1911 Art 113.

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Common Themes Generality and Specificity The survey of the history of third-party rights reveals a number of common themes. Fundamental is that raised explicitly by Professor Visser and Ms Cook in dealing with the recent history of South African law, that at least some part of the confusion which has afflicted the law in this area has been the attempt to formulate a general principle which covers a number of rather disparate situations, each of which raises its own particular problems. The tension between the search for a general principle and the resolution of specific problems is neither a new one nor one which is limited to South Africa. It is already visible in thirteenth-century France, when the broad general rule of the enforceability of third-party rights in Beaumanoir’s Coutumes des Beauvaisis is immediately, if implicitly, qualified by the narrow range of illustrative examples given; similarly in the Netherlands in the seventeenth-century the general rule is justified by reference to the very specific situation of the negotiable mercantile document; and much of the motive force for the development in the nineteenth century seems to have been provided by the desire to explain the effectiveness of life insurance contracts. The same phenomenon can be seen from the other side, in the glossators’ recognition of a wide range of exceptions to the prohibition of stipulations for another. We might reasonably suppose that at least some of the confusion which has bedevilled attempts to deal with third-party contracts has been the result of trying to express the rule – either positively or negatively – at too grreat a level of generality.

Third-Party Rights and Other Legal Rules A second theme is the difficulty of trying to understand the problem of thirdparty rights in contract without considering the context of other rules of law and legal institutions. This is easily visible in the contrast between German law and English law in the twentieth century as described by Professor Schermaier and Dr Swain. No comparison between the broad German rule of BGB § 328 and the narrow English rules of pre-1999 privity of contract can make sense if it ignores the relationship between those rules and the law of tort in each system. Equally, it is quite impossible to make sense of the English rules, from as early as the fifteenth century, without taking into account the law of trusts; no more can we understand the contract rules in seventeenth-century Holland and elsewhere without relating them to the fideicommissum inter vivos, or the Roman rules if we ignore the donatio sub modo. Procedural rules might also be important. If, as in England, a system recognises mechanisms to allow one person to bring an action in the name of another without any formal mandate from the other, then the problem of the enforceability of third-party rights is largely solved, however firm the rule that contracts create rights and obligations only for the immediate parties.

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More specifically, the third-party rules have to be fitted into the other rules of the law of contract. The easier it is to make someone a party to a contract, the less need there is to recognise contracts for the benefit of third parties. In the extreme case, where liability arises out of a simple unilateral promise, the distinction between beneficiaries who are parties and those who are not vanishes almost to nothing. At the other end of the spectrum, where the primary initiative in contract formation is taken by the person acquiring the right rather than by the person undertaking the duty (as in the Roman’s stipulatio), it will – for that reason – be impossible to formulate any rule giving a direct right to a third party. Somewhere between these extremes is the classical European contractual model of the seventeenth to nineteenth centuries, where contracting is expressed in terms of offer (or promise) and acceptance. Associated with this, unsurprisingly, is the granting of rights to persons not originally party to the contract dependent on their acceptance. It is largely a matter of semantics whether we describe this in terms of a third party’s adhesion to a contract between others, or of the creation of a separate contract, or as the direct recognition of third-party rights arising out of the original contract. No less important, if some model of contract is characterised by a restriction to reciprocal agreements, as was the case with most non-formal contracts in Roman law and in English law in the seventeenth, eighteenth and nineteenth centuries (and, arguably, still in the twentieth), then there is almost no scope for an additional rule restricting contractual rights to the parties. So much was this the case in England during this period that the formal parties-only rule was completely supplanted, or at least almost completely supplanted, by the rule that consideration must move from the promisee.

Practice and Theory In 1860 Ferdinand Busch observed the ‘great battle’ between practice and theory in so far as the enforcement of third-party contract rights was concerned.95 Whether or not we agree that there has been a great battle, the uneasy tension between theory and practice has been marked since at least the middle of the twelfth century. It has had numerous manifestations. We have already suggested that the express appearance of statutory provisions allowing third-party contracts in southern Europe between the twelfth and fourteenth century may best be understood as a conscious response to the rejection of such rights by the ius commune.96 In other places, for example in Castille in the sixteenth century and Germany in the seventeenth century and later, the learned laws flowed into legal practice and moulded its norms. The flow was not all one-way: the general recognition in the Middle Ages of rights arising under contracts entered into by notaries, we would 95 F. B. Busch, Doctrin und Praxis über die Gültigkeit von Verträgen zu Gunsten Dritter (Heidelberg 1860), quoted by Dr Swain at p. 331, and discussed by Professor Pennitz at p. 278. 96 Above, at footnote 36.

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suspect, owed more to legal practice than to any scholar’s argument that the medieval notary public was the direct equivalent of the Roman servus publicus. This leads to two further observations. First is the complexity of much of the theory, with its concern with finding a coherent theoretical justification for the enforceability or unenforceability of third-party rights, what Michele Graziadei has recently described as ‘a principle in search of a reason’.97 These writings contrast sharply with what are often very simple formulations of the rules in practice. Moreover, while theoretical works display a strong concern with the question exactly when and by whom the third party’s rights can be revoked or released (assuming that the third party has rights at all), a question largely glossed over in practice. This leads to the second observation, the very substantial difference between the history of third-party rights in England and their history elsewhere in Europe. The English development can be seen almost exclusively in terms of the law in practice as revealed through cases, with almost nothing in the way of reflective analysis of the problem between Bracton in the middle of the thirteenth century and the Anglo-American academic lawyers (Williston, Holmes, Pollock) at the end of the nineteenth.98 An English lawyer looking at continental European materials after Grotius will see an almost obsessive concern with the practically insignificant question of revocability; the continental lawyer will see a cavalier disregard for the crucially central problem.

97 M. Graziadei, “I Terzi e gli Effetti Contrattuali: una Prima Riflessione Comparativa”, in: L. Vacca, ed., Gli Effetti del Contratto nei Confronti dei Terzi nella Prospettiva StoricoComparatistica (Turin 2001), 151, 158. 98 It should be stressed that this is not simply a historiographical phantom resulting from English legal historians concentrating on case-law while their continental counterparts concentrate on doctrine. There is simply no hint of any serious theoretical reflection.

SIR JOHN BAKER

Privity of Contract in the Common Law before 1680 Like most concepts in the common law, ‘privity’ was not a technical concept in its inception, but an ordinary everyday notion expressed in simple French. It might best be translated in modern English as ‘link’ or ‘connection’.1 In any lawsuit there has to be some kind of link between the plaintiff and the defendant which gives the former a cause of action. The link might be contractual, or it might alternatively be based on property or family. We therefore hear not only of privity of contract, but of privity of estate, privity of tenure, privity of blood, privity to a deed or record, and so forth.2 There is no overall legal theory connecting these different kinds of privity other than the need for something to link the parties into a legal relationship. Some notion of privity seems to be part and parcel of the very idea of contract.3 A contract or agreement in its nature is a coming together of two or more parties, and – as Bracton pointed out – the parties do not have it in their power to bind anyone else.4 A sale, for instance, is an agreement between two parties whereby one transfers title to the other in return for a price. The very idea of a contract of sale without reciprocity was ‘merveillous’ to a fifteenth-century English lawyer: that is, amazing or unthinkable.5 But the case may seem rather different if the parties, instead of seeking to impose obligations on a third party, seek to confer a benefit on him. Suppose the parties agree that the price should be paid to a third party, or 1 Privetés (usually plural) also had a second meaning, of private affairs or secret business: J. H. Baker, Manual of Law French (2nd edn, 1990), p. 175. 2 A random list of different species of privity will be found in T. Ashe, Promptuarie (1614), iii. 240, s.v. Privies et privities. There are also lists in Rastell’s Termes de la Ley (1624) and Wingate’s Maximes of Reason (1658): see V. V. Palmer, Paths to Privity: A History of Third Party Beneficiary Contracts at English Law (San Francisco, 1992), pp. 6 – 10. 3 Though not of promise or undertaking: cf. below, p. 41. 4 Bracton De Legibus et Consuetudinibus Angliae, ed. Woodbine and Thorne, ii. 69, 145; iii. 161; as to which see D. Ibbetson, Historical Introduction to the Law of Obligations (1999), p. 77, note 37; and below, p. 39, note 25. The Roman maxim Res inter alios acta aliis praeiudicare non debet was well known to the early common lawyers: e.g. Year Books 21 & 22 Edw. I (Rolls Series), p. 295; 19 Selden Soc. 110; 31 Selden Soc. 51, 78, 79, 144, 161; 33 Selden Soc. 200; below, p. 39, note 19. 5 Doige’s Case (1442) translated in J. H. Baker and S. F. C. Milsom, Sources of English Legal History (1986) [hereafter B. & M.], p. 391 at p. 393, per Newton C.J.

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that title to the goods should pass to a third party. If the third-party beneficiary subsequently approves such an arrangement, is there any reason why the law should not enforce such it, even though the beneficiary was not privy to the contract of sale? There is one obvious difficulty about enforcement. Take a contract of sale where the price is to be paid to a third party, and the buyer neglects to pay. If it is the vendor who brings suit for the price, he ought not to recover it, because it was not payable to him; nor should he, in principle, recover monetary damages to compensate him for non-payment of the price to the third party, because the loss is not his. A possible solution to this problem today is to allow the party to sue for specific performance of the contract; but this remedy was not available at common law, and hard information is lacking as to the attitude of courts of equity in making specific performance available to third-party beneficiaries.6 If, on the other hand, it is the third party who brings the action, he will be unable to set out any legal relationship between himself and the purchaser. Moreover, if the vendor and purchaser were to agree, subsequently to the sale, that the price should be paid instead to the vendor himself, or a different third party, it is not easy to see – in the absence of a trust – how the original third-party payee could be said to have been legally wronged by this change of mind. Likewise, if the contract of sale provided that the goods should go to a third party, it is not easy to see how title could pass to that third party without physical delivery or some other involvement on his part. Certainly it could not pass without his ratification. In the absence of privity to the contract, his remoteness is equivocal: he might want the goods, but equally he might not, and therefore – even without reference to the question of reciprocity – title cannot be thrust upon him by others. But the ‘purchaser’ cannot claim the goods under such an agreement either, since the agreement did not provide for him to have them. There is therefore a certain logic in the general proposition that, if a contract cannot be made to the detriment of a third party, it cannot for the like reason be made for his benefit.7 A number of possible qualifications to this over-simple analysis may occur to the legal mind, but most or all of them will be found to be apparent rather than real exceptions, being cases where the privity is not complete or absolute: for instance, if our ‘third party’ is actually in league with one of the parties, so that the party is acting as his servant, agent or surety; or if he is closely related to one of the parties, so that there is an implied if not an actual agency; or if he is a creditor to one of 6 The cases in W. T. Barbour, History of Contract in Early English Equity (1914), p. 107, under the heading ‘Benefits conferred on a third party’, are actually concerned with the recovery of money laid out at the request of the defendant. Courts of equity probably did compel obligees to enforce bonds in favour of third parties: below, p. 38, note 11. And they seem to have allowed suits to recover marriage-money: ibid. 124 – 6, 164; Archdale v. Bernard (1607) BL MS. Add. 35954, fo. 175 (Court of Requests). See also Torell v. Rudston (temp. Hen. VIII) REQ 2 / 8 / 261 (summarised in the appendix, below). 7 Cf. Tweddle v. Atkinson (1861) 1 B. & S. 398, per Crompton J.: ‘It would be a monstrous proposition to say that a person was a party to the contract for the purpose of suing on it for his own advantage, and not a party to it for the purpose of being sued.’

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the parties, so that the contractual arrangement may be seen as an indirect form of payment. These, it turns out, are precisely the cases in which privity of contract was most prominently discussed in our period. And we shall find that the common law was unwilling at first to go beyond these situations in providing remedies for third parties. Indeed, it was unwilling at first even to go so far. The common law did acknowledge by the fifteenth century that contracts could be made through servants or agents,8 in which case the principal could be deemed a party to the contract; but it did not yet allow the other ‘exceptions’. If a contract of sale provided for payment to be made to a creditor of the vendor, this was held in 1433 to be nudum pactum and ineffective, though counsel had tried to persuade the court that it was different from payment to a mere third party.9 Conversely, if a third party guaranteed the debt of a party entering into a contract, this was not a contract either, though it might be enforceable as a covenant if it was embodied in a deed under seal.10 The principal debate concerned family relationships, which were to be the main focus of debate about privity throughout our period. In 1458 an action was brought by a bridegroom against his father-in-law to recover a sum promised as marriage-money (that is, a dowry). This was a very common arrangement, and even in the fourteenth century it had been thought that an action might lie for marriage-money, at any rate if the agreement was under seal.11 The principal doubts at first were jurisdictional, since marriage was a ‘spiritual’ matter. If, however, there was no deed, it was difficult to find a theoretical justification for treating the obligation to pay as a debt,12 and the year-book report of the 1458 case revealed very starkly the absence of any coherent doctrine of contract in the common law at that period. It had been argued by counsel that debt could be brought by someone retained to perform a service for a third party: for instance, by a schoolmaster hired to educate the defendant’s son, or a labourer hired to repair a highway (which benefited the public generally). Prysot C.J., however, distinguished that case; here there was no contract, nor a retainer to perform a service, but merely an agreement. Danvers J. responded that debt did lie, because, although it was not a ‘pure’ contract (whatever that means), there was quid pro quo in that the father was disburdened of the girl’s marriage. Ashton J. sought refuge from the 8 For the details see A. W. B. Simpson, History of the Common Law of Contract: The Rise of Assumpsit (1975), pp. 552 – 4. The term ‘agent’, in this sense, does not seem to have been much in use before the middle of the seventeenth century (below, p. 54), doubtless because there was no juristic generalisation; the usual cases were master and servant, client and attorney, husband and wife, religious house and monk. 9 Anon. (1433) Y[ear] B[ook] Pas. 11 Hen. VI, fo. 43, pl. 30 (held by the whole court). 10 Anon. (1344) Y.B. Pas. 18 Edw. III (Rolls Series), p. 23, pl. 7; Anon. (1370) Y.B. Trin. 44 Edw. III, fo. 21, pl. 23; Anon. (1421) Y.B. Mich. 9 Hen. V, fo. 14, pl. 23. 11 Anon. (1348) Y.B. 22 Edw. III, Lib. Ass., pl. 70, per Thorpe C.J., apparently suggesting that it was an actionable covenant. The case concerned a writ of prohibition to an ecclesiastical court which had been asked to provide a remedy. 12 This had, nevertheless, also been suggested in the fourteenth century: Anon. (1357) Hil. 31 Edw. III, Fitz. Nat. Brev. 120K.

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problem by declaring it to be a spiritual matter, outside the court’s jurisdiction. Danby J. said the words used in the writ to describe the agreement were ‘concordatum est’, and those words denoted a covenant rather than a contract; the correct remedy was therefore an action of covenant, which did not lie without a deed. Moyle J. retorted that that was irrelevant once the plaintiff had performed his part. If a carpenter was retained to build a house, he could not be sued without a deed because there was merely a promise; but, if he built the house, he could sue without a deed because there was a debt accruing from his work done. In such cases there is no need for quid pro quo: it is enough if the plaintiff has done what was agreed. Prysot C. J. said that was a good point, and the case was adjourned. The year book records no conclusion, and the case has not yet been traced in the plea rolls. The common law of contract was in consequence left unsettled for another century, though in a similar case of 1480 a serjeant at law asserted without reported opposition that ‘although this thing which the plaintiff is to do is for a third person, who is in no way privy to the contract, it still seems to me that it is good enough’.13 By the seventeenth century it was well settled that debt would lie to recover remuneration for a service which conferred a benefit on a third party rather than the defendant.14

Formal contracts under seal We have mentioned deeds, and it will be as well to record that deeds were a law unto themselves. Where there was a covenant, evidenced by a deed under seal, the common law decided early on that it did not require contractual reciprocity provided that the plaintiff was privy to the deed in the sense of being named. Thus, in 1317, a covenant to pay money to vicars to pray for the soul of a deceased person could be enforced by the covenantee, even though it was argued that he was unable to allege any damage to himself.15 Conversely, a person who did not play an active part in the contractual process could enforce a covenant made for his benefit provided he was joined as a party to the deed.16 Moreover, and more importantly in practice, a penal bond could be made subject to a condition which benefited a third party, and there was no difficulty in allowing the obligee to recover full the penalty in case of breach.17 It was even possible for the obligee to authorise the beneficiary Anon. (1480) Y.B. Pas. 20 Edw. IV, fo. 3, pl. 17, per Callow sjt. Lady Chandos v. Sympson (1602) B. & M. 246; Woodhouse v. Bradford (1619) 2 Rolle Rep. 76; Haines v. Finch (1646) Aleyn 4 (educating another person’s child). The same principle applied to indebitatus assumpsit for services rendered to a third party. 15 Dean of Hereford v. Maudeleyne (1317) Y.B. Hil. 10 Edw. II (54 Selden Soc.), p. 4, pl. 2; and see Anon. (1305) Y.B. Hil. 34 Edw. I in Year Books 33 – 35 Edw. I (Rolls Series), p. 140. 16 Ibbetson, Obligations, p. 79. 17 Ibbetson, Obligations, pp. 77 – 8. The beneficiary himself could not sue, though by the mid-fifteenth century he might petition the chancellor to force the obligee to do so: Master Bate’s Case (1462) Pas. 2 Edw. IV, fo. 2, pl. 6, per Danby C.J. and Moyle J.; Ibbetson, op. cit., p. 80. 13 14

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to bring suit on the bond in his name; the beneficiary would not be named on the record, but would instruct the attorney and pay the costs.18 A bond could be enforced directly by executors or administrators, or heirs (if named),19 since they were privy ‘in law’.20 A penal bond could also be made conditional upon performance by a third party,21 and this became a common way of providing surety.22 Then again, leases of land by deed had the special characteristic that the covenants which they contained could be enforced by and against assignees of the lease;23 but here the doctrinal explanation was found in ‘privity of estate’ rather than constructive privity of contract.24 There were other cases in which contracts were thought to run with the land, by reason of privity of estate.25 Apart from these exceptions, where it was said that the law created a privity, only the parties to a deed inter partes – that is, the persons named in an indenture as being ‘of the first part’, ‘of the second part’, and so on – could bring an action upon it or plead it.26 18 For a pleaded example of authority to enforce someone else’s bond – in this case to recover a debt – see Bourne v. Mason (1668 – 70), below. 19 Cf. the lecturer of c. 1307 who said that the sapientes of his day did not much care for the modern formula whereby a man bound himself and his heirs, because res inter alios acta aliis praeiudicare non debet: CUL MS Dd.7.6, pt ii, at fo. 13 (translated). 20 An informal contract, however, could not be enforced against personal representatives by means of an action of debt. The reason was that the defendant in debt on a contract was entitled to ‘wage law’ (purge himself by a general oath), and no one could wage the law of another person. The same principle applied to the successor of an abbot: Cowplond v. Abbot of Wymondham (1515) Caryll’s reports, 116 Selden Soc. 679: ‘the defendant could not wage his law in this case, because he was not privy or party to the contract’. Unsecured debts therefore died with the debtor until an alternative remedy was found in assumpsit (below, p. 41). 21 Anon. (1424) Y.B. Mich. 3 Hen. VI, fo. 18, pl. 27. 22 Principal and surety could also be joined in deeds as if they were principals. This was said to be common practice in 1289: Fishacre v. Kirkham (1289) 112 Selden Soc. 322. 23 Pakenham’s Case (1368) Y.B. Hil. 42 Edw. III, fo. 3, pl. 14; Ernley v. Garth (1490) OHLE, vi. 640. A later qualification was added that covenants ‘ran with the land’ only if they touched and concerned the land. In the 1490 case it was argued without avail that debt did not lie for the devisee of a lease ‘because it wants privity, and he is not party’: Y.B. Pas. 5 Hen. VII, fo. 18, pl. 12. 24 Simpson, Contract, pp. 116 – 18; Ibbetson, Obligations, pp. 78 – 9. 25 See Bracton, ed. Thorne, ii. 69, 145. The author seems to have thought that the thirdparty grantee of land subject to a prior contractual condition (modus) could be sued by the original feoffor provided he was joined as defendant with the contracting party. (Thorne’s translation of agere cum on pp. 69 – 70 is ambiguous, but the meaning seems to be to litigate with X, i.e. against X, rather than to join as plaintiff with X: cf. p. 145. We are grateful to Professor Ibbetson for pointing out this ambiguity.) By Littleton’s time, however, the analysis of conditional grants is no longer clouded by contract; a condition is seen as limiting the estate granted rather than as a covenant. Littleton recognised that the third-party grantee was not ‘privy to the condition’, but it nevertheless governed his estate: Tenures, s. 336; and cf. ss. 355 – 8. 26 See Vieux Natura Brevium (c. 1300), cit. Ibbetson, Obligations, p. 77 n. 78; Anon. (1425) Y.B. Hil. 3 Hen. VI, fo. 27, pl. 8; East Skidmore and Foame v. Vaudstevan (1587) Cro. Eliz. 56; 2 Co. Inst. 673; Offley v. Ward (1668) 1 Lev. 235; Gilbey v. Copley (1683)

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Thus rent could not be reserved on a lease to be paid to a third party.27 The general rule had more to do with the nature of deeds than with the law of contract,28 and it did not apply to deeds poll,29 such as bonds, but it effected a fairly tight regime of privity where a contract was made by deed inter partes.

Accountability Some preliminary mention ought also to be made of the action of account, which was founded on a receipt of money for which the recipient was accountable: receptio denariorum ad compotum inde reddendum. According to Ames, ‘there was never any necessity for privity in the old action of account’.30 The word ‘never’ goes too far, because the action was invented for use against a bailiff or other agent, where there clearly was privity, and until the early fourteenth century it was not extended further. But in 1320 it was established that accountability could arise from the mere receipt of money from a third party to the use of the plaintiff.31 Therefore, if A delivered money to B to pay over to C, C could bring an action of account against B even though there was no prior relationship between them.32 Even so, this is not properly to be regarded as a case of an agreement being enforced by a third party, since account would not lie in respect of a mere promise by B to pay money to C. There had to be an actual payment to the use of another, 3 Lev. 138 (see p. 139, per Levinz J., ‘It is common erudition that one not party to a deed made inter partes cannot take by the deed’). 27 Oates v. Frith (1614) Hob. 130; cit. at 2 Wms Saund. 370; Bland v. Inman (1632) Cro. Car. 288; Cole v. Sury (1627) Latch 264 at p. 267, per Dodderidge J. (‘an infallible and undeniable ground’); Co. Litt. 47, 143v (‘a maxime in law’). 28 See Gilbey v. Copley (1683) 3 Lev. 138, where the rule was thought to have survived the recent decision in Dutton v. Poole. See further Professor Ibbetson’s article, below. 29 Cooker v. Child (1673) 3 Keb. 94, 155; 2 Lev. 74. A deed poll was unilateral, and usually began with words such as Noverint universi . . . (‘Know all men . . .’). It was so called because it was cut straight (‘polled’) rather than indented. 30 J. B. Ames, Lectures on Legal History (1913), p. 119. Cf. also C. D. Hening, ‘History of the Beneficiary’s Action in Assumpsit’ (1909) Select Essays in Anglo-American Legal History, iii. 339 – 67, at p. 354. 31 Taillour v. Medwe (1320) Y.B. Mich. 14 Edw. II (104 Selden Soc.), p. 39; also in Novae Narrationes, 80 Selden Soc. 293, no. C266B. This was a new departure: cf. Anon. (1318) B. & M. 289; Bastenthwayt v. Lenebane (1319) Y.B. Pas. 12 Edw. II (81 Selden Soc.), p. 53. See also S. F. C. Milsom, Historical Foundations of the Common Law (2nd edn, 1981), p. 280; Ibbetson, Obligations, p. 79. 32 See also Anon. (1405) Y.B. Hil. 6 Hen. IV, fo. 7, pl. 33, at fo. 8, per Hankford J. (‘If someone delivers certain money to you to pay to me, I shall have a writ of account against you and not a writ of debt, because there is no contract between us’); Calwodelegh v. John (1478) B. & M. 526 at p. 527, per Bryan C.J. (‘he shall have an action of account and not debt. What would his action of debt be based on? He cannot declare on a contract, on a sale or on a loan, and so that action fails’). Debt was, however, eventually allowed: Harris v. De Bervoir (1624) Cro. Jac. 687; 2 Rolle Rep. 440.

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and so the cause of action should be looked upon either as restitutionary, to prevent an unjust enrichment, or as founded upon a common-law species of trust, to enforce an obligation of conscience.33 The concept of the trust was to provide one of the escape routes from the requirement of privity of contract.34

Assumpsit The action on the case to enforce an informal undertaking – the species known as assumpsit – was considerably more flexible than the actions of debt or covenant, and indeed was developed principally because of the shortcomings of those older remedies. Trial was by jury, the law of deeds was irrelevant, and the essence of the cause of action was a breach of promise causing loss to the plaintiff. Although pleaders sometimes used words of bargain or agreement in such actions, the phrase which prevailed was super se assumpsit et fideliter promisit (‘took upon himself and faithfully promised’); and this was doubtless, in the first place, intended to make a deliberate distinction from the language of contract and covenant. It is true that assumpsit was, or soon became, in reality a contractual remedy; but it was in origin and in form an action to recover compensation for a trespass, or wrong, and therefore not necessarily constricted by the notions of privity of contract as developed in medieval times. If not performing a promise could be regarded as an actionable wrong, provided it caused damage to the intended beneficiary, and if the required damage could be indirect and include economic loss, the prospect began to open up of a remedy for third-party beneficiaries who could claim to have suffered such loss. There is little or no discussion of this new possibility in the fourteenth and fifteenth centuries. What brought it to the fore was the expansion of assumpsit in the sixteenth century to embrace money-claims. Assumpsit could now be brought for marriage-money; and so long as it was unnecessary to show reciprocity or a promise made to anyone in particular it would have given a very broad remedy.35 Yet 33 Cf. the language of ‘property’ in Anon. (1367) Y.B. Pas. 41 Edw. III, fo. 10, pl. 5. But this was not appropriate terminology for money out of a bag. 34 N. G. Jones, ‘Uses, Trusts and a Path to Privity’ (1997) 56 C.L.J. 175 – 200; and his paper below. 35 Note Duplake v. Glover (1549) CP 40 / 1140, m. 411, where judgment was given for the plaintiff by default, even though the plaintiff had not formally alleged consideration or a promise to himself. The plaintiff alleged that, whereas the defendants had long laboured for a marriage to be contracted between the plaintiff and their sister, they promised and undertook to pay £20 ‘with’ her if the plaintiff would marry her, which he then did. No doubt the performance of the condition should be seen effectively as a consideration, albeit not necessarily moving to the brothers. Similar conditional marriage-money formulae, not using the in consideratione clause, though with a promise to the plaintiff, are found in Hewes v. Wolley (1550) KB 27 / 1153, m. 60; Atwell v. Smyth (1557) KB 27 / 1181(1), m. 110. Cf. Hannys v. Horsman (1528) CP 40 / 1057, m. 353 (promise made to the plaintiff to deliver 10 marks to

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any prospect of a wholly privity-free action for the beneficiary was barred by the development in mid-century of the doctrine of consideration, which introduced an element of reciprocity into what was in form a remedy based on a promise.36 By early Elizabethan times it was becoming common-law dogma that no action would lie upon an assumpsit unless it was supported by good consideration.37 This requirement could be seen as reintroducing, by a side wind, a new form of privity, though whether and to what extent it did so would take more than three centuries to resolve.38 Privity and consideration became inextricable. The reason why the matter was less than clear is that the doctrine of consideration itself was less than clear. It could be defined, by 1580, as either a charge (or labour) to the plaintiff or a benefit (or profit) to the defendant.39 But the theoretical basis was obscure, and the doctrine may have confused several distinct lines of thought.40 Some thought it the same as the medieval quid pro quo, in which case its effect might simply have been to restore the medieval learning; but this was too simplistic. Some thought the ‘charge’ to the plaintiff represented the damage necessary to found an action on the case for a wrong, and indeed it was later widened to include any ‘detriment’; but this seems too loose an explanation. At any rate, consideration was not a notion which could be applied decisively to the case of the third-party beneficiary, since he might yet be able to assert that the defendant had received a benefit in return for the promise and might even be able to assert some appropriate loss or burden to himself. The expansive nature of assumpsit soon became apparent in money claims in the early sixteenth century. Among the earliest precedents of assumpsit for money in both benches were actions against sureties, as for breach of an undertaking to him in maritagio ‘with’ the defendant’s daughter; no mention of a condition, though the plaintiff did in fact marry her). 36 It also became settled that the promise had to be pleaded as made to someone, usually the plaintiff: Jordan v. Jordan and Harvey (1595) Cro. Eliz. 369; KB 27 / 1330, m. 384 (rollnumber confirmed by Professor Ibbetson); Goldsmith v. Preston (1605) Rolle Abr., i. 30, line 35; Weeke v. Tybold (1605) ibid., lines 37 – 42; Noy 11; sub nom. Wreeks v. Tibald, BL MS. Add. 35954, ff. 379, 459; sub nom. Tilbott v. Wreekes, BL MS. Harley 1679, fo. 176v (offer made to world); Coleman v. Blunden (1651) Style 255. Cf. Coulston v. Carr (1601) Cro. Eliz. 847, 848; Chappell v. Woodham (1614) Rolle Abr., i. 30, lines 30 – 35 (where it was presumed that the promise was made to a particular person, though not so pleaded). 37 There was apparently an exception, a legacy from the fourteenth century, if the breach of promise caused physical damage. But in that case the action should perhaps be regarded as lying for what we would call the tort of negligence rather than for breach of contract. 38 See generally S. P. de Cruz, ‘Assumpsit, Consideration and Third Party Rights’ (1986) 7 Journal of Legal History 53 – 67. 39 Webb’s Case (1577) 4 Leo. 110; Richards v. Bartlett (1584) 1 Leo. 19; Stone v. Withypoll (1588) 1 Leo. 114, Owen 94, per Coke. Note that the definitions refer to the plaintiff and defendant rather than the promisee and promisor; the more recent dogma that consideration must move from the promisee completely (but perhaps unwittingly) changed the concept of privity. 40 J. H. Baker, ‘Origins of the “Doctrine” of Consideration 1535 – 1585’ in On the Laws and Customs of England, ed. M. S. Arnold and others (1981), pp. 336 – 58; reprinted in The Legal Profession and the Common Law (1986), ch. 20.

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‘save the plaintiff harmless’ against a third party,41 or to pay for goods if the seller failed,42 or to indemnify a creditor who released a judgment-debtor from execution;43 and they seem to have gained acceptance precisely because these were cases where debt was not available. In such cases there was, of course, privity to the agreement, and a loss to the plaintiff; but there was no quid pro quo, since the benefit was conferred on a third party rather than the defendant. Actions were also allowed by sureties, for recovering their indemnity; but here there was a benefit to the defendant whose debt had been discharged.44 In the same period the King’s Bench decided that assumpsit would lie against the personal representatives of a deceased debtor,45 though in this case the Common Pleas declined to follow suit and the law remained controversial until the early seventeenth century.46 In 1575, both Wray C.J. and Dyer C.J. are said to have ruled on their circuits that an action lay on an undertaking made to someone other than the plaintiff, provided the consideration ‘grew’ from him,47 though it is not clear what kind of case they had in mind.48 Marriage-money remained conceptually difficult, even in the assumpsit context, since it was not clear whether the action should be brought by the father to whom the promise was made or the son to whom the money was payable; clearly there could not be a remedy for both. The number of cases in the reports and rolls suggests that it was a problem of common occurrence, and so the failure to find a clear answer is indicative of a serious conceptual hitch. In 1557 it was decided that the son could bring assumpsit, although he was not party to the agreement.49 In

41 OHLE, vi. 855 n. 94 (three cases in Common Pleas involving one Blakburn in 1506 – 08); Wryght v. Evyngar (1514) KB 27 / 1010, m. 25d (judgment against a surety in the King’s Bench, 1514). 42 Grafton v. Bolde (1520) KB 27 / 1037, m. 88d (judgment); Cleymond v. Vyncent (1520 – 1) below, note 45 (judgment against executors of guarantor); OHLE, vi. 869 n. 188; Squyer v. Barkeley (1532) Spelman’s report, 93 Selden Soc. 7 (reserved judgment in King’s Bench). See also Browne v. Garborough (1587) Cro. Eliz. 63 (surety for a marriage agreement). 43 Holygrave v. Knyghtysbrygge (1535) B. & M. 413. 44 OHLE, vi. 856 n. 100, 869 n. 188. 45 Cleymond v. Vyncent (1520 – 1) Y.B. Mich. 12 Hen. VIII, fo. 11, pl. 3 (119 Selden Soc. 46; B. & M. 446); Port’s notebook, 102 Selden Soc. 10; KB 27 / 1037, m. 40; OHLE, vi. 856. In this case the deceased was a guarantor. 46 It was finally settled by Pynchon v. Legat (1611) B. & M. 455. 47 Anon. (1575) in Christopher Yelverton’s reports, 110 Selden Soc. 457, no. 203. But cf. Anon. (1571) ibid. 452, no. 180 (‘An assumpsit must be to the plaintiff himself, or to some other person to whom the plaintiff agrees, or else it is not good’). 48 The principle was said to apply if ‘an undertaking is made to someone else, such as the plaintiff ’s wife, as in 27 Hen. VIII’. That is a reference to Jordan’s Case (1535) below, p. 56, note 123. But the words ‘such as’ indicate that it was not meant to be confined to the wife’s agency. 49 Anon. (1557) BL MS. Hargrave 4, fo. 142; OHLE, vi. 859 n. 121. Cf. Josselyn v. Shelton (1558) CP 40 / 1173, m. 532; Benl. 57; OHLE, vi. 869 m. 189 (but here the promise was to pay money to the bridegroom’s father).

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another sixteenth-century case, of uncertain date, it is alleged to have been decided that an action could be brought by the father.50 One explanation for the son’s cause of action was that the father was acting as his agent;51 another was that that ‘the promise was made to the son’s use’, so that it was analogous to a trust.52 Either theory would have enabled actions to be brought by third-party beneficiaries outside the context of marriage agreements, and there is some evidence that this was thinkable.53 But the trust concept did not bear much fruit before the twentieth century,54 and the courts showed no general inclination to imply agencies for thirdparty beneficiaries.55 The case of marriage-money remained contentious into the seventeenth century. One line of opinion denied any action to the son,56 leaving 50 ‘Towse, of counsel with the plaintiff, cited a case adjudged in this court [Queen’s Bench], Cardinal v. Lewes, where in consideration of marriage betwixt the defendant’s son and the plaintiff’s daughter , the defendant undertook to give a stock of £100 to his son: and for non-performance of that promise the father brought the action, and adjudged maintainable. The Court willed him to show that precedent. Et adjournatur . . .’: Levet v. Hawes (1599) Cro. Eliz. 652; cf. variant reports in Hetley 176; BL MS. Add. 25203, fo. 57. 51 Levet v. Hawes (1598) as reported in BL MS. Add. 35951, fo. 76v (citing the master and servant agency cases); Champney and Evans v. French (1646) Twisden’s reports, BL MS. Add. 10169, fo. 6, per Rolle J.; Spratt v. Agar (1658) 2 Sid. 115, as reported in BL MS. Lansdowne 1109, fo. 166, per Glynne C.J. 52 Levet v. Hawes (1598) Cro. Eliz. 652, per Popham C.J. Cf. the report in BL MS. Add. 25203, fo. 43v (translated: ‘the use shall be raised to [the children] and at common law it was but a trust’); but this report says the other judges disagreed. The case was argued again in Easter term 1599 but no final outcome is reported: BL MS. Add. 25203, fo. 57. (Throughout this paper, quotations from contemporary reports in law French are translated or rendered into modern English.) 53 E.g. Anon. (1580) cit. in Hetl. 176: ‘A man had a licence to transport herrings to Spain, and the daughter [of] one of the parties had a licence; and a stranger comes to the father and says to him, “Procure me that licence, and I’ll give you £100, and £100 to your daughter.” It was held that the daughter should have the action for the one £100, for more specially it concerns her.’ See also Body’s Case (1587) Goulds. 49; Rippon v. Norton (1601), below; Hadves v. Levit (1631) Hetl. 176 (the similarity in name to Levet v. Hawes seems to be coincidence); Thomas v. Goory (1655) Style 461; as reported in BL MS. Lansdowne 1066, fo. 7 (‘the daughter brought the action, and that was not so much as spoken to’). 54 In Colston v. Carre (1601) BL MS. Add. 25203, fo. 412, Fenner J. declared that ‘matter in conscience cannot beget a consideration in law’. Cf., to the contrary, Megott v. Broughton (1586) B. & M. 497, otherwise called Megod’s Case, where the Queen’s Bench held that an action of assumpsit lay against a trustee of land, to enforce the trust, because the trust reposed in him was a good consideration. This might have had more effect if it had been reported in print. It bore little fruit in practice, though it is presumably the case cited by counsel in Delabar v. Gold (1661) 2 Keb. 63, as ‘P. 28 Eliz. Meggots case in the Exchequer’. See also N. G. Jones, 56 C.L.J. 175. 55 See, however, Sadler v. Paine (1582) Sav. 23, where the Court of Exchequer allowed a third party to sue on an agreement made not only for his benefit but at his request; the promisee was the plaintiff ’s uncle. The request may have been thought to establish a kind of agency; at any rate, Shute B. quoted the maxim, Qui per alium facit per seipsum facere videtur. 56 E.g. Archdale v. Barnard (1607) Rolle Abr., i. 30, line 43; BL MS. Add. 35954, fo. 175 (prohibition to the Requests denied because no remedy at common law); Anon. (1627) Hetl. 12;

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open the question of quantifying the damages recoverable by the father.57 Another was that either could sue, but that a recovery by one barred the other.58 There seems also to have been a third view, that only the son could sue. This was the view which prevailed in Rippon v. Norton (1601 – 2), which was not a marriage-money case but likewise involved promises made on behalf of children. The defendant’s son had assaulted Richard Rippon and his son Walter; Richard had laid a complaint before the magistrates on behalf of both of them; the defendant, in consideration that Richard would withdraw his complaint, undertook that he and his son would keep the peace against Richard and Walter; the defendant’s son then committed another assault on Walter and wounded him. Richard brought assumpsit for breach of the undertaking and the court held that he could not sue since he had suffered no injury.59 In a second action, however, it was held that Walter could bring the action.60 It is difficult to understand these two decisions. Walter was not privy to the promise, and since it seems that the consideration was the staying of the prosecution, which was the father’s act rather than the son’s; he was not privy to the consideration either. It was evidently the son’s injury which entitled him to sue the defendant, as surety for the wrongdoer, as if it were an insurance contract; the court seems not to have been concerned that the plaintiff was not party to the contract, except perhaps on the footing that his father must have made it on his behalf as his agent. On the other hand, the denial of an action to the father was inconsistent with some of the marriage-money cases and seems not to have been universally accepted as law.61 Although Rippon v. Norton did nothing to explain the requirement of privity, it is noticeable that the only clear cases of recovery by third parties so far involved close family relationships, perhaps because a kind of agency was always tacitly implied. A ‘mere stranger’ could not enforce a promise made for his benefit, Hill v. Ashmore (1655) Cory’s reports, BL MS. Hargrave 23, fo. 437 (‘B’s father, to whom the promise was made for his daughter’s benefit, shall have the action and not the daughter’). 57 See Anon. (1646) Style 6, identifiable as Bayfield v. Collard (1646) KB 27 / 1696, m. 673 (see appendix and next note): ‘. . . adjudged that the action did well lie by the [father’s] administrator, though she should receive no benefit if he did recover’. Aleyn says the court held that ‘the damages recovered will be assets’. 58 Provender v. Wood (1627) Hetley 30; Walford v. Calfe (1640) Cory’s reports, BL MS. Hargrave 42, fo. 31, per Maynard; Bayfeild v. Collard (1646) Aleyn 1; Style 6 (anon.); Rolle Abr., i. 31, line 16; Cory’s reports, BL MS. Hargrave 42, fo. 122; Spratt v. Agar (1658) BL MS. Lansdowne 1109, fo. 166; cit. by Twisden J. in 1 Vent. 6; Bell v. Chaplain (1663) Hard. 321; and cf. Hornsey v. Dimocke (1671) 1 Vent. 119 (similar point, though not said to be a marriage agreement: either the promisee or the payee may sue). 59 Richard Rippon v. Norton (1601) Cro. Eliz. 849; BL MS. Add. 35951, fo. 170v. This is obviously the ‘Rixon & Horton’ cited in Hetl. 177. See also Anon. (c. 1609) Lincoln’s Inn MS Misc 586A, fo. 57v, to the same effect. 60 Walter Rippon v. Norton (1602) Cro. Eliz. 881; Yelv. 1; BL MS. Add. 25203, fo. 490. 61 See, e.g., W. Brown, The Entring Clerk’s Vade Mecum (1678), p. 7 (precedent of assumpsit against someone who, for £10 paid, had undertaken to teach the plaintiff ’s son his trade but had failed to do so).

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because the action ought properly to be brought by the person to whom the promise was made. There was no reason why the parties who made the contract, and furnished the consideration, should not be free to rescind or alter it and thereby lawfully deprive the beneficiary of his expectation. In the middle of the seventeenth century, there were attempts to broaden the scope of assumpsit to accommodate other third-party beneficiaries.62 In 1627 it was said that ‘the party to whom the benefit of a promise accrues may bring his action’; and in 1647 that ‘he for whose benefit a promise is made may have an action for breach of this promise although the promise was not made to him’.63 Though couched in general terms, however, the principle does not seem to have been quite so generally applied in practice. Most of the cases still involved family relationships; but that is hardly surprising, since it was common for members of a family to make contracts for the benefit of other members. Rolle J. reaffirmed in 1646 that it was the parent-child relationship which made the difference:64 Champney sold a house to the defendant and in consideration thereof the defendant promised the plaintiff to pay John Champney and Francis Evans. And it was resolved by Rolle [J. K. B.] that the action ought to be brought in the name of the person to whom the promise was made and may not be brought by him to whom the payment ought to be made. And the difference is that, where in consideration of a marriage the promise is made to the father to give a portion with his daughter, there the son may have the action, because it is an interest to him and the motive arises from him and the father is solely a means to conclude the agreement.65 But when it is upon another consideration it sounds merely in covenant and ought to be brought by the party to whom the promise is made. 62 Note also BL MS. Lansdowne 1132, fo. 5, in an index to some unidentified manuscript reports (translated): ‘He to whom the promise is to be performed shall have the action and not he from whom the consideration moves: 241p. . . . Also he from whom the consideration moves may also sue: 249h . . . Assumpsit to pay to a third person, he shall have the action: 419a. . . . [Assumpsit] by him to whom the benefit [is] even though he is not party to the contract: 443g. 585a.’ The volume has the signature of Sir Simon Degge (1612 – 1704), called to the Bar in 1653, and refers to ‘all the cases I have in manuscript’. 63 Provender v. Wood (1627) Hetley 30 (but in the context of marriage-money); Anon. (1647) noted in W. Style, Practical Register (1657), p. 31; J. Lilly, Practical Register (1719 edn), i. 113. Note also Oldham v. Bateman (1637) KB 27 / 1628(1), m. 127; Rolle Abr., i. 31, line 31; BL MS. Add. 35958, fo. 372v (‘Jones [J.]. I promise upon consideration given by you to assure land to John Style, John Style shall have an action. Bramston [C.J.] agreed and said that if I promise upon consideration to assure a jointure upon your daughter, she may have an action upon the case’); sub nom. Adams v. Bateman, Yale Law School MS. GR 29.27, sub dat. Pas. 13 Car. Oldham v. Bateman might be viewed as a special form of assumpsit for ‘money had and received’: see the pleadings summarised in the appendix, below. 64 Champney and Evans v. French (1646) Twisden’s reports, BL MS. Add. 10619, fo. 6. These reports, by Thomas Twisden (later J. K. B.), are in the form of an alphabetical abridgment or commonplace but seem to be of his own taking. The BL manuscript is a copy; but cf. Lib. Congress, Law MS. A.C. 5 – 6, continued in Harvard Law School MS. 5015. The case is cited by Twisden J. in Delabar v. Gold (1661) 1 Keb. 122 (‘Evans and Jamney’). The plea-roll reference given by Twisden is incorrect; the case is not in KB 27 / 1689, m. 221. 65 The authority, at the end of the report, is Oldham’s Case (1637), as to which see above, note 63.

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During the Interregnum the new testing-ground came to be the promise to pay money to a third-party creditor of the promisee. Where money was actually paid to the use of someone else, it had been accepted at least by 1607 that the beneficiary could bring assumpsit,66 and soon after that the action for ‘money had and received’ was established as a replacement for the old action of account.67 The more purely contractual question was whether the third party could sue where there was no payment of money to his use but merely a promise upon some other consideration. In 1587 the Common Pleas appear to have allowed an action to the creditor-beneficiary in such a situation;68 but in 1601 and 1606 the action had been denied.69 In the 1640s the courts reverted to the more generous view. First, in 1646, the King’s Bench considered a case arising from an arrangement between creditors. A owed B £44, and C owed A £23; D undertook that if B would accept the £23 from C in satisfaction of the £44 due from A, and if C failed to pay, D would pay. The action succeeded. According to Rolle C.J., ‘The promise was mutual, for the plaintiff promised that he would accept the £23 from his debtor’s debtor, ergo he could not sue his debtor afterwards without breach of the promise, and that is good consideration.’ The decision was not reported in print, but it is of interest to historians of contract law both because it recognized that a debt could be discharged by payment of a lesser sum by a third party, and because it showed that the courts did not require any benefit to the defendant promisor in such situations.70 This prepared the way for the leading case of Disborne v. Donnaby in 1649. Edward Donnaby was bound to X under penalty of £50 to pay £25 to the plaintiff Mary Disborne when she reached the age of 21. Edward sought to pass this duty to the defendant William Donnaby by transferring his father’s property71 to him in consideration that he would pay the £25 to Mary Disborne at 21. Mary sued William in the Upper Bench, pleading a promise to herself in consideration that Edward had given the goods to William, and it was moved in arrest of judgment 66 Gilbert v. Ruddeard (1607) Dyer 272 (1688 edn), marg.; Harvard Law School MS. 105, fo. 88; B. & M. 503. See also Flewellin v. Rave (1610) 1 Buls. 68. 67 The first clear case is Beckingham and Lambert v. Vaughan (1616) 1 Rolle Rep. 391; KB 27 / 1457, m. 929; B. & M. 465. The action had been denied by the Common Pleas in Howlet v. Osbourn (1595) Cro. Eliz. 380. But for sixteenth-century antecedents see OHLE, vi. 862, 880. 68 Body’s Case (1587) Goulds. 49, pl. 8. 69 Taylor v. Foster (1601) Cro. Eliz. 807; Ritley v. Dennet (1606) Rolle Abr., i. 30, line 47; sub nom. Riveley v. Dermett, BL MS. Add. 35954, fo. 464v (‘for the plaintiff was a mere stranger to everything before the promise’). The proper course was doubtless for the promisee to sue for failing to pay his money over to the third party: e.g. Kellett v. Heton (1540) CP 40 / 1107, m. 558d (writ only); Wade v. Kent (1555) KB 27 / 1173, m. 21 (judgment). 70 Wickred v. Metcalfe (1646) Harvard Law School MS. 113, pp. 246 – 8. 71 Edward Donnaby was the executor of the defendant’s father, William Donnaby, senior. It seems probable that Edward, William and Mary were siblings, though this is not stated in the record.

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that there was no consideration; she nevertheless recovered, and the judgment was affirmed by all the judges in the Exchequer Chamber.72 Although it seems that that the parties were related,73 they are treated in the reports as if they were strangers. The judges held that, ‘the consideration was good, there being a benefit to the defendant, and it is not material of whom the benefit comes if the defendant has it’.74 Rolle C.J. added that if X handed money to Y to take to X’s creditor Z, Z could sue Y; and Jermyn J. said the same principle applied where X sold goods to Y in consideration of his paying the price to X’s creditor Z.75 Thus Mrs Disborne succeeded because she was a creditor-beneficiary rather than because of any family relationship. Shortly after that case, it was held by the Upper Bench that a payee could enforce a contract made for his benefit even though he was not the promisee’s creditor, at any rate where the promisor had died and could no longer countermand the promise. In this case A sold goods to B in consideration that B would pay C after A’s death. C was not A’s creditor, and although he was in fact A’s grandson the relationship was not emphasised. C brought indebitatus assumpsit against B, and recovered, and after verdict it was moved in arrest of judgment (inter alia) that ‘the agreement is collateral and the plaintiff a stranger to it’.76 Rolle C.J., Jermyn and Aske JJ. nevertheless held (Nicholas J. doubting) that the action lay, and that the case was ‘all one with the case where money is delivered to J.S. to the use of J.N.’77 Rolle C. J. said that ‘the gift of the goods here to the defendant for the payment of the £20 to the plaintiff is tantamount as if he had delivered the £20 to the defendant to be paid over to the plaintiff.’78 Jermyn J. did indeed distinguish the creditor-beneficiary from the donee-beneficiary, and explained that the latter could not sue because the voluntary delivery of money was countermandable.79 Although 72 Disborne v. Donnaby (1649) KB 27 / 1717, m. 1010 (see appendix); sub nom. Dishborne v. Donaby, in Rolle Abr., i. 30 – 1; sub nom. Donnaby v. Tishburne, in Cory’s reports, BL MS. Hargrave 42, ff. 190, 249; sub nom. Dishborne v. Donneby, in Twisden’s reports, BL MS. Add. 10169, fo. 9. Rolle, Twisden and Cory all give the plea-roll reference as Hil. 24 Car. I, rot. 1010; but the case is not in KB 27 / 1709, m. 1010, which seems to have been renumbered. 73 Twisden said the plaintiff ’s maiden name was Mary Donnaby: BL MS. Add. 10169, fo. 9. But the record describes her as a spinster. 74 MS. Hargrave 42, fo. 249. 75 BL MS. Add. 10619, fo. 9. 76 Starky v. Milne (1651) Style 296; BL MS. Hargrave 42, fo. 331 (‘The law raises the promise’); Cremer’s reports, Gray’s Inn MS. 33, pp. 105 – 06; Rolle Abr., i. 32, line 27; record in KB 27 / 1739, m. 1701 (see appendix, below). 77 MS. Hargrave 42, fo. 331. 78 Gray’s Inn MS. 33, p. 105. 79 Cf. Harris v. De Bervoir (1624) Cro. Jac. 687, per Davenport sjt (‘when [money] is delivered, as it is here, payable to John Style, which is intended in satisfaction of a [prior] debt, there it is not countermandable; and he who is to receive it as a debt may upon this receipt have an action of debt or account’); 2 Rolle Rep. 440.

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he did not spell it out, presumably it was A’s death in the case at bar which made the promise final, since the arrangement could no longer be rescinded. Style’s report, however, gives the impression that the judges were thinking in broader terms, and had not clearly distinguished between privity to the consideration and privity to the promise. To the argument that there was no consideration, Rolle C.J. replied, ‘There is a plain contract, because goods were given for the benefit of the plaintiff, though the contract be not between him and the defendant, and he may well have an action on the case, for here is a promise in law made to the plaintiff though there be not a promise in fact’.80 If there was a doctrinal problem, it seems from this remark that it could be resolved by the use of fiction. This was, it may be recalled, the very period when Rolle C.J. and his brethren were sanctioning fictions which provided restitutionary remedies by means of assumpsit.81 Fictions were also the means by which common lawyers in this period solved the principal problem raised by privity of contract in the commercial sphere. There was often no privy between the holder of a bill of exchange and the drawer, or intermediate indorsee, but it had long been the universal custom of merchants that drawers and indorsees of bills were liable to holders in due course. The solution was to bring assumpsit, setting out the drawing or indorsing of a bill which had come to the plaintiff, and alleging a customary obligation – under a general or a local custom of merchants – followed by a fictitious assertion that the defendant (the drawer or indorsee), in consideration of that obligation, had undertaken to pay the plaintiff.82 That such an elaborate pleading device was necessary shows how seriously the requirement of privity of contract was taken. But there is no other evidence that fictional promises were used to make general inroads into that requirement.83 Rolle C. J.’s successor, Glynne C. J., confirmed in 1658 that it was not necessary for a plaintiff in assumpsit to be privy both to the promise and to the consideration. If he provided the consideration, it was not necessary that the promise should have been made to him.84 Then, in the Restoration period, there were further attempts 80 Style 296. Cf. MS. Hargrave 42, fo. 331: ‘it is a debt due to the plaintiff, and the law raises the promise’. 81 J. H. Baker, ‘The Use of Assumpsit for Restitutionary Money Claims 1500 – 1800’ in Unjust Enrichment, ed. E. H. J. Schrage (15 CSC, 1995), pp. 31 – 57; reprinted in The Common Law Tradition (2000), ch. 17. 82 J. H. Baker, ‘The Law Merchant and the Common Law before 1700’ (1979) 38 Cambridge Law Jnl 295 – 322, reprinted in The Legal Profession and the Common Law (1986), ch. 19. 83 In the case of marriage-money it was said that the promise had to be laid truthfully as having been made to the father: Bell v. Chaplain (1663) Hard. 321. Cf. below, p. 56. 84 Spratt v. Agar (1658) as cited in 1 Vent. 6 (‘the parties who brought the assumpsit did the meritorious act, tho’ the promise was made to another’); reported on another point in 2 Sid. 115. The report in BL MS. Lansdowne 1109, fo. 166, says the defendant promised the plaintiff ’s father to assure land to the marrying couple if he (the father) would consent to the marriage, which suggests that the consideration was the father’s consent rather than the children’s act of marrying; but Glynne C.J. treated the father as ‘an agent to the plaintiff ’, and

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to clarify the underlying doctrine prior to the great Exchequer Chamber case of Dutton v. Poole.85 The position was fully reviewed in Delabar and Delavall v. Gould (1661).86 The plaintiffs had let part of a ship to Luke Wood, and Wood had let half of his share to the defendant. Wood owed the freight to the defendants, and Gould was being sued for freight by Wood. It was therefore agreed between Gould and Wood that if Wood withdrew his suit against him, Gould would pay his freight directly to the plaintiffs. Delabar sued Gould on this promise,87 and it was moved that the plaintiff was a stranger both to the consideration and to the promise. This was countered by the argument that there was a consideration, at any rate by implication:88 It was argued by [blank] that upon consideration performed by a stranger an action of the case would lie, for it was said there is a difference between considerations that respect interest and those that are personal: as mutual love and affection, for this is incommunicable, but the other may raise a benefit to a third person, so consideration of money paid by a stranger will raise an use. And it was a general rule that either a loss to the plaintiff or benefit to the defendant will make a sufficient consideration, and that the party is a stranger is not material, for the promise being to his benefit and at the same time the consideration is performed, it shall be intended that all the parties were together and that the persuasion of the third party had an influence upon the performance of the consideration.

No judgment is reported or recorded, but the court inclined to the view that the action would not lie, for want of privity.89 Twisden J. applied the reasoning in Disborne v. Donnaby and Starky v. Milne, and extracted from the case-law the doctrine of the mere stranger: ‘Upon a collateral promise on a marriage to a person unconcerned . . . the married persons shall not have benefit; but otherwise where the meritorious cause ariseth from a third person, as in a promise betwixt said that either the children or the father could bring the action. Cf., to the same effect, Cremer’s report in Gray’s Inn MS. 34, p. 380 at p. 381. Twisden J. later said that the consideration was ‘good enough because the father could have refused to give his consent’: Bourne v. Mason (1670) Lincoln’s Inn MS. Misc. 500, fo. 10. 85 As to which see below, p. 138. 86 Delabar and Delavall v. Gould (1661) 1 Keb. 44, 63, 121; BL MS. Hargrave 64, ff. 39v, 52; Lincoln’s Inn MS. Hill 83, ff. 5, 23; MS. Misc. 497, pp. 6 – 7, 30; record in KB 27 / 1839 / 1, m. 152 (see appendix). 87 The declaration in the record differs from the reports, and seems to suffer from a haplography in omitting the assumpsit clause. As the roll records it, the defendant is apparently supposed to have made a direct promise to the plaintiffs in consideration of their making it appear to him how much freight was due. 88 Lincoln’s Inn MS. 497, p. 6. 89 See MS. Hargrave 64, fo. 52: ‘The court were of opinion that the consideration was not good, [Gould] not being indebted to the plaintiff, so the promise to him was nudum pactum, but gave the plaintiff liberty to move it again if he thought good.’ Cf. Lincoln’s Inn MS. 497, p. 30: ‘But though the court agreed these cases [Starky v. Milne and Oldham v. Bateman] to be law, they inclined against the action . . . Sir Heneage Finch was of the other side but not prepared to argue, so the court gave day for the further hearing of it.’

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parents on marriage of their children, there either party may have the action.’90 That the action was not limited to situations where there was a family relationship was shown by the case of the creditor-beneficiary, whom the judges agreed to be able to bring suit in his own name. But clearly there had to be some privity, either to the promise or the consideration. ‘If A sells B a horse, and in consideration thereof B promises to pay to C £10, C can have no action for the £10, but A may, for he is but an agent or attorney to receive the money; but if it were to pay C £10 which A owed him, there C shall have an action because there is a duty to him and he receives it in his own right.’91 Twisden J. said the same was true of a delivery of goods to X, who promised to deliver them to Y: this promise could support an action by Y, but only if the delivery was to his use, because then he would have an ‘interest’.92 This, then, was the contemporary explanation for the treating the creditor-beneficiary as a special case. He had an interest, and the payment (though made through another party) would discharge the pre-existing debt, whereas if a mere third party received the purchase-money from a sale without consideration he would be deemed to have received it to the use of the seller. The case of Bourne v. Mason and Robinson (1668 – 70) is sometimes taken to show that there had to be privity to the promise. In fact a promise to the plaintiff was pleaded, and it was the consideration which was held wanting. One Parry owed £3. 10s. to Bourne and £30 to the defendants, and one Chanter owed a larger (unspecified) sum of money to Parry. It was arranged that if Parry would allow the defendants to sue Chanter (in Parry’s name) for the debt owing to Parry, then they (the defendants) would pay Parry’s debt of £3. 10s. to Bourne. The defendants duly recovered the money from Chanter, and the plaintiff now sued them on the promise to pay him. The action apparently failed.93 In spite of some general statements to the effect that ‘he to whom the promise was made must bring the action’,94 which Kelyng C. J. doubted, the court actually approved Spratt v. Agar and the main point was that the plaintiff was a stranger to the consideration:95 ‘The plaintiff did 90 1 Keb. 44. Cf. Lincoln’s Inn MS. 497, p. 30: ‘Twisden J. said he was at first of opinion for the action, upon Disborough and Donabyes case, . . . but now I perceive that makes nothing to this case.’ 91 MS. Hargrave 64, fo. 39v. Cf. Lincoln’s Inn MS. Hill 83, fo. 23: ‘In consideration that A has sold B goods B shall pay C so much, C shall not have action for he is but a servant and receiver of A, but if there had been a special recital of a debt between A and C and that the payment was to be in discharge of the debt, C might well have an action’. See also 1 Keb. 64, per Wyndham J.: ‘If the promise were in consideration that A hath sold goods to B he promiseth to C £10, C hath no remedy because he is but an attorney of A to receive for his use . . .’. 92 Cf. Bell v. Chaplain (1663) Hard. 321, where the plaintiff delivered Y’s goods to X, and paid X to deliver them to Y; it was held that either the plaintiff or Y could bring assumpsit. 93 1 Vent. 6; 2 Keb. 454, 457, 527; Lincoln’s Inn MS. Misc. 500, ff. 9v – 10 (which ends with an adjournment for further consideration). All these reports are from Hilary term, 1669. 94 2 Keb. 528, where it is stated that the promise was pleaded as having been made to Parry. A case called Dummilo’s Case was cited in support, but it has not been traced.

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nothing of trouble to himself, or benefit to the defendant, but is a mere stranger to the consideration’.96 The court distinguished the cases where the plaintiff provided the consideration (or ‘meritorious act’) even though the promise was made to another. If we have identified the plea roll correctly, the record shows that the lack of consideration was far from being as obvious as the report suggests.97 The plaintiff had himself obtained authority to sue Chanter for the £30, and the consideration as pleaded was that he would desist from suing and hand over the writing, and the authority to continue the action, to the defendants. It is difficult to see why this was not a valid consideration. Even more difficult to understand is the fact that in 1670, a year after the ‘decision’ in banc, the plaintiff brought a second action, unreported, in which the assignment is not mentioned and the consideration was merely that the plaintiff would discharge Chanter. This was more obviously a bad consideration, since it was only of benefit to the third party; but all we know of this action is that the parties joined issue, and a jury was summoned.98 In each case a promise was alleged to have been made to the plaintiff, and this, according to earlier decisions, ought to have been sufficient. But neither the promise nor the assignment of the authority to sue Chanter was mentioned in the reports, and it may be that the court was able to take a view of the true facts; it was a Middlesex case, and the trial would probably have been at bar. If the decision really meant that it was necessary to be privy both to the promise and the consideration, then it did not stand for very long. A year after this case, the Common Pleas held in Pine v. Norish (1671) that a child of the promisee could not sue on a marriage agreement,99 a decision which was to be much debated in Dutton v. Poole. But there the marriage was that of the parents, not of the child, and the agreement was between the child’s own two parents, so the case could have been distinguished from the precedents on the ground that the usual implied agency in a marriage treaty was not present. Again, therefore, there seems to have been neither kind of privity. The broader view that either kind of privity was sufficient to maintain an assumpsit was confirmed by Hale C.J. in Corny and Curtis v. Collingwood 95 The ambiguity is pointed out by De Cruz, ‘Assumpsit, Consideration and Third Party Rights’, p. 64; and see S. J. Stoljar, A History of Contract at Common Law (Canberra, 1975), pp. 137 – 8. Cf. Price v. Easton (1833), which is ambiguous for the same reason: see Professor Ibbetson’s article, below. 96 1 Vent. 6. 97 KB 27 / 1898 / 1, m. 303 (Easter term 1668; discontinued; see appendix). The reports mention a verdict, which is not enrolled, preceding a motion in arrest of judgment in Hilary term 1669; but it seems likely that the plaintiff did not waste money on the entry of such matter when the motion in arrest of judgment succeeded. 98 Bourne v. Mason (No. 2) (Easter term, 1670) KB 27 / 1918 / 1, m. 516d (see appendix). The entry ends with the venire facias. 99 T. Jones 103; cit. sub nom. Pine v. Norwich, 3 Keb. 786, 815, 830, 836; cit. sub nom. Pine v. Norris, 1 Vent. 318; 2 Lev. 211. The record is CP 40 / 2892, m. 1538 (see appendix, below).

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(1676).100 The action was instituted by churchwardens to recover a sum promised to them in consideration of an absolution granted by the bishop of Lincoln in a suit brought by themselves, and they were successful in gaining a verdict. They were themselves the promisees, but it was not alleged that they had themselves done anything towards obtaining the absolution,101 and so it was moved in arrest of judgment (by the attorney-general) that ‘the consideration is insufficient as the to the plaintiffs, who have no privity but [are]102 mere strangers that are no parties to the contract’.103 But this was to redefine ‘mere strangers’, since – by way of contrast with the previous two cases – there was clearly privity to the promise. According to Hale C.J., ‘It is not necessary the consideration should always move from the parties’,104 and ‘where a promise is made to a stranger upon a good consideration he that hath interest in the promise shall have the action’.105 Judgment was given for the plaintiff. There was as yet, it seems, no hint of the modern maxim that consideration must move from the promisee, who must be the plaintiff. The plaintiff in assumpsit must indeed always show a valid consideration; but it need not move from the promisee, and (when it does) he need not himself be the promisee. Yet it is difficult to find evidence that the common law did routinely give remedies to third-party beneficiaries except in special cases. In one important special case, the bill of exchange, the remedy was found by leaving aside the law of contract and relying on custom, fortified (for the sake of form) by a wholly fictitious promise to observe the custom. The discharge of a debt via a third party was also a special case. If there was an actual payment to the use of the creditor, the liability of the payee to hand over the money could be regarded as quasi-contractual rather than contractual; it was a kind of common-law trust. Where no money changed hands, but the intermediary used his own money (which he owed to the third party’s debtor), there may likewise have been thought to be some kind of trust, albeit of a different kind. At any rate, the courts did not permit an action to the third-party payee unless there was a prior debt to be discharged, and so this was not merely a particular instance of a broader remedy. The numerous cases where fathers acted on behalf of children could be, and sometimes were, explained in terms of agency.106 It is not too fanciful to suppose 100 Reported under various spellings in 3 Keb. 329, 434, 489; 2 Lev. 119; 1 Vent. 297; 1 Freem. 284. 101 According to the report in Ventris, however, that ought to be presumed. 102 Text reads ‘as’. 103 Cf. Simpson, p. 476: ‘Lawyers in the sixteenth and seventeenth centuries simply did not think of the action of assumpsit as an action between parties to a contract’. 104 3 Keb. 435. Cf. Clypsam v. Morris (1668 – 9) 2 Keb. 401, 443, 453, which was not resolved. 105 1 Freem. 284, per curiam. 106 Cf. A. M. Finlay, Contracts for the Benefit of Third Persons (1939), p. 15, who refers to this as ‘blood-agency’.

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that a father negotiating a marriage agreement as guardian was, in a sense, acting on behalf of his son. The situation was analogous to the married woman’s implied agency to pledge her husband’s credit for household necessaries, a form of agency much discussed in the later part of our period and held in 1663 to rest on fact rather than law.107 To label the situation as one of agency, however, is not necessarily to move it into a different legal compartment. There was no pre-ordained law of agency, and its development is part of the story of privity. So far as we have been able to discover, the words ‘agent’ and ‘agency’ were not used before the midseventeenth century108 as a means of drawing together the different cases where a representative could bind a principal; and they do not occur as headings in the law books or dictionaries in our period.109 We may suppose that the absence of the terminology indicates the absence of a general idea. The seeds of the law of agency were instead growing separately in various compartments of the law of master and servant, husband and wife, and corporate personality. The root idea, no doubt, is indicated by the Roman maxim, Qui facit per alium facit per se.110 A person who is incapacitated, or away from home, or just too busy, does not lose his contractual capacity by reason of his inability to attend to his affairs in person; he may engage someone else to make contracts for him, and those contracts are his own contracts.111 There is, in such cases, no true third party. That was clearly the understanding in the case of master and servant, husband and wife, or monastery and monk, where the relationship was continuous and involved a certain interdependence. It was not too difficult to extend the idea to someone who was requested or authorised to act for another person ad hoc, as in the case of the attorney retained for a specific task,112 or a friend or relative asked to arrange something.113 But already in the later medieval law of monks and servants there was a broader notion of agency which did not rest on prior authority. If a contract was made without authority it could nevertheless bind a superior or master if it the latter subsequently accepted the benefit:114 the classic case was the purchase by a monk of goods Manby v. Scott (1663) O. Bridg. 229; Simpson, History of Contract, pp. 547 – 50. We have noted examples of 1658 and 1661 in quotations above. 109 Rastell’s Les Termes de la Ley in the later editions has the title ‘Agent and Patient’, but the entry does not touch upon agency in contract. 110 See Anon. (1356) Y.B. Mich. 30 Edw. III, fo. 19, per Green J. (‘In this writ you have counted that you yourself sold the goods to him through such a one who was your servant, and so you have supposed the contract to have been made by yourself ’). For the pleading, see further below, p. 56. 111 There was, however, a difficulty as to whether a general or a specific authority was required. In Anon. (1430) Y.B. Mich. 9 Hen. VI, fo. 53, pl. 37, it was agreed that the master was not liable on a contract made by his servant without specific authority. 112 E.g. Blaker v. Claggett (1626) KB 27 / 1552 / 1, m. 271, where a promise not to sue execution of a confessed debt was pleaded as made to the plaintiff ’s attorney: ‘super se assumpsit et prefato Edwardo Henshawe adtunc attornato ipsius Edwardi Claggett . . . ex parte ejusdem Edwardi Claggett fideliter promisit . . .’. 113 This seems to be the explanation of Sadler v. Paine (1582) Sav. 23; above, p. 44. 107 108

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which came to the use of his religious house,115 or by a servant of goods which came to the use of his master,116 or by a wife of goods which came to the use of her husband,117 and the principle also applied to a loan of money.118 An undertaking by a servant on behalf of his master, if made without authority, could on the same principle bind his master if he agreed to it afterwards; the ratification had the same effect as prior authorisation and could be treated as a fictitious promise.119 If this principle had been generalised to the utmost extent, it might have been supposed that an agency could be deemed to arise ex post facto whenever a person in whose interest a contract was made subsequently ratified it; and a contract by ratification must have given the ratifier not only the burden of the contract but also the benefit. If that conclusion had been adopted, it would have reduced the effect of privity to little or nothing. But it was not. Perhaps there had to be, as we should say, an ‘ostensible authority’ for the agent before a ratification could work its magic.120 114 On one theory, however, the seller’s remedy was not contractual so much as what we should call restitutionary: see Scott v. Abbot of Fountains (1433) Y.B. Pas. 11 Hen. VI, fo. 30, pl. 16, per Strangeways J. (‘it is the coming to the use of the house which charges him, so that whether the contract was made by the abbot or the monks is irrelevant’); Wivel v. Abbot of ‘Dorford’ (1443) Hil. 21 Hen. VI, fo. 23, pl. 3, per Markham sjt (‘This action is not only based upon the contract, but upon the coming to the use of the house’) and Newton C.J. (‘As Markham has said, the coming of the goods to the use of the house is the cause of his action’). 115 E.g. Anon. (1307) Y.B. Trin. 35 Edw. I (Rolls Series), p. 567; Randolf v. Abbot of Hayles (1311) Trin. 4 Edw. II (42 Selden Soc.), p. 19, pl. 3; Scott v. Abbot of Fountains (1433) Y.B. Pas. 11 Hen. VI, fo. 30, pl. 16; Cowplond v. Abbot of Wymondham (1515) 116 Selden Soc. 679, pl. 503. In such a case, the correct pleading was not that the monk made the contract, but that the abbot made the contract through the monk: Anon. (1490) 115 Selden Soc. 25, pl. 32, perhaps idenitfiable as Spark v. Prior of Ramsey, CP 40 / 907, m. 101d. 116 E.g. Stowey v. Prior of Bruton (1378) Y.B. Trin. 2 Ric. II (Ames Fdn), p. 11, pl. 4; C. St German, Doctor and Student, ed. Plucknett and Barton (91 Selden Soc.), p. 269 (‘if the servant . . . buy them in his own name, not speaking of his master, the master shall not be charged unless the things bought come to his use’). 117 E.g. Anon. (1305) Mich. 34 Edw. I, Fitz. Abr., Dett, pl. 163 (pleading difficulty); Scott v. Abbot of Fountains (1433) Y.B. Pas. 11 Hen. VI, fo. 30, pl. 16, per Martin J.; Anon. (1442) Y.B. Hil. 20 Hen. VI, fo. 21, pl. 19 (with some qualification); Anon. (1499) Trin. 14 Hen. VII, Fitz. Abr., Dett, pl. 260; printed (from Fitz. Abr.) as Mich. 21 Hen. VII, fo. 40, pl. 64. 118 Anon. (1307) Y.B. Trin. 35 Edw. I (Rolls Series), p. 567; Campo Arnulfi v. Abbot of Tavistock (1333) Y.B. Trin. 7 Edw. III, fo. 35, pl. 35; C. St German, Doctor and Student, ed. Plucknett and Barton, p. 269. 119 Anon. (1567) 110 Selden Soc. 444, no. 150, per Dyer C.J. (‘Note that the factor of a merchant shall not charge the merchant unless the thing for which he makes the contract comes to the use of the merchant, or the merchant agrees’); Seignior v. Wolmer (1623) Godb. 360 at 361, per Dodderidge J. (who treated the ratification, fictionally, as a promise ab initio). In the second case, however, the action was brought by the master on an undertaking to the servant, who had authority to deal with Wolmer. 120 In Stowey v. Prior of Bruton (1378), above, Belknap C.J. limited the doctrine to the case of ‘a bailiff or servant who is known to be your servant (conu pur vostre servaunt)’. In Scott v. Abbot of Fountains (1433) Y.B. Pas. 11 Hen. VI, fo. 30, pl. 16, there was disagreement as to whether a monk had to be an office-holder in the monastery, such as the cellarer or kitchener, in order to bind the house.

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There was, however, no tendency to generalise the law of agency during the critical period. There was little need to do so, since a third-party beneficiary could often achieve a remedy simply by pleading that the undertaking was made to himself. That was fairly straightforward if he was really present when the promise was made,121 as was doubtless often the fact in – for example – the marriage-money cases.122 Whether a promise could with equal validity be made to someone physically absent might seem more of a conundrum. In law it could; for, when a promise was made to an agent, it was the practice to plead it as having been made to the master, and made to him (it will be noted) at the moment when it left the promisor’s lips.123 In the classical common law a promise can in other circumstances be made to an absent person, though whether it is deemed to be made before it arrives is still a matter of difficulty.124 It would not therefore have been absurd to plead that a promise was made to an absent third party. We need not even speak of it as fiction; for it is only a fiction if we define a promise as a factual event requiring instantaneous communication between promisor and promisee, or as a response to an offer from the promisee, as opposed to a legal construction placed upon facts.125 On the other hand, there was some seventeenth-century authority for saying that where a promise was made to someone present, for the benefit of someone absent, it ought to be pleaded as made only to the person present.126 The legal analysis, however, is academic. It would not have given undue trouble to a dozen laymen deciding in accordance with everyday notions of substantial justice. The jury had 121 Rookwood’s Case (1589) Cro. Eliz. 164 (promise pleaded as made to the beneficiary as well as to the person acting on his behalf). 122 The common precedents of actions for marriage-money by the son do not mention his father at all: e.g. Hannys v. Horsman (1527) CP 40 / 1057, m. 353; Hewes v. Wolley (1550) KB 27 / 1153, m. 60; Rokes v. Godsalve (1555) KB 27 / 1174, m. 97; J. A. v. E.W. (1589), printed in J. Herne, The Pleader (1657), p. 228 (and cf. seven plea-roll references to marriage-money cases on p. 227); Aplethwayt v. Nortley (1590) printed in E. Coke, A Book of Entries (1671 ed.), fo. 2, pl. 2; Cropp v. Smart (1639), printed in W. Brown, The Entring Clerk’s Vade Mecum (1678), p. 49; undated examples in Brown, Entring Clerk’s Vade Mecum, p. 9; R. Brownlow, Latine Redivivus (1693), p. 24, pl. 32. But sons obviously could and did in fact conduct such negotiations themselves. In Atwell v. Smyth (1557) KB 27 / 1181(1), m. 110 (see appendix), the plaintiff ’s father is mentioned in the plea, but not as promisee. 123 Anon. (1353) Y.B. 27 Edw. III, Lib. Ass., pl. 5; translated in J. H. Baker, The Law’s Two Bodies (Oxford, 2001), p. 114 ; Holygrave v. Knightsbridge, alias Jordan’s Case (1535) Y.B. Mich. 27 Hen. VIII, fo. 24, pl. 3; translated in The Law’s Two Bodies, pp. 119 – 20; cf. Hagger’s Case (1598) translated in B. & M. 221; W. Noy, Maxims of the Laws of England [1641], ed. W. M. Bythewood (1821), p. 218; Manby v. Scott (1663) O. Bridg. 229 at p. 269. 124 Note Adams v. Lindsell (1818) 1 B. & Ald. 681; Dunlop v. Higgins (1848) 1 H.L.C. 381; Household Fire Insurance Co. v. Grant (1879) 4 Exch. Div. 216 (contract made by letter which never arrives). 125 For the difference between fictions and rules of law, or legal metaphors, see Baker, The Law’s Two Bodies, pp. 43 – 7. 126 Bell v. Chaplain (1663) Hard. 321 (‘if a third person be to have the benefit of the promise, as in the case of father and son,. . .either of them may bring the action. But in that case the declaration must be upon a promise made to the father, though the son bring the action.’).

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the last word, because the question could not be raised after trial.127 If it was indeed the habit for a third-party beneficiary to plead a promise made to himself, then our halting discussions of privity may have arisen from irregular (or unduly scrupulous) pleading rather than from common real-life difficulties.128 But we cannot be absolutely sure one way or the other. At any rate, as far as revealed law was concerned, the liberal position as stated by Hale C.J. in 1676 represented the furthest reach of the English law of contract until recent times.

Appendix Some cases summarised from the plea rolls (1) Christopher Torell v. Thomas Rudston (temp. Hen. VIII, prob. 1540s) REQ 2 / 8 / 261. Petition to the King’s Council: whereas, upon an agreement of marriage between the plaintiff ’s mother (Anne Fowler, widow) and Thomas Rudston of Swaffham Bulbeck, Cambridgeshire, esquire,129 the latter, ‘in consideration of the poore state and abilite that your said orator130 and other of the chylderen of the said Anne Fowler where lefte in by there father of longe tyme before decessid’, and before the espousals were celebrated, promised to the said Anne ‘and to other of hyr frendes’ to give £20 a year during the marriage to be divided equally between the plaintiff and Anne’s other children, and the defendant and Anne were thereafter married, but the defendant has never performed the promise; the plaintiff seeks relief because he has no bond or other writing whereby he could recover the money at common law. It would seem that the defendant’s wife was still living; but she could not in law bring an action against her own husband. No outcome is recorded. (2) James Atwell v. Richard Smyth (1557) KB 27 / 11821(1), m. 110. Declaration: whereas on 10 Oct. 1548 at Burstow, Surrey, there was a discussion (colloquium) between the plaintiff and defendant for a marriage between the plaintiff and the defendant’s daughter Margaret, and thereupon the defendant promised the plaintiff that if he would marry Margaret he would pay him £3. 6s. 8d.; he married Margaret; and the defendant did not pay. Plea: protesting that the declaration is insufficient in law, the discussion was that if Robert Atwell, the plaintiff’s father, would convey two messuages to James and Margaret in fee tail, the defendant would pay the £3. 6s. 8d.; and Robert did not 127 The point arose in the 1353 case at the trial itself, which was reported. In Jordan’s Case (1535) it was raised at the trial by a bill of exceptions, though the court ruled that this procedure was improper and it was not used again. In Hagger’s Case (1598) it was raised voluntarily by a defendant about to wage his law, who wished to be satisfied in his conscience. Note, however, Bourne v. Mason (1668 – 70), above, where the promise seems to have been disregarded in banc. 128 We are grateful to Professor Ibbetson for this suggestion. 129 Of Gray’s Inn (admitted 1521, ancient 1534); attorney of the Common Pleas in 1520s and 1530s; J. P. Cambs. from 1530; M. P. Cambs. in 1542; died 1556; his second wife was Anne, daughter of William Mordaunt: S. T. Bindoff ed., History of Parliament: the House of Commons 1509 – 58, iii. 227 – 8; warrants of attorney in CP 40. 130 I.e. petitioner.

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make any such conveyance. Replication: the defendant made the undertaking as alleged by the plaintiff. A jury is summoned to try this issue, but no more is recorded. (3) Anthony Oldham v. Gabriel Bateman (1637) KB 27 / 1628(1), m. 127. Declaration: whereas on 2 July 1608 at Duffield, Derbyshire, the defendant promised the plaintiff that he would maintain him in drink, clothes and lodging until the age of 14, the defendant in consideration thereof and in consideration that Nicholas Oldham of Duffield, yeoman, then and there paid £12 to the defendant for the plaintiff, promised the plaintiff that when he attained the age of 21 he would pay him the £12 and all other sums of money which the defendant should receive from the said Nicholas for the plaintiff ’s education; in 1619 Nicholas paid the defendant another £4 for the plaintiff, so that the total received was £16; the plaintiff attained the age of 21 in 1634; and the defendant has still not paid. Plea: non assumpsit. On 7 March 1637 at Derby assizes before Hutton J. and Trevor B. the jury found for the plaintiff with £16 damages and £2. 13s. 4d. costs. The King’s Bench gave judgment for the plaintiff with an increment of £5. 6s. 8d. for costs, making a total of £24. (4) Anne Bayfeild, administratrix of William Bayfeild v. John Collard (1646) KB 27 / 1696, m. 673. Declaration: whereas Robert Collard, the defendant’s son, married Mary Bayfeild, daughter of William Bayfeild, deceased, and after the marriage, on 1 Sept. 1640 at Bawdeswell, Norfolk, there was a discussion (colloquium) between William Bayfeild and the defendant concerning the provision of a better living and maintenance for Robert and Mary, whereupon the defendant on the same 1 Sept. 1640, in consideration that William Bayfeild at the special instance and request of the defendant would give Robert £50, undertook and promised to William Bayfeild that he would give Mary £100 if Robert died while Mary was living; William paid the £50 to Robert on 30 Sept. 1640; Robert died on 20 March 1641; Mary is still living; and the defendant has not paid. Plea: non assumpsit. On 20 July 1646 at Norwich assizes, before Trevor B. and Pheasant J., the jury found for the plaintiff with £120 damages and 40s. costs. The King’s Bench gave judgment for the plaintiff with an increment of £10 for costs, making a total of £132. (5) Mary Disborne v. William Donnaby (1649) KB 27 / 1717, m. 1010. Declaration: whereas William Donnaby (the defendant’s father) and Edward Donnaby became bound on 14 Jan. 1631 to George Cater in £50 for payment of £25 to the plaintiff when she attained the full age of 21; and whereas the father on 28 March 1639 made his last will appointing Edward his executor, and died possessed of various goods; and whereas Edward took upon himself the executorship, and took possession of the goods: on 20 March 1645 the defendant, at Mumby in Lincolnshire, in consideration that Edward (at his request) had given and transferred to him all the said goods, undertook and promised to the plaintiff that he would pay her the £25 due when she was 21; and she says in fact that she attained the age of 21 on 12 Feb. 1648 and gave notice thereof to the defendant, and he has refused to pay. Plea: non assumpsit. On 20 March 1649 at Lincoln assizes, before St John C. J., the jury found for the plaintiff with £25. 10s. damages and 53s. 4d. costs. The Upper Bench gave judgment for the plaintiff with an increment of £6. 6s. 8d. for costs, making a total of £34. 10s. A writ of error was received on 5 May 1649, and on 25 May the judgment was affirmed in the Exchequer Chamber with a further £6 awarded to the plaintiff for costs. (6) Alice Starky v. Richard Milne (1651) KB 27 / 1739, m. 1701. Declaration: (first count) whereas Richard Milne of Milnrow, Lancs., yeoman, deceased, grandfather of the plaintiff and defendant, was possessed on 20 Sept.

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1647 of various cattle and household goods worth £80, at York Castle, and (being so possessed) gave the defendant all these goods, and upon the gift declared to the defendant and the plaintiff, and ordered and appointed, that after his (Richard’s) death the defendant should pay the plaintiff £20 in lieu of the goods; and thereupon, in consideration of the foregoing and in consideration that the plaintiff, at the defendant’s request, accepted his promise of payment, the defendant promised the plaintiff to pay the £20 after their grandfather’s death; and the grandfather died in 1649; (second count) and whereas the defendant was indebted to the plaintiff in £20, which he undertook to pay to her in accordance with an agreement between him and their said grandfather, in lieu of goods worth £80 given to the defendant by the grandfather, and (being so indebted) in consideration thereof promised to pay her: yet the defendant has not paid. Plea: non assumpsit. On 20 July 1651 at York assizes, before Thorpe B. and Serjeant Parker, the defendant defaulted and the jury found for the plaintiff with £20 damages and 40s. costs. The Upper Bench gave judgment for the plaintiff with a £7 increment for costs, making a total of £29. (7) Vincent Delabar and Thomas Delavall v. Thomas Gould (1661) KB 27 / 1839 / 1, m. 152. Declaration: whereas Thomas Grove, for and on behalf of the plaintiffs, on 16 March 1656 in London had let to freight (ad naulum concessit) three-eighths of a ship called The Peace of London to Luke Wood, and whereas Luke Wood on 23 March 1656 had let to freight to the defendant one half of three-eighths of the same ship; and whereas also on 1 March 1660 a discussion (colloquium) took place between the plaintiffs and the defendant concerning the freight then due to the plaintiffs, whereupon the plaintiffs would then and there have demanded (demandarent) the defendant’s freight for his half of the three-eighths, and thereupon the defendant, in consideration that the plaintiffs would make it appear to the same defendant how much money was owing, would pay it to them;131 and the plaintiffs aver that at the time of the promise and undertaking the sum of £498. 15s. was owing for the three-eighths, and therefore £249. 7s. 6d. was due for the half of three-eighths, and they are ready to make this appear to the defendant, but he has not paid. Plea: non assumpsit. No more is entered. (8) Thomas Bourne v. Patrick Mason and John Robinson (No. 1) (1668) KB 27 / 1898 / 1, m. 303d. Declaration: whereas Thomas Parry on 20 Sept. 1667 at St Paul’s, Covent Garden, was indebted to the plaintiff in £3. 10s. and also to the defendants in a sum exceeding £3. 10s. (as they affirmed), and whereas also Robert Chanter was indebted to Parry in £30, and Parry, for the speedier payment of the £3. 10s. to the plaintiff, delivered to the plaintiff a certain writing whereon the £30 was payable by Chanter to Parry, and gave authority to the plaintiff to sue Chanter on the writing for recovery of the £30, and to receive therefrom the £3. 10s. due to him, and whereas also the plaintiff, in pursuance of this authority, procured Chanter to be arrested at the suit of Parry: the defendants, having notice of the foregoing, afterwards on the same day and in the same place, in consideration that the plaintiff at their special instance and request would desist in the suit against Chanter, and in consideration that the plaintiff at their request would deliver to them the writing, with the authority to sue Chanter, undertook and promised to the plaintiff that they would pay the £3. 10s. to the plaintiff out of the principal sum recovered from Chanter; and the plaintiff says in fact that, 131 The words assumpsit et fideliter promisit do not appear in the declaration. It seems likely, in view of the later reference to a promise, that there is a haplography in the entry, conflating the discussion and the subsequent promise.

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relying on the promise, he had desisted from the suit against Chanter, and that the defendants on 20 Oct. 1667 had received132 the £30 from Chanter, nevertheless, scheming to defraud the plaintiff, they have not paid him the £3. 10s. The defendants imparl until the Wednesday after the quindene of Easter [1 April 1668], when they plead Non assumpsit. There is a venire facias to summon a jury, with the date left blank, but no more is entered. According to a marginal note, the bill was discontinued. (9) Thomas Bourne v. Patrick Mason and John Robinson (No. 2) (1670) KB 27 / 1918 / 1, m. 516d. Declaration: whereas Thomas Parry on 20 Sept. 1668 at St Paul’s, Covent Garden, was indebted to the plaintiff in £3. 10s. and also to the defendants in a sum exceeding £3. 10s. (as they affirmed), and whereas also Robert Chanter was indebted to Parry in £30: the defendants, in consideration that Parry at their special instance and request would permit them to implead (‘Anglice to sue’) Chanter for the £30, and in consideration that the plaintiff at their request would discharge Parry of the £3. 10s. in which he was indebted to the plaintiff, took upon themselves and promised the plaintiff they they would pay him the £3. 10s. from the moneys so recovered; and the plaintiff says in fact that Parry permitted the defendants to implead Chanter for the £30, and they did so and recovered, and the plaintiff at their request discharged Parry of the £3. 10s., whereof they had notice; and yet the defendants, little regarding their promise but scheming to defraud the plaintiff, have not paid him the £3. 10s. Plea: non assumpsit. A jury is summoned to Westminster on the Thursday post mensem Paschae [5 May 1670], but no more is recorded. (10 James and Elizabeth Pine v. Sybil Norish, widow (1671) CP 40 / 2892, m. 1538. Declaration: whereas tenements now in the tenure of the defendant, and formerly in the tenure of her former husband John Norish, are and from time immemorial have been copyhold of the manor of Ive, Devon, where the custom is that if any copyholder dies seised of freehold for life, having a wife at the time of his death, the wife shall have the tenements for her life so long as she lives unmarried; and whereas John Norish was seised in his demesne as of freehold for life of the aforesaid tenements and had four daughters (including the plaintiff Elizabeth), and on 5 May 1653 at Ive there was a discussion (colloquium) between John and the defendant Sybil, who was then single, concerning the four daughters and concerning a marriage to be solemnised between John and Sybil: afterwards, on the same day, Sybil (while still single) promised John that if she should survive him and become entitled to the copyhold tenements, she would pay 60s. a year to each of the four daughters so long as she had the tenements, and if at any time she should surrender them or remarry she would pay 100s. to each of them; and John, trusting to this promise, married Sybil on the said 5 May 1653; on 14 April 1666 John died seised of the tenements, and Sybil survived him and has remained unmarried and still has the tenements; and she has not paid the 60s. a year to the plaintiff for five years, so that arrears of £15 are payable. Plea: non assumpsit. Nothing is recorded beyond the plea; but it is known from the reports that the court decided against the plaintiffs.

132

Sic: it does not say ‘recovered’.

JAN HALLEBEEK

Ius Quaesitum Tertio in Medieval Roman Law I. Introduction Nowadays many systems of law are familiar with the modern contract in favour of a third party. If A (promisee) stipulates from B (promisor) that something be given to C (the third person) and both parties intend that C acquires a claim, this contract will be valid, and C will have an action at his disposal against the promisor (B) in order to enforce the performance. C may accede to this agreement and become party to the contract (modern Dutch law) or may derive a right from the agreement (German law). Although certain comparable constructions were known in the indigenous law of the German territories, such as the Affatomie of the lex Salica, and in mercantile law with its bills of exchange and bearer instruments, the modern contract in favour of a third party, at any rate the contract from which the third party derives a right although he is no party to the contract, was a dogmatic invention of German legal scholarship of the nineteenth century1. As a general category it was introduced in that period, either through the European codifications of civil law or by interpreting certain provisions from these codes. Its exact development and the social circumstances which prompted its emergence will be described elsewhere in this volume. This chapter deals with Roman law as it was taught and interpreted at the medieval law schools and universities from the early twelfth century onwards2. The Roman sources were not yet familiar with something comparable to the modern contract in favour of a third party. But the same holds good for an allied legal concept. When the third person himself is exclusively considered to be the party to the contract, although it was entered into on his behalf through an agent as intermediary, we speak about direct representation or agency. This legal concept is already clearly apparent in the Natural Law doctrine of Hugo Grotius (1583 – 1645), but not before that time3. It is important to realize that when investigating legal scho1 Although it may be argued that a comparable concept was already acknowledged in Stair’s Institutions of the Law of Scotland (1693); see the contribution of MacQueen and Sellar in this volume. 2 For this reason the sources investigated are those of learned law. No or only little attention will be paid, e.g., to statutory law, the reception of Roman law and the consilia-literature. 3 Although a more extensive application of the actio institoria and the actio exercitoria paved the way already for the eventual development of agency in its modern shape.

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larship of the Middle Ages it is not possible to speak about contracts in favour of a third party or agency in the modern sense of the terms, nor to draw a sharp distinction between these concepts. What we can investigate is a comparable problem which we do find in the sources, viz. that parties A and B intend in a contract to benefit C and sometimes also to grant C a right. The sources make clear that in considering this issue it is of vital importance to deal separately with two different problems, viz. whether the agreement that something be given to a beneficiary has effects for the parties to the contract themselves and whether or not the beneficiary has an action at his disposal to enforce what was stipulated in his favour, at least if that was the intention of the parties. Only in that case is there a ius quaesitum tertio. As will appear later, in medieval legal scholarship based on the Corpus iuris, these questions were always discussed within the field of the law of contract and not within the sphere of delict or property. The Corpus iuris civilis, the legislation of the Roman Emperor Justinian (527 – 565) dating from the sixth century A.D., contained a number of maxims which were considered as serious obstacles to stipulations in favour of a third party, and before discussing these maxims in their medieval interpretation, it may first be noted that in the original context of classical law, i.e. in the palingenetical context of the texts and seen against the background of the formulary procedure, they did not always have the meaning ascribed to them in medieval scholarship, as will be shown below. It is true that Roman law originally was rather reluctant to accept the validity and enforceability of agreements aimed at benefiting a third party, and there are various theories which attempt to explain this: the individualistic Roman would not submit himself to the will of another person in acquiring something; the law had to offer a stronghold to protect personal freedom; direct representation was not accepted because it involved a fiction; ancient Roman law was controlled by conservatism and formalism; there was only a very personal bond between debtor and creditor; the rule that one cannot stipulate for another was due to the Roman system of actions, or there was no economical and legal necessity to abrogate this rule4. This does not mean, however, that it was absolutely impossible to acquire rights without entering into a contract. The principal rules were undermined by the intervention of slaves and children under paternal control, who under normal circumstances had full contractual capacity. When entering into a contract, a slave and a child under paternal control never acquired a right. It was their master or father who became creditor in the obligation resulting from the contract they entered into5. 4 See U. Müller, Die Entwicklung der direkten Stellvertretung und des Vertrages zugunsten Dritter, Ein dogmengeschichtlicher Beitrag zur Lehre von der unmittelbaren Drittberechtigung und Drittverpflichtung [Beiträge zur neueren Privatrechtsgeschichte, 3], Stuttgart etc. 1969, p. 17 – 18, with references to the older literature. 5 See Ulp. D. 45.1.38. 17, Paul. D. 45.1.39, Ulp. D. 45.1.45 and Pomp. D. 41.1.53.

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Moreover, one of the relevant maxims, alteri stipulari nemo potest, probably did not have the purport it was assumed to have in the medieval interpretation of Justinianic law6. Originally, in classical Roman law, this rule was phrased in a slightly different way: alteri stipulari dari nemo potest7. In the formulary procedure of classical Roman law the stipulation alteri dari apparently had no effect. This can be explained if we take into consideration the formulas of the action to be used. If the promisee stipulated that something be given to himself, i.e. that a certain amount of money or ownership of a certain object was transferred to him, the promisor would be liable under the condictio certae pecuniae or condictio certae rei. In such a case the judge would sentence the promisor either to pay the amount he promised or – because of the condemnatio pecuniaria principle – the value in money of the object he promised. However, in case of a promise alteri dari, i.e. to give something to someone not being the promisee, the amount or object was not owed to the latter. Thus, even if the promisee had a monetary interest that something be given to a third party beneficiary, the formula of the actions to be used did not allow the judge to evaluate this interest in money. After the formulary procedure had gradually been replaced by the extraordinaria cognitio there were no longer procedural impediments preventing the promisee from claiming damages to compensate his interest that something be given to a third party and the rule alteri stipulari dari nemo potest actually had lost its significance. Instead of abrogating the rule, however, post-classical law still stuck to it, and Justinian just deleted the dari from the maxim8. However, we can trace it in the sources side by side with the major exception to the rule “unless the promisee has an interest”. Thus, in its Justinianic context the maxim no longer referred to the problem that the formulas of the condictio certae rei and condictio certae pecuniae did not enable the judge to estimate the plaintiff ’s interest in case of a stipulatio alteri dari, but it emphasized the requirement that the promisee had to have an interest for the stipulatio alteri to be effective9.

6 See H. Ankum, Une nouvelle hypothèse sur l’origine de la règle alteri stipulari nemo potest, in Études offertes à Jean Macquéron, Aix-en-Provence 1970, p. 21 – 29. 7 This we read in the Institutes of Gaius (Gai. 3.103); the ancient phrasing is still used in Ulp. D. 45.1.38.22, Paul. D. 45.1.126.2 and Diocl. C. 8.38(39).3. Even a single medieval scholar considered the stipulation ineffective, if it is promised to do (facere) something for a third party. Cf. F. de Zulueta / P. Stein, The teaching of Roman law in England around 1200 [Selden Society Supplementary Series, 8], London 1990, p. 91. 8 One may also argue that in Justinianic law the maxim was preserved in order to indicate that, if the promisee had no interest, the stipulatio alteri would be ineffective or that, even if it was effective, it did not result in an enforceable right for the third party. 9 Ulp. D. 45.1.38.17 and 20 and Inst. 3.19.19 and 20.

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II. Justinianic law Justinianic law10 is characterized by a number of maxims which were considered as serious obstacles to stipulate effectively that something be performed to a third party. But this did not mean that every contract in favour of a third party was without effect. In the first place there was the general exception that if the promisee had an actionable interest in the performance towards the third party, he had an action against the promisor. His interest could also be artificially created by means of a penalty clause11. It that case the sum to be paid was fixed in advance. Secondly, the Corpus iuris displays a series of exceptional cases where the contract in favour of a third party seems to be valid and even enforceable by the third party, the beneficiary12. 1. The maxims of Roman law In the Institutes of Justinian a number of basic principles of the law of obligations can be found, which imply that the agreement that something be given to an absent beneficiary will have no effect.

a) alteri stipulari nemo potest First, there is the maxim which prescribes that it is impossible to stipulate that something be performed to a third party: alteri stipulari nemo potest. The maxim is handed down in several texts13. 10 Literature: C. Gareis, Die Verträge zu Gunsten Dritter, Historisch und dogmatisch dargestellt, Würzburg 1873; J. P. Moltzer, De overeenkomst ten behoeve van derden [dissertation Leyden], Amsterdam 1876; G. Wesenberg, Verträge zugunsten Dritter, Rechtsgeschichtliches und Rechtsvergleichendes [Forschungen zum römischen Recht, I. Band, 2. Abhandlung], Weimar 1949; B. Schmidlin, Die römischen Rechtsregeln, Versuch einer Typologie [Forschungen zum römischen Recht, 29], Cologne / Vienna 1970; G. Cornil, Explication historique de la règle alteri stipulari nemo potest, in Studi in onore di Salvatore Riccobono IV, Palermo 1936, reprint Aalen 1974, p. 241 – 258; M. Kaser, Zur Interessenbestimung bei den sog. unechten Verträgen zugunsten Dritter, in H. Hübner e.a. (eds), Festschrift für Erwin Seidl zum 70. Geburtstag, Cologne 1975, p. 75 – 87; P. Apathy, Zur exceptio pacti auf Grund eines pactum in favorem tertii, in ZSS Rom. Abt. 93 (1976), p. 98 – 114; O. Behrends, Überlegungen zum Vertrag zugunsten Dritter im römischen Privatrecht, in Studi in onore di Cesare Sanfilippo V, Milan 1984, p. 1 – 58; R. Zimmermann, The law of obligations, Roman foundations of the civilian tradition, Cape Town etc. 1990. 11 The idea that the penalty clause constitutes an interest is expressed in Pap. 45. 1. 118.2. 12 This paragraph focuses on Justinianic law and takes the texts as worded in the Corpus iuris and in their Justinianic contexts as point of departure, since only this approach is relevant for medieval scholarship. This also explains that only occasionally there is room for questions concerning possible interpolations. 13 See also Inst. 3.19.4 and C. 8.38(39).3.

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Ulp. D. 45.1.38.17: Alteri stipulari nemo potest, praeterquam si seruus domino, filius patri stipuletur: inuentae sunt enim huiusmodi obligationes ad hoc, ut unusquisque sibi adquirat quod sua interest: ceterum ut alii detur, nihil interest mea. ( . . . ). Inst. 3.19.19: Alteri stipulari, ut supra dictum est, nemo potest: inuentae sunt enim huiusmodi obligationes ad hoc, ut unusquisque sibi adquirat quod sua interest: ceterum ut alii detur, nihil interest stipulatoris. ( . . . ).

Both texts, Ulp. D. 45.1.38.17 and Inst. 3.19.19, mention explicitly the personal character of the Roman stipulation and the fact that parties only acquire what is in their interest. They indicate the lack of such an interest as the ground for the fact that the stipulation in favour of a third party has no effect. There are no texts indicating there were other reasons to reject generally the possibility of stipulating for a third party, such as contravention of public order or good morals. Moreover, if this had been the case, it would not have been permissible to create a kind of interest by adding a penalty clause. Although a single fragment in the Corpus iuris qualifies the stipulatio alteri as prohibited14, the principal rule in Ulp. D. 45.1.38.17 and Inst. 3.19.19 speaks about being impossible (non potest), while in the context of these fragments terms are used as being void (non valere) or having no legal force (inutilis). This implies that, in case the promisee had no interest and no penalty clause was added, the stipulation in favour of a third party simply had no effect, nor for the promisee and promisor and neither for the third party.

b) per extraneam personam nihil adquiri posse Justinian’s Institutes also display an allied rule of law, viz. that it is impossible to acquire something through an extraneous person, an outsider, i.e. not one’s slave or one’s child under paternal control: per extraneam personam nihil adquiri posse15. This rule is phrased in a similar way in the fourth book of the Codex Justinianus16. The context in the Institutes seems to refer merely to acquisition of possession or real rights. The context in the Codex, on the other hand, indicates that both real and personal rights cannot be acquired through an extraneus as intermediary. Thus, according to Justinianic law the rule not only applies to the acquisition of real rights but also to the acquisition of personal rights through a contract by an extraneus as intermediary. This is confirmed by other texts in the Corpus iuris. One cannot enter into a contract of pledge through a free agent, not being one’s son, nor can a freedman stipulate that something be given to his patron17. Simi14 Diocl. C. 5.12.26 (294): . . . nec tibi prohibente iure quaerere potuit actionem. At any rate, in such a meaning the text is sometimes understood. 15 Inst. 2.9.5. The maxim is derived from the Institutes of Gaius, who qualified it as a ‘common expression’; cf. ( . . . ) quod vulgo dicitur ( . . . ), in Gai. 2.95. 16 Diocl. C. 4.27.1pr (290): Excepta possessionis causa per liberam personam, quae alterius iuri non est subdita, nihil adquiri posse indubii iuris est. 17 Ulp. D. 13.7.11.6 and Paul. D. 45.1.126.2.

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larly, a procurator is incapable of acquiring a right for his principal through stipulation, and it is not possible to purchase something on behalf of another person, either by contracting in one’s own name or in the name of the other18.

c) neque stipulari neque emere vendere contrahere, ut alter suo nomine recte agat, possumus There was an even more fundamental Roman principle, i.e. that persons, when entering into a contract, solely represent themselves and acquire what is in their own interest. Contracts create a very personal bond between parties, locking out outsiders. This underlying principle also explains, why in Roman law assignment (cession) was unknown. It was impossible to assign actions otherwise than by appointing the one to whom the claim should be transferred as procurator in rem suam. This principle is clearly expressed in Paul. D. 44.7.11. An outsider is not capable of bringing an action in his own name based on the contract we entered into, such as stipulation or sale. Paul. D. 44.7.11: Quaecumque gerimus, cum ex nostro contractu originem trahunt, nisi ex nostra persona obligationis initium sumant, inanem actum nostrum efficiunt: et ideo neque stipulari neque emere vendere contrahere, ut alter suo nomine recte agat, possumus.

The same principle seems to be expressed in D. 50.17.73.4, a fragment from the Republican jurist Quintus Mucius Scaevola (c. 140 – 82 b.C.). Scaev. D. 50.17.73.4: Nec paciscendo nec legem dicendo nec stipulando quisquam alteri cauere potest.

It has been disputed whether this text was interpolated, but in its Justinianic form it has a general purport, covering major parts of the law of contracts, especially when applied in medieval scholarship where the notion pactum was one of the generic terms for all kinds of agreements19. 18 Diocl. C. 4.27.1 (290) and Diocl. C. 4.50.6 (293), although Ulp. D. 45.1.79 grants the principal an actio ex stipulatu utilis for the exceptional case the principal was present at the moment the stipulation was entered into; also through praetorian stipulations of his procurator and institor the principal does acquire a right; see Paul. D. 46.5.5. Some texts may seem to be in contravention with the rule that no right can be acquired through an extraneus. However, sometimes the Digest explicitly states that the rule is no impediment (Paul. D. 13.5.15 dealing with constitutum debiti alieni) or that only seemingly acquisition through an extraneus takes place (Paul. D. 2.14.27.1, dealing with the pact between debtor and creditor not to sue the surety). 19 The only contract where the rule does not seem to be in force is mandate (mandatum). In Inst. 3.26.3 several examples are given of a mandate to act in the interest of a third party, e.g. by standing surety for this person. It is accepted that a mandate can take place in the mere interest of a third party. In such a case the mandatory has an actio mandati contraria against the mandator for the expenses he incurred, but there cannot be an actio mandati directa from the mandator against the mandatory because of a lack of interest. See Ulp. D. 17.1.6.4 and Ulp. D. 17.1.8.6.

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2. Exceptions to the basic rules Already in the Corpus iuris there are some exceptions to the Justinianic maxims mentioned above. The most important one is where the promisee has an actionable interest that something be performed to the third party or where such an actionable interest is created artificially by adding a penalty clause. In both cases it is the promisee who can sue the promisor; the third party has no action. Apart from these two categories there is a series of specific cases in the Corpus iuris where it is the third party who can enforce what was stipulated in his favour.

a) The promisee has an interest; the promisee has an action In the Institutes the rule that the stipulatio alteri has no effect (Inst. 3.19.19) is followed by a paragraph which explains that such a stipulation is effective where the promisee himself had an interest in the performance to the third party20. Such a kind of contract was in later times, i.e. in 20th century German legal doctrine, together with the stipulation alteri with a penalty clause, qualified as the ‘non-genuine contract in favour of a third party’. Inst. 3.19.20: Sed et si quis stipulatur alii, cum eius interesset, placuit stipulationem valere ( . . . ).

The interest of the promisee had to be a financial one. For classical law this resulted from the condemnatio pecuniaria principle (Ulp. D. 40.7.9.2), but, as will appear from the examples given below, it seems that also in Justinianic law a financial interest was required21. The sources mention specific examples of the interest the promisee may have in the performance to the third party. The gloss ‘nihil agit’ ad Inst. 3.19.4 of Accursius (y 1263), the composer of the authoritative Ordinary Gloss (c. 1260) in the 20 In a similarly general way this is expressed in other texts in the Corpus iuris. Paul. D. 2.14.23pr (quia nihil eius interest), Ulp. D. 45.1.38.17 (inuentae sunt enim huiusmodi obligationes ad hoc, ut unusquisque sibi adquirat quod sua interest), Ulp. D. 45.1.38.22 (cum sua interesset) and Diocl. C. 8.38(39).3 (290) (nisi sua intersit). 21 This does not mean that affection did not play any role in Roman law. In several texts in the Digest the late classical jurist Papinian allows slaves to be sold under conditions in their favour. As a matter of fact, sale is no stipulation, a slave is not a free person, and the conditions do not involve a performance, but nevertheless these texts indicate that an affective interest can justify such conditions. The wish to confer a benefit to someone else, who is not even a relative, suffices. See Pap. D. 17.1.54, Pap. D. 18.7.6pr-1 and Pap. D. 18.7.7; see about these texts Behrends, p. 30 ff. The idea that every person, stipulating that something be given to a third party, may be presumed to have acted in his own interest, only emerged much later, viz. in the writings of the Roman-Dutch authors of the seventeenth century. Arguments to defend this fiction were derived from Florus D. 1.1.3 (i.f.) and Pap. D. 18.7.7. Cf. also the socalled profit moral in modern French case law.

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thirteenth century, recorded sixteen cases in which he considered the rule alteri stipulari nemo potest not to apply. And although, strictly speaking, Accursius’ scheme cannot be qualified as Justinianic law, in view of the following paragraph on the era of the glossators we will follow this outline. The first three exceptions brought up by Accursius concern cases where the promisee has an interest. As will appear, in the opinion of Accursius, the rule alteri stipulari nemo potest does not refer only to the verbal or written contract of the Roman stipulation, but to all contracts, pacts and other legal acts in favour of a third party. Moreover, the rule is not only taken to be an obstacle for the agreement in favour of a third party to be effective, but also as an obstacle for the beneficiary to acquire an action. In this respect, medieval doctrine deviates from Justinianic law. i) A tutor stipulates from his fellow tutor that the ward’s patrimony will remain intact. This refers to the case where one tutor gave up his part of the administration of the pupil’s tutelage, leaving it entirely to his fellow tutor. Through a cautio rem pupilli salvam fore he could stipulate from his fellow tutor that something be done for his ward, namely that the latter’s patrimony will well be taken care of. The former tutor’s interest exists in the fact that he could be held liable by the pupil under the actio tutelae at the moment the pupil would reach majority. As may be clear, this stipulation creates the possibility of having recourse against the fellow tutor in case the former tutor is held liable to his ward. The latter will not derive a right from the stipulation. The gloss does not refer to a specific text, but the case is described in Inst. 3.19.20 and Ulp. D. 45.1.38.20. ii) A principal stipulates that something be given to his procurator. The gloss gives no references, but this exception is mentioned in Inst. 3.19.20 and in Ulp. 45.1.38.23. iii) A debtor stipulates that something be performed to his creditor. In this case the promisor’s performance to this creditor was meant to release the promisee from his debt and by doing so to avoid a penalty or the alienation of a mortgaged property, but, more generally, it seems to have been sufficient to stipulate a performance for one’s creditor as long as this performance contributed to the performance one was obliged to. The gloss ‘nihil agit’ refers to Inst. 3.19.20, Ulp. D. 45.1.38.22 and Ulp. D. 45.1.38.21. The latter contains three examples. This may not be an exhaustive survey of cases where the promisee has an interest. When selling a plot of land, one can stipulate in favour of his tenant, i.e. that the latter may continue to enjoy the property leased out, in order to avoid becoming liable under the actio conducti. Such a pact does not result in an action for the tenant and only creates for the landlord the possibility of having recourse against his purchaser; but the pact does have effects for the relationship between seller and buyer and the rule alteri stipulari nemo potest does not seem to apply in such a case22. 22

Ulp.-Serv. D. 19.1.13.30, Gai. D. 19.2.25.1 and Alex. C. 4.65.9 (234).

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b) Addition of a penalty clause; the promisee has an action There was a way of making every stipulatio alteri effective, viz. by adding a penalty clause. It was stipulated not only to perform to Titius (the third party), but also to pay the promisee a penalty if performance to Titius did not take place. In such cases the actual interest of the promisee was irrelevant. It was considered to be created artificially. The only thing that mattered was the amount of the penalty and the suspensive condition. By so doing, the promisee’s interest was not only presumed, it was also fixed. No inquiry was necessary into a possible underlying interest. Nobody could ask what benefit there may have been. Neither was there for the iudex a problem as to the amount in which the non-performing promisor should be condemned towards the stipulator. This had been already laid down between parties beforehand. If a penalty clause was added it was the promisee who had the remedy at his disposal; the third party beneficiary had no direct action23. c) Specific exceptional cases where the third party has an action In some fragments in the Corpus iuris we also trace exceptions to the rule that no right can be acquired through an extraneus. Here it appears that the third party beneficiary even has an action at his disposal. In the gloss ‘nihil agit’ ad Inst. 3.19.4, the remaining thirteen cases belong to this category24. In some of these cases the promisee was, at least according to medieval doctrine, considered to have an interest. In others he did not have one. Some of these cases much more closely resemble what we would call agency than a stipulatio alteri. iv) Praetorian stipulations take place. The gloss refers to Paul. D. 46.5.5, Paul. D. 39.2.18.16 and Ulp. D. 3.3.27.1. The principal acquires an action through praetorian stipulations by his procurator or institor. v) A procurator stipulates for his principal who is present at that moment. The principal acquires an action (actio utilis). The gloss refers to Ulp. D. 45.1.79 and Pap. D. 3.3.68. Normally a procurator is not capable of stipulating for his principal, unless he has an interest, and in the latter case it is the procurator who acquires the remedy which he can assign to his principal25. Inst. 3.19.19 and D. 45.1.38.17. Not in all the cases this is entirely clear. In the Digest title D. 46.6 (case ix) it is not explicitly stated that the third party acquired a remedy. 25 Diocl. C. 4.27.1 (290): Si igitur procurator non sibi, sed ei, cuius negotia administrabat, redintegratae rei uindicationem pactus est idque pactum etiam stipulatio insecuta est, nulla domino obligatio adquisita est. seruis autem res traditae dominis adquiruntur. See also Diocl. C. 4.50.6 (293). 23 24

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vi) An actor municipum stipulates for his municipium. The gloss contains no references, but this case is mentioned in Ulp. D. 13.5.5.9. vii) A curator or tutor stipulates for the one confined to his care. The gloss refers to Ulp. D. 13.5.5.9. viii) An institor stipulates for his principal. The gloss refers to Ulp. D. 14.3.1 – 2. The principal, the owner of the undertaking, could derive an action from the contract entered into by his institor, i.e. the manager of the business undertaking, slave or free man, if this is the only way to secure his interest. ix) A iudex, notarius or persona publica stipulates for an absent beneficiary. Accursius compares these office holders with the Roman servus publicus. The gloss refers to Paul. D. 46.6.1. Ulp. D. 46.6.3 and Ulp. D. 46.6.4pr, Nov. 96.1 (Coll. VII.7) and Nov. 118.5 (Coll. IX.1). A tutor had to promise through a cautio to his pupil to take good care of the pupils goods and to return these to the pupil on reaching majority. If the pupil could not be present or was unable to speak, the pupil’s slave could stipulate. However, if the pupil had no slave, he could make use of a public slave (servus publicus). The tutor’s promise to this public slave, made in the presence of the magistrate, resulted in an obligation towards his pupil26. As we will see below, in the Middle Ages it was disputed whether the beneficiary acquired an actio utilis himself, or whether the notary had to assign to the beneficiary his actio directa. x) A creditor concludes a pact from which his debtor acquires an action. The gloss refers to Ulp. D. 13.7.13pr. This case is sometimes also understood as a situation where the pact in favour of the third party is valid because the promisee has some kind of interest. However, unlike similar cases mentioned above, in this text the third party has an action (actio in factum) at his disposal. It was agreed at the sale of mortgaged goods, that the debtor was entitled to recover the goods when refunding the purchase price. What the exact interest of the seller in this case was is not clear, but one can think of several possibilities. It might have been a premature alienation where the creditor took advantage of a good opportunity to sell the pledged goods although the debt could not yet be claimed. Alternatively he might have agreed with the debtor not to sell the pledged goods unless under such a clause in favour of the latter27. xi) A grandfather concludes a pact to restore the dowry to the grandson who is no longer under his paternal control. The gloss refers to Paul. D. 24.3.45. In Roman law a father or grandfather was expected to provide the future husband of his daughter or granddaughter with a dowry (the dos profecticia), but the woman herSee also Marc. D. 1.7.18 and Ulp. D. 27.8.1.15. See J. Hallebeek, An ‘action tailored to the facts’: Some remarks concerning the actio in factum of D. 13,7,13 pr. in the tradition of continental European legal scholarship, in L. de Ligt e.a. (eds), Viva vox iuris Romani: Essays in honour of Johannes Emil Spruit, Amsterdam 2002, p. 181 – 196, with references to further literature. 26 27

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self was also capable of doing so (the dos adventicia). If she died during the marriage, her husband was entitled to retain the dos adventicia, but the dos profecticia had to be restored to the father, if he were still alive. If the marriage ended by divorce or by the death of the husband, it was the woman or, if she was under paternal control, her father, who could claim restitution by means of the praetorian actio rei uxoriae. The sources give the impression that there seems to have been a social need in Roman antiquity to stipulate the restoration of the dowry to a third party, i.e. not the person who granted it or his heir. Rules about restoring the dowry could apparently be derogated from by the parties’ private agreements. Restitution to a third party was laid down in formal stipulations or informal pacts. If the father could persuade the future husband of his daughter to promise in a stipulation directly to the third person to restore to him the dowry, the latter could bring an action if the marriage came to an end. If such a stipulation did not take place and there was merely an agreement between father and husband to restore the dowry to a third party, it was questionable whether the father who granted the dowry or his heir would have an action against the husband, not to speak of a direct action of the third party. The gloss indicates the text of Paul. D. 24.3.45 as exceptional. Gaius Seius stipulated restitution of the dowry to his granddaughter Seia or himself. The grandfather subsequently died. According to Paul, Seia has no action, but in the last lines, which are probably added or elaborated in post-classical time, a different solution is given. The stipulation is valid as if it were a stipulation solutionis causa28. Seia has no actio directa, but she does have an actio utilis for several reasons: the decision is in favour of the marriage and based on the affection of the persons involved (fauore enim nuptiarum et maxime propter affectionem personarum). These words were in the Middle Ages sometimes adopted as indicating the promisee had an interest, viz. an affective interest. A similar case, not mentioned by the gloss ‘nihil agit’, is Diocl. C. 5.14.7 (294). A father agrees through informal pact with his future son-in-law to restore the dowry to his grandchildren (children of the woman?) if the daughter died. The grandchildren have an actio utilis at their disposal based on equity (ex aequitate). xii) One is procurator of the seller. The gloss refers to Ulp. 19.1.13.25. In this case it is actually the procurator, not the principal, who is the seller. After the example of the institor, the principal is bound by his procurator, if he had ordered the procurator to enter into the contract. For this reason, the Digest argues that the principal should have an actio utilis on the basis of the contract of sale. xiii) Something is deposited under the condition to restore it to a third party. The gloss does not refer to any text, but the case is described in Diocl. C. 3.42.8. 28 In a stipulation solutionis causa the promisee makes mention of another person (Titio), next to himself (mihi), in view of the payment (solutionis causa). Such a thing can be done in the interest of the promisor. For various reasons it can be easier for the promisor, the debtor, not to pay to the promisee himself, but to another person. The third one, to whom the payment can take place is not necessarily the promisee’s creditor.

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xiv) Something is borrowed under the same condition. The gloss refers to Paul. D. 16.3.26 and Diocl. C. 3.42.8 (293). The first text deals with a certain Publia Maevia. When she left home to see her husband, she entrusted a locked box containing clothes and documents to her friend Gaia Seia and ordered her to restore it to the son out of her first marriage, if something bad should happen to her. Who could now claim restitution of the box? According to Paul it was Gaia Seia’s son, not her husband. The second text prescribes that in case another man’s things are lent out (commodatum) or deposited (depositum) under the condition that these objects be restored to the owner, this owner according to strict law (stricto iure) could not derive an action from the pact between others, but on grounds of equity (propter aequitatis rationem) he would have an actio depositi utilis against the depositee29. xv) Something is given subject to a condition to hand it over to a third party. The gloss does not refer to a text, but the case is dealt with in Diocl. C. 8.54(55).3. We are dealing here with the so-called donatio sub modo. It was not unusual in Rome to add a condition (modus) when granting someone a gift. It was acknowledged that a slave could be sold or donated under the condition that he should be manumitted after a certain lapse of time. The idea was to benefit two persons. The one who accepted the gift could for some time enjoy the services of the slave and after this period the slave could enjoy his freedom30. In a similar way it was possible to donate an object under the condition to pass this object after a certain period to another person. By so doing the donor intended to benefit two donees. Originally the second donee did not acquire any rights. Only the donor could bring a condictio if the first donee refused to fulfil the modus31. Probably in classical time some Emperors were already willing to grant an action to the second donee too. This is at any rate the case in a rescript of Diocletian dating from 29032. It first mentioned the rule of ancient law that only the donor and his heir can sue the unwilling first donee by bringing a condictio. Subsequently, without mentioning their names, Diocletian referred to his divine predecessors who in such cases on a benevolent interpretation of the law (benigna iuris interpretatio) had granted the third party an actio utilis in conformity with the donor’s wish, which opinion was also followed by Diocletian himself for the case in dispute. xvi) A father stipulates for his son or someone else under his control that something be given after his death. The son has an action although he is not the heir. The gloss refers to Ulp. D. 45.1.45.2. If the father stipulated unconditionally and not after his death, he himself would acquire an action. The gloss refers to Paul. D. 45. 1. 39. A case with comparable facts can be found in African. D. 16.3.16. Scaev. D. 45.1.122.2 and Paul. D. 18.7.3. 31 This was probably only the case if the modus was laid down in a stipulation between donor and donee. This is not stated in C. 8.54(55).3, but appears from Fragmenta Vaticana nr. 286. Cf. Wesenberg, Verträge, p. 29 – 35 and Zimmermann, p. 39 – 40. 32 Diocl. C. 8.54(55).3 (290) also preserved as Fragmenta Vaticana nr. 286. 29 30

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The gloss ‘nihil agit’ ad Inst. 3.19.4 did not succeed in making the survey complete. The literature describes more cases in the Corpus iuris where the rule alteri stipulari nemo potest, in its medieval interpretation, seems to be set aside. It is striking that one category of cases is not mentioned by Accursius. According to the Roman texts, it was also possible to grant a credit (mutuum) in the name of a third party. Thus B, the intermediary and an extraneous person, could hand over a certain amount to C, the recipient, on behalf of A. Irrespective of the fact whether the coins were owned by A or B, it was A who became the creditor and could claim the money back from C by a condictio33.

III. The glossators 1. The scholarly approach in general In some respects the medieval approach towards the rule alteri stipulari nemo potest deviated from Justinianic law. We have seen already that according to Scaev. D. 50.17.73.4 it is not possible to agree in an informal pact (pactum) that something be given to a third party, while in the cases of those pacts in favour of a third party which in the Corpus iuris are considered to be valid most of the time the promisee appears to have an interest himself34. Thus, in Justinianic law the principle expressed in the rule alteri stipulari nemo potest was not restricted to the formal stipulation. In its Justinianic context the maxim implied that if the promisee had no interest that something be given to a third party, the contract would be ineffective. In two respects the maxim gained a broader significance in medieval doctrine. In the first place it covered, even more than in Justinianic Law, the entire law of contracts. This was the result of the gradual development of a more open system of contracts. Roman law was characterized by a restricted system of a limited number of enforceable contracts. Especially in classical law, each contractus was governed by its own set of rules and resulted in a specific remedy with a formula of its own. Remnants of the formulary procedure could still be traced in the Corpus iuris. In the Middle Ages, however, there is more emphasis on the features the contracts have in common, which approach would eventually lead to an open system and general rules for all contracts. The boundaries between the Roman enforceable contractus and the unenforceable pacts were vanishing, since terms as conventio and pactum were developed into generic terms for contract in general and also the pactum vestitum, i.e. the pact based on a causa, would, according to medieval doctrine, result in an enforceable obligation35. 33 Ulp. D. 12.1.9.8 and Paul. D. 45.1.126.2. In Justinianic law the intermediary, when lending out on behalf of a principal, could even accept a pledge for this principal. Without assignment of remedies, the principal could bring an actio hypothecaria against the debtor. Cf. Just. C. 4.27.3(2) (530). 34 See Ulp. D. 13.7.13pr (cf. Ulp. D. 20.5.7), Ulp. D. 19.1.13.30 and Alex. C. 4.65.9.

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Moreover, as appeared from the Accursian gloss ‘nihil agit’ ad Inst. 3.19.4, the maxim alteri stipulari nemo potest was in the Middle Ages also taken to express that a third party cannot acquire a right, not only through a stipulator alteri, but also through any kind of intermediary.

2. Listing the exceptions As was shown, Justinianic law was familiar with exceptions to the rule alteri stipulari nemo potest. If the promisee had an actionable interest or such interest was created artificially through a penalty clause, the agreement that something be given to a third party was effective between the parties. Moreover, in a number of specific other cases, the third party even had an action to enforce what was promised in his favour. From the beginning the glossators at Bologna recited these exceptions for didactical reasons36. This can be found already in the Casus codicis of Wilhelmus of Cabriano, a glossator who is supposed to reflect faithfully the teachings of his master Bulgarus de Bulgarinis (y 1166). According to Wilhelmus the notion ‘interest’ has a broader sense than just the monetary interest. In the two texts in the Corpus iuris where it was stipulated to restore the dowry to one’s grandchildren and these grandchildren appeared to have an action (Diocl. C. 5.14.7 and Paul. D. 24.3.45) there was also an interest, viz. an affective interest. A monetary interest of the promisee results in an actio directa for himself, an affective interest of the promisee results in an actio utilis for the third party. However, such an affective interest was only recognized for this specific situation of stipulating the restoration of the dowry to a third person. In the other cases, where the third party appears to have a claim, there is always a specific reason (ratio singularis). These cases are elements introduced in contravention of the ratio iuris, the internal 35 A. Söllner, Die causa im Vertragsrecht des Mittelalters bei den Glossatoren, Kommentatoren und Kanonisten, in E. J. H. Schrage (ed), Das römische Recht im Mittelalter [Wege der Forschung, 635], Darmstadt 1987, p. 130 – 186 and Zimmermann, p. 549 ff. See for the contractual causa in Canon Law: R. H. Helmholz, Contracts and the canon law, in J. Barton (ed), Towards a general law of contract [Comparative studies in continental and Anglo-American legal history, 8], Berlin 1990, p. 49 – 65. 36 Literature: Moltzer, op. cit.; J. C. de Wet, Die ontwikkeling van die ooreenkoms ten behoewe van ‘n derde, Leyden 1940, p. 28 – 68; G. Wesenberg, Zur Behandlung des Satzes Alteri stipulari nemo potest durch die Glossatoren, in Festschrift Fritz Schulz II, Weimar 1951, p. 259 – 267, H. Lange, “Alteri stipulari nemo potest” bei Legisten und Kanonisten, in ZSS Rom. Abt. 73 (1956), p. 279 – 306, J. A. Ankum, De voorouders van een tweehoofdig twistziek monster, Beschouwingen over de historische ontwikkeling van het beding ten behoeve van een derde, Zwolle 1967, U. Müller, op. cit.; J. A. Ankum, Die Verträge zugunsten Dritter in den Schriften einiger mittelalterlicher Romanisten und Kanonisten, in W. G. Becker / L. Schnorr von Carolsfeld (eds), Sein und Werden. Festgabe für Ulrich von Lübtow zum 70. Geburtstag am 21. August 1970, Berlin 1970, p. 555 – 567, reprinted in E. J. H. Schrage (ed), Das römische Recht im Mittelalter [Wege der Forschung, 635], Darmstadt 1987, p. 116 – 130; J. Hallebeek, Audi domine Martine! Over de aequitas gosiana en het beding ten behoeve van een derde, Amsterdam 2000.

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system of the law, and the Digest itself prohibits the generalization of these elements37. Thus, applying these elements by analogy was not allowed38. If the prohibition of the Digest was not observed, this would violate the law, Wilhelmus argued39. This line of reasoning by Bulgarus, presented here by his pupil, was followed by the majority of Bolognese glossators, as we will see below.

3. The doctrine of Martinus In Bologna there was also a dissenting view in the twelfth century, viz. that of the glossator Martinus Gosia (y after 1157)40, one of the so-called quattuor doctores, which was primarily handed down through later glossators. Martinus considered every stipulatio tertio to be valid and even every tertius to have acquired an enforceable right. In the literature we find various attempts to explain this remarkable point of view. Some authors thought that Martinus wanted to adjust the Roman texts to Lombard law41 or to the indigenous law of the German territories42, but the modern literature no longer endorses this view43. We may not Paul. 1. 13. 14 and D. 50. 17. 141pr. For the analogy principle in the glossators see: G. Otte, Dialektik und Jurisprudenz, Untersuchungen zur Methode der Glossatoren [Ius commune SH, 1], Frankfurt am Main 1971, p. 203 – 204. 39 Wilhelmus de Cabriano, Casus codicis ad C. 4.27.1, in T. Wallinga (ed), The Casus Codicis of Wilhelmus de Cabriano [Studien zur europäischen Rechtsgeschichte, 182], Frankfurtam Main 2005, p. 273 – 274: ( . . . ) Sunt tamen casus in quibus et ei cui stipulatio est facta actio quesita creditur. Vbi ergo cuius interest alii dari poterit alteri stipulari, ut interdum directa actio nascatur, interdum utilis detur, id est: uel directa competat ei qui stipulatus est, uel utilis datur ei cui stipulationem fecit. Interesse autem estimatur uel ratione persone uel etiam propter affectionem. Quedam etiam stipulationes alii facte subsistunt speciali ratione: ratione persone, ut si creditori procuratoriue suo quis stipulatus sit, quo casu ei qui stipulatus est actio competit affectionis ratione, cum pater nepotibus stipulatus est, quando cui stipulatio facta est, actio danda est, ut infra de pactis dotalibus Pater (C. 5.14.7) et ff. Sol. matri. Gaius (D. 24.3.45), ratione singulari, ut C. ad exibendum l. penult. (C. 3.42.8) et ff. de pignorat. Si cum (D. 13.7.13) et de donationibus que sub modo Quotiens (C. 8.54(55).3), quibus casibus et ei cui stipulatus facta est actio danda est. Vbi ergo reperieris ex alterius contractu alteri actionem dari, cum certi sint casus in iure nostro comprehensi in quibus debeat decerni, ibi dandam merito dixeris. Ceterum si passim hoc ad consequentias trahere uolueris, uereor ne legem offendas. 40 Literature: F. C. von Savigny, Geschichte des römischen Rechts im Mittelalter IV, 18502 (reprint Bad Homburg 1961), p. 124 – 140; H. Kantorowicz / W. W. Buckland, Studies in the glossators of the Roman law, Newly discovered writings of the twelfth century, Cambridge 1938 (reprint Aalen 1969), p. 86 – 102; E. Cortese, Il diritto nella storia medievale II (Il basso medioevo), Rome 19983, p. 76 – 102; H. Lange, Römisches Recht im Mittelalter I, Munich 1997, p. 170 – 178. 41 K. Neumeyer, Die gemeinrechtliche Entwickelung des internationalen Privat- und Strafrechts bis Bartolus I, Munich 1901 (reprint Berlin 1969), p. 59. 42 N. Tamassia, Odofredo, in Scritti di Storia Giuridica II, reprint Padua 1967, p. 335 – 479 (published previously in 1894 – 1895), p. 403 – 404; E. Seckel, Die Anfänge der europäischen 37 38

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exclude the possibility that in Canon Law the maxim alteri stipulari nemo potest, at any rate in the opinion of some canonists, did not apply as it did in Justinianic law, where the promisee was required to have an interest for the stipulatio alteri to be effective. There are generally phrased statements, e.g. in the Summa decretorum of Huguccio (y 1210) and in the Glossa Palatina (1210 – 15), which seem to express the view that it is possible to promise something to an absent beneficiary through someone present (a representative) or to promise to someone present that something will be given to an absent beneficiary44. These statements may be part of the same tradition as Martinus is standing in: it has been suggested that Martinus was still abiding with Canon Law opinions from a previous century45. Another option is that he attempted to adapt the Roman texts to certain opinions of the canonists in order to make civilian scholarship more acceptable and less dependent on ecclesiastical courts46. The dissensiones dominorum ascribed to Hugolinus de Presbyteris (y after 1223), discussed in connection with Diocl. C. 4.50.6 a difference of opinion between Martinus on the one hand and others such as Azo Portius (y 1220) on the other, regarding the question whether one can enter into a contract of sale through an intermediary as a nuntius. Subsequently the question arose whether someone can derive an actio utilis from a pact he was not a party to (ex alieno pacto)47. Martinus maintained this was possible, referring to two texts in the Corpus iuris. The first deals with the pact to restore goods deposited with a third party, the case of Publia Maevia (Diocl. C. 3.42.8, case xiv in the gloss ‘nihil agit’), the second with the pact to transmit a gift to a third party after a lapse of time, the case of the donatio sub modo (Diocl. Jurisprudenz im 11. und 12. Jahrhundert, in ZSS Rom. Abt. 45 (1925), p. 391 – 395, p. 394; E. Genzmer, Die Justinianische Kodifikation und die Glossatoren, in Atti del Congresso Internazionale di Diritto Romano, Bologna I, Pavia 1934, p. 345 – 430, especially p. 399. 43 Wesenberg, Verträge, p. 101 – 111 and Müller, p. 49. 44 Huguccio, Summa Decretorum ad C.1 q.7 c.9 in Paris, BN lat. 15396, fol. 106vb: per te: quod per alium alii potest fieri promissio, quod uerum est, et si sit mandatarius cui promittitur; the gloss ‘per te’ ad C.1 q.7 c.9 edited in A. Padoa Schioppa, Sul principio della rappresentanza diretta nel Diritto canonico classico, in S. Kuttner (ed), Proceedings of the Fourth International Congress of Medieval Canon Law [Monumenta Iuris Canonici C subsidia 5], Città del Vaticano 1976, p. 107 – 131, especially p. 116, cf. also p. 130; this gloss was adopted by Johannes Teutonicus in the Ordinary Gloss on Gratian’s Decree; see the gloss ‘et per te’ ad C.1 q.7 c.9: ( . . . ) Sed credo iure canonico me teneri, si ego promitto tibi me daturum Titio decem, arg. xxii q.v Iuramenti (C.22 q.5 c.12), maxime si interuenerit sacramentum arg. ff. de constit. pecu. l. i et l. Eum qui (D. 13.5.1pr). For similar opinions and the interpretation of these texts by later canonists see the contribution of Dondorp in this volume. 45 Cortese, p. 80 – 81. 46 See for this so-called ‘saving the face of Roman law’: G. Dolezalek, The moral theologians’ doctrine of restitution and its juridification in the sixteenth and seventeenth centuries, in Acta iuridica 1992, p. 104 – 114, p. 105. 47 See G. Haenel, Dissensiones dominorum, Leipzig 1834 (reprint Aalen 1964), Hugolinus § 256 (p. 428 – 429) and V. Scialoja, Dissensiones Dominorum (Cod. Chis. E. VII, 211), in Studi giuridici II, Rome 1934, § 20 (p. 341).

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C. 8.54(55).3, case xv in the gloss ‘nihil agit’). In both cases the third party has an actio utilis at his disposal, in the first case based on equity, in the second based on a benevolent interpretation of the law. According to later glossators Martinus generally accepted the validity of the stipulatio alteri and in all cases (semper) he granted the third party an action48, not only in the exceptional cases49. Probably Martinus took the two exceptional cases as mentioned in the dissensiones dominorum, viz. C. 3.42.8 and C. 8.54(55).3, as a starting point50. However, there are similar texts in the Corpus iuris and according to Martinus their number suffices to consider the exceptions henceforth as the general rule51. If a specific text in the Corpus iuris explicitly states that the third party beneficiary has no action at his disposal, such a text, according to Martinus, only pronounces upon the actio directa, not upon an actio utilis. Moreover, the solution of the Corpus iuris, i.e. that the third party has no actio directa, is the solution of strict law, the ius strictum or rigor iuris. Based on equity, aequitas, the third party does have an action, an actio utilis52. This seems to be a formal way of harmonizing Martinus’ dissenting view with the texts of the Corpus iuris, because as regards substantive law the actio directa and actio utilis will lead to the same result, that the promisor is liable towards the beneficiary. 4. The mainstream glossators and the Accursian Gloss: Martinus’ doctrine rejected Martinus’ doctrine concerning the stipulatio alteri may have had some influence upon statutory law. The validity of agreements that something be given to a third party, was without exception accepted in the Statutes of the cities of Northern Italy53. For the city of Pisa the influence of Martinus was shown explicitly54, for other cities we may not exclude it. 48 Azo, Summa Codicis, Venice 1581, ad C. 2.3 no. 28 (column 68), the gloss ‘utilis’ ad C. 3.42.8 and the gloss ‘nihil agit’ ad Inst. 3.19.4. 49 Azo, Lectura super Codicem, Paris 1577 (reprint Turin 1966) ad C. 3.42.8 (p. 251 – 252): ( . . . ) Martinus tamen uoluit propter hoc dicere quod semper ex pacto alterius detur utilis actio, et sic dixit generale et non speciale. 50 See the phrasing of the gloss ‘utilis’ ad C. 3.42.8: ( . . . ) Item nota, quod ex hac lege dixit M[artinus] ex alterius pacto semper dari utilem actionem ( . . . ). 51 See Azo, Summa Codicis ad C. 4.27 no. 14 (column 360); Lectura super Codicem ad C. 4.27.1 no. 5 (p. 306); and the gloss ‘quaecumque gerimus’ ad D. 44.7.11: ( . . . ) licet Martinus semper dederit ex alterius stipulatione, quia hoc in multis casibus inueniebat, ut ( . . . ) and the gloss ‘nihil agit’ ad Inst. 3.19.4: ( . . . ) Sed Martinus dicebat hos casus facere regulam: at si quis casus esset contra illud, speciale esset at quod hic regulariter dicetur ( . . . ). 52 Azo, Brocardica, Venice 1581, rubrica IIII (De pactis), no. 54 (column 19); the gloss ‘nulla’ ad C. 4.27.1 and the gloss ‘nihil agit’ ad Inst. 3.19.4. The distinction between strict law and equity was clearly inspired after C. 3.42.8. 53 Literature: H. Brunner, Beiträge zur Geschichte und Dogmatik der Werthpapiere II, Die fränkisch-romanische Urkunde, in Zeitschrift für das gesammte Handelsrecht 22 (1877),

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However, the three others of the quattuor doctores, Bulgarus, Hugo (y before 1171) and Jacobus (y 1178), rejected the teachings of Martinus on the stipulatio alteri and they were followed by later glossators such as Johannes Bassianus (y 1197), a pupil of Bulgarus55, Hugolinus and Azo56. The latter qualified Martinus’ view on the stipulatio alteri as incorrect (falsum)57, a view which was later to be endorsed by Accursius58. All these glossators retained the exceptional character of the cases in the Corpus iuris, where the third party is granted an action and emphasized that this is exceptional (speciale) and deviating from what is normal59. In their opinion, the two texts upon which Martinus based his doctrine, are exceptional cases, where Justinian explicitly granted an actio utilis, but apart from these instances one should stick to the principle that one cannot derive an action from the contract one did not enter into60. According to Azo, following the reasoning of Wilhelmus of Cabriano, the exceptional cases should not be developed into a new general rule (specialia non sunt trahenda ad consequentiam)61. This was also the stand of the Accursian Gloss. In the preceding paragraph we saw that the Accursian gloss ‘nihil agit’ ad Inst. 3.19.4 described sixteen cases where the rule alteri stipulari nemo potest was considered not to apply, but nevertheless the gloss qualified all sixteen as specialis and abided with the maxim just mentioned as a principal rule, thereby repeating again the words of Wilhelmus of Cabriano: speciales non sunt trahendi ad consequentiam62. As well, the reasoning of Martinus that if there is no action according to ius strictum, there was neverp. 59 – 134, p. 90 – 99; C. Freundt, Das Wechselrecht der Postglossatoren II, Leipzig 1909, p. 79; R. Fränkel, Die Grundsätze der Stellvertretung bei den Scholastikern, in Zeitschrift für vergleichende Rechtswissenschaft 27 (1912), p. 289 – 391, p. 296; Wesenberg, Verträge, p. 111; and Lange, Alteri, p. 291 note 64. 54 This influence is in general described in E. Besta, Le obbligazioni nella storia del diritto Italiano, Padua 1936, p. 88 – 90. 55 See the glosses ‘utilis’ ad C. 3.42.8 and ‘nulla’ ad C. 4.27.1. 56 The gloss ‘fieri’ ad D. 45.1. 38. 21 and Azo, Lectura super Codicem ad C. 3.42.8. 57 Azo, Summa Codicis ad C. 2.3 no. 28 (column 68) and Lectura super Codicem ad C. 4.27.1 no. 5 (p. 306). 58 See the glosses ‘potes’ ad C. 4.50.6 and ‘nihil agit’ ad Inst. 3.19.4. The gloss ‘plerumque’ ad D. 2. 14. 25.2 speaks about a misconception (error). 59 Azo, Lectura super Codicem ad C. 3.42.8 (p. 251 – 252) and ad C. 5.14.4 no. 1 (p. 399); Odofredus, Lectura super Digesto veteri II, Lyon 1552 (reprint Bologna 1968) ad D. 13.7.13pr (fol. 57vb) and ad D. 16.3.26pr (fol. 80va), Lectura super Codice ad C. 5.14.4 (fol. 279vb) and ad C. 5.14.7 (fol. 280ra); the gloss ‘aut in factum’ ad D. 13. 7. 13pr, the gloss ‘ex stipulatu’ ad D. 3.3.27.1 and the gloss ‘admiserunt’ ad C. 8.54(55).3. 60 Haenel, p. 428 – 429 and Scialoja, p. 341. 61 Azo, Summa Codicis ad C. 2.3 no. 28 (column 68), Lectura super Codicem ad C. 3.42.8 (p. 251 – 252) and ad C. 4.27.1 no. 5 (p. 306). 62 See the gloss ‘nihil agit’ ad Inst. 3.19.4 with a reference to Paul. D. 1.3.14; cf. also Odofredus, Lectura super Codice I, Lyons 1552 (reprint Bologna 1968) ad C. 4.27.1 no. 6 (fol. 225rb).

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theless room for an actio utilis, was rejected63. In stronger words the glossators rejected the aequitas gosiana64. According to Azo the equity invoked by Martinus to grant the third party an actio utilis, is an aequitas cordis, an equity of the heart65. Martinus followed the personal equity of his own conscience, the aequitas rudis, not yet expressed in the words of the law66, and that is not allowed.

5. A general rule for the pact to restore the dowry to a third party As was shown, the mainstream glossators, unlike Martinus, opposed the idea of developing a more general rule on the basis of the casuistic opinions of the Corpus iuris. But in one respect this may not be true. We will explain this more fully. In the foregoing paragraph reference was made to two texts in the Corpus iuris, where it was agreed that the dowry had to be restored to an outsider, a third party. These texts, Paul. D. 24.3.45 and Diocl. C. 5.14.7, prescribed that this outsider would even have an actio utilis (based on equity). Wilhelmus of Cabriano maintained that these two text have something in common, viz. that the promisee had an affective interest in restoration of the dowry to a third party, which would result in an actio utilis for the third party. However, there are also texts in the Corpus iuris, which explicitly reject such a possibility. In Pap. D. 23.4.26.4 the third party has no action, but is only protected by an exception. In the first lines of Paul. D. 24.3.45 it is stated that the third party has no action, because the stipulation was made alteri and not solutionis causa. In Gord. C. 5.14.4 (240) it is stated that an action for the beneficiaries, the children, only lies if they had themselves stipulated. In Diocl. C. 8.38(39).3 (290) only the stipulator has the action ex persona tua, not the third party beneficiary, a certain Julian, while in Diocl. C. 5.12.26 (294), the third party has no action because the stipulation in his favour is said to be prohibited by law (prohibente iure). However, in Diocl. C. 5.14.7 (294) the beneficiaries have an actio utilis at their disposal based on equity (ex aequitate), while in Diocl. C. 5.12.19 (294) the third party, a certain Ammia, has no action. One cannot derive an 63 Referring to Ulp. D. 45.1.45.2 the Gloss maintains that it does not make any difference whether one can bring an actio directa or an actio utilis. See the gloss ‘nihil agit’ ad Inst. 3.19.4: ( . . . ) dicebat iure directo non ualere, sed utiliter acquiri posse. Et sic secundum eum semper ex pacto alterius quaeritur. Quod falsum est, cum parum interesset, directo an utiliter queretur, ut ff. de ne. gest. l. Actio (D. 3. 5. 46(47)). 64 So termed after Martinus Gosia. 65 Azo, Brocardica, rubrica IIII (De pactis), no. 54 (column 19): ( . . . ) Martinus uero ex aequitate cordis sui dicebat dari utilem actionem ex alterius pacto. 66 Azo, Lectura super Codicem ad C. 3.1.8 no.3: ( . . . ) praeterea intellige de aequitate quae in lege reperitur, non quod de suo corde liceat inuenire. ( . . . ) (p. 167). Cf. Haenel, Hugolinus § 91 (p. 330). The aequitas rudis is the unpolished equity not yet expressed in the texts of the law, aequitas nondum constituta, as opposed to the fixed equity or aequitas constituta. This is the written law, the ius civile.

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action from a pact between others (ex alieno pacto nec prorsus ei ulla competit actio), it is argued. At the same time, the text suggests that Ammia might have acquired a right if the restitution had been formally stipulated. The fact that the various texts in the Corpus iuris seem to clash can be explained by referring to their chronological order. The texts from the classical jurists, Paul. D. 24.3.45 in its classical form (without the last lines), and the imperial constitutions until 294, all deny the third party an action, but Emperor Diocletian (c. 243 – 316) was apparently willing in some cases to grant the third party an action, while in other cases he was not. This can in its turn be explained by taking into consideration the relation between the woman for whom the dowry was given and the third party. Sometimes the third person was not a member of the family, an extraneus of the woman, but in other cases he or she was. The son in C. 5.12.26 was an extraneus, which means that he was probably emancipated and sui iuris, while also Ammia in C. 5.12.19 and Julian in C. 8.38(39).3 were probably no relatives, but extranei. Thus the underlying thought in the rescripts of Diocletian could have been that when we stipulate restitution of the dowry to members of the woman’s family, such as the grandchildren of the father in C. 5.14.7, who were probably also her children, equity justifies it that, unlike in Pap. D. 23.4.26.4, the latter will have an actio utilis, whereas for the extranei it remains the case that they cannot derive an action from the agreement between others. This idea is more or less confirmed in the last lines of Paul. D. 24.3.45, which contain probably a post-classical addition or elaboration. Here, the restitution of the dowry is not stipulated for an extraneus, but for the woman herself. There is no mention of equity in order to justify the fact that she has an actio utilis against her former husband, but the vague terms in the last line seem to point in such a direction. Therefore our conclusion must be that in Justinianic law there were only two texts supporting the third party’s action to claim restitution of the dowry (D. 24.3.45 and C. 5.14.7), and many more texts saying the opposite. For medieval scholarship the chronological order and the historical background did not play any role. In conformity with Justinian’s intention, the entire Corpus iuris was adopted as emanating from one and the same lawgiver, promulgated at one single moment in history, and provided with equal legal authority. At the same time, the medieval jurists searched for consistency in the compilation and much of their work was aimed at harmonizing (seemingly) contradicting provisions. After all, Justinian himself had ordered that the Digest should be consistent, have a logical sequence, and contain no contradictions whatsoever67. Azo explained the text of Gord. C. 5.14.4 in a similar way as Martinus would have done. According to the text of the Codex the children have no action to demand restitution of the dowry, but according to Azo this only refers to the actio directa. They do have an actio utilis, such as in the case of Diocl. C. 5.14.7. They can bring this action on the basis of the mother’s pact, as in the last lines of Paul. 67

Cf. the introductory constitution Deo auctore § 8.

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D. 24.3.45 Seia has an actio utilis based on her grandfather’s pact. At the same time Azo qualified as exceptional the fact that an action was derived from a pact one did not enter into68. Accursius followed the interpretation of Azo, but maintained that not he, but ‘others’ qualified this action as exceptional69. And indeed it appears that there are more texts where the Corpus iuris withholds from the third party beneficiary a remedy to claim restitution of the dowry, but where Accursius again granted an action. Commenting on Diocl. C. 5.12.19 Accursius stated that where there had not been a will the beneficiary would have had an actio utilis70. The Gloss is even more clear in the case of Diocl. 5.12.26, which states that the stipulatio alteri is prohibited by the law. It offers two solutions, the first one being an exact copy of the reasoning of Martinus, rejected many times at other places in the Gloss. According to strict law there is no action here, but according to equity there is71. Thus, as regards the stipulation to restore the dowry to a third party, the mainstream glossators seem to be inclined to generalize the solution given in Paul. D. 24.3.45 and Diocl. C. 5.14.7 and grant the third party beneficiary an actio utilis also in cases where this is explicitly denied in the Corpus iuris.

6. The stipulatio mihi recipienti suo nomine As we have seen, according to Justinianic law it was already possible to stipulate that something be given to a third party if the promisee had an actionable interest or added a penalty clause. Such a contract certainly had effects for the parties, although the third party could not derive a claim from it. For this reason the contract is not comparable with the modern contract in favour of a third party and traditionally it is termed as ‘non-genuine contract in favour of a third party’. In such a case according to Justinianic law the promisee acquired an action and could even 68 Azo Lectura Codicis ad C. 5.14.4: Quaerere non potuit. Directo, sed utiliter, ut infra eo. Pater (C. 5.14.7). Poterunt ergo agere ex pacto matris, sicut faciunt ex pacto aui materni, ut ff. sol. matri. Gaius Seius (D. 24.3.45) et erit speciale quod ex pacto alterius detur actio ut nota alios casus supra ad exhibendum (C. 3.42). 69 The gloss ‘actionem’ ad C. 5.14.4: directam sed utilem sic ut infra e.l. Pater (C. 5.14.7) et ff. so. ma. l. Caius (D. 24. 3. 45). alii dicunt speciale in auo et nepote propter rationem que redditur in d.l. Caius (D. 24. 3. 45). 70 The gloss ‘actio’ ad C. 5.12.19: actio scilicet directa sic et infra ti. ii l. Quamuis (C. 5.14.3) et l. Pactum (C. 5.14.4) et supra si quis alteri uel sibi (C. 4.50). Multum utilis sic, si non esset testamentum, ut infra ti. ii Pater pro filia (C. 5.14.7) et infra de don. que sub mo. Quoti. (C. 8.54(55).3). 71 The gloss ‘actionem’ ad C. 5.12.26: actionem directam stricto iure, sed ex equitatem habet utilem, ut infra ti ii. l. Pactum (Diocl. C. 5.14.4) et l. Pater (Diocl. C. 5.14.7) et ff. sol. ma. caius. (Paul. D. 24.3.45) uel dic quod nullam habet hic extraneus cum esset ratio que redditur in fi. illius l. caius scilicet dotis et conuentionis, sed mulier habet ex l. sibi datam, ut infra ti. i § accedit et § extraneum (Iust. C. 5.13.1.13 and 13c) que nascitur ex numeratione ut et alius ut ff. si cer. pe. l. Certi condi. § Si nummos (Ulp. D. 12.1.9.8).

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assign this action to the third party beneficiary. This was no cession in the modern sense, since the promisee remained the creditor, but it was possible to appoint the third party as procurator in rem suam. This we find explained again in the Accursian gloss ‘supra dictum est’ ad Inst. 3.19.1972. This gloss deals with the question how the stipulatio alteri had to be phrased. Where a son stipulated for his father, a tutor for his pupil, an actor municipum for his municipium etc., in short in all cases where the Corpus iuris always granted the third party a claim, it did not matter which person was mentioned in the verba promissoria (the words indicating to whom the promise was made). A son could stipulate ‘Do you promise me to give to Titius (my father)?’, but also ‘Do you promise Titius (my father) to give to him?’. However, if the promisee was an extraneus to the third party beneficiary, the verba promissoria (the words indicating to whom the promise was made) had to contain the name of the one who was present to accept the promise, the verba executoria (the words indicating to whom something had to be given) the name of the third person, the beneficiary: ‘Do you promise me to give to Titius?’. As a matter of fact such a stipulation only had effect in case the promisee had an interest or a penalty clause was added. Subsequently, the gloss ‘supra dictum est’ dealt at length with how exactly the penalty clause had to be phrased. However, at the end of the gloss we encounter a specific kind of stipulatio alteri, at least a formula where the alteri stipulari rule apparently did not apply, in spite of the fact that the promisee had no interest and no penalty clause was added: ‘Do you promise to give to me as recipient in his name?’ (promittis quod dabis mihi recipienti nomine eius?)73. By using this formula the promisee, although an extraneus, acquired an action which he had to ‘assign’ to the third party. It is doubtful, though, whether this formula could be generally applied and used in all cases where the promisee had no interest, including those where he acted out of generosity74. We find this specific kind of stipulatio alteri again in Odofredus de Denariis 72 Accursius, the gloss ‘supra dictum est’ ad Inst. 3.19.19: supra eod. § Si quis alii (Inst. 3.19.4). Hoc tamen fallit in multis casibus ut ibi diximus. Et nota quod hic tribus modis alteri stipulamur. Nam interdum directam acquirimus actionem, subaudi alteri stipulando, ut filius patri, seruus domino et econtra. ut supra eod. § Si quis alii et § Ei uero qui (Inst. 3.19.4), quandoque utilem ut tutor pupillo et in similibus ratione officii, ut seruus publicus ut ff. de consti. pec. l. Eum qui § pen. (D. 13.5.5.9) et ff. rem pu. sal. fo. l.iiii. (D. 46.6.4); interdum nullam acquirimus actionem, et tunc necessaria est poena, ut hic dicitur. Item nota quod hoc ultimo casu uerba stipulationis et sortis et poene possunt formari tribus modis. Aut enim sic dico: promittis mihi quod dabis illi et eodem modo poenam? aut sic: promittis illi, quod dabis ei et eodem modo poenam? Et in his duobus casibus non ualet neque sortis neque poene promissio. Sed aliud quando deberet utilis uel directa acquiri, ut in primis duobus casibus. ut ff. de constit. pec. l. Eum § Si actori (D. 13.5.5.9) et § Iulianus (D. 13.5.5.1) et hic. aut sic: promittis mihi quod dabis illi aut penam mihi, tantum stipulor, quia et tunc habet locum quod hic dicitur. aut quarto modo dico: promittis quod dabis mihi recipienti nomine eius? quo casu ualet utrunque et ego illi cedam cuius nomine stipulatus sum. ut ff. mandat. Si procur. § fin. (D. 17.1.8.10). 73 Actually this is no stipulatio alteri, since both the verba promissoria and the verba executoria contain the name of the one present, who accepts on behalf of someone absent.

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(y 1265), this time formulated in a slightly different way: ‘promittis mihi recipienti nomine domini mei quod restitueres rem?’75. This wording makes clear what exactly the promisee was accepting, viz. that a certain thing be restored to him as recipient in the name of his principal (dominus). Thus, the promisee is not stipulating that something be restored to a third party, but to himself, while this third party, on whose behalf he stipulated, is not just anybody but the principal in whose name he acted. This implies that the specific formula brought up in the last lines of the gloss ‘supra dictum est’ ad Inst. 3.19.19 was apparently intended to be used not just by any promisee, including those acting out of mere generosity, but by someone acting on behalf of his principal, i.e. either as the manager of the principal’s affairs or as the principal’s procurator76.

7. The servus publicus in medieval context As we have seen, according to Justinianic law, a tutor could, at the occasion of his appointment, promise to a servus publicus to administer his pupil’s patrimony well. From the gloss ‘nihil agit’ ad Inst. 3.19.4 it also appeared that Accursius awarded a comparable public service to the medieval magistrate (iudex), notary (notarius) and other public officers, probably officers of the court77. As a matter of fact these persons were not slaves but free men. Unfree persons could not even become notaries78. Only in one specific respect could the medieval notary be regarded a slave, i.e. that according to Italian indigenous law he was not free to 74 That no interest is required follows from the gloss ‘quaecumque gerimus’ ad D. 44.7.11, which not only grants the promisee an actio directa to be assigned, but also the third party an actio utilis: ( . . . ) Ita intelligitur haec lex, quod non possum ex meo actu alii aliquam obligationem acquirere, nisi mea intersit. Sed tunc non ille agit, sed ego ad interesse meum, ut infra titulo primo l. Libe. homo § fi (D. 45.1.118pr). Et hoc si mihi stipulor ut illi des uel etiam illi extraneo, nam semper ago si mea interest. Si autem mea non interest, et uolo quod ualeat: tunc mihi et suo nomine stipulor: et sic mihi directa sibi cedenda, et sibi utilis quaeritur, ( . . . ). 75 Cf. Odofredus, Lectura Codicis, Lyons 1562 (reprint Bologna 1968), ad C. 4.27.1 nr. 4 (fol. 225r): ( . . . ) Interdum promissionem et restitutionem concipiendo in sua persona nomine domini, uerbi gratia, promittis mihi recipienti nomine domini mei quod restitueres rem, dicit ille, promitto, ualet ista stipulatio: quia acquiret sibi actionem sed domino tenetur cedere. 76 The Gloss used the same formula for an heir stipulating from a legatee. See the gloss ‘huiusmodi legatum’ ad D. 30.1.84pr: ( . . . ) Item non uidetur ualere cautio, quia alteri stipulari etc. ut infra de uer. ob. l. Stipulatio ista § Alteri (D. 45.1.18.17)? ( . . . ) Responsio. Vel dic cauet heredi scilicet sic ut ualeat, puta recipienti nomine meuii. et sic cedet meuio, ut arg. supra de nego. gest. l. penul. (D. 3.5.47(48)). 77 In case there was no tabellio available another official (officialis), such as a clerk of the court could take his place; see the gloss ‘aut dare aliquem’ ad D. 46.6.3: alium officialem. 78 The gloss ‘seruo publico’ ad D. 1.7.18: id est tabellio, ut infra rem pu. sal. fo. Si pupillus (D. 46.6.2) et Insti. e. § Cum autem (Inst. 1.11.3). Seruus autem non potest esse tabellio ut C. de tabu. l. Generali li. x (C. 10.71(72).3); the gloss ‘publicum’ ad D. 46.6.2: id est tabularium ut insti. de adop. § Cum autem (Inst. 1.11.3). Tabellio autem seruus esse non potest ut C. de tabul. l. Generali (C. 10.71(72).3).

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refuse to draw up instruments79. The notary (notarius, tabellio) was generally put on a par with the Roman servus publicus, because he publicly offered certain services80. The Accursian Gloss did not restrict to the setting of the court room the capacity of notaries to stipulate validly in their instruments that something be given to a third party. As a consequence of this qualification of the medieval notary as the Roman public slave, it was possible to apply the Roman rules concerning the servus publicus to the notary. As the servus publicus could stipulate from the tutor in favour of the pupil, the medieval notary could validly stipulate that something be given to a third party beneficiary81. We are dealing here with either an early reception of the Roman sources or an early attempt to justify the existing legal practice with authoritative texts from the learned law. What the exact effects of this valid stipulation by a notary in favour of an absent third party would be was discussed at length in the fourteenth and fifteenth centuries82.

8. Conclusions Our conclusion for the era of the glossators should therefore be that, although the stipulatio alteri was much debated, the differences between Justinianic law in its original form and its medieval interpretation by the glossators are not striking. The number of cases where parties could effectively agree that something be performed to a third party did not increase enormously through the interpretation of the glossators. The only difference was probably that managers of another’s affairs and procurators were generally capable of stipulating on behalf of their principals and subsequently assigning the action they acquired to these principals, as long as they used the correct formula. After the doctrine of Martinus was definitively rejected by the vast majority of scholars, the number of cases where the third party beneficiary would have an action even without assignment did not increase. The Gloss only applied the actio utilis more generally in cases where it was stipulated to restore a dowry to a third party. See A. Pertile, Storia del diritto italiano, Vol. VI,12, Turin 1900, p. 301. The gloss ‘seruus publicus’ ad D. 27.8.1.15: Potest intelligi in uero seruo, uel in tabellione, qui seruus esse non potest ut C. de tabel. l. Generali lib. x (C. 10.71(72).3) et sic dicitur quod cuilibet de populo seruit ( . . . ); and the gloss ‘seruo publico’ ad C. 8.47(48).2: id est notario quia publice seruit, non sit seruus ut ( . . . ). 81 The gloss ‘dari solet’ ad D. 1.7.17.5: scilicet agnatis arrogati et aliis uel seruo publico idest tabellioni stipulanti pro eis quod restituat ipsiis bona arrogati si apud eum decesserit adhuc impubes ut ( . . . ). 82 Innocent IV (y 1254) taught that the tabellio and other officials were in court (in iudicio) and on authority of the magistrate capable of stipulating validly in favour of a third party. The magistrate could do the same without any other authorization. See Innocentius IV, Super libros quinque Decretalium, Frankfurt 1570 (reprint Frankfurt 1968), ad X 3.32.20 n. 1 (fol. 427vab). 79 80

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IV. The commentators 1. General approach and cocial context As we will see, the commentators did not return to the teachings of Martinus. Probably such a thing could not be achieved in view of the strong rejection of these teachings as misconception or false doctrine in the authoritative Accursian Gloss. However, the question we discuss – are parties to a contract capable of stipulating that something be given to a third party and what would be the consequences? – was still very much alive in legal scholarship of the fourteenth and fifteenth centuries. We must realize that by this time the scholarly debate took place in a social context where the Roman formalities, which made it difficult to stipulate effectively in favour of a third party, did not exist. These formalities were either not received in indigenous law or were set aside by contrary custom or particular legislation. For example, in Castile, where an early reception of Roman law had taken place, the ley ‘Paresciendo’ in capitulo 29 of the Ordenamiento de Alcalá, promulgated on 28 February 1348 by King Alfonso XI of Castile (1311 – 1350), had taken away all Roman formalities. Parties no longer had to come together in order to conclude a contract, and stipulating in favour of an absent beneficiary was perfectly valid. This may have prompted the commentators to develop within the civilian tradition, i.e. based on the Corpus iuris, more possibilities to stipulate effectively in favour of a third party. After all, in order to adopt the Corpus iuris as living law, it should not deviate too much from what was already in existence83.

2. Extending the number of cases where the third party beneficiary has an action The discussion during the period of the glossators had more or less the character of ‘all or nothing’. The choice was either to accept the doctrine of Martinus who generalized the exceptional texts and would always grant the third party beneficiary a remedy, or to consider as exceptional the few specific cases in the Corpus iuris where such a remedy was granted. In the fourteenth and fifteenth centuries there was eventually a more subtle approach, with more attention for indigenous law and the needs of legal practice. We encounter a further tendency to interpret Roman legal rules and concepts in a medieval context. Moreover, the idea of developing new rules on the basis of exceptional cases is applied again, albeit not as rigorously as Martinus had done. First we will have a look at cases where, according to the commentators, the third party beneficiary would have an action even without any assignment by the promisee. 83 An allied development was the extensive application of the actio institoria and the actio exercitoria, which paved the way for the acceptance of direct representation (agency). However we will pay no attention to this subject.

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a) The son under paternal control and the curator in medieval context According to Roman law a son under paternal control never acquired for himself but always for his paterfamilias. If he had stipulated a performance, the promisor became obliged towards the son’s father, no matter whether the son had stipulated for himself or for his father. Stipulations by slaves had similar effects. Slaves acquired for their master. In the Middle Ages also monks were considered always to acquire for their monastery or superior84. The curator and tutor who take care of another’s patrimony have their medieval equivalents too: the glossator Placentinus (y 1182) mentioned as examples the steward (oeconomus) of the Church and the administrator of the city85. The commentators considered every legitimus administrator or actor universitatis as capable of acquiring for the body he represented. Further examples were the prelatus ecclesiae and the syndicus86.

b) The servus publicus in medieval context As we have seen in the preceding paragraph on the glossators, the Accursian Gloss awarded to the medieval magistrate (iudex), notary (notarius, tabellio) and other public officers (clerks of the court) a comparable public service as the Roman sources had done to the servus publicus87. In this respect the Gloss tried to apply Roman law to legal practice or to justify the latter with Roman texts. According to the indigenous law of many territories in Southern Europe, public officers could validly stipulate for an absent beneficiary, even without the latter’s mandate, e.g. in case of a donation to an unborn child. The Siete Partidas (1265) gave effect to promises made to a public clerk, at any rate in his capacity as court clerk88. From 84 This could be found in the gloss ‘iuri’ ad Inst. 3.19.4 and in Partidas 5.11.7; cf. also Angelus de Perusio (Angelus de Ubaldis), Super secunda Digesti Novi Lectura, Lyons 1548 ad D. 45.1.38.21 n. 6 (fol. 12va). 85 Cf. Placentinus / Distinctio ad C. 8.54(55).3 / Incipit: Aliquando ex pacto alterius alteri datur actio / Expl. si tutor pu, curator adulto, yconumus ecclesie, administrator ciuitati stipulatur. p[lacentinus] / Berlin Lat. fol. 274, fol. 175r. 86 Angelus de Ubaldis ad D. 45.1.38.21 n. 5 (Super secunda Digesti Novi lectura, fol. 12va); Paulus Castrensis (Paulus de Castro), Secunda super Digesto Novo, [s.l.] 1527, ad D. 45.1.38.17 n. 6 (fol. 16vb) and Jason de Mayno (Iason Mainus), In secundam Digesti Novi partem commentaria, Lyons 1581, ad D. 45.1.38.20 n. 9 and 11 (fol. 67vb and 68rb) and ad D. 45.1.122.2 n. 23 – 24 (fol. 156va). Stipulating for Churches, for sacred places and for charitable ends (the paupers) was allowed to everyone. 87 The gloss ‘nihil agit’ ad Inst. 3.19.4 and the gloss ‘seruus’ ad D. 27.8.1.15. Cf. Lange, Alteri, p. 283 – 286 and 288 – 290. 88 Partidas 5.11.7: ( . . . ) E aun dezimos que los judgadores e los escriuanos de concejo, que escriuen con ellos, pueden rescebir promission en nome de otro. E esto seria, si la rescebiessen en nome de algund huerfano prometiendole el guardador que lealmente guardasse a

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1348 the ley ‘Paresciendo’ of the Ordenamiento de Alcalá allowed the promise that something be given to a third party to be made in the presence of a public clerk or even some private person89. Also the Statutes of many cities in Northern Italy from this period acknowledged the possibility of acquiring rights through an intermediary. This could anyhow be achieved through a notary (tabellio), but often also through a private person as long as the parties to the contract had the sincere intention that a third party would acquire a right90. Thus, in the late Middle Ages it was established legal practice that the third party would have an action in view of the stipulation of e.g. a gift inter vivos made for his benefit in a notarial instrument. However, this practice fundamentally deviated from Roman law with its maxim alteri stipulari nemo potest. In the concise treatise De tabellionibus, edited in the sixteenth century under the name of Baldus, this practice was qualified as clashing with the ius commune91 and Antoine Favre (1557 – 1624) described it in later times as one of the errores of medieval law92. But what was the opinion of the scholars? The French jurist Jean Faure (y c. 1350), who studied at Montpellier and mainly worked as legal practitioner, followed the Gloss and based the fact that public officers can stipulate for a third party on Paul. D. 46.6.1, Ulp. D. 46.6.2 – 3 and similar texts. Subsequently he dealt with the several categories of public officers. That the magistrate (iudex) can stipulate for a third party, can only be found in Ulp. D. 27.8.1.15, he argued, but this competence is nowadays also laid down in the Liber Sextus of 1298 (VI 5.5.2). That the notarius or tabellio publicus can stipulate, can be deduced from many texts in the Corpus iuris. Jean Faure did not pronounce clearly upon the effect of the stipulatio alteri by public officers. It seems, however, that the case of the tabellio was an exceptional one, in contravention of the ius commune where the rule alteri stipulari la persone del huerfano e a sus bienes. E si la rescebiesse en juyzio de la una parte en nome de otro, sobre algun pleyto, que oviesse entre ellos. O si la rescibiessen, tomando tregua de vno en nome de otro. 89 Ordenamiento de Alcalá, c. 29: ( . . . ) oque [la promysion] fue fecha aescriuano publico oaotra persona priuada en nonbre de otro entre absentes, o que se obligó a vno de dar ode fazer alguna cosa aotro ( . . . ). 90 Lange, Alteri, p. 290 – 292 and Müller, p. 55 ff. 91 Baldus, De tabellionibus, in Decimum volumen tractatuum e variis iuris interpretibus collectorem, Lyons 1549, fol. 125rb – 127ra, n. 2 (fol. 125vab): Praeterea secundum ius commune alteri per alterum non queritur l. Stipulatio ista § Alteri de uerb. obligatio. (D. 45.1.38.17). Ergo patet quod alteri acquiritur per tabellionem, quod est contra ius commune sed inferior a Principe non potest tollere ius commune l. Ille a quo § Tempestiuum ad Trebellia. (D. 36.1.13.4) et l. Nam magistratus de arbit. (D. 4.8.4) et uidetur casus in l. Actuarios C. de actu. lib. xii (C. 12.49(50).7) et hoc tenet Inno. iii in c. fina. in principio de fide instru. (X 2.22.16) ubi dicit quod nemo subditus Pape uel imperatori potest creare tabelliones, sed ipsis solis hoc est concessum. 92 Antonius Faber, Pars secunda de erroribus pragmaticorum et interpretum iuris, Genova 1622, Decadis XLVII, error II, n. 4 (p. 1132).

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nemo potest was in force. This may indicate that Jean Faure considered the beneficiary to have an action to claim what the notary had stipulated in his favour without assignment93. Here we come upon an important question, discussed by the commentators94. Would the notary have to assign his actio directa derived from the instrument in favour of a third party or would the third party have acquired an actio utilis without cession? An almost identical question arose when interpreting the provisions in the municipal Statutes, which allowed stipulations in favour of a third party. The usual solution was that the third party had an actio utilis without assignment, which was identical to the actio directa of the promisee (notary)95. Also later commentators, such as Jason de Mayno (1438 – 1519), a pupil of Alexander de Imola who later lectured at Padua, were of the opinion that where municipal Statutes acknowledged the stipulatio alteri, the third party beneficiary would acquire an action without assignment. Jason even dragged in a Roman text to support this view96. But what was the doctrine of the commentators in their commentaries on the Roman sources concerning the possibility of acquiring rights through a servus publicus? In what way would the pupil have acquired his action? No clear answer was given either in the Digest title D. 46.6 nor in the gloss ‘nihil agit’ ad Inst. 3.19.4. Bartolus de Saxoferrato (1314 – 1357), a pupil of Cinus de Pistorio (1270 – 1336), first displayed the opinion of the Bolognese jurist Dynus de Mugello (y c. 1303) that the pupil in Ulp. D. 46.6.2 would have an actio utilis without any assignment97. Similarly, the French jurist Guillaume de Cunh (y 1335), who had studied at Bologna and became professor of civil law at Toulouse, argued that it was the third party beneficiary who acquired the action, even if he had not ratified the stipulation98. The notary’s services were not meant to result in an action for himself, and, in addition, he acted as public officer99. Subsequently, Guillaume de Cunh 93 Johannes Faber, In Institutiones commentarii, Lyons 1557 (reprint Frankfurt 1969), ad Inst. 3.19.4 n. 4 – 6 (fol. 87vb-88ra). 94 See Lange, Alteri, p. 294 – 297. 95 See Müller, p. 56 – 57. 96 See Jason de Mayno ad D. 45.1.38.17 n. 2 (In secundam Digesti Novi partem, fol. 64rb): ( . . . ) sic etiam lex municipalis uel statutaria potest statuere, quod alter alteri possit stipulari, et non requiratur aliqua cessio. ( . . . ); and ad D. 45.1.38.20 n. 29 (In secundam Digesti Novi partem, fol. 69rb): Vndecima fallentia est, quando statutum diceret, quod ex stipulatio alteri facta agi possit, tunc non requireretur cessio quia dictio ex significat causam immediatam l. i § Ex incendio ff. de incen. ru. naufr. (D. 47.9.1.2). Ita in specie decidit Bal. in l. i. in fin. C. de test. manu. (C. 7.2.1). 97 Bartolus de Saxoferrato, Commentaria, Venice 1526 (reprint Rome 1996), Vol. VI, ad D. 46.6.2 n. 2 (fol. 114vb): Quero utrum ex stipulatione notarii debetur pupillo utilis sine cessione et textus hoc non exprimit. Dynus dicit quod sine cessione et nihil allegat. Habes textum in lege ii C. de ma. conue. (C. 5.75.2). 98 It may be noted here that the notary stipulated “for himself as recipient for the third party”, which may have been the commonly used formula in notarial practice.

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dealt with the question whether this only holds good for pretorian and judicial stipulations or also for conventional stipulations. According to Bartolus it is not necessary to draw a distinction. In every case the third party acquires a remedy without cession100. Baldus de Ubaldis (1327 – 1400), a pupil of Bartolus, also maintained that the beneficiary had an actio utilis sine cessione, thereby referring to common practice and custom101.

c) The donatio sub modo The commentators discussed a number of specific questions related to the interpretation of the donatio sub modo (Diocl. C. 8.54(55).3), such as the problem whether the modus was revocable as long as it was not yet accepted by the third party, i.e. the second donee. Exactly the same question had to be answered when applying the ley ‘Paresciendo’ from the Ordenamiento de Alcalá, which was in the late fifteenth century also enshrined in the Ordenanzas reales de Castilla. It only ruled that a debtor could not bring as a defence that he promised someone to give something to or to do something for another person who was absent at the moment the promise was made. Also for a number of municipal Statutes in Northern Italy it was not clear whether the promise to a third party was revocable. As just stated, legal scholarship dealt with a similar problem, when discussing the so-called donatio sub modo. At the end of the fifteenth and during the sixteenth centuries, the opinions of the commentators appeared to have had considerable influence on the writings on indigenous law, such as on the law of Castile. The opinions of the Spanish authors from that period in their turn influenced the Natural Law doctrine of Grotius on the adquisitio obligationis per alterum102. In case of the so-called donatio sub modo, a donor had given a certain thing to a donee, prescribing that after a certain lapse of time (or when a certain condition 99 Baldus Perusinus, Commentaria in Digestum Vetus, Lyons 1562, ad D. 1.1.17.5 n. 8 (fol. 37rb): Quarto quero notarius sibi stipulatur recipienti pro alio, ille non ratificat, utrum notarius aget et uidetur quod sic, infra de admi. tuto. l. Si absen. (D. 27.2.6?). Gulielmus dicit contrarium quia notarius non adhibetur ut sibi querat ullo modo. Item quia adhibetur ut publica persona. Ergo non agit ut priuata. ( . . . ). 100 Bartolus, Commentaria, Vol. VI, ad D. 46.6.2 n. 3 (fol. 115ra): ( . . . ) teneo indistincte quod per stipulationem notarii vel cuiuscumque alterius officialis publici possit nobis queri actio utilis. ( . . . ). 101 Baldus ad D. 12.1.9.8 (Commentaria in Digestum Vetus, fol. 322rb): ( . . . ) Sed communis practica et consuetudo simpliciter approbat quod si notarius pro alio recipit, queritur alteri sine cessione, quia est publica persona. Si autem stipularetur non tamquam publica persona idem in eo quod in priuata ( . . . ). Cf. also Jason de Mayno ad D. 45.1.38.20 n. 15 (In secundam Digesti Novi partem, fol. 68vab). 102 Literature: J. H. Dondorp / J. Hallebeek, Grotius’ doctrine on adquisitio obligationis per alterum and its roots in the legal past of Europe, in O. Condorelli (ed), “Panta rei”, Studi dedicati a Manlio Bellomo, Tomo II, Rome 2004, p. 205 – 244.

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was met) the donated object would be acquired by a third party. According to Diocl. C. 8.54(55).3, the third party had an action against the donee to enforce his right. The commentators took as a starting point the case Bartolus had described in his commentary on Scaev. D. 45.1.122.2103. It concerned a plot of land donated under the modus that this plot of land after a lapse of time should belong to the Church. The donor wanted to withdraw the modus. Was that possible? In view of the constitution in the Codex, C. 8.54(55).3, it would seem as if the Church had already acquired an action and, as a consequence, it would be impossible to withdraw the modus. Bartolus, however, came to a different conclusion. He found his main argument in Paul. D. 18.7.3. This text prescribed that, when a slave was sold under the condition that after a certain period he had to be manumitted, this slave would be a free man, even when no manumission had taken place, but then the text added “if at least the vendor persisted in his desire that the slave should be free (si tamen is qui uendidit in eadem uoluntate perseueret)”. From the latter requirement Bartolus apparently deduced that the donor of a plot of land under a modus in favour of the Church could change his mind until the moment the prescribed period had lapsed. Before that moment it could be decided to withdraw the modus. This could be achieved by consent between donor and donee or by the donor himself. The donor’s heir, by contrast, was not capable of so doing, as was the case with the vendor’s heir in Paul. D. 18.7.3104. Baldus discussed a case comparable to the one of Bartolus: someone had donated something to Titius under the modus that after Titius’ death the thing would belong to the Hospitale Misericordiae. Is it possible to revoke the modus? If the agreement was qualified as contractus innominatus, the donor could revoke the modus. Moreover, even the donor’s heir and the donee could change their minds and revoke the modus. If they did, after the donee had died the thing would not belong to the hospital. However, if someone accepted the modus on behalf of the hospital, e.g. a notary or the donee, then the hospital was considered to have entered into the contract through their services and it would henceforth be impossible to revoke the modus to the prejudice of the hospital105. If the pact, on the other 103 Bartolus, Commentaria, Vol. VI, ad D. 45.1.122.2 n. 1 (fol. 49va): ( . . . ) Quidam donauit alicui unum fundum ut post certum tempus esset cuiusdam ecclesie. Iste donator uult istud pactum remittere. Queritur an possit. ( . . . ). 104 Bartolus, Commentaria, Vol. VI, ad D. 45.1.122.2 n. 1 (fol. 49va): ( . . . ) Videtur quod non, quia ecclesie est iam quesita actio utilis, ut l. Quotiens C. de dona. que sub modo (C. 8.54(55).3). Tu dic contra, nam hic queritur ius seruo ut hic patet et tamen ista pactio potest tolli uoluntate donatoris solius uel utriusque ut l. iii, et quod ibi notaui supra de ser. expor. (D. 18.7.3). Heres autem non possit mutare uoluntatem ut ibi. Cf. Bartolus, Commentaria, Vol. II, ad D. 18.7.3 (fol. 115rb). 105 Baldus, In quartum et quintum Codicis libros commentaria, Venice 1577, ad C. 5.12.7 n. 7 – 10 (fol. 181vab), n. 10 (fol. 181vb): ( . . . ) quod ubi aliquis recepisset pro hospitali, puta notarius, uel etiam ipse donatarius, quia etiam tunc ipsum hospitale intelligeretur contrahere per ministerium suum et necessario sequeretur quod inuito eo non haberet locum penitentia in sui preiudicium, ut ff. rem ra. ha. l. Bonorum (D. 46.8.24) ( . . . ).

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hand, was not accepted on behalf of the hospital, the parties, i.e. donor and donee, could agree by mutual consent to repent of the modus and to revoke it106. According to Bartolomeo da Saliceto (y 1411), Bartolus would not only have based his view, that the right of the third party could be revoked until the period had elapsed, on Paul. D. 18.7.3, but also on Alex. Sev. C. 4.57.1. Saliceto draw a distinction between revocable and irrevocable acquisitions of rights and these technical terms were to be used by all later commentators when discussing the donatio sub modo. Saliceto disagreed with Bartolus’ view that the modus could be withdrawn, thereby adopting what was for the Middle Ages a remarkably historical approach to the Roman sources. Before the promulgation of C. 8.54(55).3 a second donee might not have acquired an irrevocable right, but nowadays, i.e. after the promulgation of the imperial constitution, the second donee will acquire an action right away and withdrawing the modus is impossible107. Also Paulus de Castro (y 1441), who had been teaching for some time at Avignon (probably from 1394 until 1412), described the case of Bartolus and searched for arguments to support Bartolus’ view. He mentioned the opinion, already present in the writings of Baldus, that the donatio sub modo could be seen as a kind of contractus innominatus. The qualification of the donatio sub modo as an agreement do ut facias vel des had important consequences. It would support the idea that the right of the third party was revocable. Donation to the third party was the purpose of handing over the goods to the first recipient. In such a case the donor might afterwards regret entirely what he had done and withdraw the modus before the period had elapsed. This followed from Ulp. D. 12.4.5. Thus, the right of the third party beneficiary, i.e. the second donee, was considered to be revocable until he acquired from the first donee. It existed unless the donor withdrew from the entire transaction or part of it. However, Paulus de Castro had his doubts about such a substantiation of Bartolus’ opinion. If one donates under the modus that after the recipient’s death the goods will belong to the Church, one does not act primarily in consideration of the ultimate result108. 106 Baldus ad C. 5.12.7 n. 10 (In quartum et quintum Codicis libros commentaria, fol. 181vb): ( . . . ) Sed quando non intercessit aliquis tanquam minister hospitalis, sed pactum fuit appositum gratia ipsorum contrahentium principaliter, tunc possent penitere de communi consensu ( . . . ). 107 Bartholomeus de Saliceto, Quarta super septimo octavo et nona Codicis, [s.l.] 1541, ad C. 8.54(55).3 n. 4 (fol. 158vb): ( . . . ) sic nec hic ante legem istam querebatur huic secundo donatario, cum igitur hodie ei queratur si statim quesita dicitur puto quod non possit reuocari per textum supra ti. i. l. Si quis argentum § Si uer (C. 8.53(54).35.5b), cum enim in arbitrio. Hec pondera ut subtilia. 108 Paulus de Castro ad D. 45.1.122.2 n. 3 (Secunda super Digesto Novo, fol. 38vab): ( . . . ) sed uolendo sustinere Bartolum potest dici quod illi tertio acquiritur ius reuocabiliter, quia iste uidetur quidam contractus innominatus habita relatione ad donationem ad causam explicandam per donatarium, scilicet dono ut facias uel des in quo habet locum penitentia re integra ut, in l. Si pecuniam de condi. ob cau. (D. 12.4.5). Et sic illi tertio non potest acquiri ius aliter quam fuerit acquisitum donatario, set illi fuit acquisitum reuocabiliter, scilicet nisi

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Alexander Tartagnus de Imola (1423 / 24 – 1477), professor at Ferrara, Padua and Bologna, dealt with the case of Bartolus more thoroughly. In an extensive fragment (in the folio edition four columns in print)109 he discussed the question whether the donor could withdraw the pact to the prejudice of the Church, thereby following the opinion of Bartolus that the donor is capable of so doing, but his heir is not. Subsequently he treated six questions. i) Could the donor revoke the donation towards the donee (first recipient)? This was impossible in spite of the fact that a modus was added that the thing after a lapse of time would belong to the Church110. ii) Could the donation be revoked to the prejudice of the Church after the prescribed period had lapsed? This was impossible since at that moment the acquisition by the Church had become perfect111. iii) Could the donee, if the donor regretted the modus in favour of the Church before the prescribed period had elapsed, nevertheless give the thing to the Church against the will of the donor? This was possible, because withdrawing the modus was to the benefit of the donee, not of the donor, and the donee was entitled to renounce the benefit he had received112. iv) Could the donee by himself repudiate the transaction to the prejudice of the Church? This was no longer possible from the moment the donation had taken place113. donatoris penituerit. Et sicut potest penitere de toto ita de parte. Tamen adhuc dubito, quia si dono simpliciter cum pacto quod post mortem perueniat ad ecclesiam non moueor ad donandum propter hoc principaliter quod perueniat, quo casu esset contractus innominatus, sed illud uenit in consequentiam. Vnde tutius uidetur tenere contrarium eius quod dicit Bartolus, licet ex uerbis appareret contractus innominatus, quia fieret prout puta dono ut sic facias ut tunc illud est causa inductiua ad donandum. 109 Alexander de Imola, Super secundam ff. Noui partem, [s.l.] 1528, ad D. 45 1.122.2 n. 8 (fol. 83va – 84va). 110 Alexander de Imola ad D. 45.1.122.2 n. 9 (Super secundam ff. Novi partem, fol. 84va): ( . . . ) Quod aut querimus an Ticius donans possit reuocare donationem quo ad Seyum principalem donatarium et dico quod non, quamuis fuerit adiectum pactum quod post certum tempus res esset talis ecclesie. Ita probatur in d. l. Aristo (D. 39. 5. 18) ( . . . ). 111 Alexander de Imola ad D. 45.1.122.2 n. 9 (Super secundam ff. Novi partem, fol. 84va): ( . . . ) Secundus casus est an post tempus quo res debeat esse ecclesie possit reuocari ad preiudicium ecclesie et dico quod non quia acquisitio iam perfecta est. ( . . . ). 112 Alexander de Imola ad D. 45.1.122.2 n. 9 (Super secundam ff. Novi partem, fol. 84va): ( . . . ) Tertius est casus an si donantem peniteat ante euentum dicti temporis pactum illud apposuisse, possit nihilominus Seyus donatarius inuito donante dare ecclesie et puto quod sicquia per penitentiam non uidebatur commodum rei esse reuersum ad donantem ( . . . ). Et sic cum reuocatio pacti facta per donantem tenderet ad commodum Seyi donatarii, poterit Seyus illi commodo renunciare per regulam l. pe. cum similibus C. de pactis (C. 2.3.29) ( . . . ). 113 Alexander de Imola ad D. 45.1.122.2 n. 9 (Super secundam ff. Novi partem, fol. 84va): ( . . . ) Quartus est casus an solus donatarius ad preiudicium ecclesie possit penitere. Et dicas quod non postquam sibi est impletum per donantem ( . . . ).

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v) Could the donor withdraw the modus to the benefit of the donee, in the sense that the donee was no longer held to give the object to the Church? This was a doubtful case, but according to Alexander de Imola, this could be done, unless a notary or another had accepted the modus in the name of the Church. Only in such a case did the right of the third party apparently become irrevocable114. vi) The final question was also a doubtful one. Suppose the donor could revoke, was his heir entitled to do so also? Following Bartolus and rejecting the argument of Baldus, Alexander de Imola stated that this was impossible115. The writings of Jason de Mayno confirmed the teachings on the donatio sub modo as we traced them in the commentaries of the learned jurists of the fourteenth and fifteenth centuries. C. 8.54(55).3 granted the third party beneficiary a right, but according to late medieval interpretation it was at first a revocable right116. It could become irrevocable in two ways, viz. when at the moment the period lapsed the donor had not yet withdrawn the modus, or at the moment it was accepted through an intermediary on behalf of the third party beneficiary. This latter possibility was brought up again by Jason de Mayno. If at the moment the donation took place the modus had already been accepted by the notary, by the donee or by someone else on behalf of the absent beneficiary or in the name of this beneficiary, the beneficiary had entered into a contract with the donor as through a servant (minister)117. d) The pactum appositum in rei traditione The glossators were reluctant to develop general legal rules on the basis of exceptional cases in the Corpus iuris. The Accursian Gloss rejected the opinion of Martinus. It only generalized to some degree the texts concerning restitution of the dowry to a third party. It listed the exceptions to the maxim alteri stipulari nemo potest, but at the same time it declared explicitly that all cases were exceptional. 114 Imola did not adopt the idea of Baldus that through an intermediary the third party had entered into the contract. Alexander de Imola ad D. 45.1.122.2 n. 9 (Super secundam ff. Novi partem, fol. 84vab): ( . . . ) Quintus est casus an possit donans reuocare ad commodum ipsius Sey donatarii adeo quod Seyus non teneatur dari ecclesie ( . . . ). intellige nisi notarius uel alius nomine ecclesiae recepisset, quia tunc non posset donans reuocare ut uolint Baldus in dicta lege Cum a socero (D. 5.12.7), ut supra retuli. ( . . . ). 115 Alexander de Imola ad D. 45.1.122.2 n. 9 (Super secundam ff. Novi partem, fol. 84vb): ( . . . ) Vltimus est casus, qui etiam dubio non caret, an posito quod donans possit reuocare an possit etiam hoc idem heres suus facere et in hoc etiam sto cum Bartolo ( . . . ). 116 Jason de Mayno ad D. 45.1.122.2 n. 14 (In secundam Digesti Novi partem, fol. 155vb). 117 Jason de Mayno ad D. 45.1.122.2 n. 19 (In secundam Digesti Novi partem, fol. 156rb): Secundo limita nisi notarius uel ipsemet donatarius, uel alius tertius tempore dictae donationis recepisset talem donationem stipulando pro ecclesia seu nomine ecclesiae. Tunc non posset donans reuocare, quia tunc ecclesia intelligitur per ministrum suum contrahere et sic mediante facto suo sibi acquirere, ergo ea inuita nam (lege: non) potest habere locum penitentia. ( . . . ).

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The gloss ‘nihil agit’ ad Inst. 3.19.4 first mentioned three situations, where the promisee was considered to have an interest. Where there was such an interest, the stipulatio alteri would be effective, at least between the parties to the stipulation. Subsequently the gloss mentioned exceptional cases where even the third party would have an action. A number of these cases have something in common, i.e. that at the moment of handing over an object, there was a clause that it be restored to a third party. Those were the cases where a dowry was given (Paul. D. 24.3.45 and Diocl. C. 5.14.7, case xi in the gloss), where something was deposited or leased out (Paul. D. 16.3.26pr and Diocl. C. 3.42.8, cases xiii and xiv in the gloss), and the donatio sub modo (Diocl. 8.54(55).3, case xv in the gloss). Moreover, there was also the case of Ulp. D. 13.7.13pr (case x in the gloss), where the clause in favour of a third party was probably an informal pact to the consensual contract of sale, although medieval jurists may have regarded it as made at the moment at which the mortgaged goods were conveyed to the buyer. There were even more cases of such a kind, not mentioned by the gloss ‘nihil agit’. When the promisee at the moment of handing over money in the name of a third party in order to grant someone a credit, had stipulated that the money handed over had to be reimbursed to this third party, the latter would have an action. This clearly followed from Ulp. D. 12.1.9.8, Paul. D. 45.1.126.2 and Iust. C. 4.27.3(2). During the era of the commentators, there were various attempts to read something in the nature of a general rule into some of these texts about stipulating for a third party at the moment of handing over. One of these theories goes back to the Guillaume de Cunh. In his opinion some of these cases had even more in common, i.e. that the third party was owner of the goods handed over. These cases are Ulp. D. 12.1.9.8, Ulp. D. 13.7.13pr and Diocl. C. 3.42.8. According to Guillaume de Cunh, they were not exceptional at all. In all three a general rule is operative: if the promisee added a pact in my favour at the moment of handing over my goods or the goods I am entitled to, I will acquire a right118. A similar view was recorded in the commentary on the Institutes of Jean Faure, albeit without referring to Ulp. D. 12.1.9.8 and Ulp. D. 13.7.13pr. Apart from Diocl. C. 3.42.8, Jean Faure mentioned two other texts, Diocl. C. 5.14.7 and Paul. D. 24.3.45, but it is not clear in which way he considered the grandchildren in those texts to be entitled to the dowry at the moment it was handed over, unless it was in accordance with their future claim as heir119. 118 Bartolus, Commentaria, Vol. II, ad D. 13.7.13pr (fol. 83va): ( . . . ) Dicunt quidam quod hoc est speciale. Guil. de Cu. dicit quod non est speciale imo est regula, quandocunque pactum apponitur in traditione rei mee vel rei in qua habeo ius et alteri quaeritur actio ut l. Certi conditio § Si nummos supra si cert. peta (D. 12.1.9.8) et l. pe. C. ad exhi. (C. 3.42.8) ( . . . ). 119 Johannes Faber, In Institutiones Commentarii, ad Inst. 3.19.4 n. 12 (fol. 88rb): ( . . . ) Praeterea uideret ut dicendum quod aut pactum apponitur in traditione pro tertio qui est dominus rei, uel ad quem pertinet uel alias pertinere deberet; et tunc de rigore non agit, sed de aequitate datur utilis ut l. Si res ad exhib. (C. 3.42.8) et l. Pater de pact. con. (C. 5.14.7) et l. Caius soluto matrimonio (D. 24. 3. 45).

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Bartolus rejected these opinions of Guillaume de Cunh and Jean Faure. He ascribed no great importance to the text of Ulp. D. 12.1.9.8, because handing over of money is governed by specific rules of its own120. Bartolus took as a starting point Paul. D. 16.3.26pr, the case where Publia Maevia had stipulated the restitution to the son out of her first marriage of the things she deposited (case xiv in the gloss ‘nihil agit’ ad Inst. 3.19.4). It was possible to explain this text again by referring to a ratio specialis, viz. that the action was given because of the consanguinity between promisee and third party. However, Bartolus saw in the text the application of a general legal principle, albeit not the rule formulated by Guillaume de Cunh and Jean Faure, but a different one: if the promisee handed over to the promisor an object, which was to remain the promisee’s property, and the promisee stipulated (in a pact) that it be restored to a third party, the latter would have an action. This opinion was based on Paul. D. 16.3.26pr and Diocl. C. 3.42.8. If the object handed over, by contrast, did not continue to be owned by the promisee, as a general rule the third party would have no action. This was the case in Paul. D. 36.1.61(59).1. The Digest contains only two exceptions to this general rule, viz. the case of money loan (mutuum) in Ulp. D. 12.1.9.8 and the donatio sub modo of Diocl. C. 8.54(55).3121. Baldus followed the opinion of Bartolus. The fact that the son in D. 16. 3. 26pr had an action at his disposal cannot be explained by referring to consanguinity. Also if an extraneus, and not his mother, had concluded the pact in his favour, the son would have had an actio utilis, as long as the object handed over remained the property of the promisee122.

120 Bartolus, Commentaria, Vol. II, ad D. 13.7.13pr (fol. 83va): ( . . . ) Hoc non placet, quia in dicto § Si nummos (D. 12.1.9.8) est speciale propter singularia precepta pecunie in l. pe. C. ad exhiben. (C. 3.42.8). Quando enim interponitur pactum super re tradentis que durat eis tunc non queritur actio alteri regulariter nisi in casu speciali donationis ut l. Quotiens de dona. que sub modo (C. 8.54(55).3) ubi textus hoc expresse dicit. Dicamus ergo hic esse speciale et sic fuisse rescriptum per principem ( . . . ). 121 Bartolus, Commentaria, Vol. II, ad D. 16.3.26pr (fol. 100vab): Ex pacto apposito in traditione rei mee que mea durat alteri queritur utilis actio. ( . . . ). Solutio. Hic fuit pacta mater super re sua que semper durat sua. Idem in l. penu. C. ad exhibendum (C. 3.42.8). Si uero non duraret sua, tunc non queritur alteri actio nisi in duobus casibus ut in mutuo, ut l. Certi condictio § Si nummos supra si cert. pe. (D. 12.1.9.8). Item in donatione, ut l. Quoties C. de dona. que sub modo (C. 8.54(55).3), et dixi in l. Stipulatio ista § Si quis insulam infra de uerb. obli. (D. 45.1.38.21). Bartolus, Commentaria, Vol. VI, ad D. 45.1.38.20 n. 3 (fol. 20rb –20va): quandoque paciscor super re mea que durat mea et alteri queritur utilis ut supra depo. l. Publia in prin. (D. 16.3.26pr). Nec dicat quis quod ibi speciale in filio, quia immo ius commune, cum per matrem non possit queri filio ut ( . . . ). Quandoque stipulor super re que est mea cum non durat mea, et tunc alteri non queritur actio regulariter, ut ( . . . ); cf. also Bartolus, Commentaria, Vol. VII, ad C. 3.42.8 (fol. 130vb). 122 Baldus ad D. 16.3.26pr (Commentaria in Digestum Vetus, fol. 400rb): ( . . . ) Sed aduerte quod in lege nostra non queritur filio utilis actio ex eo, quod paciscens erat mater, quia idem esset in quolibet extraneo paciscente opponente pactum in restitutione rei sue que durat sua, ut patet in l. pe C. ad exhi. (C. 3.42.8). Sed si apparet pactus in re sua non durat , puta quia transtulit dominium in alterum, tunc alteri ex tali pacto actio non queritur, nisi in duobus casibus. Primus est in mutuo, ut supra si cer pe l. Certi condictio

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Paulus de Castro again adopted the older opinion of Guillaume de Cunh and Jean Faure. If the object was owned by the third party, the latter had an action, as long as the promisee had stipulated in his favour when the object was handed over, even if this third party beneficiary would lose ownership at that moment. This was the case in D. 13.7.13pr. The vendor conveyed the mortgaged goods and stipulated (in a pact) from the purchaser that the third, i.e. the debtor, who until that moment was owner, could reclaim the object after offering the selling price123. At the same time Paulus de Castro followed the opinion of Bartolus. If the object was owned by the promisee, a distinction should be made between the situation where the promisee continued to own the object and the one where he lost ownership124. In the latter case, however, Paulus de Castro did not trace two, but four, exceptions in the Corpus iuris. These were, apart from the money loan (mutuum) in Ulp. D. 12.1.9.8 and the donatio sub modo in Diocl. C. 8.54(55).3, as already mentioned by Bartolus and Baldus, the case where a dowry was given for a woman and restitution to a third party was stipulated, as in Paul. D. 24.3.45, and the case where a woman herself, when granting a dowry, had stipulated restitution for her child or grandchild, as in Diocl. C. 5.14.7. In the first case, that of the money loan in another’s name, the third party acquired an actio directa, in the other three cases it was an actio utilis125. § Quoniam (D. 12.1.9.3). Secundus est in donatione ut l. Quoties C. de dona. que sub modo (C. 8.54(55).3) ( . . . ). 123 Paulus Castrensis (Paulus de Castro), In secundam Digesti Veteris partem commentaria, Venice 1582, ad D. 13.7.13pr n. 7 (fol. 83vb): Vltimo notatur ex hac lege, quod ex pacto alterius apposito in traditione rei meae, etiam quae non duret mea, acquiritur mihi actio, si apponitur in fauorem, fortius si duret mea ut in l. pe. C. ad exhibendum (C. 3.42.8). Sed quando apponitur super re paciscentis, distinguitur an duret sua uel non: ut l. Publ. in prin. et ibi dixi infra depositi (D. 16.3.26pr). Non obstat ergo § Per liberam (D. 13.7.11.6) cum similibus, quia ibi quando non super re mea, nec super sua, ad quod facit l. Quod proc. ex re. de procurtori. (D. 3.3.68). 124 Paulus de Castro ad D. 45.1.38.17 n. 6 (Secunda super Digesto Novo, fol. 17ra): ( . . . ) fallit (sc. the maxim alteri stipulari nemo potest) quando stipulor alteri rem meam que durat mea, nam acquiritur illi utilis actio, ut supra depo. l. Publia in prin. (D. 16. 3. 26pr) et uide Bartolum in l. Mercedem § Si habitatoribus de act. emp. (D. 19.1.53.1), ubi possum stipulari alteri in traditione rei mee que non durat mea. ( . . . ). 125 Paulus de Castro ad D. 16.3.26pr n. 1 (In secundam Digesti Veteris partem commentaria, fol. 116vb): Ex pacto apposito in traditione rei meae quae durat mea, acquiritur alteri utilis actio ( . . . ). n. 2 (fol. 116vb): Si autem in traditione rei meae, que non durat mea: et tunc in quatuor casibus tantum alteri quaeritur actio, scilicet in mutuo et tunc quaeritur directa, ut l. Certi condictio § Nummos si cer. pe. (D. 12.1.9.8). Item in donatione fauore exercentis liberalitatem ut l. Quoties C. de donatione que sub modo (C. 8.54(55).3) et tunc acquiritur utilis. Item in dote quam quis dat pro muliere, qui potest pacisci quod restituatur et quaeritur illi utilis ex illo pacto l. Caius sol. mat. (D. D. 24.3.45), nam etiam si non pacisceretur, posset illa agere, quia praesumitur sibi donata, ut C. de rei uxo. act. § Accedit (C. 5.13.1.13). n. 3 (fol. 116vb) Est et quartus casus in dote, quam mulier dat pro seipsa, nam paciscitur eam reddi filio, uel nepoti et quaeritur illi utilis actio, ut l. Pater de pac. conuen. (C. 5.14.7). Also Jason the Mayno followed the opinion of Bartolus. Cf. Jason ad D. 45.1.38.20 n. 26 – 27 (In secundam Digesti Novi partem, fol. 69rab).

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3. Extending the number of cases where the stipulatio alteri has effect for the parties themselves Apart from the cases described above, where the third party beneficiary acquired an action himself, there were cases where there was only an effect for the parties to the stipulatio alteri. The most important one was where the promisee had an interest of his own or a penalty clause was added. Beyond such situations the principal rule of Justinianic law was that the stipulation would have no effect: alteri stipulari nemo potest. First it will be shown in which way the requirement of interest was understood by the commentators and, subsequently, we will investigate which developments took place as regards the cases, where the promisee had no interest to stipulate in favour of a third. If the stipulation in favour of a third only affected the parties, this implied that the third party did not acquire an action. This was also the case in Pap. D. 41.2.49.2: a principal may unknowingly acquire possession through his procurator, but in case of eviction of the goods purchased by the procurator, the principal is not capable of bringing an actio evictionis. He first has to compel his procurator by means of an actio mandati to ‘assign’ to him the actio evictionis. In a similar way the promisee could ‘assign’ his action to the third party beneficiary, in order to allow him to claim what was promised in his favour. This was no cession in the modern sense. The promisee would remain the creditor. In Roman law it was, in view of Paul. D. 44.7.11, impossible to authorize the third party beneficiary so that he could act as plaintiff in his own name. Cession or assignment of actions in a Justinianic context always refers to allowing the third party beneficiary to act as procedural representative of the promisee (procurator in rem suam) and to obtain the amount the defendant was condemned to pay. a) Bartolus: the third party as procurator ad recipiendum and the interesse superveniens As we have seen the stipulation for a third party was effective, at least for the parties to the contract, where the promisee had an actionable interest. This was already the basic rule in Justinianic Law. In the fourteenth century, Bartolus considered the promisee always to have an interest, if he had stipulated that goods were given to a third party which had been his or which he had been entitled to in the past, even if this was due to a natural obligation. In such a case the third party functioned as procurator ad recipiendum and the promisee could claim from him what was paid to him by the promisor. The main text to support this view was Procul. D. 46.3.82, where Seia had stipulated (in a pact) from her husband the restitution of the dowry to Cornelius, who had granted this dowry in her name to him. By so doing Seia had made Cornelius the manager of her affairs126. 126 See Bartolus, Commentaria, Vol. I, ad D. 2.14.1 n. 3 (fol. 85ra): ( . . . ) Sed contra quia semper uidetur mea interesse, nam si tu promittis mihi quod dabis Titio perinde est ac si

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It is not clear whether this opinion was followed by many other commentators. Jason de Mayno pointed out that there is a contradicting text in the Corpus iuris. According to Diocl. C. 5.12.26 it was stipulated from a son-in-law that the dowry had to be restored to a third party. The text maintains that this stipulation is of no value127. Moreover, Jason continued, even Bartolus himself, commenting upon Ulp. D. 45.1.38.20, admitted to have certain doubts128. Thus it is hard to say exactly to what extent this opinion of Bartolus was accepted in the legal scholarship of the fourteenth and fifteenth centuries. Another opinion of Bartolus, however, was rather influential, as will be shown later. In the examples given in the Corpus iuris of the promisee having an actionable interest, this interest was always present at the moment the stipulatio alteri was entered into, but the commentators developed the idea of the interesse superveniens, the later emerging interest. The roots of this idea go back to the teachings of Cynus de Pistorio. In his commentary on Diocl. C. 2.3.26, Cynus taught that the informal agreement (conventio) between parties that something be given to a third party is a pact. It may not be an effective pact, but it has the form of a pact and that is sufficient. A stipulation is said to have a certain form, although it may be void or without effect. Similarly, in spite of the fact that a pact may be ineffective, it is still a pact if it has the form of a pact. In an additio to this passage we find the remark that, as a consequence, if one succeeds another person who was party to an ineffective pact, the pact can become effective. Here, three examples from the Corpus iuris are given. The first is Ulp. D. 45.1.38.4. Someone guaranteed through stipulation the uninterrupted possession (habere licere) of a thing which was not his. This agreement can become valid, if the promisor in the future acquired the ownership of the thing. The second case is the § Aliquando, Pap. D. 46.3.95.2 in medio. It deals with validating the obligation of the surety, who, when instituted heir of the principal debtor, will lose the exceptio against the creditor. The third example is Ulp. D. 17.1.6.4, where a mandate was given which at first was not in the interest of the mandator. If at a later stage it becomes his interest, he will have an actio mandati129. The three cases, dealing with stipulation and mandate, have in comfacerem Titium meum procuratorem ad recipiendum, et possum postea illum Titium prohibere sicut procuratorem meum. Casus est notus in l. Si cum Cornelius infra de sol. (D. 46.3.82). Responsio. Illud uerbum quando tu promittis mihi te daturum alteri id quod ante erat meum uel mihi debitum, tunc uideor illum adhibere tanquam meum procuratorem, quia adhibeo super negocio meo; Bartolus, Commentaria, Vol. VI, ad D. 45.1.38.17 n. 3 (fol. 19rb): ( . . . ) Solutio. In illis qui stipulabantur alteri quod erat ipsius stipulantis uel sibi debitum, unde et illum tertium uidetur facere procuratorem seu gestorem negocii sui ( . . . ). 127 Jason ad D. 45.1.38.17 n. 13 (In secundam Digesti Novi partem, fol. 65rb): ( . . . ) Contra istam limitationem Bartoli habes fortem textum in l. Si genero C. de iure do. (C. 5.12.26), ubi aliquis dat rem suam in dotem genero et stipulatur soluto matrimonio dari tertio. Dicit ibi, notat textus, quod illa stipulatio nihil ualet et tamen stipulabatur super re que erat propria ipsius stipulantis et propterea Bartolus, melius considerans in § Si stipuler in 5. et 9. fallentiis infra eadem lege (D. 45.1.38.20) dicit se semper de hoc dubitasse ( . . . ). 128 Cf. Bartolus, Commentaria, Vol. VI, ad D. 45.1.38.20 n. 3, fallentiae 5 and 9 (fol. 20rb).

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mon that these contracts may at first have been ineffective but have become valid afterwards130. Bartolus131, followed by Baldus, specifically allowed the interesse superveniens to validate the stipulation in favour of a third party. The promisee did not need to have an interest at the moment he entered into such a stipulation; it sufficed if he had an interest at the moment of suing the promisor132. Apparently the stipulatio alteri without interest was regarded as a pact which could be validated, and this in spite of the fact that it did not have the form of a pact. Baldus explicitly stated that the only requirement would be that the verba promissoria and the verba executoria were phrased correctly as prescribed by the gloss ‘supra dictum est’ ad Inst. 3.19.19. Being a pact without effect it could be validated by a later emerging interest133. Also, according to Angelus de Ubaldis (1328 – 1407), a brother of Baldus who also lectured at Bologna, and Jason, the later interest would make the stipulatio alteri effective between parties134.

b) The formula mihi recipienti suo nomine The Accursian Gloss and Odofredus acknowledged that the one who had an actionable interest that something be given to a third party had an action (actio directa) against the debtor which he could ‘assign’ to the beneficiary. A similar effect occurred, when someone accepted a promise on behalf of his principal (dominus): ‘Do you promise to me as recipient in the name of my principal ( . . . )?’ (pro129 Cynus Pistoriensis, In Codicem ( . . . ) doctissima commentaria, Vol. I, Frankfurt 1578 (reprint Turin, 1964) ad C. 2.3.26 n. 2 and the additio (fol. 57ra). 130 Bartolus also mentioned Guillaume de Cunh as the originator of this idea. See Bartolus, Commentaria, Vol. I, ad D. 12.1.14.1 n. 3 (fol. 84vb – 85ra): ( . . . ) Si mea non interest uidetur quod non habeat effectum ab initio. Sed pro tanto dicitur esse pactum quia superueniente interesse confirmabitur ( . . . ). Hoc etiam tenet Guil. et Cy. in l. Pacto successorum C. eo. (C. 2. 3. 26) ( . . . ). 131 Bartolus, Commentaria, Vol. VI, ad D. 45.1.38.17 n. 3 (fol. 19rb). 132 Baldus ad D. 12.1.9.3 n. 2 (Commentaria in Digestum Vetus, fol. 321 rb): ( . . . ) Aut non interest, et non agat. Istud est uerum. Tamen quandocumque superueniat interesse agere potero ut infra manda. l. Si uero non remunerandi § Si tibi (D. 17.1.6.4) et nota pro Guillelmo in lege i. supra de pac. (D. 2.14.1) quod an intersit inspicitur tempus quo agitur, non tempus contractus ( . . . ). 133 The text of the following fragment is probably slightly corrupt in the edition consulted. Baldus ad D. 2.14.1 n. 5 (Commentaria in Digestum Novum, fol. 116vb) ( . . . ) quod est uerum ubi principale uerbum obligationum collatum est inter ipsos loquentes, licet uerbum executiuum sit directum in absentem, ut in hoc exemplo: promittis mihi quod dabis Titio?, quod pactum, quia non peccati forma, potest reconciliari per superueniens interesse, arg. infra man. l. Si remunerandi § Si tibi (D. 17.1.6.4), de uer. ob. Stipulatio ista § Quesitum (D. 45.1.38.4). 134 Angelus de Perusio (Angelus de Ubaldis), Super prima parte Digesti Veteris lectura, Lyons 1545, ad D. 2.14.1 n. 5 (fol. 56va): ( . . . ) Idem quia oritur naturalis ex superuenienti interesse accumulabitur ciuilis et reconualescet pactum. ( . . . ). See on the question also Alexander de Imola ad D. 45.1.38.17 n. 19 (Super secundam ff. Novi partem, fol. 35vb – 35ra); Jason ad D. 45.1.38.17 n. 21 (In secundam Digesti Novi partem, fol. 65vb – 66va).

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mittis mihi recipienti nomine domini mei ( . . . )?). It was not clear yet exactly in which cases such a stipulation could be used effectively. We can trace this formula again in the commentary on the Institutes of Jean Faure, in the context of the problem whether the manager of another’s affairs can stipulate in the same way as a procurator that something be given to or done for the principal. As we have seen, the effect of such a stipulation was not that the principal acquired a right135, but there were nevertheless effects for the parties. According to Faure, the procurator belonged to the category of stipulators having some kind of interest136. He himself could acquire an action through the stipulatio alteri and assign this action to his principal. Jean Faure also explained why the procurator has an interest, viz. because he is liable for negligence, carelessness (culpa) towards the principal. However, in a similar way the manager of another’s affairs has to observe good faith (bona fides). Would that not constitute a sufficient interest for a valid stipulatio alteri? According to Jean Faure, the manager of another’s affairs simply cannot stipulate alteri, but the reason why not is a mystery still to be unlocked137. However, there is another option, Jean Faure continued. The manager of another’s affairs may use the stipulation sibi nomine alterius and in that case he acquires an action which he can assign to the principal. Jean Faure compared the case of the manager of another’s affairs using the specific formula with two similar situations, i.e. where a procurator acted without mandate and his acts were later ratified by the principal and where the donation to an absent beneficiary was accepted in the name of the donee138. Bartolus maintained that beyond any doubt this formula could be used by procurators and managers of another’s affairs, but he did not pronounce upon the question which other categories of stipulators acting on behalf of someone else might use it139. The view of Angelus de Gambilionibus (de Aretio) who lectured on the Institutes at Ferrara and Bologna in the years 1441 – 1445, was more in conformity with 135 This was impossible in view of Diocl. C. 4.27.1. The only exception was Ulp. D. 45.1.79, the case where the principal was present at the moment the stipulation was entered into. 136 Inst. 3. 19. 20 and Ulp. 45.1. 38. 20. 137 Johannes Faber, In Institutiones commentarii, ad. Inst. 3.19.19 n. 1 (fol. 93rb): ( . . . ) Sed dices, numquid tenetur gestor bonam fidem ex quo accessit ad negotia? Cur ergo non tenetur stipulari? Dices quod non potest. Sed cur non potest, sicut procurator, restat adhuc soluendum. 138 Johannes Faber, In Institutiones commentarii, ad. Inst. 3.19.4 n. 2 (fol. 93rb): unde forte posset dici, quod gestor saltem generalis poterit sibi nomine alterius stipulari ut sibi acquirat et post cedat sicut procurator cum ratihabitione etc. C. ad Mace. l. fi. (C. 4.28.7) et dicta lege Si ego (D. 3.5.23(24)) et pro hoc facit, quia absenti potest donari, si sit qui nomine donatarii recipiat C. de donat. Nec ambigi (8.53(54).6), ubi scripsi et supra de do. (Inst. 2.7) ( . . . ). 139 Bartolus, Commentaria, Vol. VI, ad D. 45.1.38.20 n. 2 (fol. 20ra): ( . . . ) Sextus modus est ut utrumque uerbum conferatur in personam stipulantis nomine tamen alterius ut promittis mihi dare nomine Titii etc. et ista ualet sine dubio in procuratore. Item in negotiorum gestore ut ( . . . ).

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the one of Jean Faure, since he restricted the use of the formula promittis mihi dare nomine Titii to the same two categories as mentioned by Jean Faure140. These opinions of Jean Faure and Angelus de Gambilionibus, were inserted as an additio into later editions of the Ordinary Gloss141. Also Jason de Mayno, when discussing the case where the formula sibi dare nomine alterius was used without any mandate from the principal, mentioned the possibility of ratifying the stipulation afterwards and compelling the manager on the basis of unauthorized administration to assign his remedy142. We may not exclude the possibility that the formula mihi recipienti suo nomine was also used in notarial instruments143. Angelus de Ubaldis mentioned it as one of the correctly phrased ‘stipulationes alteri’ and qualified it as invented by notarial custom144. The formula was also prescribed by some of the municipal Statutes in Northern Italy145. c) A natural obligation confirmed by oath Beyond the cases where the promisee had an interest from the start or where an interest arose at a later stage, and beyond the cases where even without interest 140 Angelus a Gambilionibus de Aretio, In quattuor Institutionum Iustiniani libros commentaria, Venice 1609, ad Inst. 3.19.4 n. 2 (fol. 166ra): ( . . . ) Sexto modo, ut utrunque uerbum in persona alterius conferatur, ut promittis mihi dare nomine Titii, et ista ualet in procuratore et negotiorum gestore, ut notat glossa in l. Huiusmodi § i et ibi doctores ff. de leg. i (D. 30.1.84(86)) ( . . . ). Cf. also Angelus de Gambilionibus ad Inst. 3.19.19 n. 3 (fol. 169vb). 141 It can be found e.g. in the Institutionum ( . . . ) libri quatuor, Lyons 1550, as addition to the gloss ‘supra dictum est’ ad Inst. 3.19.19 (p. 169): Et hoc est uerum, siue sim procurator habens mandatum siue negotiorum gestor, siue saltem generalis, ut mihi acquiram et postea cedam, sicut procurator cum ratihabitione etc. ut l. fina. C. ad Macedonia. (C. 4.28.7) et l. Si ego ff. de nego. gest. (D. 3. 5. 23(24)) ut per Ioan. Fab. et Angelum hic. 142 Jason ad D. 45.1.38.17 n. 11 (In secundam Digesti Novi partem, fol. 64vb): ( . . . ) sed si stipularetur sibi dari nomine alterius, tunc bene ualet per glossas preallegatas etiam nullo precedente mandato et si postea ille tertius habebit ratum tenebor sibi cedere actionem negotiorum gestione ( . . . ). Cf. also Jason ad D. 45.1.38.17 n. 10 in fine (In secundam Digesti Novi partem, fol. 68rb). This opinion is quite similar to the one of Diego Covarruvias y Leya (1512 – 1577); see the contribution of Dondorp in this volume. 143 See Angelus de Perusio (Angelus de Ubaldis), Super secunda Infortiati sequitur lectura, Lyons 1545, ad D. 30.1.84(86) n. 2 (fol. 14va): Sequitur glossam, puta recipienti nomine Meuii. Dic auditu tabellio ut semper conficias uerba instrumentorum in hac forma quando unus pro altero stipulatur aut paciscitur ut dicas quod talis promissit tali recipienti nomine alterius talis et ualebit pactum, sicut et si ille fuisset presens ( . . . ). 144 Angelus de Ubaldis ad D. 45.1.38.21 n. 6 (Super secunda Digesti Novi lectura, fol. 12va): ( . . . ) Idem si stipuletur sibi recipienti pro domino. Et iste est mos notariorum inuentus per glossam in l. Huiusmodi de leg. i. (D. 30.1.84(86)); see also Paulus de Castro ad D. 45.1.38.17 n. 6 (Secunda super Digesto Novo, fol. 17ra): ( . . . ) Et quotidie uidemus fieri quod notarius stipulatur tanquam persona publica nomine omnium quorum interest et ualet ut acquiratur actio ( . . . ). 145 Müller, p. 56.

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managers of another’s affairs and procurators could use a specific phrasing on behalf of their principal, there still remains the case where the promisee simply stipulated for the third party out of mere generosity in order to confer a benefit on him. According to Roman law, in such a case the agreement had no effect at all. It did not result in a contract enforceable by the stipulator, nor did it provide the third party beneficiary with an action. However, the commentators considered it not to be prohibited to stipulate for a third party without having an interest. The stipulatio without interest is not in contravention of the law or prohibited by the law, contra legem, but the ratio legis simply does not support it. It is praeter legem146. Now, the Accursian Gloss already acknowledged that if an actionable interest is lacking, the stipulatio alteri will nevertheless result in a natural obligation between parties147. Bartolus restricted this possibility to the stipulation for a third party of goods the promisee himself owned or was entitled to148. Moreover, he taught that this natural obligation towards the promisee did not exist in the amount to be given to the third party. What the promisor owed to the promisee was the act, i.e. that performance to the third party actually takes place. If the promisee had no interest, he would not derive an enforceable right from the stipulatio alteri. It nevertheless qualified as a pact because it could be validated by the later emergence of an interest (interesse superveniens), as seen above149, and a pact results in a natural obligation. Later commentators such as Angelus de Ubaldis, Alexander de Imola and Jason de Mayno just followed the Gloss and assumed that the stipulatio alteri without interest resulted generally in a natural obligation towards the promisee. According to civil law this natural obligation was not enforceable, but in the ecclesiastical courts it was, albeit it not through the regular procedure but by means of denuntiatio euangelica150. The natural obligation between promisee and promisor could even become a civil one, and thus an enforceable obligation, viz. when the promisor confirmed his promise by taking an oath151. As a consequence, confirming by oath that something be given to the third party, resulted in a civil obligation between promisor 146 See Bartolus, Commentaria, Vol. VI, ad D. 45.1.38.17 n. 5 (fol. 19ra), Alexander de Imola ad D. 45.1.38.17 n. 5 (Super secundam ff. Novi partem, fol. 35ra) and Jason de Mayno ad D. 45.1.38.17 n. 16 (In secundam Digesti Novi partem, fol. 65rb). 147 The gloss ‘nihil interest’ ad D. 45.1.38.17: stipulantis scilicet cui naturalis est quesita obligatio, ut alii detur ( . . . ). 148 Bartolus, Commentaria, Vol. VI, ad D. 45.1.38.17 n. 3 and 8 (fol. 19rb-19va). 149 Bartolus, Commentaria, Vol. VI, ad D. 45.1.38.17 n. 8 (fol. 19va). 150 Angelus de Ubaldis ad D. 45.1.38.17 n. 2 (Super secunda Digesti Novi lactura, fol. 12ra), Angelus de Ubaldis ad D. 2.14.1 n. 5 (Super prima parte Digesti Veteris lectura, fol. 56va), Alexander de Imola ad D. 45.1.38.17 n. 7 (Super secundam ff. Novi partem, fol. 35ra); for the alternative procedure of denuntiatio evangelica see the contribution of Dondorp in this volume. 151 Lange, Alteri, p. 297 – 305.

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and promisee. This binding force of the oath has its origin in Canon Law and must have been gradually accepted in the writings of the civilians. The Ordinary Gloss on Gratian’s Decretum by Johannes Teutonicus (c. 1170 – 1245) taught that according to Canon Law the promise to someone present that ten be given to a certain Titius who was apparently absent, is binding, especially when an oath was used152. From around 1300 it was established practice in canonical procedure that the oath could indeed be used to make the stipulatio alteri enforceable, even for the absent beneficiary. At first the civilians did not ascribe a binding force to the oath. Jean Faure still maintained that the stipulatio alteri confirmed by oath according to civil law was void153. However, Bartolus and later commentators show a different view. The oath has a similar effect to the penalty clause. The penalty clause makes the stipulatio alteri enforceable in the sense that the promisee can claim the penalty. Similarly, the oath confirming the stipulatio alteri makes the conventio that something be given to a third party, which without oath would only result in a natural obligation, enforceable by the promisee154. The commentary on the Institutes edited on the name of Baldus155 considered the stipulatio alteri always to be enforceable, as long as the verba promissoria contained the name of the person present to accept the promise and the promise was confirmed by oath156. The same opinion can be found in the commentary of Baldus on the Digestum Vetus157and in the 152 In the final line of the gloss ‘et per te’ ad C.1 q.7 c.9, which was adopted from the Glosa Palatina; it is not clear, however, whether the oath mentioned here had to confirm the promise to the promisee or the performance towards the third party; for Canon Law there was no difference and no distinction was made; see the contribution of Dondorp in this volume. 153 In his opinion acquiring rights through a stipulatio alteri would even be in contravention with the Canon Law of his days, where he considered such a thing still to be very exceptional, thereby referring to the Liber Sextus (VI 5.5.2). That the ecclesiastical court could compel the promisor to abide with his oath is true, but that is quite something else. Cf. Jean Faure, In Institutiones commentarii, ad Inst 3.19.4 n. 14 (fol. 88rb): Sed quid, si quis alteri paciscatur, uel stipuletur et promissor se obliget iuramento? Responsio. De iure ciuili non ualet, ut dixi in simili supra proximo §. Sed Ioannes glossator decretorum uidetur tenuisse quod iste sit correctus de iure canonico, maxime quando appositum fuit iuramentum, ut notat j. q.vii c. Quoties (C.1 q.7 c.9) in glossa super uerbo ‘et per te’. Ego non credo hoc ‘maxime’, quia de iure canonico nouissimo est speciale in certis personis et casibus, quod alii acquiratur ut c. Quamquam (VI 5.5.2) sepius allegat et sic in contrarium est ius commune. Sed bene credo, quod ubi iuramentum fuit appositum quod ecclesia debet compellere promissorem ad tenendum iuramentum et sic quo ad hoc posset uerificari quod dicit Ioannes. Cf. X 2.24.8 and similar provisions in the Liber Extra. 154 Bartolus, Commentaria, Vol. VI, ad D. 46.1.56 no. 12 (fol. 84va). 155 Manlio Bellomo acribes this work to Bartolomeo da Novara ( 1408). 156 Baldus, Praelectiones in quatuor Institutionum libros, Venice 1576, ad Inst. 3.19.4 n. 5 (fol. 34vb). 157 Baldus ad D. 12.2.9.6 (Commentaria in Digestum Vetus, fol. 351rb): Per liberam personam acquiritur alteri actio et exceptio, si est appositum iuramentum; ratio, quia § Alterius habet locum in contractibus, secus in iudiciis et quasi contractibus, nam iurando quasi contrahitur ( . . . ).

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works of Alexander de Imola and Jason de Mayno158. The majority of the commentators only granted the promisee a remedy, which could be assigned to the third party. Only a single civilian, Jason de Mayno, followed the rules of canonical procedure and granted the third party an action whenever the stipulatio alteri was confirmed by oath159. In such a case there was, as a matter of fact, no need to assign the promisee’s remedy. The action resulted from the binding force of the oath itself160.

V. Conclusions The medieval sources of learned law we investigated have shown that it is impossible to write a history of our modern contract in favour of a third party on the basis of these materials. Something comparable to this modern contract simply did not exist before early modern times. However, we did see that through the ages, i.e. from the moment the study of Roman was taken up, the learned jurists struggled with the problem how to accomplish in a contract between two parties that a third party would be benefited or acquire a right. Some legal historians may argue that the nineteenth century contract in favour of a third party is the eventual solution to this problem and even describe the development of legal dogmatics through the ages, paving the way for this solution, as one of progress towards a more cultivated or a more humane system of law. However, when reading the medieval texts, we must realize that the learned jurists were not familiar with any legal concept invented in later times. Their purpose was merely to adopt the Corpus iuris as living law and this implied that they had to interpret the texts, standing in the area of tension between on the one hand the demands of social circumstances and on the other the authority of the text of the Corpus iuris as such. In that field also the problem of ius quaesitum tertio was discussed. The sources also made clear, that there must have been an enormous discrepancy between the Roman texts and existing legal practice. Roman law in its Justinianic form was characterized by all kinds of obstacles making it difficult, if not even entirely impossible, to conclude a contract with the purpose of benefiting a third party, not to speak of the possibility for the third party to claim what was promised 158 Alexander de Imola ad D. 45.1.38.17 n. 8 (Super secundam ff. Novi partem, fol. 35rb) and Jason de Mayno ad D. 45.1.38.17 n. 4 (In secundam Digesti Novi partem, fol. 64va). 159 As described by Alexander de Imola ad D. 45.1.38.17 n. 8 – 9 (Super secundam ff. Novi partem, fol. 35ra). The promisee may in an ecclesiastical court proceed by means of denuntiatio euangelica, the third party can only bring an action if the stipulation in his favour was confirmed by oath. It was only Felinus Sandeus (1444 – 1503) who maintained that also the third party beneficiary could in canonical procedure use the denuntiatio evangelica; see the contribution of J. H. Dondorp in this volume. 160 Jason de Mayno ad D. 45.1.38.20 n. 21 (In secundam Digesti Novi partem, fol. 68vb): Secundo per istam fallentiam sequitur quod si in stipulatione alteri facta interponitur iuramentum, propter iuramentum quaereretur illo tertio utilis actio sine cessione, quia iuramentum habet uim iudicii l. Qui iurasse § fi. de iureiur. (D. 12.2.26.2) de quo ultimo dicam statim.

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in his favour. In the Roman system there was actually no room for the ius quaesitum tertio. The basic underlying principles of the Roman law of obligations locked out outsiders. Parties could only bind each other and acquire what was in their own interest. In the medieval legal world beyond the scholarly study of Roman law, there was no system of law or territorial jurisdiction which rejected so rigorously the stipulatio alteri as the Roman sources did. In the indigenous law of the German territories, in mercantile law and in Canon Law, nowhere was the idea that parties can stipulate for a third party so thoroughly rejected as in Roman law. The stipulatio alteri was not always acknowledged as a general type of contract and the fact that we can stipulate for a third party did not always imply that the third party acquired an enforceable right, but that is another thing. Moreover, indigenous law in the Southern territories of Europe showed a remarkable contrast to the Roman law as taught at the universities with its formalities and obstacles. In the indigenous law of Castile and in the Statutes of the cities of Northern Italy, all Roman requirements were explicitly set aside. There was no need for parties to come together in order to conclude a contract and the ius quaesitum tertio could easily come into existence if the parties had the sincere intention to be bound to the absent beneficiary. During the era of the glossators, i.e. from the beginning of the twelfth until the middle of the thirteenth century, the scholarly debate centred around the first attempt to adapt the learned law to the needs of social life and existing indigenous law, but the doctrine of Martinus implied a serious infringement of the original, grammatical purport of many texts in the Corpus iuris and was generally rejected by the vast majority of his contemporaries and by later generations of glossators. The authoritative Accursian Gloss from the middle of the thirteenth century contained only minor adaptations and showed only few traces of a consciousness that there was a real legal world outside the university. The Roman slave became a monk and the Roman public slave became a notary. A specific formula was acknowledged by which the manager of another’s affairs and the procurator could acquire a right to be assigned to their principal, but only the cases concerning restitution of the dowry to a third party were generalized. To achieve this the Accursian Gloss used an identical mode of legal reasoning to that which it condemned at the same time in the teachings of Martinus. Legal scholarship in the fourteenth and fifteenth centuries was at first quite similar. The sources did not allow that the third party could acquire a right through a private intermediary, as laid down in the Ordenamiento de Alcalá and in the Statutes of the Italian cities, but the Roman servus publicus did help to provide the existing notarial practice with a Roman foundation, although the learned jurists at the same time stated that this practice was incompatible with the ius commune. For the cases where one did not want to invoke the services of a notary, there were some laborious attempts to extend the possibility of granting the third party an enforceable right. The donatio sub modo was not applied extensively, but only used as sedes materiae for practical questions of indigenous law, such as the possi-

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bility of revoking the promise as long as it had not yet reached the third party beneficiary and the exact effects of its acceptance by the promisee. The attempts to grant the third party a right on the basis of the Roman texts were sincere, but resulted in only a little progress. The pactum appositum in rei traditione was in itself a kind of generalization, but did not lead to the acceptance that the third party will in all situations acquire a right to enforce what was stipulated in his favour, but just in the case the promisee handed over a thing he owned and continued to own. A remaining option was to extend the possibility that the promisee acquired a right. Whenever this was the case, the third party would not have an action of his own, but the promisee’s action could at least be assigned to him. Initially the attempts in this direction did not imply a considerable progress. Through the procurator ad recipiendum and the interesse superveniens the number of cases where the promisee was considered to have an interest was enlarged but not significantly, while it would have been too easy to presume that every stipulation in favour of a third party was made in the promisee’s interest, as did the Roman-Dutch jurists in later times161. Nobody is so insane as to stipulate for a third party without interest, they argued, and the well-being of a fellow human being is always of one’s own interest. The arguments for the latter statement could even be found in the Digest162. The stipulation mihi recipienti suo nomine was not applied generously. It could only be used by the procurator and the manager of another’s affairs on behalf of their principal. Until the days of Bartolus it was impossible for the promisee to acquire a right he could assign to the third party beneficiary, if he did not have an interest. This changed with the artifice we can trace from that period onwards. By contrast with the simplicity with which the Ordenamiento de Alcalá had in one move set aside all the Roman formalities and obstacles and acknowledged the validity of binding oneself towards an absent beneficiary, even if this was not in the interest of the promisee, the means by which the same goal was reached by the jurists who had to reason within the boundaries of the Corpus iuris were complicated and sophisticated: the stipulatio alteri without any interest was a pact, a pact resulted in a natural obligation, if the promisor confirmed his promise by oath the natural obligation became a civil obligation, from this civil obligation the promisee derived an enforceable right and could assign this right to the third party beneficiary, but this was no cession in the modern sense, since the third party had to act as procedural representative of the promisee (procurator in rem suam). Thus, from the moment this mechanism was invented the parties to a contract had all the means at their 161 Simon Groenewegen van der Made (1613 – 1652), De legibus abrogatis, Justiniani Institutiones Bk. 3 tit. 20 § 19 n. 3, in B. Beinart (ed), Groenewegen, De legibus abrogatis (on abrogated laws), Volume I, Johannesburg 1974, p. 76; Simon van Leeuwen (1625 – 1682), Censura Forensis, Lib. IV, cap. 16 (de verborum obligatione) n. 8, in the edition Leyden 1662 p. 522. 162

Florus D. 1.1.3 and Pap. D. 18.7.7.

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disposal in order to achieve the result that a third party beneficiary would acquire a right. The strange construction can be explained as a creative way of justifying on the basis of the Corpus iuris what was already there in indigenous law and to show that as regards its eventual outcome Roman law did not deviate very much from existing legal practice. It is sometimes rumoured that the work of the commentators was nothing else but Spielerei with ancient texts without having any relation with legal practice163, but the reality could have been entirely different. The way the commentators – who produced an enormous quantity of consilia for the legal practice of their days – interpreted the Corpus iuris can be elucidated against the background of the legal and social reality of the time and their involvement in that reality. By the end of the fifteenth century a process of reception of Roman law was taking place throughout great parts of continental Europe and this would only have been possible if the learned jurists had modified ancient Roman law, making it suitable to be received and adopted by the already existing social and legal order. This could only be achieved through creative interpretation and misinterpretation of the Roman texts, a craft of which the commentators proved themselves to be perfect masters.

163 N. E. Algra, Positieve discriminatie van vrouwen in de middeleeuwen, Groningen 1993, p. 18.

HARRY DONDORP

Ius Quaesitum Tertio in Medieval Canon Law I. Introduction The modern concept of a contract in favour of a third presupposes that a promise is made for the benefit of a third, viz. in favour of someone else than a party to the contract. The Roman law sources give a few examples: a bridegroom promises his father-in-law to restore the dowry to the latter’s grandson (D. 24.3.45), a depositee promises to restore the object to the depositor’s son (D. 16.3.26), a donee agrees to pass the gift to a third (C. 8.54.3)1. In discussing third party rights, the bridegroom, depositee, and donee were seen as examples of persons who promised to give something to a third party (or to do something for him); hence they were called promisors. The father-in-law, depositor, and donor stood for the party who took the initiative to request such a promise; hence they were called stipulators – using the terminology of the stipulatio for all contracts and pacts. The canonists, who took the binding force of promises as their starting point, also referred to them as persons who accepted a promise. The grandson was named tertius, because he was neither the stipulator nor his heir. Because the performance agreed upon, was to someone else, the contract was termed stipulatio alteri: an agreement to give something to a third or to do something for him. It was only in exceptional cases, described in the Corpus Iuris, that such an agreement resulted in a right for the third party; hence, it would be wrong to translate stipulatio alteri in the Roman law sources as contract in favour of a third party. The concept of a stipulatio alteri included every agreement to give something to someone other than the stipulator (or to do something for him)2. In Roman law, because (in principle) both parties had to be present at the moment a contract was concluded, the promisee and the stipulator were the same person, viz. the person present. Following Azo, the civilians taught that there could only be an agreement between the parties if the stipulator requested a promise directed to himself to give something to a third: “promittis mihi”; and such an agreement resulted in an obligation if the promisee had a financial interest in the performance agreed upon. There was no contract if the promisor made a promise 1 They are described as exceptions to the principle Alteri stipulari nemo potest; see the contribution of Hallebeek to this volume (cf. nrs. xi, xiii – xv). 2 See J. A. Ankum, De voorouders van een tweehoofdig twistziek monster, Zwolle 1967.

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phrased as addressed to someone other than the person present (stipulator)3. In the example above, the bridegroom had to make a promise to his father-in-law: “I promise you”. If the promise was phrased as addressed to the grandson, he was not obliged. Promises to an absent promisee (the grandson) could not be accepted by someone else (the father-in-law). The Roman law principle Alteri stipulari nemo potest, as interpreted in the Middle Ages, was also taken to prohibit what we call representation4. Canon law, however, influenced by the biblical notion that one must keep his word, was inclined to acknowledge the obligatory force of unilateral promises and bare agreements (pacta nuda), and to allow representation / agency and third party rights. Therefore, the canonists queried whether the absent promisee could enforce the promise. Various arguments were posited. The decretal X 1.35.3 suggested that the Church acknowledged the obligatory force of nude promises. From other decretals it could be derived that, provided the absent promisee consented, the agreement between promisor and promisee resulted in an obligation, which could be enforced in an ecclesiastical court. A text in Gratian’s decretum (C.1 q.7 c.9) seemed to allow the absent promisee to consent through someone present, who accepted the promise for him – what we call agency. Perhaps, canon law even granted a remedy to the third party, to whom the parties had agreed to perform. The first topic, the canonists discussed, was agency. For them, the Roman law principle Alteri stipulari nemo potest implied that one could not consent for someone else. If the absent promisee sent an agent, it followed that the latter could do no more than conclude the contract himself. The agent became the promisee (stipulator) and he would stipulate to give something to a third, viz. to his principal5. The Church, however, seemed to allow representation, and some canonists also used the verb stipulari when the absent principal concluded the contract through an intermediary. This poses a terminological problem in describing the view of the canonists. Apparently, to them the promisee was not necessarily present: he was the person the promisor would be obliged to and who acquired a right to sue. Stipulator and promisee need not be the same person. See Accursius, gloss ad D. 45.1. 38. 21; Hallebeek, this volume, § III.6. See R. Zimmermann, The law of obligations. Roman foundations of the civilian tradition, Cape Town etc. 1992, p. 41 & 34. 5 The civilians taught that Roman law acknowledged what we call indirect representation, if the agent had an interest based upon his contractual liability towards his principal. Acting within the limits of his mandate an agent could accept the offer (directed to him) to give something to a third. The promisor was obligated towards the agent to perform to the third (the agent’s principal); the agent in turn was bound (under his contract with his principal) to cede his action. Because it was not certain if the agent had an interest, it was safer to stipulate, that the object would be given to him (the agent) who would receive it for his principal. See Accursius, gloss Supra dictum ad Inst. 3.19.19 and Odofredus, ad C. 4.27.1. See also Hallebeek, this volume, § III.6. 3 4

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II. Agency acknowledged? The medieval canonists primarily discussed the obligatory force of promises to give something to an absent person, and queried what the effect would be if this promise was made to someone else who was present. Would it result in an obligation towards the absent person? The question was first discussed at the turn of the twelfth century, actuated by the phrasing of the oath sworn by a schismatic bishop, who wished to return to the Church, described in Gratian’s Decretum (C.1 q.7 c.9): “promitto tibi N. et per te Sancto Petro, apostolorum principi, atque eius vicario beatissimo vel successoribus eius . . .”. His promise to observe henceforth the teachings of the Church was not only addressed towards the church official present (promitto tibi), but also through him (et per te) towards Saint Peter, his vicar – viz. the pope – and his successors. The canonists grasped that one might argue on the basis of this text that a promisor was bound by his promise, if that promise was addressed through someone present (per te) to the absent beneficiary (Sancto Petro), because the Church taught that promises and oaths were equally binding. From their glosses – published by Antonio Padoa Schioppa in 19766 – it can be seen that their line of thought was the following: if one can validly promise to Saint Peter under oath through someone present, one can similarly make a promise to any absent promisee – the person one intends to be obliged to – through someone present (per alium). Consequently, the absent promisee acquires a contractual right (obligatio) through an intermediary. This is possible, if the promise is made to an agent (mandatarius) of the absent promisee, as Huguccio’s comment to this text reads7. Apparently, in twelfth century canon law, it was both possible to promise something on behalf of an absent person (based on D.63 c.33) and to accept a promise made to him (based on C.1 q.7 c.9). In other words: both the promisor and the promisee could send a representative. This view, ascribed to the canonist Bazianus,8 was queried by the French canonists. They argued that, in general, promises made per alium (through someone present) to an absent promisee had no effect, because only sons9 and slaves could 6 See A. Padoa Schioppa, Sul principio della representanza diretta nel Diritto canonico classico, in S. Kuttner (ed), Proceedings of the Fourth International Congress of Medieval Canon Law, Monumenta Iuris Canonici C subsidia 5, Città del Vaticano 1976, p. 107 – 131. 7 Cf. Huguccio, Summa Decretorum, ad C.1 q.7 c.9 s.v. ‘Et per te’ (Ms. Paris BN lat. 15396, fol. 106vb): quod per alium alii potest promissio fieri, quod verum est, et si sit mandatarius cui promittitur. 8 See Padoa Schioppa, p. 115. 9 In Roman law filii familiae acquired for their father. In their glosses the civilians and canonists refer to sons (filii) who acquire for their father and vice versa. See Accursius, gloss

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stipulate for someone who was absent, viz. for their fathers and masters. In other words: only promises made to his son or slave gave the father a right to sue. It would be contrary to the principle Alteri stipulari nemo potest, if upon one’s request everyone could act as his representative10. In the apparatus Animal est substantia (1206 – 1210) the Roman law principle is explained by referring to the fact that one cannot acquire a (contractual) right for someone else – viz. the intermediary cannot acquire for his principal – , because in order to create an obligation the consent of both parties is needed: that of the promisor and that of the (absent) promisee; and it is impossible to consent for someone else, one’s father or master excepted11.

III. Agency rejected Another exception to the Alteri stipulari nemo potest principle is mentioned in the anonymous French apparatus Ecce vicit leo (1202 – 1210): in Roman law a procurator acquires for his principal; this is the reason why the pope and prelates acquire for their churches12. This way of reasoning was refuted by the English canonist Alanus (d. 1238). In the second version of his commentary to Gratian’s Decretum, written between 1202 and 1205, he argued that procurators could only acquire for themselves. In other words, promises to one’s agent resulted in an obligation towards the agent. Promisor and agent would be parties to the contract. With regard to the promise henceforth to observe the teachings of the Church, described in C.1 q.7 c.9, he taught that canon law made an exception ratione catholice religionis, ruling there Supra dictum ad Inst. 3.19.19: . . . Nam interdum directam acquirimus actionem, subaudi alteri stipulando, ut filius patri, seruus domino et econtra. ut Inst. 3.19.4. 10 See Ecce vicit Leo, ad C.1 q.7 c.9 s.v. ‘Et per te’ (ed. Padoa Schioppa, p. 114). 11 See Animal est substantia, ad C.1 q.7 c.9 s.v. ‘Petro’ (Ms. Luik 127E, fo. 94vb): Et ita per alium iste potuit obligari? Contra Inst. de inutilibus stipulationibus § Alteri (Inst. 3.19.19). Et hoc est quia nemo potest alteri acquirere. ff. de regulis iuris Quod tutela (D. 50.17.73). Et hec est ratio quia nemo potest pro alio consentire. Aliud est hic. Et est notandum quod prorsus nemo etc.? Testator bene potest, arg. ff. de certis l. Annis (C. 2.3.28?) unde per papam hic eius acquiritur obligatio et per iudicem, et bene, et ex lege potius quam ex natura. ff. rem pupilli saluam fore l. ii. (D. 46.6.2) idem ff. de procuratoribus In cause § ult. (D. 3.3.27.1) et ff. de pactis Sities (D. 2.14.62?). Si penitus extranea persona, tunc nihil aquirit in contractibus qui retrahuntur uel non. Cod. ad exhibendum Si res (C. 3.42.8). In quantitatibus secus est. Si det pecuniam nomine meo, acquiritur michi directa actio. ff. si certum petatur. Certi condictio § ult. (D. 12.1.9.8). Ratio est quia pecunia habet suum esse in genere. 12 See Ecce vicit leo, ad C.1 q.7 c.9 (ed. Padoa Schioppa, p. 114 – 115): [ . . . ] Leges tamen contrarie sunt que dicunt quod nemo potest pacisci uel stipulari per alterum, ut Inst. de inutili. stipu. § iv. (Inst. 3.19.4) nisi in casibus specialibus, sicut filius patri [ . . . ] nisi fuerit procurator, quia procurator potest illi cuius est procurator unde dominus papa et quilibet prelatus, cum sit procurator ecclesie. ut xii. q.i. Res (C.12 q.1 c.26 potius ibid. 27) bene potest acquirere ecclesie.

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would be an obligation towards the pope if this promise was made to someone present whom the pope had commissioned to accept the promise13. If one compares the views around 1200, it becomes clear there was a difference of opinion among both glossators and canonists. The minority view among the civilians – defended by Martinus Gosia14 (d. before 1166) – that a promise made to a representative had a similar effect as a promise to the promisee himself had its parallel in canon law in the teachings of Guillelmus Vasco15, Bazianus, Huguccio, and Ecce vice leo16. At the beginning of the thirteenth century, however, the canonists adopted the majority view of the civilians. With regard to agency, canon law did not abandon the principle of ‘alteri stipulari nemo potest’, although the Church clearly favoured representation as an essential element of Christian life and belief17. Nevertheless, a difference between Roman and canon law was felt, as Laurentius Hispanus’s gloss, written around 1210, shows: Glosa Palatina ad C.1 q.7 c.9 s.v. Per te [ . . . ] Sed credo iure canonico me teneri si ego promitto tibi me daturum Titio decem. xxii. q.v. Iuramenti (C.22 q.5 c.12), maxime ubi interuenit sacramentum. arg. ff. de const. pecun. l.i. (D. 13.5.1.pr)18.

Since Johannes Teutonicus (1170 – 1245) copied Laurentius’s gloss to C.1 q.7 c.9 Quotiens into his apparatus, which in time became the Glossa Ordinaria to Gratian’s Decretum, the gloss which otherwise might have been forgotten became widely known. Later canonists recognised the importance of the gloss and discussed at great length in what respect canon law differed from Roman law with regard to stipulationes alteri.

13 See Alanus, Ius naturale, ad C.1 q.7 c.9 s.v. ‘Et per te’ (ed. Padoa Schioppa, p. 115): ( . . . ) Procurator enim si domino stipuletur obligationem ei non acquirit. ut C. per quas personas nob. ac. l.i. (C. 4.27.1): procurator enim solam possessionem acquirere potest domino et ea mediante dominium. ut l. ea. (C. 4.27.1) et inst. eo. § Ex his (Inst. 2.9.5). Sed dicas hic pape per procuratorem obligationem adquiri speciali ratione ob favorem ecclesie et sic catholice religionis sicut pupillo et municipio per procuratorem acquiritur obligatio. ut ff. de const. pecu. Cum qui Effesi (D. 13.5.5.9). 14 Martinus generally accepted the validity of the stipulatio alteri and in all cases he granted the third an action. See Hallebeek, this volume, § III.3. 15 See Guillelmus Vasco, ad C.1 q.2 c.9 (ed. Padoa Schioppa, nt. 19): Argumentum quod aliquis potest stipulari uni per alterum, et hoc uerum est quando interest stipulatoris sic stipulari. A similar gloss can be found in Bernardus Compostellanus Antiquus’s commentary in Ms. Gniezno 28 (ed. Padoa Schioppa, nt. 23). 16 See Padoa Schioppa, p. 113 – 114; he suggests that the anonymous author of Animal est substantia interprets C.1 q.2 c.9 as if a papal messenger was sent to accept the promise. 17 See Zimmermann, p. 54 (with litt.). 18 Laurentius Hispanus, ad C.1 q.7 c.9 s.v. ‘Per te’ (ed. Padoa Schioppa, p. 116).

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IV. Contracts in favour of a third party acknowledged? “I believe I am bound according to canon law, if I promise you that I shall give Titius ten, especially when I promise under oath.” The exact purport of Laurentius’s statement is difficult to establish. In the context of C.1 q.7 c.9, the Roman law principle Alteri stipulari nemo potest was primarily taken to prohibit stipulating per alium - entering into a contract through an intermediary. Contracts could not be made through an agent, because nobody could stipulate a performance in favour of a third party, sons and slaves excepted. Thus derived from Inst. 3.19.419. In Roman law an absent promisee only acquired a right to sue if his son or slave had accepted the promise20. This was also Laurentius’s opinion. He began his gloss discussing, whether one could enter into a contract through someone else – what we would call agency. The formula in Gratian’s decretum suggested that the promise to a representative created an obligation towards the (absent) promisee, his principal. Laurentius argued that this would be contrary to Inst. 3.19.4. Promises made to (or in the presence of) someone else, even promises made to one’s agent (procurator), did not result in an obligation towards the principal, unless he himself was also present at the moment of agreement21. In order to explain why the pope may act as representative for Saint Peter, Laurentius refers to the analogy of a slave and describes the Pope as servus servorum22. Following this line of thought, the end of the gloss suggests that canon law differs from Roman law with regard to the legal protection of Titius, the absent promisee. In interpreting the words “Sed credo iure canonico me teneri si ego promitto tibi me daturum Titio decem” one should, however, note that the wording of this promise differs from that in Gratian’s Decretum. Laurentius began his gloss discussing a promise phrased ‘per te promitto St. Petro’, addressed to an absent promisee (St. Peter). At the end of the gloss the promise is phrased differently: ‘promitto tibi’, as if addressed to a promisee who is present (you). Inst. 3.19.4: Si quis alii, quam cuius iuris subjectus sit, stipuletur, nihil agit. The civilians did not distinguish, whether sons and slaves concluded the contract as representatives, or not; neither did the canonists. Sons and slaves could accept a promise addressed to their fathers or masters (acting as representatives) or addressed to themselves. The effect for his father or master would be the same: he acquired a right to sue. 21 Thus derives from D. 45.1.79, which states an exception to the rule that one cannot acquire rights through the act of a free person. The principal, who is present when his procurator stipulates that something will be given (back) to him, acquired a right to sue the promisor. See Hallebeek, this volume, § II.2 nr. v. 22 See Laurentius Hispanus, Glosa Palatina, ad C.1 q.7 c.9 s.v. ‘Et per te’ (ed. Padoa Schioppa, p. 116): [ . . . ] Dic ergo ideo hoc fieri quia papa seruus est beati Petri, unde dicit de se in epistolis suis seruus seruorum Dei. He errouneusly read in C.1 q.7 c.9 that the schismatic bishop made a promise to the pope and ‘through him’ to St. Peter. 19 20

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The reason for the difference may be the following. In the civilian tradition – the glossa ordinaria refers to Azo (d. 1220) – only sons and slaves could stipulate “do you promise Titius (my father) to give him 10?”23. In other words: promises directed towards an absent promisee (Titius) could not be accepted by someone else, except by his son or slave. While stipulating, other persons had to use a different phrase, asking: “do you promise me to give Titius 10?”. In order to have any effect, their stipulatio alteri had to phrased correctly, viz. naming the person present (stipulator) as promisee. In modern terms: agency was not allowed. A correctly phrased stipulatio alteri was an agreement between parties (both present) and resulted in an obligation between them, if the promisee had an interest in the performance to the third (Titius). Thus derived from Inst. 3.19.19. The promisee (you) acquired a right to sue; the third (Titius) only in a few exceptional cases, described in the Digest and Codex. The civilians did not acknowledge representation or third party rights, except in the few specific situations, already mentioned in the Corpus Iuris, e.g. the actor municipum and representatives of other public bodies. With regard to agency, the canonists adopted the view of the civilians, that the principal could not sue the promisor (unless the agent assigned his action to him). Did Laurentius Hispanus, perhaps, imply that in canon law the agreement between parties, if thus intended, created third party rights?

V. Three different interpretations of Laurentius’s gloss Later authors varied in their reading of Laurentius’s gloss. To some, he discussed promises in general, viz. promises to give something to an absent person. In their view Laurentius did not distinguish between promises to an absent promisee, made in the presence of someone else (who accepts for him) on the one hand, and agreements between parties, both present, in favour of a third, on the other. In other words, in their view the gloss implied that the absent beneficiary could enforce a promise directed to him or to someone who was present. An example of this can be found in Baldus’s (1327 – 1400) commentary to Codex 1.2.19: If someone states that he donates 100 to a sacred place or charitable end (the poor)24, the donation is valid, because everyone can accept such a promise, even if he – the person present – is not the promisee. According to Baldus this is the situation in which the gloss applies25. See Hallebeek, this volume, § III.6 Baldus is discussing a question posed in the ordinary gloss: ‘Quid si aliquis existens in camera sua dixit ‘dono pauperibus centum’ utrum ista donatio ualeat’. Cf. Baldus d’ Ubaldis, ad C. 1.2.19 nr. 3 (Opera Omnia, ed. Lyons 1585, III, fo. 32va): Secundo quero utrum possit donari pauperibus certi loci uel in genere nemine recipiente pro eis? 25 Baldus d’Ubaldis, ad C. 1.2.19 nr. 3 (Opera Omnia, III, fo. 32va): Ego addo unum quod piis locus et pauperibus possit quilibet stipulari etiam uerbis directis ipsius absentibus. Ista est glossa ordinaria que alibi non reperitur. i. q.vii. Quotiens cordis (C.1 q.7 c.9). See also 23 24

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The majority of the canonists maintained that the gloss did not include promises to an absent promisee made in the presence of someone else. They concluded from the words ‘si promitto tibi’ that Laurentius had discussed the effect on the third party of an agreement between parties to give something to an absent person, viz. the problem of third party rights. Panormitanus (Nicolaus de Tedeschis, 1386 – 1445) was the first canonist who thus interpreted the gloss: “videtur quod Titius potest agere contra me”26. In a third interpretation of the gloss, third party rights are not the issue. The gloss states that I am bound by the promise I made to you. This does not necessarily imply that the gloss argues there is an obligation towards Titius, the third party, which he can enforce. In Roman law, because of the Alteri stipulari nemo potest principle, our agreement did not result in an obligation towards the promisee, unless he had a financial interest in the performance agreed upon. In this interpretation Laurentius seems to argue that the promisee (you) can enforce the agreement in an ecclesiastical court, even though he has no financial interest.

VI. New law with regard to third party rights Not only Gratian’s Decretum, but also papal decretals raised the question whether absent persons could acquire contractual rights. Would a promise for the benefit of a third party result in an enforceable right? Promises in court were not the issue. It was generally accepted, that judges could order (one of) the litigants to make a promise that would benefit an absent person, the other litigant or a third party. Such promises – aimed at creating a right for the absent person – were generally considered to be binding and could be enforced by him. The same was true for promises made to a court-clerk (tabellio or notarius) to give something to an absent person. The effect of promises made outside the courtroom to give something to an absent person was widely discussed. Did canon law acknowledge new exceptions to Inst. 3.19.4, viz. other than promises made to one’s son or slave? Were promises made to arbitrators excepted as well? Promises to court-clerks (notarii) outside the courtroom? Were promises to one’s agent excepted? The civilians acknowledged that promises in notarial instruments resulted in a right to sue27. They denied, though, that arbitrators and agents acquired rights for other persons (unless on the basis of statutory law). It was even disputed, whether agents and arbitrators could themselves enforce promises made to them to give something to a third party, Nicolaus de Tedeschis, ad X 1.43.4 nr. 7, (Super quinque decretalium, Lyons 1509 – 1510, fo. 130 va): Quam glossam in l. Illud C. de epi. et cle. (C. 1.2.19) uidetur Bartolus (lege: Baldus) intellexisse quoad pias causas, sed non est uerum quod glossa sic loquatur. 26 See Nicolaus de Tedeschis, ad proemium nr. 25 (ed. Lyons 1509 – 1510, fo. 6r). 27 See Hallebeek, this volume, § III.6 & 7.

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because they might lack sufficient interest in the promised performance unless a penalty clause was added. With regard to arbitrators, the canonists also questioned whether they acquired an action which they could assign to the third party28. The effect of the acceptance by a public notary was also questioned, because it seemed as if the absent person (for whom he had accepted) did not acquire a right to sue in an ecclesiastical court29. This was a result of the decretal Quamquam (VI 5.5.), canon 27 of the Council of Lyon (1274), which denied a christian burial to usurers unless they had restored the interest gained, or had promised to do so. Such a promise should either be made to (and in the presence of) those who had paid them interest or to their sons (who could acquire for them). If none of those was present, the promise to make restitution should be made to the local bishop, the rector of the parish or a public notary. For the latter, the pope required an authorisation by the bishop30.

VII. Contracts in favour of a third rejected From the specified enumeration of those people whose presence made the usurer’s promise effective, we can see that canon law acknowledged at the most a further exception to the principle Alteri stipulari nemo potest, which in medieval times was still taken to prohibit the acquisition for absent persons. A specified group of persons could accept promises of usurers: the bishop, the rector of a parish and (with episcopal authorisation) a public notary. Agents (procuratores) were not mentioned. Hence, with regard to promises to one’s agent, canon law did not deviate from Roman law, as interpreted by the glossators. The agent himself acquired a right to sue and should assign his action to his principal, as is explained by Johannes Garsias: 28 A penalty clause was necessary according to Guillelmus Duranti and Antonius de Butrio (ad X 1.43.4). According to Panormitanus canon law did not require, that the promisee had a financial interest in the performance agreed upon, because a promisee could enforce an obligatio naturalis. See Nicolaus de Tedeschis, ad X 1.43.4 nr 16 (ed., fo. 152ra): ratione naturalis obligationis potest agi de iure canonico. ut in c. i. de pac. (X 1.35.1) et dic ut ibi dixi et uide glosam i. q.vii Quotiens (C.1 q.7 c.9). 29 Antonius de Butrio referred to a gloss of Innocent IV to X 3.32.20, from which he concluded that the latter denied that the absent person acquired a right to sue in extraiudicialibus et conventionalibus. He also pointed out that Bartolus did not make such a distinction. See Antonius de Butrio, ad proemium nr. 69 (Commentaria, Venice 1578, repr. Turin 1967, I, fo. 4ra). Nicolaus de Tedeschis referred to Bernardus Parmensis and Innocent IV. See Nicolaus de Tedeschis, ad proemium nr. 22 (ed., fo. 6ra). 30 VI 5.5.2: ( . . . ) vel, eis absentibus, loci ordinario aut eius vices gerenti, siue rectori parochiae, in qua testator habitat ( . . . ) aut servo publico, de ipsius ordinarii mandato idonee de restitutione facienda sit cautum.

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. . . Si absenti (domino procurator stipulatur) . . . extra rem domini, aut dominus est persona privilegiata, ut miles vel pupillus vel adultus, et tunc acquiret utilem. ff. si certum petatur Si pecuniam (D. 12. 1. 25) aut dominus non est persona privilegiata et tunc domino nichil adquirit, sed tenetur cedere actionem per actionem mandati. ff. de adquir. poss. Quoque § Et si possessio (D. 41. 2. 49.2)31.

If one compares the views around 1300, there seems to be no difference of opinion between the civilians and the canonists. They all adhere to the principle, that an absent person can only acquire contractual rights (obligationes) through his sons or slaves. They acknowledge the same exceptions, viz. those already mentioned in the Digest and Codex, among them the tutor, curator and representative of public bodies32. The majority view of the civilians was adopted by the canonists, though they acknowledged that the decretal Quamquam stated a new exception. There is no indication, Laurentius’s gloss excepted, that in canon law an absent promisee could enter into a contract through an intermediary (agency), or that third parties could acquire rights if the parties so intended (contracts in favour of a third party). This was also the conclusion the civilian Jean Faure (d. ca. 1350) arrived at in his commentary to Inst. 3.19.4. He pointed out that Johannes Teutonicus (ca. 1170 – 1245), who had copied Laurentius’s gloss, seemed to maintain that Inst. 3.19.4 no longer applied in canon law. Jean Faure denied this, insofar the gloss implied that all promises – not only those under oath – resulted in a right for the absent promisee or third33. Jean Faure argued, that only in exceptional cases did the absent person, to whom the promisor had agreed to give something, acquire a right to sue. This resulted from the decretal Quamquam (VI 5.5.2). In general Inst. 3.19.4 was still to be applied in canon law34.

31 See Johannes Garsias, Commentarium ad decretales Gregorii X, de usuris. c. Quamquam (ed. Padoa Schioppa, p. 123); Johannes Andreae, ad VI 5.5.2 s.v. ‘Possint adquirere’. 32 See Hallebeek, this volume, § IV.2.a. 33 He did not distinguish between a promise to an absent promisee (accepted by someone else present) and the promise to someone present, to give something to a third. 34 Jean Faure, In Institutiones commentarii, ad Inst. 3.19.4 nr. 14 (ed. Lyons 1577, repr. Frankfurt 1969, fo. 88rb): Sed quid si quis alteri paciscatur uel stipuletur, et promissor se obliget iuramento? Responsio: de iure ciuili non ualet, ut dixi in simili supra proximo §. Sed Ioannes glossator decretorum uidetur tenuisse quod iste § (Inst. 3.19.4) sit correctus de iure canonico, maxime quando appositum fuit iuramentum. ut no. i. q.vii. c. Quoties (C.1 q.7 c.9) in glossa super uerbo ‘et per te’. Ego non credo hoc “maxime”, quia de iure canonico nouissimo est speciale in certis personis et casibus quod alii acquiratur ut c. Quamquam (VI 5.5.2) sepius allegatum. Et sic in contrarium est ius commune. Sed bene credo quo ubi iuramentum fuit appositum quod ecclesia debet compellere promissorem ad tenendum iuramentum et sic quo ad hoc posset uerificari quod dicit Ioannes.

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VIII. An Alternative: a promise under oath Jean Faure agreed, though, with Laurentius Hispanus and Johannes Teutonicus that a sworn promise would bind the promisor, because the Church would compel35 the promisor to keep his word. This did, however, not necessarily imply that they granted the absent third party a right to sue. Because the oath was not recognised in Roman law as source of obligation, the canonists queried if a sworn promise to give something to an absent person could result in a right to sue. Was the presence of the promisee required? Would that of someone else suffice? The civilians maintained that the oath could be used to confirm a promise if the agreement resulted in an natural obligation. As a result, the promisee could bring action. A promise directed to an absent promisee, however, never resulted in a natural obligation, even if the promise was accepted by someone else who was present, the accipiens. Such an acceptance had no effect at all. There was no natural obligation to be confirmed, neither between the promisor and the promisee, because he was absent, nor between the promisor and the accipiens, because the stipulatio alteri was not phrased correctly. To have any effect, it had to read “do you promise me to give Titius 10”. This was not the case if the promise was addressed to the absent person. Similarly in canon law there would be nothing to confirm by oath. First, there was no natural obligation between the promisor and the absent promisee. Since the canonists (following X 1.35.1) acknowledged the obligatory force of agreements (pacta nuda), the reason no longer lay in the absence of the promisee, but in the fact that he had not yet accepted the promise; other persons, sons and slaves excepted, could not consent for him. Secondly, there was no natural obligation between the promisor and the accipiens, because the promise was not addressed to him. Would the absent promisee nevertheless be able to enforce the promise under oath? Innocent IV (Sinebaldo Fieschi, d. 1254) denied this36. In his opinion, promises under oath did not result in a right to sue, though the Church would compel the promisor to keep his word. Some later writers adhered to Innocent’s view, e.g. Jean Faure and Philippus Corneus37, but already Hostiensis (d. 1277) and Johannes On the way to proceed, see § IX (denuntiatio evangelica). See Innocentius IV, In quinque libros decretalium commentaria, ad X 3.6.7 (ed. Venice 1570, p. 442): Sed nobis uidetur quod ex iuramento non competit actio ciuilis, sed archiepiscopus poterat denunciare crimen periurii; idem, ad X 1.35.1 s.v. ‘Cohibuerit’ (ed., p. 195): id est, nisi pacta seruet excommunicabitur; idem, ad X 2.1.13 (ed., p. 233): si aliud petendum nulla competat actio ciuilis uel canonica, ut quando quis iurauit dare uel facere sine stipulatione, locum habet denuntiatio. ut hic. Nicolaus de Tedeschis referred to his gloss ad X 1.35.1 nr. 5, ad X 2.1.13 nr. 50; ad X 3.7.6 nr. 27. 37 Petrus Philippus Corneus, Consilia sive responsa III.cons. 210 nr. 3 (ed. Venice 1582, fo. 234va): Et simpliciter in dicto c. Quoties cordis oculus non dicitur quod actio queratur absenti, sed potius uidetur tendere ille textus ad obligandum Deo. . . . 35 36

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Andreae (d. 1348) maintained that the beneficiary himself would have an action38. Bartolus de Saxoferrato (1313 – 1357) followed their view, viz. that canon law granted an action, building on the phrase ’omne iuramentum esse seruandum’ in the decretal Cum venissent (X 3.7.6)39. They argued, that this was in accordance with the civilians’ interpretation of the constitution Sacramenta puberum of emperor Frederick I (1152 / 5 – 1190)40, who had derived from the phrase ‘sacramenta . . . inuiolabiter custodiantur’ that the emperor, deviating from Roman law, had ruled that all sworn promises gave rise to an action41. Differentiating between the confirmatory oath42 and the obligatory oath, Bartolus named the latter a iuramentum introductorium obligationis43. The obligatory oath could be enforced in an ecclesiastical court. In discussing the obligatory force of oaths, the canonists did not distinguish between the promise to an absent promisee (promitto Titio), accepted by someone present, and the promise for a benefit of a third party (promitto tibi). Apparently, in the latter case, if I have sworn to you to give something to a third, he has an action to sue for damages. It would, however, be wrong to conclude that his right derives from the agreement between parties, as if their agreement is confirmed by the oath44. Even Luis Molina (1535 – 1600), who taught that unilateral promises to an 38 See Johannes Andreae, In quinque decretalium libros Novella commentaria, ad X 3.7.6 nr. 20 (ed. Venice 1581, repr. Turin 1963, III, fo. 47vb): Dicunt quidam et placet hoc Hostiensem quod secundum canones ex conventionali iuramento datur actio. arg. 12 q.2 Quicumque (C.12 q.2 c.66) et q.5 Quia ioannes (C. 12 q.5 c.3), nec mirum cum detur ex nudo pacto. ad hoc supra de pactis c. 2 et 3. 39 Bartolus de Saxoferrato, Super secunda digesti novi, ad D. 46.1.56 nr. 4 (Commentaria, ed. Venice 1526, repr. Rome 1996, VI, fo. 83vb): . . . Secundus est iuramentum introductorium obligationis. istud de iure ciuili non est modus obligationem inducende, nisi in liberto ut hic cum similibus. Sed quero quid de iure canonico? Innocentius uidetur dicere quod idem. extra de iud. Nouit (X 2.1.13) et c. Cum uenissent de instit. (X 3.7.6). Audio quod Ioannes Andreae in dicto Cum uenissent (X 3.7.6) tenet contrarium secundum Hostiensem. Et hoc plus placet, cum enim dicatur in canone ‘omne iuramentum esse seruandum’ . . . patet quod oritur actio et exceptio ex illo casu ut l. Statuas supra de acquir. rerum domin. (D. 41.1.41) et notata in dicto aut. Sacramenta (Aut. post C. 2.27 (28).1) in glossa super uerbo ‘custodiantur’. 40 See Hostiensis, ad X 2.24.28; Johannes Andreae (ad X 2.2.428) referred to his gloss. 41 See Accursius, ad Aut. post C 2.28 (29).1 s.v. ‘Custodiantur’: scilicet ut detur actio et exceptio. arg. ff. de acquir. rerum dom. Statuas (D. 41.1.41). . . . This was disputed, however. Martinus de Fano and Jacobus Balduinus did not recognised the oath as an independent source of obligations. See J. Hallebeek, ‘Actio ex iuramento. The legal enforcements of oaths’, Ius Commune 17, p. 80 and 85. 42 See Bartolus, ad D. 46.1.56 nr. 6 & 12 (Commentaria, VI, fo. 83vb): Puto quod de iure canonico per tale iuramento talis conuentio ualidatur, sicut penalis stipulatio super ea apposita ualet. ut dicto § Alteri (D. 45.1.38.17) et C. de contrah. et commit. stip. l. Nuda (C. 8.37.5) cum similibus. 43 In his discussion of the ‘actio ex iuramento, Hallebeek did not distinguish between both types of oaths. Cf. Hallebeek, Ius commune 17, 69 sqq. 44 When the promisee has no interest in the performance agreed upon, a natural obligation towards the promisee arises, which can be confirmed by oath; this would, however, not result

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absent person were binding in natural law and spoke of confirmatory oaths45, pointed out that sworn promises were enforceable in ecclesiastical courts for another reason46. Various reasons were given, why the absent promisee or third (depending on the way the promise was phrased) acquired a right to sue. Antonius de Butrio (1338 – 1408) and Panormitanus (Nicolaus de Tedeschis; 1386 – 1445), argued that an oath has effect, independent of the acceptance by the beneficiary, because it is a promise to God, who is omnipresent47. Paulus Parisiens (ca. 1471 – 1545) argued that “Deus supplet presentiam partis”, thus feigning presence of the absent beneficiary48. According to Felinus Sandeus (1444 – 1550), God accepts the promise for the absent third party49. Andreas Alciatus (1492 – 1550) denied this. In his opinion, the promise under oath was made under the tacit condition that the absent beneficiary accepted the promise50. In several situations the oath could be used to create an enforceable right for an absent person. The unilateral promise to an absent promisee thus became enforceable, and public notaries for this reason used to request sworn promises, because it was disputed whether they could accept on behalf of the beneficiary. The sworn promise to give something to a third, made to and accepted by the other party to a contract , also gave the third party a right to sue. Although canon law did not know in an civil obligation between the promisor and the third. See Andreas Alciatus, ad X 2.24.28 nr. 316 – 317 (Opera Omnia, ed. Basel 1621): Ex qua ratione infertur quod ubi obligatio naturalis non oriretur, ut quia uerba promissionis nullo modo respicerent praesentem sed alterum . . . tunc iuramentum non confirmaret. Secunda infertur quod confirmatur obligatio quoad ipsum stipulantem, quia respectu ipsius oritur obligatio naturalis, non autem quoad ipsum tertium qui fuit absens, ut habetur in dicto § Alteri (D. 45.1.38.17) et ita expresse sentit Abbas hic.; See Nicolaus de Tedeschis, ad X 2.24.28 nr. 31 (ed., fo. 136va). 45 Luis Molina, De iustitia et iure, II (De contractibus), disp. 263 nr. 17 (ed. Mainz 1614, col. 49): Postremum dubium in hac materia est, utrum ex promissione nondum acceptata, iuramento tamen a promittente confirmata, concedatur actio iure canonico et ciuili. 46 Luis Molina, De iustitia et iure, II, disp. 263 nr. 17 (ed., col. 49): Dicendum nihilominus est cum Panormitanum c. Cum uenissent de constitu. num. 26 (X 3.7.6) Couarruuiam c. Quamuis pactum part. 1 § 2 nu. 3 & 4 et part. 2 § 7 nu. 16 et aliis quos citat, iure canonico et ciuili concedi ex illa actionem, non quidem quod reuiuiscat uis ad obligandum quam promissio iuramento non confirmato, stando solo iure naturali, haberet antequam acceptetur, ut dis. 150 ostendimus. 47 See Antonius de Butrio, ad proemium nr 69 (Commentaria, I, fo. 4ra): ( . . . ) in iuramento fateor, quia ex eo agi posset, quia illud principaliter dirigitur Deo nec exigit formalitatem recipientis; Nicolaus de Tedeschis, ad proemium nr. 25 (ed., fo. 6rb). 48 Paulus Parisienis, Consilia, I cons. 82, nr. 1 (ed. Frankfurt am Main 1590, fo. 149vb); III, cons. 82 nr. 51 (fo. 171ra). 49 See Felinus Sandeus, Commentaria in v libros decretalium, ad proemium nr. 26 (ed. Lyon 1513 – 1514; fo. 4rb): quia tunc ex iuramento ualidatur, quia dirigitur Deo et ipse recipit pro absente. 50 See Andreas Alciatus, ad X 2.24.28 nr. 322, 334 (Opera Omnia, ed. Basel 1621): . . . sicut donatio tacitam habet conditionem si pars acceptaverit, ut supra uidimus, ita etiam iuramentum habere intelligitur.

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the modern concept of contracts in favour of a third party, around 1300 one could easily reach the same effect by requesting a sworn promise.

IX. An alternative remedy: denuntiatio In 1204 John, the king of England, had turned for help to Rome, after the king of France had infringed upon his feudal right. Not being the competent feudal court in such a matter – because the king was not his vassal – Pope Innocent III declared himself competent to hear the case “ratione peccati”, arguing that no man of reason cannot know that it is our duty to correct any Christian for whatsoever mortal sin. The king of England had not brought an action, but had denounced the king of France, claiming that in breaking the peace of the land he had sinned against him, and after admonition had not changed his ways. The idea, expressed by Innocent III, that the Church in such a case was obliged to correct the sinner, found its origin in a passage in the Gospel of Matthew (Matthew 18: 15 – 17). From it it followed that, if his fellow christian sinned against him by not giving an object or quantity owed, a person must try to correct him in private. If the other did not comply, even after a second monition by three of his brothers in Christ, one could turn to the Church and denounce the other’s sin, and request the bishop to compel the other to do penance. He could thus enforce indirectly the performance owed, because the latter’s penance would be feigned if he refused to make restitution51. This procedure, called denuntiatio evangelica, allowed everyone, except those excommunicated52, to denounce ecclesiastical crimes, such as perjury, adultery, and simony. The canonists pointed out, that this remedy was also available if one could not bring action in a secular court53. ‘Ratione peccati’, ecclesiastical courts might have usurped all jurisdiction; for which reason the canonists limited this remedy to perjury and other ecclesiastical 51 See Johannes Teutonicus, ad 3Comp. 2.1.3 s.v. ‘Feudo’ (ed. Pennington, p. 171): Et sic per consequentiam cogitur restituere feudum. ut xiii. q.vi. Si res (C.14 q.6 c.1); Bernardus Parmensis, ad X 2.1.13 s.v. ‘de feudo’; Innocentius IV, ad X 2.1.13 nr. 3 (ed., p. 233): Et hanc denuntiationem potest procedi etiam ille cuius interest ratione rei familiaris ut hic. Et etiam petere quod sua interest et dicere, ut cum non possit agere penitentiam nisi satisfaciat, quod reddat ei quod sibi debet. . . 52 Thus Johannes Andreae. Johannes Teutonicus, Bernardus Parmensis and Innocent IV also excluded criminals. 53 In their commentaries to X 2.1.13 they distinguish between the denuntiatio evangelica and the denuntiatio iudicialis. The first aims at correction of the sinner, the other also at restitution; hence everybody can denounce a mortal sin, but only the interested party may request restitution. See e.g. Johannes Andreae, ad X 2.1.13 (Opera Omnia II, fo 9r) and Nicolaus de Tedeschis, ad X 2.1.13. Enforcing an obligatio naturalis by means of a denuntiatio is described as an example of a denuntiatio iudicialis.

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crimes, breach of the peace, and cases in which Roman law did not provide an action. As examples Pope Innocent IV mentioned promises under oath and bare agreements54. In his opinion, this was the only remedy canon law provided, but others denied this, and granted the promisee an action as well55. Johannes Andreae taught, that this remedy could be used to enforce obligationes naturales, viz. equitable obligations, which did not result in a right to sue56. Bartolus de Saxoferrato (1313 – 1357) explained in his commentary to the constitution Ad reprimendum (1312)57, which obligatio naturalis was meant: the duty to make restitution in case of unjustified enrichment and the duty to perform as agreed in case of a nudum pactum or a sworn promise58. Bartolus then added: Idem puto de eo qui promittit ei, qui stipulatur alteri. ut l. Stipulatio ista § Alteri de uer. obl. (D. 45.1. 38. 17)59.

In case of unjustified enrichment, bare agreements and unilateral promises, the civilians taught, that an obligatio naturalis arose; by exception one could bring an action in court, e.g. to enforce the services promised under oath by a freedman. (D. 38.1.7.pr.). Similarly, in case parties agreed to give something to a third (or to do something for him), the promisee could not bring action, if and because he had no financial interest in the performance agreed upon. The civilians acknowledged, though, that the stipulatio alteri resulted in a natural obligation between the parties. For Bartolus, the promisor had an obligation to the promisee that the performance to the third party took actually place60. Bartolus, therefore, seems to imply, that an ecclesiastical court would hear a complaint, that the promisor had not fulfilled a contract which could not be enforced in a secular court, because the performance agreed upon was intended as gift to the third. Bartolus does not say who may thus denounce the promisor: the promisee or the third party.

54 See Innocentius IV, ad X 1.35.1 s.v. ‘Cohibuerit’ (ed., p. 195): id est nisi pacta seruet excommunicabitur; idem, ad X 3.6.7 (p. 442) and X 2.1.13 (see note 36). 55 Johannes Teutonicus (ad C.12 q.2 c.66) taught that the promisee could bring action in an ecclesiastical court to enforce a bare agreement (nudum pactum). His opinion became the prevailing view. With regard to sworn promises, see § VIII. 56 Johannes Andreae, ad X 2.1.13 (ed., II, fo. 9v). 57 On the constitution Ad reprimendum see K. Pennington, The prince and the law, 1200 – 1600: sovereignty and rights in the western legal tradition (Berkeley 1993). p. 169 sqq. 58 Bartolus, Tractatus super c. Ad reprimendum (Commentaria IX, fo. 93vb): Sed dico ea que sunt dicta de obligatione naturali intelligi de ea naturali qua quis tenetur eo ipso quod quis locupletatur cum aliena iactura [ . . . ] uel de cause naturali, que habet originem ex consensu, ut ex pacto nudo uel iurerando interposito ab alio quam a liberto. 59 Cf. Bartolus, Tractatus super c. Ad reprimendum (Commentaria, IX, fo. 93vb). 60 See Hallebeek, this volume, § IV.3.c.

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X. Contracts in favour of a third party acknowledged? In discussing promises to give something to an absent person, Antonius de Butrio (1338 – 1408) used the difference between actio and denuntiatio to explain the difference between Roman and canon law – hinted at in Laurentius’s gloss. With regard to the acquisition of an action, he taught that canon law did not deviate from Roman law. It acknowledged the same exceptions: the absent beneficiary could enforce promises made to (or in the presence of) public officials, judges and court-clerks. Such promises made outside the courtroom, unless made to his son, however, did not result in an action for him, except after assignment (cessio) of the action61. Laurentius’s gloss, that I am bound by my promise to give Titius 10, should therefore not thus be interpreted to be saying that Titius could bring action in an ecclesiastical court. As said, Titius did not acquire an action sine cessione; hence he could only bring action against me, if he acquired an action when three requirements were met: namely, you are named as promisee, acquire an action, and assign this action to him. If these requirements were not met, canon law provided another remedy: the denuntiatio evangelica. Quod credo, ut [tertius] agi possit uia denuntiationis Euangelice, sed non ordinario iure [ . . . ] quia obligatio debet capere initium in persona cum qua contrahit. ff. de act. et obl. l. Quecumque. (D. 44. 7. 11)62.

Panormitanus (Nicolaus de Tedeschis; 1386 – 1445) pointed out, that this was not true, because the acceptance of a promise with the intention that someone else acquires a right, has no effect at all, neither a civil obligation nor an obligatio naturalis, because one cannot bring an obligation into existence for someone else63. Distinguishing, as the civilians did, between two different types of stipulationes alteri, namely the promise addressed to an absent person which was accepted by someone else (the accipiens) and the promise addressed to the person present to give something to an absent person, he pointed out that the denuntiatio evangelica presupposed the existence of an obligatio naturalis in Roman law; hence, the denuntiatio was not meant to be a remedy to enforce all stipulationes alteri, as 61 According to Antonius de Butrio, this was also true for promises made to arbiters, public notaries and procurators. See Antonius de Butrio, ad proemium nr. 69 (Commentaria, I, fo. 4ra). 62 Antonius de Butrio, ad proemium nr. 60 (Commentaria, I, fo. 4ra). 63 Nicolaus de Tedeschis, ad proemium nr. 25 (ed., fo. 6rb): . . . Sed quando interuenit simplex promissio, tunc nihil puto actum, quia stipulatio non habet subsistere de per se, sed causatur ex facto partium, ut in iuribus superius allegatis. Facit preall. c. Debitores (X 2.24.6), ubi turpiter recipiens simplicem promissionem nihil agit; idem si sua non interest, ut quia uult acquirere tertio. . . . Sed quando alius recipit promissionem, tunc nulla est obligatio, nec naturalis nec ciuilis. Non ciuilis, ut de se patet ex iuribus preallegatis. Non naturalis, quia obligatio non potest acquiri absenti, sed oportet quod fundetur in personam illius cui acquiritur.

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Antonio de Butrio implied, but those agreements, which in Roman law resulted in an obligatio naturalis. If phrased correctly, viz. as an agreement between parties both present, the stipulatio alteri gave rise to an obligation between them. There was, however, no remedy to enforce the contract, if and because the promisee had no financial interest in the performance agreed upon, viz. to give something to a third party. With regard to the acquisition of an action, canon law did not deviate from Roman law. Neither the promisee nor the absent third acquired right to sue64. Such an agreement, however, resulted in an obligatio naturalis, which could be enforced by means of another remedy, the denuntiatio evangelica. Therefore, “If I promise you to give Titius 10”, Panormitanus concludes, given the way the promise is phrased, namely as directed towards the promisee (you), Laurentius rightly maintained, that the promisor is bound by his promise65. Puto tamen quod, si uerba proferuntur in presentem, ut quia ‘promitto tibi quod dabo titio absenti x.’, quod per uiam denuntiationis euangelice potero compelli ad soluendum. Et sic saluo et intelligo illam glosam (ad C.1 q.7 c.9) nunc novissime scribendo66.

Laurentius seemed to imply that Titius could bring action in an ecclesiastical court67. As Antonius de Butrio had pointed out, a civil action could not be meant, because there was no obligation between Titius and me. Titius, the absent promisee (when my promise was directed towards Titius) or the third party (when my promise was addressed to you) could enforce the promise by way of a denuntiatio evangelica. Panormitanus denied that the absent promisee could thus proceed. Could, perhaps, the third beneficiary thus enforce contracts made to his benefit? Did Panormitanus acknowledge third party rights? Panormitanus does not state who may denounce that I sin by not performing as promised: you, the promisee, or Titius, the third party. He discussed, though, whether this remedy was needed, because one might argue that the promisee could bring action in an ecclesiastical court, even though he had no financial interest in 64 Nicolaus de Tedeschis, ad X 2.22.14 (ed. Lyons 1510, fo. 45va): Sed contra eum directe agi non poterit, non enim per istum cui facta est promissio, quia sua non interest et sine actione nemine experitur l. Si pupilli ff. de neg. gest. (D. 3.5.5) et l. Stipulatio ista § Alteri ff. de verb. obl. (D. 45.1.38.17) Nec per illum absentem, cum illi per alium queri non potuit d. § Alteri et c. Si tibi absenti. (VI 3.4.17). 65 See Nicolaus de Tedeschis, ad X 1.43.4 nr. 7 (Commentaria, II. fo. 130 va): Et credo illam glossam uerum dicere quo ut loquitur, quando promitto tibi quod alteri dabo, ita quod uerba obligatiua seu promissiua dirigantur in te presentem, ut quia ‘promitto tibi’, nam hoc casu etiam de iure ciuili oritur naturalis obligatio. ut in dicto l. Stipulatio ista § Si quis insulam (D. 45.1.38.21) et in l. i. ff. de pactis (D. 2.14.1.pr.). 66 Nicolaus de Tedeschis, Super secunda parte secundi decretalium, ad X 2.22.14 (ed. Lyons 1510, fo. 45va); see also ad X 1.38.12 nr. 7(fo. 130va); ad X 1.43.4 nr. 16 (fo. 152). 67 See Nicolaus de Tedeschis, ad proemium nr. 25 (ed., fo. 6rb): Unde si promitto tibi quod dabo titio centum, uidetur quod ticius potest agere contra me, maxime si interuenerit iuramentum secundum illam glossam et ista glosa multum notata et quotidie allegata.

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the performance agreed upon, because canon law acknowledged the obligatory force of nude pacts in X 1.35.1. Panormitanus denied this. He acknowledged that X 1.35.1 should be interpreted to the effect that nude pacts were enforceable in canon law. He could also not deny that both nude pacts and contracts in favour of a third party resulted in an obligatio naturalis, but Panormitanus did not conclude from this parallel that the promisee in the case of a promise for the benefit of a third party could bring action in an ecclesiastical court68. He had to proceed by means of a denuntiatio evangelica. Felinus Sandeus (1444 – 1503) maintained that the third party himself could use this remedy. In his opinion, canon law provided the absent third party an ‘efficax remedium’ to enforce promises made for his benefit69. Hence, he saw no reason to describe in detail the effect of promises to arbitrators, agents and public notaries, whether they had to add a penalty clause, and whether they should assign their action. Every agreement to give something to a third party (or to do something for him) resulted in an obligatio naturalis, which the third party could enforce indirectly, because the Church would compel the promisor to do penance and to make restitution. Laurentius’s gloss should thus be interpreted that canon law provided the third party with an alternative remedy, to enforce the contract in his favour. Felinus Sandeus, proemium nr. 22 Sed posito quod glosa in dicto c. Quotiens non esset uera adhuc (ut) stant predicta, quia dicitur quod queratur actio absenti prout dixit glosa, sed erit uia denuntiationis. ut hic per dominem Abbatem et dominem Antonium (de Butrio) in dicto prohemio70.

Andreas Alciatus (1492 – 1550) taught that the promisee thus indirectly enforced a promise for the benefit of a third. He acquired an action, which he could assign to the third, if he had a financial interest in the performance agreed upon. However, if it was meant as a gift to the third, he could not bring an action in an ecclesiastical court. A financial interest was not required if he denounced that the promisor had sinned in resiling from the promise made to him. Their agreement resulted in an obligatio naturalis and the Church would compel the promisor to perform as promised. 68 See Nicolaus de Tedeschis, Super secunda parte secundi decretalum, ad X 2.22.14 nr. (ed. fo. 45va): Nec obstat c.i. de pact. (X 1.35.1) quia loquitur de pacto facto cum illo cuius interest pactum seruari, merito directe potest agere de iure canonico. Sed in casu nostro pactum fuit initum cum illo cuius non interest. Et hec bene notabis, quia alias non discussa; et ad hoc puto reducenda ea que scripsi supra in prohemio Gregoriano. 69 Felinus Sandeus, proemium nr. 22 (ed. fo. 4rb): de iure canonico competat absenti efficax remedium ex stipulatione alteri facta. 70 Felinus Sandeus, Commentaria in v libros decretalium ad X 2. 22. 14 nr. 27 (ed. Lyon 1513 – 1514, fo. 101rb); idem, ad X 1.35.1 nr. 8 (fo. 215va): Poterit tamen iste [cuius favore est promissum] agere remedio denuntiationis euangelice. et sic saluatur glosa trita in c. Quotiens cordis oculis c.i. q.vii. (C.1 q.7 c.9) de qua oportune scripsi in glo in uers. ‘seruus’ in proemio decretalium.

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In his opinion, the denuntiatio evangelica was a remedy for the promisee. Tertius casus est respectu presentis cui facta promissio quod daretur tertio; et tunc, quia oritur naturalis obligatio competat sibi remedium denuntiationis evangelice, . . . quia saltem [requiritur] sua interest ut frater eximatur a peccato in quod incidit propter naturalem obligationem. c. Novit supra de iud. (X 2.1.13)71.

Diego Covarruvias y Leya (1512 – 1577) taught that the promisee, if parties agreed to give something to a third, acquired an action himself. He did not require that the promisee had an interest in the performance agreed upon. The contract was valid, and the promisee acquired an action he could assign to the third party. He referred to the civilians’ teaching that the promisee could accept the promise to give something to a third nomine tertio.72 If he stipulated “do you promise me who accepts the promise on behalf of a third, to give him ten”, the civilians no longer required that the promisee had a financial interest in the performance to the third party.73 The promisee acquired an action which he must assign to the third party, if the latter consented. In canon law, the same applied in case of a simple acceptance: Ipse opinor iure pontificis alteri per alterum posse stipulari uerbis promissionis in presentem directis, secundum auctoritatis glossae et eorum qui eam sequuntur in dicto Quoties cordis oculis (C.1 q.7 c.9) et praeterea ratione quod iure canonico ex pacto nudo actio oriatur. c. i. de pact. (X 1.35.1) atque ideo ob eadem equitatem hec stipulatio erit iuris pontificis admittenda in hoc sensu ut ualida sit et secuta absentis acceptationem eiusque prestito consensu, teneatur presens stipulator ei actionem accedere. Sic etenim intelligo glosam in dicto capitulo Quoties74.

XI. Promises directed to an absent promisee Panormitanus taught, that the promise directed to an absent promisee could not be accepted by someone else. The acceptance by someone other than the promisee did not result in an obligation. It differed from both a nudum pactum, the agreement to perform to the promisee himself, and from a valid (correctly phrased) stipulatio alteri, i.e. the agreement between parties to perform to a third party. The nude pact resulted in a right to sue, the valid stipulatio alteri could be enforced by means of a denuntio, but this stipulatio alteri had no effect at all in canon law unless the promise was made under oath. According to Panormitanus, the promisor did not sin if he changed his mind and decided not to do as promised75. 71 Andreas Alciatus, In decretalium Gregorii aliquot titulos commentaria, ad X 2.24.28 nr. 323 (Opera Omnia, ed. Basel 1621). 72 See Covarruvias, Relectio in VI. 1.18.2, pars 2 § 9 (ed. Opera Omnia, Antwerp 1638, 291). 73 See Hallebeek, this volume, § III.6. 74 Covarruvias, Relectio in VI. 1.18.2 pars II § 4 nr. 9 (ed., fo. 291). 75 See Nicolaus de Tedeschis, ad proemium nr. 25 (ed., fo. 6rb).

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et ideo uidetur quod iste potest retrocedere sine peccato quia sine alterius preiudicio potest quis mutare uoluntatem suam.

He did not mention whether the promisor could still change his mind after the absent promisee accepted his promise. The obligatory force of bare agreements was acknowledged by the canonists, and an absent promisee may well accept the promise later. Offer and acceptance resulted in an obligation between them. Panormitanus seems to have hesitated over the question whether an absent promisee could enforce the promise if the promisor had changed his mind. In his commentary to the decretal Qualiter (X 1.35.1), he pointed out that the Pope, not differentiating between contracts, agreements and unilateral promises, ruled that judges must see to it that what is promised will also be performed76. Though this passage is widely referred to by later canonists, because Panormitanus seems to acknowledge the obligatory force of nude promises, viz. those not strengthened by oath, they all follow Panormitanus’s view expressed elsewhere (ad X 1.6.18), where he maintained that a unilateral promise did not result in a right to sue77. Vnde simplici pollicitatione non credo quod possit aliquis agere pro interesse suo, quia c.i. (X. 13.5.1) loquitur de pacto, sed peccat retrocendo iuxta illud quod psalmiste ‘que procedunt de labiis meis non faciam irrita’78.

The theologians taught that promises seriously intended should be kept. The keeping of promises was primarily seen as a moral obligation, but the principle sometimes79 had led to a right to sue, for instance to enforce promises in favour of a church or public funds80. Did canon law provide an alternative remedy to other 76 See Nicolaus de Tedeschis, ad X 1.35.3 (ed., fo. 118ra): Nota primo uerbum ‘studiose’ quod iudex in compellendo adimplere promissa uel pacta non debet esse contentus simplici excommunicatione, ut quidem dixerunt in c.i. (X 1.35.1), sed studiose et effectualiter agere ut promissa adimpleantur opere. . . . Et pondera quia textus non requirit quod interuenit stipulatio uel scriptura uel aliena solemnitas. Et sic uidetur quod, cum uerbum promissorio sit multum generale nedum in pactum quod est duorum sed in pollicitatione que est unius tantum (consensus), debet habere locum iste textus. 77 In Roman law the unilateral promise or pollicitatio was ineffective, except the promise to a municipial community to erect a building or to pay a sum by the one who stood up for an office. 78 Nicolaus de Tedeschis, ad X 1.6.18 nr. 13 (ed., fo. 98rb). 79 Not in general, as implied by Helmholz, referring to Panormitanus’s commentary to X 1.35.3. The latter is, however, only one of the places where he discussed the obligatory force of unilateral promises. His extensive interpretation of X 1.35.3 was not followed. See R. Helmholz, Contracts and the canon law, in: J. Barton (ed.), Towards a general law of contract [Comparative Studies in Continental and Anglo-American Legal History 8], Berlin 1990, p. 50. 80 See Johannes Teutonicus, ad C.12 q.1 c.9; Bartolus ad C.1.2.19 nr. 5 (ed., VII, fo. 25va): Et tunc ualebit iure cuiusdam uoti seu pollicitationis, ut sic sit obligatus personaliter, ut l. ii. in princ. de pollici. (D. 50.12.2) et extra de uot. et uo. redem. per totum (X 3.34).

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promisees, viz. the denuntiatio? Would the Church compel the promisor to do penance and thus to give what was due? According to Antonius de Butrio, it followed from the decretal Ex parte (X 3.39.18) that every absent promisee could thus enforce the promise81. Felinus Sandeus (1444 – 1553) referred to Butrigarius’s opinion, but he himself seems to follow Panormitanus and Bartolus, who taught that the unilateral promise did not result in an obligatio naturalis, because the required consent of both the promisor and promisee was not met. The promisor could, therefore, go back on his promise unpunished82. Diego Covarruvias y Leya (1512 – 1577) argued this was the reason why unilateral promises were not enforceable in canon law83. A different explanation was given by Luis Molina (1536 – 1600), based upon the position of several late scholastics, Covarruvias among them84. For Molina, unless positive law provides the contrary, a promise can bind the promisor even though it has not been accepted85. A promise itself has force by its very nature before acceptance to bind the promisor in such a way that he is bound to show the promise, so that if the promisee wishes to accept it he should fulfil the promise, as he was for his part bound before the acceptance. He acknowledged, though, that Roman and canon law allowed the promisor to go back on his promise (usually to donate something) until his promise was accepted by the promisee. He reasoned that this was the case because the Roman lawgiver intended to protect people against the consequences of promises too easily made86. In ecclesiastical courts, since canon law lacked provisions which expressly concerned unilateral promises (pollicitationes), Roman law was also applied, and the absent promisee could not enforce the promise in an ecclesiastical court. 81 See Antonius de Butrio, ad X 3.39.18 nr. 2 (ed., III, fo. 182va): Nota ex decretali quod uouentes ex uoto obligantur et compelli possunt per ecclesiam ad uotum exequendum et sic ex nudo consensu sub ratione simplici pollicitatione agitur, saltem de iure canonico. 82 Bartolus, ad D. 2.14.27.2 nr. 16 (ed., I, fo. 92vb): Item quero utrum in pollicitatione sit naturalis obligatio. Glossa prima paruula hic uidetur uelle quod non. Tu dicas quod colligi ex dictis Guillelmi quod in pollicitatione non est naturalis obligatio. 83 Diego Covarruvias y Leya, Relectio in VI 1.18.2, II.4 nr. 15 (Opera omnia, Antwerp 1638, p. 296): Et preterea constat hec opinio ex eo, quod pollicitatio non producit naturalem obligationem, que ex consensu duorum oritur. l.i. ff. de pactis (D. 2.14.1). Notat in specie Bartolus in l. Si unus § Pactus colum. 5 ff. de pact. (D. 2.14.27.2) unde manifeste cessat equitas praetoris et iuris pontifici ratio: ex quibus pacta nuda fomentum acceperunt. 84 See J. Gordley, Natural law origins of the Common law of Contract, in: J. Barton (ed.), Towards a general law of contract, p. 379 – 380. 85 See A. F. Roger, Molina, Stair and the Jus quesitum tertio, JR 1969, p. 138; H. L. MacQueen, Third Party Rights in Contracts, in: K. Reid and R. Zimmermann (eds.), A history of private law in Scotland, Oxford 2002, p. 225. 86 Luis Molina, De iustitia et iure, II, disp. 263 nr. 11 (ed., col. 45): Ratio autem utriusque sententiae haec est, quoniam ius ciuile in reipublicae commodum atque ad tollendos scrupolos et minuendas lites, statuere potuit ut promissio et donatio antequam acceptaretur nullam omnino uim habere ad obligandum donantem.

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This did not change, if someone present accepted the promise for him, because he could not consent for him. The promisor did not sin if he revoked the promise. The acceptance by someone present had no effect at all.

XII. Conclusions From the beginning of the thirteenth century the canonists strove after harmonising the Roman law principle that one cannot stipulate for a third party, with the christian moral concept that one should keep one’s word. Consequently, they taught that promises directed to an absent promisee – by messenger or by letter – could be accepted later. The bare agreement (nudum pactum) obliged the parties, based on X 1.35.1. The promise to someone absent could not be accepted by someone else present, since that would be contrary to Inst. 3.19.4. Promises to an absent person could only be accepted on his behalf by his sons or slaves. The canonists taught that the acceptance of a promise addressed to someone else had no effect at all, because one cannot consent for someone else. Though canon law acknowledged direct representation in some other fields of law, with regard to obligations it adhered to the Roman law principle that one could not acquire through another person. Therefore, stipulationes alteri had no effect, if the wording of a pact or stipulation showed that promisor and stipulator did not aim at creating an obligation between them. In this respect, the canonists followed the civilians, since specific provisions of canon law were lacking. Sworn promises, however, were enforceable, as the canonists derived from X 3.7.6. Since the obligatory force of oaths was considered to be independent of their acceptance, the Roman law principle Alteri stipulari nemo potest did not apply, and the canonists, therefore, agreed that the absent promisee or third party (if the promise was made to someone present) acquired a right to sue. In medieval legal practice, since many contracts were entered into under oath, sworn promises were a sufficient alternative for what we would call agency and genuine contracts in favour of a third party. If one stipulated that the other party promise under oath to a third, the latter could sue the promisor in an ecclesiastical court. With regard to the agreement between parties (the offer to the other party and its acceptance) to perform to a third, the canonists acknowledged that it would result only in an obligatio naturalis, if the promisee had no financial interest in the performance agreed upon. This was based on D. 45.1.38. 17. Because the promisee could not bring an action87, canon law provided an alternative remedy (denuntia87 The canonists but sporadically referred to a specific formula agents should use (promittis mihi nomine tertii) when stipulating to give something to their principal. The civilans taught that an agent or negotiorum gestor could thus validly stipulate a performance in which he had no financial interest. The agent acquired an action, which he must assign to his prin-

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tio). From X 2.1.13 it followed that ecclesiastical courts were, ratione peccati, competent to hear the complaint that the promisor had sinned because he was not willing to perform what he had promised. In this way, the canonists construed a second alternative for what we would call genuine contracts in favour of a third party. They adhered to the Roman law principle that contracts did not result in rights for third parties, but in effect the denuntiatio had the same result. Because his penitence was thought to be feigned if he refused restitution, the Church would compel the promisor to perform to the third party. The majority of the canonists did not acknowledge the concept of third party rights – Felinus Sandeus was the only one who taught that canon law provided the third party with a remedy. Canon law, however, differed from Roman law with respect to the Roman law principle Alteri stipulari nemo potest, because the promisee could enforce a promise, even though he had no financial interest in the performance agreed upon. The remedy to enforce the promise was a denuntiatio, for some – e.g. Covarruvias – an action.

Epilogue Nevertheless, although the 16th century canonists and the School of Salamanca rejected the concept of third party rights, their teachings influenced later authors who acknowledged contracts in favour of a third, because they discussed at length the statutory law of Castile, where the Roman law principle Alteri stipulari nemo potest no longer applied. The ley Paresciendo of king Alfonso XI of Castile (1311 – 1350), capitulo 29 of the Ordinamento de Alcalá (1348), ruled that someone who intended to enter into an obligation, whether this was achieved by a promise, a contract or in any other way, would be obliged to fulfil the commitment he had made. It also explicitly excluded the defence the promisor would have against an action of the promisee, namely “that between absent persons (the promise) en nombre de otro was made in the presence of a public clerk or someone else, a private person, or that he promised to one person to give or to do something for another person”88 Sixteenth century Spanish writers concluded that in Castile nude pacts were a source of obligations – as in canon law. Antonio Gómez even concluded that unicipal, if he consents to what has been agreed upon. See Bernardus Parmensis, ad X 1.38.12; Antonius de Butrio, ad X 1.38.12 nr. 8; Diego Covarruvias y Leya, Relectio in VI. 1.18.2, II.4 nr. 9 (ed., p. 291): ( . . . ) hanc stipulationem ualidam esse etiam nullam precedente mandato tenebiturque hic stipulator post ratihibionem absentis ei actiones cedere. 88 See Ordinamiento de Alcalá, c. 29: ( . . . ) oque fue fecha aescriuano publico oaotra persona priuada en nonbre de otro entre absentes, o que se obligó a vno de dar ode fazer alguna cosa aotro; for the translation see: J. H. Dondorp / J. Hallebeek, Grotius’ doctrine on adquisitio per alterum and its roots in the legal past of Europe, in: O. Contorelli (ed), Panta rei, Studi dedicati a Manlio Bellomo, II, Roma 2004, p. 205 – 244.

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lateral promises were binding89. Consequently, in his view, the promisor would be obliged whether the promise was accepted by someone present or not. For Antonio Gómez the ley Paresciendo was to be applied to stipulationes alteri, phrased as addressed to an absent promisee. The ius commune still applied if the contract was phrased in accordance with civilian doctrine, viz. if he promised someone present (the promisee) to give something to a third. The promisor, not having made any promise directed to the absent third party, was not obliged towards him90. In Covarruvias’s interpretation of the ley Paresciendo, unilateral promises could not result in an obligation; hence, in his view, the ley Paresciendo presupposed that promises were accepted by the promisee. He did not distinguish (as Gomez did) between promises phrased as addressed to an absent promisee and promises to someone present to give something to a third party. In other words, if the promisor intended to be obliged to an absent person and the latter consented, he would be required to perform as promised (to the absent promisee) or as agreed (with someone present). Because the absent person, viz. the absent promisee or third party, could not consent through someone else, he acquired no right to sue. The acceptance by someone present, if made “nomine absentis”, had another effect: the promise, though not yet enforceable, became irrevocable. Covarruvias saw a similarity between the ley Paresciendo with regard to stipulationes alteri and the ius commune with regard to the donatio sub modo, which the civilians mentioned as example of a contract in favour of a third: The donor stipulates that the donee gives something to a third party. In Roman law, by way of exception, the emperor had granted the third an action against the donee, according to C. 8.54 (55).3. In their commentaries to this text, the civilians had discussed whether the modus could be revoked. Many taught that the donor could, unless the modus was accepted “nomine absentis” by someone present: by the donee, the public notary or someone else91. Covarruvias applied the teachings of the civilians (ad C. 8.54 (55).3) to Castilian law and maintained that the absent person to whom (as follows from the agreement) the promisor intended to be obliged acquired a right to sue when he consented. The agreement between the parties, viz. the acceptance ’nomine absentis’, made the promise irrevocable. 89 See Antonius Gomezius, Variae resolutiones, II.9 nr. 18 (Opera Omnia, Antwerp 1693, I, p. 248 – 249): . . . sed etiam quando simpliciter et nuda pollicitatione quis promittit absenti, ita aperte disponit praedicta lex (sc. Paresciendo) ex qua bene nota, quod hodie in nostro regno ex nuda pollicitatione oritur actio et corrigitur totus titulus de pollicitationibus”. See also Luis Molina, De iustitia et iure, disp. 263, nr. 9 (ed., col. 43). 90 See Antonius Gomezius, Variae resolutiones, II.9 nr. 18 (ed., p. 248 – 249): Item adde, quod praedicta lex Regia debet intelligi, quando verba promissionis diriguntur in tertium absentem; secus vero, si dirigantur in personam procuratoris, vel negotiorum gestoris, quia tunc credo quod requiritur cessio rupta conclusione. 91 See Hallebeek, this volume, referring to Baldus, Alexander de Imola, and Jason de Mayno.

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The ley Paresciendo rules that one may acquire an obligation through someone else and that a promise to an absent person is effective, even though no one accepts for him, if it appears that the promisor intends to oblige himself. According to Covarruvias, it should be understood from this that he acquires a right to sue when he consents to the agreement or promise. Before he consents, there is no obligation nor any right to sue, unless the promisee has assigned his action to him. This the promisee could do, if he had acquired an action himself – which required that the stipulatio alteri was phrased correctly: “do you promise me” and that he had an interest in the performance (to the third party) agreed upon. The promise may, however, be accepted “nomine absentis” by someone present, a public notary or someone else who according to statutory law or the ius commune may accept for an absent person. Their acceptance makes the offer irrevocable. Id enim intelligendum est, etiam sine cessione (actionem queri), dum tamen ratihabitio aut acceptatio secuta fuerit; ea etenim nondum secuta, nec actio queratur nec illa obligatio firma ad agendi sine cessione censetur ex premissis, tametsi reuocari non possit, presertim ubi notarius publica uel priuata persona, que iure communi uel speciale possit id agere, nomine absentis contractum uel donationem acceptauerit. 92

This way of reasoning caused a distinct shift in perspective. The medieval civilians and canonists primarily discussed cases in which someone intended to give something to an absent person after a certain lapse of time and made a promise to do so. Here, a second perspective is added: one intends the same result, but chooses another way to reach that goal: he makes a gift or concludes a contract under the condition that the other party gives something to the third. This line of thought influenced Hugo Grotius, who discussed both promises to give something to someone absent (accepted by someone present) and the mode in favour of a third attached to a promise93.

Covarruvias y Leya, Variorum resolutionum 1.14 nr. 13 (ed. Antwerpen 1638, II. p. 73). See Hugo Grotius, De iure belli ac pacis II.19 § 18 (promises to a third) and § 19 (modus in favour of a third). 92 93

NEIL G. JONES

Aspects of Privity in England: Equity to 1680 This paper is concerned with third-party beneficiaries in equity in England in the period to 1680. Its chief sources are the record of the principal equity jurisdiction1, the Court of Chancery, and reports of decisions in Chancery; analytical treatise-type literature on equity is absent for most of the period2. Some reference is made to the fifteenth century, though the emphasis is upon the latter part of the period. The terminal date is set by reference to the great case of Dutton v. Poole, not itself a decision in equity, but displaying facts familiar in Chancery from the 1630s, if not before.

I. The Dutton v. Poole-type cases It was held in Dutton v. Poole (1678 – 80)3, that where an heir had dissuaded his father from providing for the heir’s sister, promising the father that he would pay the intended portion himself, the sister, disappointed of her portion, might succeed against the heir at common law. That a suit by a third-party would lie in Chancery to compel performance of such a promise was already well established. * Fellow of Magdalene College, Cambridge, University Senior Lecturer in Law. Unless otherwise indicated, all manuscripts are in The National Archives: Public Record Office. Quotations from manuscripts have been rendered into modern orthography and punctuation. Quotations from sources in French have been translated. The year is taken to begin on 1 January. References to the Chancery entry books of decrees and orders (C 33) are to pertinent entries only, omitting those of purely procedural significance. I am grateful to Professor D. J. Ibbetson for his valuable comments on previous versions of this paper. 1 The Court of Chancery was not the sole equity jurisdiction; the Court of Exchequer had an equity side, for example, and there were local equity jurisdictions. No work has been done for this paper on jurisdictions other than that of the Chancery. Equitable assignment of choses in action is beyond the paper’s scope. 2 The court began to keep a record in the 1530s, before which time the surviving evidence is confined to pleadings, with some endorsed decrees. Reports in equity are limited before the 1660s, and very limited before the mid-sixteenth century. Analytical treatise-type literature becomes available only from the later seventeenth century. 3 3 Keb. 786, 814, 830, 836; 1 Vent. 318, 332; 2 Lev. 210; T. Jones 102; T. Raym. 302; 1 Freem. K.B. 471.

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1. The cases In Childes v. Anthony (1634)4 it was said in Chancery that Francis Anthony, father of one of the plaintiffs, had ‘attained unto the making of gold potable, which he used divers ways as an especial cordial for the health of men, of which he having the sole use gained near one thousand pounds per annum clearly thereby’5. Being offered £1000 or £1500 ‘to communicate his skill of making the same’6, Francis Anthony was willing to sell the secret ‘for advantage of himself and advancement of his younger children’, whereupon the defendant, John Anthony, Francis’s second son, did solicit his . . . father not to communicate the . . . secret to others, but preserve it to himself and his own family, and the . . . defendant would be content with such conditions as his. . .father and Charles Anthony, brother of his . . . father, should think fit to set down for the good of the rest of his brothers and sisters unprovided for.

The plaintiffs asserted that, the conditions were that in consideration the . . . doctor would refuse the . . . sum of one thousand or fifteen hundred pounds for the . . . secret, . . . the . . . defendant would be content and did promise to pay unto his . . . father’s children, in case he survived him, the third part of the clear yearly receipt thereof after his . . . father’s death during their several lives together,

and that, thereupon the . . . doctor, out of paternal love to his . . . son the defendant (and the said defendant[’s] undertaking and promise to perform the same trust reposed in him . . . ), was contented and did entrust the . . . defendant with the . . . secret.

Shortly thereafter, approaching death, Francis Anthony summoned the defendant ‘to come to London to confirm the . . . agreement’, whereupon he was persuaded to 4 Chancery and Supreme Court of Judicature, Chancery Division: Six Clerks’ Office and successors: Decree Rolls (C 78): C 78 / 436, no 5. 5 Francis Anthony (died 1623), M.D. (Cantab.) 1608, alchemist and physician. Anthony’s claims for the powers of his ‘drinkable gold’, which brought him into long-running – if inconclusive – conflict with the College of Physicians, sparked a controversial literature, Anthony’s opponents arguing that metallic medicines were not superior to Galenic organic remedies, that Anthony’s method did not dissolve gold (as, they said, a test performed in 1609 before the Master of the Mint and others showed), and that there was no such thing as a panacea. Anthony’s son John became ‘a dutiful fellow of the College [of Physicians], though he is said to have gained a handsome income from selling his father’s remedy, and there were one or two occasions when he gave trouble to the censors’. See Sir George Clark, A History of the Royal College of Physicians of London, vol. I, 1964, pp. 201 – 203, and H. C. G. Matthew and B. Harrison, Oxford Dictionary of National Biography, 2004, vol. 2, pp. 287 – 289. 6 It was further said that the potential purchaser of the secret had offered ‘not to practise it in England, nor publicly to use the making thereof ’, during Francis Anthony’s life. Anthony had defended his panacea in print (Medicinae Chymicae, et Veri Potabilis Auri Assertio, Cambridge, 1610; Apologia Veritatis Illuscentis, pro Auro Potabile, London, 1616), but presumably without revealing the process of manufacture.

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‘confess the . . . former agreement, promise and trust reposed in him about the . . . aurum potable, and then also promised that he would faithfully perform the same’. The plaintiffs asserted that thereafter the defendant had ‘gained greatly by the . . . secret’, but had failed upon request to pay anything ‘in performance of the trust reposed in him’. The defendant pleaded and demurred, firstly that ‘all and every the supposed promises, agreements and trust in the bill mentioned and alleged to be in the lifetime of . . . [Francis Anthony7] and . . . all other promises and agreements supposed to be made above six years before the exhibiting of the . . . bill’, were barred by the Statute of Limitations (1624)8, ‘as that this defendant had been for the breach of them liable to an action of the case at the common law more than six years before the . . . bill exhibited’9; that ‘the trust [was] no other than that the defendant’s father trusted that the defendant would have performed what he promised upon good consideration’; and that the plaintiffs alleged ‘no matter in equity but that they cannot prove the said promises, which if they could prove they could have no remedy either in law or equity’10. The defendant went on to answer11, denying the promise, and asserting that he had been a co-discoverer of the secret12. The sufficiency of the plea and demurrer was referred to Sir John Mitchell, one of the masters of the court, who thought it good, upon which report, ‘and for that the defendant has denied the ground of the promise in question, and the same, if any were, was broken above ten years since’, the suit was dismissed. The dismissal seems to have been based largely upon limitation, and does not appear to show a refusal of relief in principle. The defendant’s argument that the plaintiffs alleged ‘no matter in equity but that they cannot prove the . . . promises, which if they could prove they could have no remedy . . . in . . . equity’, may have meant that had proof been possible, there would, on the facts, have been no ‘matter in equity’ to persuade the court to intervene; or it may have been part of the argument from the Statute of Limitations: even if the promises could be proved, since 7 The plaintiffs admitted that Francis Anthony had died more than 12 years before the exhibition of the bill (though Anthony died on 26 May 1623, and the bill was exhibited on or about 16 May 1634). 8 21 Jac. I, c. 16. The statute introduced the first general limitation periods upon personal actions, in most cases six years. 9 The defendant thus assumed that an action would lie at common law (though this would be to his advantage in assisting the argument from the Statute of Limitations). 10 The assertion that there would be no remedy at law appears to have turned upon the action being statute-barred, rather than upon there being no action in principle, which would contradict the first argument. 11 In contrast to those at common law, demurrers in Chancery pleadings did not constitute a definitive admission of the facts upon which they were based. 12 Having ‘the main charge of the still-house . . . he did with great pain and industry learn the . . . secret together with his father’, and, indeed, had been the first discoverer of ‘some of the material preparations belonging thereunto’ (C 78 / 436, no 5).

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the action assumed to be available in principle at common law was statute-barred, no relief should be given in Chancery13. It is possible that the argument was that there was simply no relief in Chancery in Dutton v. Poole-type cases. But had this been so, greater prominence for the argument might have been expected: the defendant began not by asserting that there was in principle no relief, but by pointing to the passage of time since the breach of the promise. Shortly after Childes v. Anthony, it was found in Sambrooke v. Ramsey (1637)14 that the testator had ‘imposed a trust’15 upon John, his eldest son, to pay a portion to George, a younger son, which John promised to do. The testator died, leaving lands to descend to John, and making no other provision for George. An order that John make the payment, unless cause was shown to the contrary, was discharged upon discovery that he was dead16. George thereupon revived the suit against John’s heir, who was decreed to pay the portion17. A Dutton v. Poole-type scenario arose again in Molineux v. Molineux (1657)18, where the plaintiff alleged that his father had conveyed land to trustees upon trust for himself for life, and after his death in trust for such person or persons and for such estate as he should declare. The father thereafter resolved to sell certain leases to provide for his younger children, including the plaintiff; but his eldest son ‘dissuaded his father from putting in execution such his intention, assuring him that he would be willing to perform what directions his . . . father should appoint’. The father thereupon gave directions, ‘according to the power in him reserved by the . . . trust’, that after the father’s death, the eldest son should pay annuities to each of the younger children, including the plaintiff19; and, on the basis that his father would give him the leases and certain other personal estate, the eldest son 13 It was said in the 1650s that ‘If money be given in trust for a 3d person, to deliver to a 3d person, there the statute of limitation may be pleaded for this is a legal trust and the 3d person might have brought an action at law for this money, but if bonds or choses in action be delivered in trust for which no remedy, there the statute of limitation can not be pleaded for it is a mere equitable trust’ (Lincoln’s Inn Misc. MS 576, p. 92. This collection was written, at least in part, by a commissioner of the Great Seal, most likely John Lisle). See also Lord Hunsdon v. Cholmley (1633) in W. H. Bryson, ed., Cases Concerning Equity and the Courts of Equity 1550 – 1660, vol. II, 2001 (Selden Society vol. 118), p. 659 no. 379e; and D. E. C. Yale, ed., Lord Nottingham’s ‘Manual of Chancery Practice’ and ‘Prolegomena of Chancery and Equity’, 1965, p. 325: ‘If suit in Chancery be for matter remediable at Common Law, which is barred by Statute [of] Limitations, the suit in equity is barred also.’ 14 Bryson, Cases Concerning Equity and the Courts of Equity 1550 – 1660, vol. II, p. 670 no. 394; C 33 / 166, ff 356, 404v; C 33 / 174, ff 45v, 197v. 15 C 33 / 174, f 197v. 16 The order had been made in John’s absence; as was subsequently discovered, he was in his last illness at the time of the hearing. 17 George died shortly after John, and the eventual plaintiffs were George’s executors. John’s heir was also his executor; relief was granted against him as heir. 18 C 78 / 870, no 16. 19 It seems that the father had declared an interest in the land held in trust for the eldest son, though this is not expressly stated in the enrolled decree.

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did not only promise to perform the . . . limitations and appointments of . . . the father concerning the . . . younger children, but also set his hand and seal to the writing declaring the mind, will, and direction of his . . . father concerning the . . . younger children, immediately after which direction so made by . . . the father, and undertaken to be performed by the defendant, . . . the father died.

After his father’s death the eldest son went into possession of his father’s lands. He paid annuities as directed, but refused to pay the plaintiff, whereupon it was decreed that he should do so20. Three further cases are reported by Lord Nottingham21. In Beringer v. Beringer (1673)22 the father, intending to sell a farm to provide a portion for his daughter, told his son of this, whereupon the son ‘persuades his father and promises, if he will let the farm descend, he will pay his sister £1000 within 3 years after his death and interest for it and diet in the meantime. The father agrees, and makes his son executor, and dies’23. The land descended to the son, who refused to make payments to his sister, upon whose action it was decreed ‘to pay the money at 3 years end and to account for the interest; though the bill were exhibited before the time24, and though it concerned only a sum of money, which in due time might be recovered at law in Assumpsit’25. For such a decree, it was said, there were ‘many precedents’26. In Chamberlain v. Chamberlain (1678)27, it was found that the father, foreseeing an insufficiency of his personal estate to pay legacies, was about to alter his will, 20 The court first offered the defendant a settlement on the basis of a payment of £50 to cover arrears, and payment of the annuity for the future. The defendant failed to submit to this, whereupon the plaintiff was allowed to make the surviving trustee party to the bill, and to bring the cause to hearing again. Upon further hearing the surviving trustee confessed the trust and submitted to such order as the court should think fit. The defendant was decreed to make annual payments of £10 during the mother’s life, and of £20 thereafter. 21 Sir Heneage Finch, Lord Keeper of the Great Seal 1673 – 75, Lord Chancellor 1675 – 1682, created Earl of Nottingham 1681, referred to here as Lord Nottingham. The spelling of the names of the parties used in Lord Nottingham’s reports, though not identical to the spelling in the record and in other reports, is adopted here. 22 Yale, Lord Nottingham’s ‘Manual of Chancery Practice’ and ‘Prolegomena of Chancery and Equity’, p. 344; C 33 / 239, f 559v (sub nom. Berrenger v. Berrenger). 23 Yale, Lord Nottingham’s ‘Manual of Chancery Practice’ and ‘Prolegomena of Chancery and Equity’, p. 344. 24 That is, before the expiry of three years from the father’s death (note added). 25 Yale, Lord Nottingham’s ‘Manual of Chancery Practice’ and ‘Prolegomena of Chancery and Equity’, p. 344. It was further ordered that ‘for the plaintiff ’s better security’ the farm was to stand charged with the payment, if it had not already been sold or disposed of. If it had been mortgaged, the plaintiff was to have the equity of redemption towards satisfaction of the payment (C 33 / 239, f 559v). 26 Yale, Lord Nottingham’s ‘Manual of Chancery Practice’ and ‘Prolegomena of Chancery and Equity’, p. 344. 27 D. E. C Yale, ed., Lord Nottingham’s Chancery Cases, vol. II, 1961 (Selden Society vol. 79), p. 632 no. 819; 2 Freem. 34; 2 Eq. Cas. Abr. 43.2, 465; C 33 / 249, f 433 (sub nom.

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to ‘charge the estate devised [to the defendant] with the payment thereof ’28. The defendant, his father’s eldest son and executor, prays him not to alter his will and promises his father to pay the legacy though there should be a defect of assets and added an imprecation to his promise, wishing that he might not prosper if he did otherwise. His father wished so too, and bid his son have a care not to use any quirks in law29.

The plaintiffs, the father’s legatees30, obtained a decree for payment by the eldest son, ‘according to his promise to his father without any regard of assets’31. ‘And the Lord Chancellor said it was the constant course of this court to make such decrees, upon promises made that the testator would not alter his will’32. In Cassy v. Fitton (1679)33 Thomas Cassy, having two sons, John and William, by different mothers, was unwilling to allow his estate to descend to the sickly and childless John: if he died without a child the estate would not descend to William. Thomas therefore resolved upon a settlement, limiting a remainder to William, [w]hich John, perceiving, desired his father that, if he would leave the land to descend, he would alien no part of it more than what was necessary for payment of debts, but would leave all the rest to his younger brother. Whereupon the father did forbear and died34. Chamberlaine v. Chamberlaine). Though the litigation occurred in the late 1670s, the plaintiffs asserted that the agreement had been made in or about 1660, so rendering irrelevant any application of the formality requirements of the Statute of Frauds (1677), 29 Car. II, c. 3, which had effect only from 24 June 1677. (See Ash v. Abdy (1678) Yale, Lord Nottingham’s Chancery Cases, vol. II, p. 666 no. 844, where Lord Nottingham held that, irrespective of the date of the bill, the Statute of Frauds ‘was not to be construed with a retrospection and to bar agreements precedent’.) 28 C 33 / 249, f 433. Unless provision was made to the contrary, the personal estate was the only fund for the payment of legacies. 29 Yale, Lord Nottingham’s Chancery Cases, vol. II, p. 632 no. 819. 30 Lord Nottingham’s report describes the plaintiff as the defendant’s younger brother. It appears from the record that there were several plaintiffs, two of whom were the testator’s daughters. The others appear to have been related to the testator (though the nature of the relationship is not clear), with the exception of one Susanna White whose position is uncertain. 31 It was further ordered that the land and £2500 due to the father on a mortgage, which the father had devised, should stand charged with the payment. The question of whether so much of the payment as could not be satisfied out of the father’s personal estate should be made good to the defendant out of the £2500 was left to be settled in a further suit between the defendant, his younger brothers, and others interested. 32 2 Freem. 34 (also 2 Eq. Ca. Abr. 43.2). 33 Yale, Lord Nottingham’s Chancery Cases, vol. II, p. 729 no. 922; C 33 / 251, ff 180, 310v; Court of Chancery: Six Clerks’ Office: Pleadings before 1714, Reynardson (C 9): C 9 / 64 / 15 (sub nom. Cassey v. Fitton). As in Chamberlain v. Chamberlain the promise had been made before the Statute of Frauds (1677), and the plaintiff said that it had been embodied in a deed. 34 It appears from the record that the promise was made ‘in case [John Cassy] died without issue’ (C 33 / 251, f 180).

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The estate descending to him upon his father’s death, John sold it to one Peter Farmer, used some of the purchase money to pay his debts, and made a will in William’s favour. But a subsequent will, of which the defendants Alexander Fitton and Henry Taylor were executors, did not provide for William35. After John’s death, William brought a suit in Chancery against the executors, devisees, and purchasers; ‘and upon this agreement proved it was decreed to be performed, and that, after debts paid and incumbrances cleared, the residue of the purchase money [remaining in Farmer’s hands] should be paid to the plaintiff ’36. From these cases it is evident that relief for third-parties in Dutton v. Poole-type situations was available in Chancery well before Dutton v. Poole itself. It was assumed that an action would also lie in assumpsit at common law, but this did not prevent relief in Chancery, even where the promise was to pay money, and specific performance therefore irrelevant. Whether relief was available in Chancery at the time of the earliest of the cases discussed, Childes v. Anthony (1634), where the suit failed, is not certain; but it seems probable that the availability of relief in principle was then accepted37. In subsequent cases relief was given; and by 1678 relief upon ‘promises made that the testator would not alter his will’ was the ‘constant course’ of the court38.

35 Yale, Lord Nottingham’s Chancery Cases, vol. II, 729 no. 922. Lord Nottingham noted that it was supposed that the executors of the second will held the property devised in trust for superstitious uses, the will having been drawn by ‘Father Conyers, the fugitive’. A George Conyers was one of the defendants. 36 It was ordered that Farmer pay the residue of the purchase money directly to the plaintiff, presumably to avoid circuity of action. 37 If this is so, there may have been earlier cases which have not yet come to light. In Staveley v. Styrleye (1560) C 78 / 127, no 17, the promisor and promisee were joint tenants of land. The promisee, falling ill, intended to grant his interest to his wife, the plaintiff. The promisor persuaded him not to do so, and ‘in consideration thereof . . . faithfully promised and granted’ that he would make payments to the wife, ‘upon the trust of the performance of which promise’ the promisee refrained from making the grant. Payment to the plaintiff widow was ordered after the promisee’s death. Here the plaintiff was also the promisee’s executrix, and a promise directly to the plaintiff was pleaded. In Playle v. Playle (1611) Tothill 163; C 33 / 119, f 1112, it was found that Thomas Playle, father of the parties, having copyhold and freehold land, resolved to divide it between them, the defendant to have the choice between freehold and copyhold. The defendant chose freehold, some of which was conveyed to him by the father, who charged the plaintiff to convey another eight acres, the defendant conversely being charged to assure the copyhold land to the plaintiff. The ‘defendant . . . [repeatedly] promise[d] his father to assure the same, and promised his father when he was to go on a journey, that if he died before he returned that then the . . . copyhold lands should be settled upon the . . . plaintiff according to his intent and meaning’. The father died on the journey, but the defendant refused ‘to perform his promise so made to his father’, whereupon the court ordered him to make an assurance of the copyhold, upon which the plaintiff was ordered to convey the eight acres of freehold. (V. V. Palmer has described Playle v. Playle, on the basis of Tothill’s brief note, as a case in which ‘the Chancellor enforced a promise at the instance of a third party beneficiary, but [in which] there was no mention of a consideration issue’; but the record reveals an element of reciprocity. (V. V. Palmer, The Paths to Privity, 1982, p. 94).

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2. The basis for relief That relief was available in Chancery before 1680 in Dutton v. Poole-type cases is clear. The basis upon which it was given requires elucidation. Sambrooke v. Ramsey and the cases reported by Lord Nottingham show merging strands of reasoning from agreement, reliance, and trust39, which are complicated by the testamentary context of some of the cases and associated ideas of legacy40.

a) Sambrooke v. Ramsey: a mixed approach Sambrooke v. Ramsey differs from the other cases in that the initiative appears to have come from the promisee, who ‘imposed a trust’ upon the promisor, John, his eldest son, to make a payment to his younger son George, ‘which John. . .then promised to his father he would pay’. Upon George’s bill, ‘it appeared to the court that the father imposed the said trust upon . . . John, and he made the promise and had assets of his father’s estate real and personal to satisfy the portion’, whereupon he was ordered to pay41. This mix of ideas, a trust, a promise, and a legacy-like reference to assets42, suggests uncertainty, or at least an attempt to cover all possibilities. It is not clear whether John was his father’s executor. If so, the reference to assets in John’s hands might suggest that the promised provision for George was regarded as a legacy to be paid generally out of the father’s estate, foreshadowing arguments from legacies in subsequent cases43. Alternatively, John may have been seen as having the land which had been left to descend to him upon trust to make the payment to George. Unless realty was expressly charged, the personal estate was generally the only fund for the payment of legacies, but the reference to assets was expressly to assets both ‘real and personal’; a legacy charged upon the realty, and a trust for the payment of a legacy, were not easily distinguished44. The significance 38 As Professor Ibbetson and Mr Swain observe in their paper in this volume, against this background a question arises as to why the action in Dutton v. Poole itself was not brought in Chancery. 39 It is clear from the record that it is an over-simplification to assert that the late seventeenth-century Dutton v. Poole-type cases are ‘innocent of any reference to the trust’ (Palmer, The Paths to Privity, p. 95), though it is true that no express reference is made to consideration or privity. 40 Childes v. Anthony and Molineux v. Molineux are of no assistance in understanding the basis for relief. 41 C 33 / 174, f 197v. 42 Assets were relevant also to the payment of debts by executors, and, in the case of specialty debts, by heirs. But no question of a debt arose in this case. 43 See pp. 147–148 below. 44 See Lord Nottingham’s note of the litigation at common law in Coleman v. Stoddell (1656) and Butler v. Butler (1657): ‘A man devised his land in trust for payment of debts and

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of the promise is unclear. Its presence in the bill, strictly necessary or not, would have been no disadvantage for the plaintiff. As evidence, it may have been required in establishing the testator’s intention in allowing the land to descend, though in substance a legacy or a trust would provide a duty without it45. Following the promisor’s death, it became necessary to determine whether his duty to make the payment devolved upon Roger, his heir and executor. The question of assets arose again: Roger had a duty as executor, but only in so far as he had assets46. His duty as heir turned upon whether the land which he had by descent from John was ‘liable to the payment’47. Coventry L. K. drew a distinction between promises and trusts: ‘this court may not charge the heir with the particular promise of his ancestor unless the ancestor had been bound in a bond for performance thereof ’, but the father had ‘left the lands to . . . John . . . with a trust that he should pay the . . . £200 portion, and charged the land with the said trust, to perform which trust the [land] is still liable in equity’48. At this stage a burden upon legacies. Though this be but a legacy in equity, yet non payment is breach of trust in the devisee, and a wrong and injury to the legatees, for which an action on [the] case was brought at Common law, and the plaintiff recovered . . . Coleman v. Stoddell’; ‘In action on [the] case for legacy, [the] plaintiff declares that [the] testator appointed his legacy to be paid out of his lands to descend to [the] defendant, his cousin and heir, and gave the plaintiff a legacy of £100. Ruled: 1. This was a legacy in equity. 2. That the law did create a trust in the heir for the payment of it. 3. That non payment was a breach of trust, for which an action on the case did lie at Common Law; and Coleman & Stoddell’s case then cited and agreed . . . Butler v. Butler’ (Yale, Lord Nottingham’s ‘Manual of Chancery Practice’ and ‘Prolegomena of Chancery and Equity’, p. 262; see also 2 Sid. 21). 45 On the establishment of trusts in the absence of a promise by the trustee see pp. 162 ff. below. Establishment of a legacy from a parol promise might face difficulties from the lack of formality (see note 72 below). For testamentary jurisdiction in Chancery in the Elizabethan period see W. J. Jones, The Elizabethan Court of Chancery, 1967, pp. 400 – 417. 46 The court ‘conceived the defendant was chargeable to pay the £200 portion with costs and damages to the plaintiff if he had assets’, and ordered the Master to consider ‘whether the plaintiff ’s bill was sufficiently drawn to charge the defendant as well as heir to John Ramsey as executor’ (C 33 / 174, f 197v). 47 C 33 / 174, f 197v. 48 C 33 / 174, f 197v. The same distinction between trust and promise in relation to the duty of an heir had been drawn in 1591: ‘Chief Baron Peryam puts a distinction between a trust and a promise concerning land, because the trust is united and goes with the land whereas a promise is collateral. And on account of this, in the case [of] Hopkins and Hodile, Michaelmas [term] 1591, the infant heir will not be bound by the promise of the father to assure land as he would be if the father had it in trust’, W. H. Bryson, ed., Cases Concerning Equity and the Courts of Equity 1550 – 1660, vol. I, 2001 (Selden Society vol. 117), p. 248 no. 118 – [123]; see also ibid. p. 193 no. 117 – 118. The distinction depends upon the promise not itself giving rise to a trust; see, for example, Gell v. Vermedun (1694) 2 Freem. 198: ‘The defendant’s ancestor, to whom he is heir, articled in his life-time for the sale of certain lands, which by the articles he covenanted to convey, but did not covenant for him and his heirs; and the question was, whether the heir should be bound to perform this agreement? And held that he should, in as much as his ancestor, after the sealing of the said articles, was in the nature of a trustee for the plaintiff of those lands, which trust with the said lands descended to the heir’.

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the land was essential, and the materials for it were readily available in the earlier mixed approach. b) Lord Nottingham’s cases: agreement Discussion in Cassy v. Fitton centred upon a promise to provide for the plaintiff upon the promisor’s death. The plaintiff ’s arguments consequently turned upon the promisor’s second will, not on its face providing for the plaintiff, seeking to show that the promisor had been of unsound mind at its making, or that the devise to the executors had been upon a secret trust for the plaintiff, and asking that the defendants be compelled to make payment ‘according to the agreement aforesaid’49. Nothing was said in the pleadings of the promisor having been trusted by the testator, or of the promisor having had the land upon trust50. The court likewise made no reference to trust. Lord Nottingham ‘conceived the . . . [agreement between father and son] to be an honest agreement, and ought to be executed, and does therefore order and decree that the said agreement be executed, and that the plaintiff shall have the full benefit thereof ’51. As to the legacies said to have been given by the second will, ‘his lordship declared they ought not to be paid, conceiving the said John to be so obliged by the agreement with his father that he could not in that manner dispose of his estate’52. As in Sambrooke v. Ramsey no mention was made of privity, of the fact that the plaintiff was not the promisee’s executor, though it was clear that the promise had been made only to the father: as the plaintiff put it in his bill, making no attempt to suggest otherwise, ‘the said John did faithfully and solemnly promise and agree to and with his said father’53. The defendant’s answer was equally silent as to privity, suggesting, if no more, that it was obvious on the facts that an argument from lack of privity could not succeed54. This silence as to privity is shared by all the Dutton v. Poole-type cases considered here55. C 9 / 641 / 15. C 9 / 64 / 15, summarised C 33 / 251, f 180. To a modern mind, an argument that the land was held upon trust would face questions as to the status of the trust during the promisor’s life, the promise being to refrain from selling the estate, except as necessary for the payment of just debts, and to leave ‘whatever estate’ was left at the promisor’s death to pass to the plaintiff (see e.g. Ottaway v. Norman [1972] Ch. 698). No indication of such questions appears in the record. 51 C 33 / 251, f 180. 52 The legacies not having been paid, no question arose as to whether, once paid, they could have been recovered back. 53 C9 / 64 / 15. 54 The identity of the promisee’s executor is not apparent from the record. In some Dutton v. Poole-type cases, as might be expected in the family context, the promisor was the promisee’s executor. Where this was so, the imposition of a privity requirement would in effect have rendered the promisor immune to suit. 55 There is no trace of an argument that the promisee acted as the third-party’s agent in receiving the promise. 49 50

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Cassy v. Fitton was likewise silent as to consideration. The only reference to it in the cases under discussion is the defendant’s argument in Beringer v. Beringer that though he had ‘voluntarily declare[d]’ to his father that he would make provision for the plaintiff out of the farm, this declaration, being voluntary, did not bind him56. But the complete silence as to privity differs from the general silence as to consideration: while it was clear in these cases that the plaintiff was not the promisee (or his executor), it was also clear that the promisee had provided consideration. This was too obvious to be mentioned; the only possible doubt was the link between the promise and the promisee’s allowing property to descend or pass by devise to the promisor unencumbered, which was the question raised by the answer in Beringer v. Beringer. Discussion of consideration was not uncommon in Lord Nottingham’s Chancery57, and had there been a doubt in this respect it would have been raised. In Honywood v. Bennett (1675)58 the defendant, Sir Levinus Bennett, had given a note to his father, Sir Thomas Bennett, taking upon himself payment of his father’s debts, ‘to which note Sir Thomas Bennett in his last will did refer and relied upon it, and died in 1667’59. In a suit for the payment of debts, Lord Nottingham held that if this note were voluntary and without consideration, though it did bind the son in honour and private conscience, with which I had nothing to do, it could not bind him in legal and regular equity, but if the father settled anything on the son in consideration of this note or forbore to cut anything off from the son which he might otherwise have cut off if he had not rested upon this note, then I would hold that son to a strict performance60.

The consideration which Lord Nottingham sought in Honywood v. Bennett was precisely that present, unremarked, in the Dutton v. Poole-type cases. It was provided by the promisee, not by the third-party plaintiff. Had it been necessary, it would presumably have been possible to fit the facts of Cassy v. Fitton and the other pre-1680 Dutton v. Poole-type cases within a requirement of consideration provided by the third-party plaintiff: the promisee had provided consideration by allowing the land to descend, and the third-party was linked to it as the promisee’s C 33 / 239, f 559v. See, for example, Gawdy v. Marriot (1677) Yale, Lord Nottingham’s Chancery Cases, vol. II, p. 476 no. 629; Walterzoone v. Cozen (1677) ibid., p. 478 no. 634; Meller v. Rudgely (1678) ibid., p. 694 no. 858; Herbert v. Price (1681), p. 863 no. 1078. See also Palmer, The Paths to Privity, pp. 102 – 104, referring to Hatchett v. Bindon (1677) Yale, Lord Nottingham’s Chancery Cases, vol. II, p. 565 no. 749 and Honywood v. Bennet (1675) D. E. C. Yale, ed., Lord Nottingham’s Chancery Cases, vol. I, 1957 (Selden Society vol. 73), p. 214 no. 307. 58 Yale, Lord Nottingham’s Chancery Cases, vol. I, p. 214 no. 307; C 33 / 245, f 191v. 59 Yale, Lord Nottingham’s Chancery Cases, vol. I, p. 214 no. 307. 60 Yale, Lord Nottingham’s Chancery Cases, vol. I, p. 214 no. 307. C 33 / 245, f 191v: ‘His lordship declared he saw no cause to relieve the plaintiffs, or to charge the defendant upon or by reason of the said note . . . and that the same was voluntary, and the defendant’s promise in the said note to pay Sir Thomas’s debts was no ways binding in regard it was voluntary, and for that there was no meritorious consideration from Sir Thomas Bennett to the defendant’. 56 57

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child61. There was no such link, however, in Honywood v. Bennett, where the thirdparty plaintiff was a creditor. But no such link was necessary: as Lord Nottingham put it in Cassy v. Fitton, there was an ‘honest agreement’ which ‘ought to be performed’. c) Lord Nottingham’s cases: reliance Lord Nottingham’s approach to Cassy v. Fitton was expressed in terms of the performance of an agreement. The plaintiff ’s pleading in that case had placed the emphasis slightly differently, asserting that the father had forborne to make a settlement as he had intended, ‘relying on his eldest son’s agreement’62. Reference to the promisee’s reliance appears also in Freeman’s report of Chamberlain v. Chamberlain: ‘the defendant having solemnly undertaken the payment of his . . . legacies, in case his father would not alter his will, . . . his father [died] in peace upon the . . . promise, that the defendant should pay the plaintiffs their legacies’63. And Lord Nottingham himself mixed consideration and reliance in his report of Honywood v. Bennett: ‘if the father settled anything on the son in consideration of this note or forbore to cut off anything from the son which he might otherwise have cut off if he had not rested upon this note, then I would hold that son to a strict performance’64. The agreement in Cassy v. Fitton, and in the other Dutton v. Poole-type cases, was part-executed when brought to suit: in Cassy v. Fitton the promisee had died leaving the land unsettled to descend to the promisor. The execution which Lord Nottingham ordered was the promisor’s performance of his part of a reciprocal agreement, the other part of which had already been performed65. In this context 61 Chamberlain v. Chamberlain may have included provision for non-children, and possibly for a non-relative, though all but one of the plaintiffs appear to have been relatives, and some were clearly the promisee’s children. V. V. Palmer points to relief for non-relatives, or distant relatives, after the period: Oldham v. Litchford (1705) 2 Freem. 285 (promisee’s wife’s nephew); Drakeford v. Wilks (1747) 3 Atk. 539 (an ‘intimate friend’, though with the same surname as the promisee); Chamberlain v. Agar (1813) 2 V. & B. 259 (housekeeper). See also Devenish v. Baines (1689) 3 Prec. Ch. 3; 2 Eq. Ca. Abr. 43.4 (god-son). (Though if relief was given on the basis of a trust of property devised, or allowed to descend, to the promisor, as, for example, in Drakeford v. Wilks, where the Lord Chancellor put the question as being whether ‘there is any foundation to relieve the plaintiff on the trust and confidence set up by the bill’, consideration would anyway be irrelevant.) 62 C 33 / 251, f 180 (pleading as summarised in the entry book). 63 2 Freem. 34. 64 Yale, Lord Nottingham’s Chancery Cases, vol. I, p. 214 no. 307. Similarly, the bill in Cassy v. Fitton: ‘which . . . promise and agreement . . . gave your orator’s . . . father such good satisfaction, that he, relying thereon, did in consideration thereof forbear to make any settlement of his estate’ (C 9 / 64 / 15). 65 In the absence of a deed no relief was available in Lord Nottingham’s Chancery upon an agreement not part-executed: ‘equity will never compel the performance of a parol agreement in specie, unless it have been in part executed or executed on one side’ (Yale, Lord Not-

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consideration from the promisee, and his reliance upon the promise, merge. And reliance upon the promise could without difficulty be re-expressed in terms of trust in the promisor. In Beringer v. Beringer the plaintiff argued that ‘the duty on the defendant for the said £5000 is . . . a particular trust in the defendant’66, echoing the plaintiff ’s words in Childes v. Anthony forty years earlier, describing the defendant’s confession of ‘the . . . former agreement, promise and trust reposed in him’67, to which the defendant replied that ‘the trust [was] no other than that the defendant’s father trusted that the defendant would have performed what he promised upon good consideration’68.

d) Lord Nottingham’s cases: trust From trust in the defendant’s performance of his promise, an argument followed easily that the defendant had the land itself upon trust to make the promised provision for the third-party, an approach which may have been stimulated by arguments concerning legacies69. Sambrooke v. Ramsey perhaps excepted, the cases before 1680 do not show plaintiffs interpreting the promised provision as a legacy, the promise providing evidence that the promisor, as executor, had ‘received assets earmarked for a legacy’70, and was therefore under a duty to make provision71. In contrast, defendant promisors are found arguing that the promised provision for the third-party was a legacy, or in the nature of a legacy, and therefore exigible tingham’s ‘Manual of Chancery Practice’ and ‘Prolegomena of Chancery and Equity’, p. 310). This rule can be traced back at least to the 1620s: see M. Macnair, The Law of Proof in Early Modern Equity, 1999, p. 145 – 149. 66 C 33 / 239, f 559 v. 67 C 78 / 436, no 5. See also the argument in Moss v. Browne (1642) March N.R. 151, accepted by the Court of Common Pleas, that a release of a debt of £400 upon a payment of £100 and a promise to pay the residue when possible, ‘is but a trust reposed in the defendant that he would pay the residue when God should make him able; and being a bare trust, is not taken away by the Statute of Limitations’, or, as Lord Nottingham put it, ‘[t]his promise is . . . in nature of a trust reposed in defendant’ (Yale, Lord Nottingham’s ‘Manual of Chancery Practice’ and ‘Prolegomena of Chancery and Equity’, p. 326). 68 C 78 / 436, no 5. 69 It is not suggested that there was a chronological pattern in the deployment of arguments in the cases: various approaches may be found mixed in a single case. 70 P. S. Atiyah, The Rise and Fall of Freedom of Contract, 1979, p. 162, referring to the Dutton v. Poole-type suit in Reech v. Kennegal (1747) 1 Ves. Sen. 123: ‘The implications are clear. Promissory liability has still not overtaken consideration-based liability. The executor is liable, not because he promised, but because he received assets earmarked for a legacy. The promise is evidence of that fact; but it is not the promise which creates the obligation’. 71 The promisor was also executor in Beringer v. Beringer and Chamberlain v. Chamberlain (though in the latter case the provision for the third-parties was expressly contained in the will as legacies, the question being the defendant’s promise to pay the legacies even if assets were insufficient), and may perhaps have been executor in Sambrooke v. Ramsey. No indication on the point is given in Cassy v. Fitton or Molineux v. Molineux.

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only upon assets in the defendant’s hands as executor after payment of funeral expenses and debts. In Beringer v. Beringer the defendant admitted that ‘he has . . . paid the plaintiff some interest for the £5000 as a legacy, but not as a duty on the . . . farm, or on the account of the pretended agreement’72, to which the plaintiff responded that the duty on the defendant for the £5000 is not in the nature of a legacy, and to be generally paid out of the estate, but is a particular trust in the defendant and for him to raise the same out of the. . .farm, and the same ought to remain chargeable with the. . .plaintiff ’s demands73.

In the same case the court found that ‘the . . . farm . . . descended to the . . . defendant upon the trust a foresaid to pay the plaintiff the £5000 and interest’74. In Chamberlain v. Chamberlain (where the payments were included in the will as legacies), the defendant ‘denies that he ever made any such promise as in the bill is alleged for the payment of the testator’s legacies, other than as executor to pay so far as assets came to his hands’, whereas the plaintiffs sought to compel the defendant . . . to perform his . . . promise and undertaking, and that in case the testator’s personal estate shall fall short, that then the £2500 mortgage on Mr Stratford’s estate, and the leases and other the . . . estate devised to the defendant, may be charged with the payment thereof, the defendant having the same as a trust for the payment of the . . . legacies75.

The movement, in the light of such arguments, from the performance of an ‘honest agreement’, to the promisor taking the land upon trust to perform the promise, was easily made, and lay with the grain of contemporary development of the equity jurisdiction76. As Dr Macnair has shown, ‘the boundary between trust and contract 72 The mechanism of the argument from legacy was not fully spelt out. It may have been meant that the intended provision was a legacy in the full sense, though this approach may have faced difficulties from the lack of formality. The parol evidence rule (preventing variation of the terms of a transaction in writing by the evidence of witnesses) was not applied in Chancery to wills of personalty (in contrast to wills of realty, for which formalities were required by the Statute of Wills (1540), 32 Hen. VIII, c. 1 and the Statute of Frauds (1677)), but by the 1620s it was said that nuncupative wills would not be relieved in equity (see Macnair, The Law of Proof in Early Modern Equity, pp. 142 – 143 and 148 – 149). Alternatively, it may have been meant that as the promisor was the promisee’s executor, the promise must be taken to have been impliedly limited to the scope of assets (as Lord Hardwicke L.C. said in Reech v. Kennegal (1748) 1 Ves. Sen. 123, ‘such promises must be understood with reference to assets, otherwise men might be drawn in; for it ought not to operate out of the executor’s own estate, binding only to pay out of the testator’s’). 73 C 33 / 239, f 559v. 74 C 33 / 239, f 559v. 75 C 33 / 249, f 433. The decree compromised between the two positions, ordering the defendant to make the payment, while leaving the question of recoupment from the realty should the assets be insufficient to a further suit between the defendant and others interested. 76 See Yale, Lord Nottingham’s ‘Manual of Chancery Practice’ and ‘Prolegomena of Chancery and Equity’, introduction, p. 44: ‘The shifting [in the seventeenth century] of the

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. . . was fluid’ in the later seventeenth and early eighteenth centuries, when ‘contracts are construed as creating trusts with a good deal of ease’77. To show a trust of property in the defendant promisor’s hands was in the interest of plaintiffs: as an answer to arguments that the promised payment should be treated as a legacy limited to assets; as a means of establishing the duty not only of the promisor but of his heir; and more generally as providing the enhanced security of a proprietary interest over a personal obligation78. But such a trust was not essential. Against the promisor himself, at least, relief did not necessarily require that the plaintiff have a proprietary interest: Cassy v. Fitton was entirely free of such an approach. One side of a reciprocal agreement had been performed, or, in other words, the promisee had acted in reliance upon the promise. The promisor’s conscience had thus been burdened, and his performance, discharging that burden, would be ordered79: the agreement ‘ought to be performed’80. That performance would be in favour of a non-promisee third-party, who may not have provided consideration, was irrelevant: the focus was upon the promisor’s duty, not upon the person to whom it was owed81.

balance from contract to trust, from equities to equitable estates, from personal obligations to proprietary interests, and the consequent hardening of the rules applied, reflect in both aspects the cause and effect of the procedural changes’. 77 M. Macnair, The Conceptual Basis of Trusts in the Later 17th and Early 18th Centuries, in R. Helmholz and R. Zimmermann, eds, Itinera Fiduciae: Trust and Treuhand in Historical Perspective, 1998, p. 234. 78 For the beneficial interest under a trust as a proprietary interest see below pp. 166 – 167. The formality requirements of the Statute of Frauds (1677) introduced a further benefit for a trust analysis, and express reliance began to be placed upon fraud. In Thynn v. Thynn (1685) 1 Vern. 296, the decree was based both upon ‘fraud’ and upon ‘trust’, in the teeth of the formality requirements of the statute (though here the promisor had expressly undertaken to be an ‘executor in trust’ for his mother if he was made executor of his father’s will in her place). In Devenish v. Baines (1689) 3 Prec. Ch. 3; 2 Eq. Ca. Abr. 43.4, which concerned copyhold land, the Commissioners of the Great Seal ‘were of opinion for the plaintiff, and said, they decreed it not as an agreement or a trust, but as a fraud; and they were of opinion, that seeing by the custom of the manor an estate might be created by parol without writing, a trust of such parol estate might likewise be raised without writing, notwithstanding the statute [of Frauds]’. 79 For this reason relief would be given in equity in Dutton v. Poole-type cases concerning payment of money despite the assumed availability of an action at law in assumpsit. 80 V. V. Palmer makes a similar point: ‘it is emphasised [in the Dutton v. Poole-type cases] that the promise was a claim on the conscience of the defendant’ (Palmer, The Paths to Privity, p. 98). But it was clear by Nottingham’s time that a voluntary parol promise, though perhaps binding in conscience, would not ground a decree in equity, and in the pre-1680 Dutton v. Poole-type cases questions of reliance and the receipt of assets were considered (cf Palmer, The Paths to Privity, p. 98: ‘In the [Dutton v. Poole-type] cases . . . , the Chancellor did not mention enrichment, reliance, or the receipt of assets as the ground of relief ’). The cases did not proceed on the simple basis that one’s word must be kept. 81 Cf Yale, Lord Nottingham’s ‘Manual of Chancery Practice’ and ‘Prolegomena of Chancery and Equity’, introduction, p. 23: ‘the first object of inquiry in Equity is the defendant’s conscience, rather than the plaintiff ’s right’.

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II. The marriage agreement cases 1. Fifteenth-century marriage agreements Situations in which A’s daughter was to marry B’s son, and B informally promised A that he would convey land to the son and daughter on marriage, were familiar in Chancery in the fifteenth century82. The lack of formality prevented an action by the promisee in covenant at common law83, but it seems clear that either the promisee or the beneficiary could sue in Chancery. The promisor may have received a benefit other than the marriage in return for the promise, a payment of money, for example84. But this was not essential: the promise might simply have been made ‘for the marriage’, or, in other words, the marriage might have occurred ‘on the faith’ of the promise85. Bills did not always state the desired remedy; but specific performance was in some cases expressly sought, and ‘[j]udging the pleadings as a whole, we conclude that the petitioners are seeking to hold the defendant to his promise; and that the chancellor did grant an order for specific performance’86. There is no evidence as to the basis for such relief. Central to the bills was the assertion that the promise had been made ‘for the marriage’, from which W. T. Barbour concluded that it followed that there was a legitimate ‘cause’ for the defendant’s promise; he made it deliberately, and has led the petitioner or beneficiary to act on the strength of it. Reason and conscience require that he should carry it out. In consequence, it does not matter whether the promisee or the benefi-

82 See generally W. T. Barbour, The History of Contract in Early English Equity, 1914, pp. 123 – 128, and 164 – 165. The promisor was generally the father of one of the parties to the marriage. The promisee was in some cases the other party to the marriage, but promises to the other father were particularly common where the promisor was the father of the groom. 83 If the promise was to pay money an action at common law would be in debt, not covenant, with no need for a deed. But the common lawyers had difficulty in allowing debt to lie in marriage agreement cases, partly because of questions as to the proper jurisdiction, and partly because of doubts as to the presence of quid pro quo. See A. W. B. Simpson, A History of the Common Law of Contract, 1975, pp. 156 ff., and David Ibbetson, A Historical Introduction to the Law of Obligations, 1999, p. 82 (including references to sample bills in Chancery in marriage agreement cases). In the fifteenth century assumpsit for the non-performance of a promise was yet to be securely established. 84 In Wace v. Brasse (between 1398 and 1403) the plaintiff groom complained that he had performed his part of the agreement, not only by marrying, but also by providing 10 marks, and a chaplain to sing divine service, for the good of the bride’s mother’s soul, whose feoffees to uses refused to convey land to the plaintiff and his wife as agreed between them and the plaintiff ’s father (W. P. Baildon, ed., Select Cases in Chancery A.D. 1364 to 1471, 1896 (Selden Society vol. 10), p. 43). And see Barbour, The History of Contract in Early English Equity, pp. 125 – 126 and notes. 85 Barbour, The History of Contract in Early English Equity, p. 126 and notes. 86 Ibid. p. 127.

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ciary is the petitioner. A promise made to another in the interest of the beneficiary, confers a right in equity upon the latter, just as much as if it were made to him directly87.

2. Covenants to stand seised Feoffments to uses, or feoffments ‘of trust’88, were an integral part of later medieval English land-holding, giving freehold tenants a power, in effect, to make a will of the land89. The feoffor’s intentions as to the land’s disposition could be declared at the time of the feoffment, but the association of contemporaneous declarations with the imposition of a common law condition, thereafter immutable, was an incentive to separate feoffment and declaration. Separate declarations might be oral; in the form of a deed poll; by indentures of agreement with the feoffees90; or in the feoffor’s last will. Such declarations of intention were originally seen as no more than directions to the feoffees, which, if necessary, the Chancellor would enforce91. But by the late fifteenth century it was possible to think not merely of a direction to the feoffees, but of a will of the use. As was said in 1535 in the great case of the will of Lord 87 Barbour, The History of Contract in Early English Equity, p. 128. Further work is required to ascertain the extent to which cases of this type appeared in Chancery after Barbour’s period. The first case in the appendix to Professor Sir John Baker’s paper in this volume (Torrell v. Rudston, in the Court of Requests, probably in the 1540s) concerned a marriage agreement, and a suit by a non-promisee, though there the promise was by the groom to a widow bride to pay money to the widow’s children by her previous marriage. Having remarried, the widow was unable at law to bring an action against her new husband, and the plaintiff in the Requests (the husband of one of the widow’s children) complained of a lack of a bond or other writing to enable him to bring an action at law. The outcome is unknown. 88 For the frequent employment of the phrase ‘feoffment of trust’, at least in the later fifteenth century and earlier sixteenth century see Sir John Baker, The Oxford History of the Laws of England, vol. VI, 1483 – 1558 (2003), p. 654. For the medieval use generally see J. Biancalana, Medieval Uses, in R. Helmholz and R. Zimmermann, eds, Itinera Fiduciae: Trust and Treuhand in Historical Perspective, 1998, p. 111; J.L. Barton, The Medieval Use, (1965) 81 Law Quarterly Review 562; J. M. W. Bean, The Decline of English Feudalism, 1215 – 1540, 1968, esp. chap. 3. 89 With certain customary exceptions, all freehold land of which a tenant died seised descended to his heir by operation of law. Feoffments to uses had other advantages, notably the possibility of escaping the burden of the incidents of tenure, in particular wardship. 90 For the privileging by the chancellor in 1439 of a declaration contained in an indenture of agreement over an earlier declaration not so formed, see Biancalana, Medieval Uses, pp. 150 – 151. 91 Until the 1450s some ecclesiastical courts also enforced certain types of uses: see Helmholz, The Oxford History of the Laws of England, vol. I, pp. 421 – 423, and R. Helmholz, Trusts in the English Ecclesiastical Courts 1300 – 1650, in R. Helmholz and R. Zimmermann, eds, Itinera Fiduciae: Trust and Treuhand in Historical Perspective, 1998, p. 153, where Helmholz observes that ‘whether these trust-like devices were regarded as belonging to the law of contracts or to that of property is quite impossible to determine. Indeed these questions seem not to have been asked’ (p. 165).

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Dacre of the South, ‘by his will the devisor does not give any of the land, but only his use’92. Uses had come to be seen as a species of property, with which the common law courts might deal, even if they did not provide a remedy: as Thomas Audley put it in 1526, ‘a use is a property or ownership of land or something else, real or personal’93. Specific performance of contracts for the sale of land was available in the fifteenth-century Chancery, and by the early sixteenth century it was established at common law that the effect of a bargain and sale of land was to pass the use immediately to the purchaser: as Rede J. put it in 1506, ‘where one is seised to his own use, if he sells the land, by force of this sale he shall be said [to be] feoffee to the use of him who buys it’94. From this the question followed of whether agreements other than for sale might likewise raise a use95. Rede J. had argued in 1506 that, in contrast to a bargain and sale, a covenant of marriage would not raise a use: ‘here it is not like a bargain and sale of land is, but it is merely in covenant; and that which lies in covenant cannot change a use’96. But in Assaby v. Lady Manners (1516)97, it was held that where A, in consideration of a marriage between his daughter and B, son of C, covenanted and agreed by indenture with C that A would hold land to himself for life, and that thereafter the son and daughter would have the land to the use of them and the heirs of their two bodies, and that all persons then or afterwards seised of the land should stand and be seised immediately after the marriage to these uses, this covenant would change the use in accordance with its terms. Assaby v. Lady Manners did not end the question. A particular difficulty arose over the immediacy of the covenant’s effect, and a distinction came to be drawn 92 Lord Dacre’s Case (1535), printed, with references, in J. H. Baker and S. F. C. Milsom, eds, Sources of English Legal History: Private Law to 1750, 1986, p. 105 at p. 111, per Spelman and Port JJ.K.B., Shelley and Fitzherbert JJ.C.P., and Fitzjames C.J.K.B. 93 Thomas Audley, reading on the statute 4 Hen. VII, c. 17, Inner Temple, 1526, printed in Baker and Milsom, Sources of English Legal History, p. 103. 94 Yearbook (YB) H. 21 Hen. VII, f. 18, pl. 30. See generally Simpson, A History of the Common Law of Contract, pp. 346 – 348. 95 As has been seen, marriage agreements might include a money payment from promisee to promisor, tending to blur the distinction between bargains and sales and other agreements. It was said in the time of Henry VIII that ‘if someone covenants with me that I shall marry my son to his daughter, for which marriage he will give me £100, and in return I covenant with him that I will leave all my lands to my son, and that all will descend to him after my death, the use of the land is now changed’: J. H. Baker, ed., Reports of Cases from the time of King Henry VIII, vol. 1, London, 2003 (Selden Society vol. 120), p. 135 no. 124 (from Roger Yorke’s notebook, c. 1513 – 35). It was perceived that there was a difficulty in the covenant to leave lands in the future, for ‘every bargain which shall change a use is in the present tense’. But this difficulty could perhaps be overcome by reference to the money payment: ‘I believe it is a good policy to state in the indenture the sum for which he made the bargain and covenant etc.’. 96 YB H. 21 Hen. VII, f. 18, pl. 30. 97 Dyer 235a. The question was discussed in Exchequer Chamber. A writ of error was subsequently brought, but the judgment was not reversed.

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between a mere covenant taking effect in the future, and a covenant operating, like a bargain and sale, as an immediate grant of the use: If someone makes a covenant with another, in consideration of a marriage, that his lands will descend to his issue after his death, this does not change any use but is solely in covenant. However, if he says that he and all other persons who are seised of the same land shall thereafter be seised to this same use, then it will be otherwise98.

An immediate covenant to stand seised, in consideration of marriage, would change a use; and by 1566 it was established that consideration of natural love and affection would also suffice99. A covenant between B and A, upon good consideration, that B would stand seised to the use of C, thus passed an immediate property interest in the land to C100. The effect of the Statute of Uses (1536)101 was to execute uses raised by covenants to stand seised, passing legal title from B to C, and so in the family context the covenant to stand seised became a mechanism of conveyance102. But outside its scope, agreements in consideration of marriage continued to appear in Chancery. 98 1532 / 33, J. H. Baker, Reports of Cases from the time of King Henry VIII, vol. 2, London, 2004 (Selden Society vol. 121), p. 276 no. 72 (from Richard Pollard’s notebook, c. 1515 – 34). If the covenant was to make a conveyance in future, there was an added difficulty that if the covenant immediately raised a use, the conveyance could not subsequently be made: in Bainton v. R. (1554) Dyer 96a, it was held that a covenant, in consideration of a conveyance to the covenantor, that the covenantor would levy a fine to the covenantee for life, remainder to the covenantor, ‘shall alter no use immediately, for then by no possibility could the covenant ever be performed, and it is a covenant in the future tense: but they agreed in a manner, that if I covenant in consideration of marriage, or for a sum of money paid to me, that the party shall have the said manor of D. by express words, this shall change an use immediately, for there is no estate to be made’. Cf the view expressed at common law in the 1570s that one to whom a feoffment was made upon trust to re-convey must be seised to his own use: see N. G. Jones, The Use Upon a Use in Equity Revisited (2002) 33 Cambrian Law Review 67 at 74. 99 It was held in Sharrington v. Strotton (1566) Plowd. 301, that ‘the affection of . . . [the covenantor] for the provision for his heirs male whom he should beget, and his affection that he had that the land should remain to the blood and name of the Bayntons, and the fraternal love which he bore to his brothers, were causes quite sufficient to make the uses in the land’. 100 It seems that before the Statute of Frauds (1677) no writing was required: Simpson, A History of the Common Law of Contract, p. 353, but cf, F. Goodwin, Before the Statute of Frauds, Must an Agreement to Stand Seised Have Been in Writing? (1893 – 94) Harvard Law Review 464 (I owe this reference to Mr P. G. Turner). It may be said that the covenant to stand seised was ‘an immediate declaration of trust’ (M. R. T. Macnair, Equity and Volunteers (1988) Legal Studies 177), though contemporary analysis was in terms of a grant or conveyance of the use (see T. F. T. Plucknett and J. L. Barton, eds, St German’s Doctor and Student, 1974 (Selden Society vol. 91), pp. xlix – li). Francis Bacon’s assertion in the early seventeenth century that ‘a conveyance in use is nothing but a publication of the trust’ referred to the different context of a use declared upon a conveyance (Francis Bacon, Reading upon the Statute of Uses, W. H. Rowe, ed., 1804, p. 14). 101 27 Hen. VIII, c. 10. 102 Unlike bargains and sales, covenants to stand seised were outside the scope of the Statute of Enrolments (1536), 27 Hen. VIII, c. 16, and so took effect immediately without need for enrolment of the deed.

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3. Seventeenth-century marriage agreements The questions raised in Chancery by marriage agreements in the seventeenth century may be indicated by a pair of reported cases: Otwaye v. Hebblethwyate (1615)103 and Wiseman v. Roper (1645)104. a) Agreement The facts of Otwaye v. Hebblethwayte were similar to those of the fifteenth-century cases. It was found that the defendant James Hebblethwayte, in consideration of a marriage between his nephew James, and Mary, one of the daughters of Roger Doulton, ‘promised to give and bestow the most part of his lands and goods at the time of his death to . . . James his nephew, and to his issue’, and that ‘in consideration of the . . . promise . . . Doulton satisfied the . . . defendant to enjoy lands of the said Doulton’s for £100 which were worth to be sold £700’, but that ‘the . . . defendant James Hebblethwayte, contrary to his . . . promise, has now in his old age conveyed all his lands and estate to the other defendant, Thomas Hebblethwayte’105. After the nephew’s death, upon a bill exhibited by his children, the court found ‘no cause but that the said defendant James should perform his . . . promise’106, and it was ordered that ‘the . . . plaintiffs shall, immediately after the death of the . . . defendant James Hebblethwayte, have and enjoy the moiety . . . [of the defendant James’s lands and goods] without let or interruption of the said defendants or either of them, or any claiming from, by, or under them or either of them’107. 103 Tothill 163; Bryson, Cases Concerning Equity and the Courts of Equity, vol. II, p. 452 no. 238; C 33 / 125, f 1128v, C 33 / 127, f 117v, C 33 / 129, f 162v. 104 1 Ch. Rep. 158; C 33 / 184, f 38, C 33 / 186, ff 268, 464, C 33 / 192, ff 224v, 510v, 695, 739, 985. The original suit was both against the promisee to deliver the articles of agreement, and against the promisor to perform. After decree for the plaintiff in both respects, there were extended contempt proceedings against the promisor: see Bryson, Cases Concerning Equity and the Courts of Equity, vol. II, p. 721 no. 437. The promisor contemporaneously exhibited a bill of review in an unsuccessful attempt to have the decree reversed: C 9 / 2 / 206; C 33 / 196, f 667 (‘their lordships now declared that they had taken serious consideration of the cause and of the precedents offered on either side, and are clear of opinion that there is no ground at all to reverse the. . .decree’). 105 C 33 / 125, f 1128v. The promisee’s identity is not clear: see p. 156 below. 106 C 33 / 125, f 1128v. The promise was informal. The decree may show that the making of a marriage sufficed to take the case outside the developing rule against relief upon parol agreements not part-performed (see Macnair, The Law of Proof in Early Modern Equity, p. 147 n. 106), though the record shows that there was additional consideration in the provision of land for the promisor at an undervalue. 107 C 33 / 125, f 1128v. The reason for the limitation to half of the promisor’s lands and goods is not clear; it is possible that there were other children of the nephew not party to the suit, or that the limitation took account of the position of the transferee from the promisor. A commission was appointed to enquire into the value of the lands and goods at the time of the promise.

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In Wiseman v. Roper, it was found that the defendant, Henry Roper, had entered into articles indented with Sir Thomas Wiseman, the plaintiff ’s father, reciting a marriage ‘lately had between the plaintiff, nephew of the defendant, and Anne his wife, without the privity, consent or good liking of . . . Sir Thomas Wiseman’, and covenanting, ‘as well in consideration of the defendant’s natural love and affection to the plaintiff, as for the regaining of the good will and affection of . . . Sir Thomas to the plaintiff and his wife’, that within a month after the death of his brother, Sir Anthony Roper, he would convey a manor to the plaintiff and his wife (reserving an estate for life to himself), and also pay an annuity of £50. It was further provided that if Sir Anthony Roper alienated the manor during his life, Henry Roper would assure other lands to that value; and that if no lands to that value descended to him from Sir Anthony, he would pay £4000 to the plaintiff or his wife or the plaintiff ’s heirs. After Sir Anthony’s death, the manor descended to Henry Roper, and the scope of the bill was to compel the defendant to perform the. . .articles by settling the manor and premises, or lands of the value, or securing the sum of £4000, and to have the . . . £50 per annum for the plaintiffs’ life, and the arrears thereof according to the said articles108.

After deliberation, the defendant was ordered to perform the articles and convey the manor. The decision in Otwaye v. Hebblethwayte raised little difficulty; Wiseman v. Roper was less easy. The defendants argued firstly that ‘the . . . articles were voluntarily entered into upon no real or valuable consideration, but only to procure a reconciliation between the plaintiff and his father’, and, perhaps recognising that a lack of consideration would be irrelevant if the land could be said to be charged with the payment, went on to assert that the same was only a covenant of one not in possession, nor having any estate therein at that time, to settle lands in case they should descend unto him, whereof at the time of the covenant he had not power whereby he might charge the same, but a bare possibility in case Sir Anthony Roper did not alien them109.

As to the first argument, the court ‘nevertheless was of opinion that the consideration was good and sufficient’, and there was therefore no difficulty over the annuity: ‘as touching the . . . £50 per annum and the arrears thereof, this court did order and decree that the . . . defendant should pay the same unto the plaintiff, and continue the payment thereof for the future according to the . . . articles’110. But, as to the second point, ‘it being a matter of weight and consequence whether this court should give relief to compel performance of a covenant of this nature’111, it was ordered that precedents be produced, whereupon 108 109 110 111

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this court did now declare that the scope of the . . . bill being to compel a performance of an agreement made by the defendant himself, which appearing to be a legal and good agreement, their lordships do find warranted by the precedents and constant practice of this court, where such agreements have been made upon which the party can only recover damages at law, for this court to decree the thing in specie, wherein this court does not bind the interest of the land, but enforce[s] the party to perform his own agreement, and therefore it is ordered and decreed . . . that the . . . defendant shall perform the . . . articles of agreement and convey the . . . manor . . . according to the true intent and meaning of them112.

As in the Dutton v. Poole-type cases, in neither Otwaye v. Hebblethwyate nor Wiseman v. Roper was there any question of privity. The identity of the promisee in Otwaye v. Hebblethwayte is not fully clear. It is possible, if not probable, that Roger Doulton, the bride’s father, was a promisee, perhaps the sole promisee113; but whatever the promisee’s identity, there is no indication in the record or reports that it was necessary that the promisee be the plaintiff. In Wiseman v. Roper the plaintiffs were not promisees, but nothing was made of this by the defendants or the court. Consideration likewise was not mentioned in Otwaye v. Hebblethwayte, but was clearly present: the promise was in consideration of marriage, and, as the court found, ‘afterward, in respect of the promises, the . . . marriage proceeded’114. That the plaintiffs, while expressly mentioned as beneficiaries of the promise, were issue of the marriage, not parties to it, occasioned no comment. It would come to be orthodoxy that the children of a marriage (and more remote issue) were within the marriage consideration115, a doctrine which may have been established in the course of the seventeenth century116, but there is no evidence of this reasoning in Otwaye v. Hebblethwayte. 112 C 33 / 186, f 464. The distinction drawn by the Commissioners of the Great Seal between the interest in the land and the defendant’s conduct encapsulates the question of the limitation of Chancery decrees to effect in personam, long insisted upon by the jurisdiction’s opponents, but shortly to be broken down by the rise of sequestration. See Yale, Lord Nottingham’s ‘Manual of Chancery Practice’ and ‘Prolegomena of Chancery and Equity’, introduction, pp. 16 – 37. 113 The promise appears to have been a means of obtaining his consent to the marriage: ‘it plainly appeared unto this court by the proof now read that the said defendant James Hebblethwayte was desirous and used means that . . . James his nephew might marry the said Doulton’s daughter, and in respect thereof he promised . . . all or [the] most part of his estate at the time of his death’ (C 33 / 125, f 1128v). And a promise to the bride’s father would fit the pattern found in the fifteenth-century marriage agreement cases. 114 C 33 / 125, f 1128v. In addition to the marriage, the promisor had received land at an undervalue from the bride’s father. It is impossible to be certain that this was not essential to the relief, though neither Tothill’s note, nor the report in Hertfordshire Record Office MS Verulam XII.A.50 (printed in Bryson, Cases Concerning Equity and the Courts of Equity, vol. II, p. 452 no. 238), mention any consideration other than the marriage. 115 J.E. Martin, Hanbury and Martin, Modern Equity, 17th ed., 2005, p. 131. 116 See Macnair, Equity and Volunteers, 175, referring to Wentworth v. Young (1638) Nels. 36, and Kinaston v. Mainwaring (1664) 1 Ch. Cas. 47, Nels. 94 (though the record shows that

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In Wiseman v. Roper the defendants thought it worth raising an absence of consideration: ‘the . . . articles were voluntarily entered into upon no real or valuable consideration, but only to procure a reconciliation between the plaintiff and his father’117. The court ‘nevertheless was of opinion that the consideration was good and sufficient’, referring seemingly to the promisor’s natural love and affection for the plaintiff, and his desire to regain the promisee’s good will and affection for the plaintiff and his wife118. Substantial difficulties arose because the promise was to assure land over which the promisor at the time had no power. Consideration, in contrast, was more easily dealt with119, and its significance is difficult to assess. Insofar as questions arose, they were as to the general presence of consideration, not as to the plaintiffs’ link to it. As further questions were raised by bill of review, the plaintiffs’ insistence upon the presence of consideration inevitably grew: but for the promisor’s ‘faithful promises and protestations’, they said, the marriage would not have taken place120. But in granting relief the court emphasised the availability, and inadequacy, of an action at law upon the covenant, an approach which would be seen again in the eighteenth century as a basis for relief for a volunteer beneficiary of a marriage settlement: that equity will not assist a volunteer had not yet hardened into dogma121.

in Kinaston v. Mainwaring the children were beneficiaries of a trust, rendering their position in respect of the consideration irrelevant: C 33 / 221, ff 586, 629v; the record of Wentworth v. Young has not been found). 117 C 33 / 186, f 268. In his bill of review the promisor asserted that it had been agreed that he should ‘be no way pressed either at law or otherwise to the performance’ of the articles, which had merely been intended to effect a reconciliation between the beneficiary and his father: C 9 / 2 / 206. 118 The report in British Library (BL) MS Harg. 1576, fo. 234v (printed in Bryson, Cases Concerning Equity and the Courts of Equity, vol. II, p. 721 no. 437), which is primarily concerned with the contempt proceedings, makes no mention of natural love and affection or the effecting of a reconciliation, but emphasises the marriage: relief had been given ‘even though the consideration was a past marriage’. Newland observed, a century and a half later, that though the plaintiff was a collateral relation of the promisor, the probable effect of a reconciliation between father and son was ‘that the father would afterwards provide for his son in every respect in the same way as he would have done, if the ground of offence had never existed; this of itself afforded a sufficient consideration for the agreement which the uncle entered into’ (J. Newland, Contracts, within the Jurisdiction of Courts of Equity, 1806, p. 77). Nothing of this reasoning is expressed in the reports or record. 119 The report in BL MS Harg. 1576, fo. 234 gave equal weight to the promisor’s lack of power over the land and the consideration being a past marriage, but this balance does not reflect the record. The report in 1 Ch. Rep. 158 closely follows the record. 120 C 9 / 2 / 206. The record gives no indication of the grounds upon which the bill of review was dismissed: C 33 / 196, f 667. 121 See Macnair, Equity and Volunteers, pp. 177 ff. Though it was not settled in Lord Nottingham’s time that inadequacy of damages was a necessary precondition to specific performance: see Blake v. Blackborow (1678), Yale, Lord Nottingham’s Chancery Cases, vol. II, p. 713 no. 895.

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b) Trust Neither Otwaye v. Hebblethwayte nor Wiseman v. Roper gives any indication of a trust analysis122: in neither case was relief said to be available because in making the promise the promisor had impliedly declared himself a trustee, and indeed in Wiseman v. Roper the court emphasised that the decree ‘does not bind the interest of the land, but enforce[s] the party to perform his own agreement’123. Nevertheless, as was pointed out in the bill of review, if the land had passed out of the promisor’s hands, an order to perform which did not bind the land risked contradiction: it is declared in the . . . decree that the . . . decree neither does nor can bind the inheritance of the manor, . . . and yet by the . . . decree your orator is ordered to convey the same, when it appears to the court . . . [that the manor was] . . . formerly sold bona fide, whereby the . . . decree appears as the truth then was, and still is, impossible to perform124.

Likewise, relief in Otwaye v. Hebblethwayte required enforcement of the decree against the promisor’s brother, to whom the land in question had been conveyed125. Relief for the third party in these cases flowed from a requirement that a promise for his benefit be performed, and not from a declaration of trust. But from the availability of specific performance proprietary consequences followed126, which might be expressed in terms of trust: shortly after the end of the period it was held in Gell v. Vermedun (1694)127 that where one articled for the sale of lands, and covenanted to convey them, but did not covenant for himself and his heirs, the heir was nevertheless bound to perform the agreement because ‘after the sealing of the. . .articles, [the promisor] was in the nature of a trustee for the plaintiff of those lands, which trust with the said lands descended to the heir’128.

122 As the promisor pointed out, such an approach would have given particular difficulty in Wiseman v. Roper where the promisor had no interest in the land at the time of the promise. 123 C 33 / 186, f 464. 124 C 9 / 2 / 206. 125 It is not clear whether the brother had given value for the land. A proprietary effect similarly flowed from the availability of specific performance in the operation of the doctrine of conversion in marriage articles. See Macnair, Equity and Volunteers, 174 – 175. 126 It was said, for example, in 1610 in the Court of Exchequer that if A agreed to lease certain land to B, and before doing so sold the land to C for valuable consideration, C, having notice of the promise, would be compelled in Chancery to make the lease to B: H. Rolle, Un Abridgment des Plusieurs Cases et Resolutions del Common Ley, 1668, bk II, p. 781 (E) pl. 1. 127 2 Freem. 199. 128 And in Skirne (or Skirme) v. Meyrick (1739) Comyn 700, 2 Eq. Cas. Abr. 740 (a) 9, it was held in the equity side of the Court of Exchequer that one taking an estate with notice of a covenant to settle it was a trustee (see Macnair, The Conceptual Basis of Trusts, 234), though the covenant in that case was to convey to trustees, rather than directly to the beneficiary.

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III. The ‘Trust of a Promise’ As has been seen, it was assumed in Wiseman v. Roper that damages would be recoverable in an action at common law in the promisee’s name; and in Dutton v. Poole the judges observed that, if it would any ways agree with the rules of law, they would not put the person to go into Chancery; as he must in this case, if this action will not lie, to inforce the executor of the father to bring this action, and then to have the money decreed to them129.

Relief for third-party beneficiaries by means of procuring an action at common law had a long pedigree in equity by 1680, at least where there was a formal bond or obligation, that is, a sealed writing acknowledging an indebtedness, actionable at common law in the writ of debt130. In 1462 Moile and Danvers JJ. said that ‘where F is obliged to the use of G,. . .G may have subpoena against the obligee to make him sue the obligor’131, and in 1492 Morton L.C. said that ‘if one be obliged to the use of another, and the obligee knows [of] this use, and releases to the obligor, he to whose use he was obliged will have a subpoena against the obligee’132. Such situations continued to appear in the sixteenth-century Chancery, frequently in connection with provision for wives or children. The mechanisms varied by which such obligations upon trust might be brought to action. As in the case of 1462, it was possible for the obligee himself to be required to proceed at law. In Wivell v. Hall (1593)133 the defendants, being found to have two obligations ‘unto the use and behoof of the complainant’, were ordered forthwith ‘to prosecute suit at the common law upon the . . . bonds’. And in Stookes v. Childe (1599)134 the defendant, who had been ‘by a former order of this court appointed to put in suit a bond of £200 made in trust to the defendant’s father, whose executor he is, . . . to the plaintiffs’ use’, but had nevertheless released the bond, was attached to answer his contempt in doing so. 1 Freem. 471. See generally Simpson, A History of the Common Law of Contract, pp. 88 ff. Such bonds might be ‘simple’ or ‘conditional’. A conditional bond constituted a formal acknowledgment of a sum owed, together with an informal condition providing that the bond would be void, e.g., upon payment of a sum of money. Also encountered are recognisances and recognisances in the nature of statutes staple. See Simpson, A History of the Common Law of Contract, pp. 125 ff. 131 YB P. 2 Edw. IV, pl. 2, fo. 6. 132 YB P. 7 Hen. VII, f. 10, pl. 2, at fo. 12. For these cases, and for references to other examples in fifteenth-century Chancery pleadings, see Ibbetson, A Historical Introduction to the Law of Obligations, p. 80. 133 C 33 / 85, f 474v. 134 C 33 / 97, f 126. See also Anon. Cary 15, citing the case of 1462 above (referred to from Cambridge University Library MS Gg.2.31, fo. 179v in Ibbetson, A Historical Introduction to the Law of Obligations, p. 141). 129 130

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Alternatively, the trustee might be required to execute a letter of attorney enabling the beneficiary to bring an action at law. So in Raynford v. Throgmerton (1581)135 it was asserted that the defendant had confessed that the plaintiff ’s late husband, Charles Raynford, had entered into indentures of covenants with the defendant’s testator, ‘being put in trust for the plaintiff ’, that Charles Raynford would ‘assure certain lands to the plaintiff for her jointure’, and had made an obligation to the defendant’s testator ‘in like trust for the performance of the same covenants’. Upon this it was ordered that, if the confession be true, the defendant should ‘bring into this court . . . the indenture of covenants and obligation, . . . to the end the same may be delivered to the plaintiff with a letter of attorney to be made to her by the defendant, to put the same obligation in suit to her own use’. In Raynford’s Case there was both an indenture of covenants and a supporting obligation. The court envisaged an action upon the obligation, not upon the indenture; but such an action, in debt for a liquidated sum, would be preferable for the beneficiary. That there was no obstacle in principle to an action instead upon the covenant may perhaps be indicated by Herbert v. Herbert, where in 1580 an injunction had been awarded against an action at law upon an obligation of £1000 made by the plaintiff to two of the defendants upon trust for the third defendant, Anne Herbert. This being so, Anne Herbert’s counsel offered, that if . . . Anne may be satisfied and paid for the £300 goods covenanted to be left unto her by her late husband (for the supposed breach of which covenant the. . .obligation is put in suit), together with her reasonable damages, costs, and charges by her sustained for that the same covenant was not to her duly performed, . . . then no further advantage shall be taken upon the . . . bond of £1000136.

Counsel did not expect difficulty in the beneficiary being compensated, by agreement, for the breach of the covenant, rather than recovering a liquidated sum upon the obligation, though no conclusion can be drawn as to the payment of compensation upon an unsupported covenant. In a number of cases the trustee was ordered to deliver the physical deed of obligation to the beneficiary, but without mention of a letter of attorney. In Wilbore v. Wilbore137, for example, it was said in 1596 that a bond had been made ‘to the defendant’s use’ for payment to her of £100 after her husband’s death, which bond had hitherto been kept from her. It was ordered that if the plaintiff did not show cause, ‘the . . . bond shall be . . . delivered out of this court to the defendant to be put in suit to the behoof of the defendant, whereby she may recover the said £100 with her reasonable costs and damages’. It seems likely that upon delivery of the bond the defendant was to proceed at law in the obligee’s name, the decree giving her liberty to do so. C 33 / 61, f 439v. For another example see Hurley v. Tredell (1596), C 33 / 91 f 245. C 33 / 61, f 105v. In contrast to the obligation, the covenant is not stated in the record to have been upon trust for Anne Herbert. 137 C 33 / 91, f 414v. 135 136

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These sixteenth-century cases concerned express trusts of formal obligations, actionable at law in debt. There were likewise formal writings (though not an obligation) in Wiseman v. Roper and the third-party’s suit was not only against the promisor for performance, but also against the promisee, Sir Thomas Wiseman, for delivery of the writings, ‘to be proceeded upon in the name of Sir Thomas Wiseman’138. Delivery was ordered without difficulty, and so without analysis, Sir Thomas being willing to comply with an order in that respect. In Dutton v. Poole there were no formal writings, and the judges envisaged not an action by the third-party in the promisee’s name, or that of his executrix, but rather a suit in Chancery to require the executrix to bring an action herself139. In neither Wiseman v. Roper nor Dutton v. Poole is there any express indication that the promisee was taken to be a trustee for the third-party, either (in Wiseman v. Roper) of the writings, or of the common law right of action. It is possible that this was tacitly assumed; it is also possible that it was sufficient that the promise had been made for the third-party’s benefit140. It has at times been suggested that an action at law upon a promise for the benefit of a third-party would give only nominal damages, either because the thirdparty was a volunteer, or because any loss was the third-party’s and not the promisee’s141. The cases concerning obligations actionable in debt for a liquidated sum in their nature give no assistance on this point. Herbert v. Herbert suggests that there was no objection in Chancery in the 1580s to compensation for the beneficiary for breach of a covenant supported by an express trust of an obligation, in return for the discontinuance of an action at law upon the obligation. It seems to have been assumed in Wiseman v. Roper and Dutton v. Poole that damages recovered at law would be more than nominal142, but there are indications the other way, and the true position, complicated by the jury’s control over damages, is unclear143.

C 33 / 184, f 38. Though, as Professor Ibbetson and Mr Swain point out in their paper in this volume, on the facts the executrix was the sole witness to the promise, and as a party to the action would have been barred from giving evidence. 140 It will be recalled that in both Wiseman v. Roper and Dutton v. Poole the third-party could be linked to the consideration. 141 See Macnair, Equity and Volunteers, 183. 142 In his bill of review in Wiseman v. Roper the promisor insisted that since the decree in Chancery could not be pleaded against an action at law, he would be open to double recovery: ‘Sir Thomas Wiseman might have had his action at the common law against your . . . orator upon the . . . articles, . . . so as your . . . orator might . . . be doubly charged by the . . . articles’ (C 9 / 2 / 206). 143 In assumpsit the plaintiff was required to allege loss of his own, and in covenant it was early said that damages could not be recovered for a third-party’s loss (see Ibbetson, A Historical Introduction to the Law of Obligations, p. 77 n. 36). 138 139

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IV. Trusts as contracts? As the Dutton v. Poole-type cases indicate, the distinction between trusts and contracts has not always been easily drawn, and the facility with which a promisor might be presented as a trustee prompts a reverse question as to how far trustees were promisors, and so as to whether trusts for the benefit of third-parties might be seen as third-party beneficiary contracts144. In the 1730s Henry Ballow ‘[explained] . . . trust as a species of contract’145, opening the second book of his Treatise on Equity with the proposition that ‘[w]e will now proceed to some of the particular kinds of Agreements which occur most usually in Chancery. And, 1st, Of a depositum or trust’146. Similarly, in Pawlett v. Attorney-General (1667)147, Hale C.B. said that there ‘is a diversity betwixt a trust and a power of redemption; for a trust is created by the contract of the party, and he may direct it as he pleaseth; and he may provide for the execution of it’. And in Earl of Kildare v. Sir Morris Eustace (1686)148, Sir James Holt argued that the 144 For a contractual approach to trusts after the period see the discussion in Professor McQueen and Dr Sellar’s paper in this volume of James Sandeman’s view in the late nineteenth century that ‘the relation of trust arises out of a contract between the truster and trustee’. See also Maitland’s view that ‘it seems utterly impossible for us to frame any definition of a contract which shall not include the acts by which ninety-nine out of every hundred trusts are created, unless we have recourse to the expedient of adding to our definition of contract a note to the effect that the creation of a trust is to be excluded’ (F.W. Maitland, Equity, A. H. Chaytor and W. J. Whittaker, eds, 2nd ed. revised by J. Brunyate, 1947, p. 111), and J. H. Langbein, The Contractarian Basis of the Law of Trusts (1995) 105 Yale Law Journal 625. 145 Macnair, The Conceptual Basis of Trusts, 235. 146 A Treatise of Equity, 1737, book 2, chap. 1, s. 1 (first published anonymously, with subsequent editions by John Fonblanque. Authorship of the original is usually attributed to Henry Ballow.) Cf Lord Hollis’s Case (1674), 1 Ventris 345: ‘An hundred pounds was lent by. . .[Lord Hollis’s] lady, and in the note which was first given for it, it was written that the money was to be disposed as the Lady Hollis should direct. An action at law for this money being barred by the Statute of Limitations, a bill was exhibited for relief, and the Statute of Limitations insisted upon. But in regard the money was looked upon as a depositum, and a trust thereupon to the lady, a decree was obtained for the money’. 147 Hardres 465 at 469; see also Yale, Lord Nottingham’s ‘Manual of Chancery Practice’ and ‘Prolegomena of Chancery and Equity’, p. 238, referring to the same case: ‘There is a difference between a trust and an equity. Trust is a kind of contract, wherein the cestui que trust must take care to provide for himself ’. 148 1 Vern. 419 at 419. Holt argued also from the availability of an action on the case at common law for breach of trust (for which see N.G. Jones, Uses, Trusts, and a Path to Privity [1997] Cambridge Law Journal 175, considering Megott v. Broughton and Davy, commonly called Megod’s Case (1586)). It seems that the basis for the action in Megod’s Case was the availability of a remedy upon the trust in Chancery, which provided ‘consideration’ for the action at common law: the common law action was parasitic upon Chancery relief. The action in Megod’s Case was pleaded in assumpsit, but the essence of the liability was the availability of relief in Chancery, not a contract actionable at law. In Butler v. Butler (1657), 2 Sid. 21 (see also Yale, Lord Nottingham’s ‘Manual of Chancery Practice’ and ‘Prolegomena of Chancery and Equity’, p. 262), it was said that ‘a breach of promise or breach of trust are

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court might take jurisdiction over a trust of land in Ireland, since ‘a trust was purely personal; and . . . a court of equity here might as well hold plea of a trust, that concerned lands in Ireland, as the other courts of law might of other personal contracts, though the same might concern lands in Ireland’. The uses of ‘agreement’ or ‘contract’ in these cases were not identical: the emphasis in Pawlett v. Attorney-General was upon the settlor’s control over the trust as differentiating a trust and an equity of redemption, the latter, but not the former, binding those coming in the post149; in Earl of Kildare v. Sir Morris Eustace it was upon the personal nature of trusts, and their distinctness from the land150. In neither case was the analogy with contract precise or direct. Ballow’s analogy, in contrast, was clear: a trust is a kind of agreement, and, in particular, a depositum151. But this was difficult to sustain: depositum will not readily explain trusts for the benefit of third-parties; and within a few sentences Ballow had turned to Chudleigh’s Case (1594)152 for Coke’s definition of a use, not as an agreement, proper grounds of [an] action on the case’, suggesting a distinction between promise and trust within a broader similarity. 149 The question was the capacity of a mortgagor to redeem against the Crown, into whose hands the mortgage had come (in the post) by the attainder for treason of the mortgagee’s heir. A link between the effect of a trust upon those coming to the trust property in the post and the settlor’s control over the trust had been made some 70 years earlier by Lord Keeper Egerton, observing that confidence and privity ‘are not to extend nor restrain further than he from whom the trust comes limits and directs it’ (Huntingon Library MS EL 482, fo. 59v, in Anon. d. Chester v. Englande. I am grateful to Professor Sir John Baker for this reference.) 150 A similar argument had been raised in The Case of the Company of Horners of London (1624) 2 Rolle 471, where the Company brought an action in the Lord Mayor’s court in London, concerning a house in Middlesex, grounding their bill upon a trust. A prohibition was issued on the ground that land in Middlesex was outside the jurisdiction of the Lord Mayor’s court, to which it was objected that ‘the trust was personal, and concerned [a] society in London’. As in Earl of Kildare v. Eustace, the emphasis was upon the personal nature of trusts; no mention was made of contract. 151 Ballow’s analogy between trusts and depositum may have been influenced by Basil Kennet’s translation of Pufendorf ’s De Iure Naturae et Gentium, which Ballow relied upon as a source, probably in the fourth edition of 1729 (see Ibbetson, A Historical Introduction to the Law of Obligations, p. 218). Kennet translated depositum as ‘charge’, but consistently referred to the depositary as a ‘trustee’, and described the relationship between depositor and depositary as one of trust: ‘A charge is where we commit to another’s trust and custody any thing belonging to us, to be kept gratis. And here the trustee is bound to preserve it diligently and to return it upon demand’ (book v, chap. v, para. vii). (I owe this suggestion to Professor D. J. Ibbetson.) Cf Blackstone’s observation some 30 years later, placing the trust as deposit or bailment at common law, that ‘A technical trust . . . created by the limitation of a second use, was forced into a court of equity . . . and this species of trust, extended by inference and construction, have ever since remained as a kind of peculium in those courts. But there are other trusts, which are cognizable in a court of law: as deposits, and all manner of bailments’ (Sir William Blackstone, Commentaries on the Laws of England, vol. 3, 1768, pp. 432 – 433) (‘peculium’ is used here not in the technical sense, but as meaning an exclusive possession). 152 1 Co. Rep. 120; Coke upon Littleton, fo. 272b.

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but as a ‘trust or confidence’153. While assertions of promise, or agreement, were not uncommonly conjoined with assertions of trust in the Chancery record before 1680154, the dominant approach to the trustee’s duty in Chancery in the period after the Statute of Uses (1536) was based not upon promise or agreement, but upon the reposing of trust155. 1. Unilateral trust An emphasis upon the reposing of trust is least unexpected in the testamentary context156. In Hibyns v. Carr (1586) the defendants ‘showed for stay [of an injunction]. . .that the house in question was to them committed in trust by their testator for the bringing up of certain infants, and that. . .[they] do not claim anything to their own use’157. And in Wood v. Bland (1592), ‘Mr Egerton, her majesty’s Attorney General’, alleged that the plaintiff ’s wife’s late father, by his last will did appoint a lease of [certain lands] . . . to be conveyed by one Dormer, who had the interest thereof by assignment [of the late father], . . . to . . . Bland and other the overseers of the said last will . . . to the use of . . . [the plaintiff ’s wife], . . . that . . . DorBallow, A Treatise of Equity, Bk II, ch. 1, s. 2. For example, in Sharpe v. Hill (1568) the plaintiff asserted that land had ‘been assured by one William Newcombe unto the . . . defendant and his heirs, upon special trust and confidence reposed by the plaintiff in the . . . defendant, that he the said defendant should make assurance thereof over unto the . . . plaintiff and his heirs, which to do the . . . defendant faithfully promised unto the plaintiff, in consideration that the . . . plaintiff had paid the money for which . . . Newcombe made the . . . assurance to the defendant’, and the defendant admitted that ‘being desired by the plaintiff to travail with . . . Newcombe to get an assurance obtained to convey the same over unto the complainant, he . . . was contented and agreed so to do’ (C33 / 37, f 198). 155 While arguing that ‘use, trust or confidence originates in an agreement’, Maitland made the same observation of the medieval period: ‘the language of contract was not used – there was no formal promise exacted from the feoffees, no obligo me, etc. It seems to be felt from the first that contract is not what is wanted – that contract won’t do . . . No, there is no “obligatory” language: all is done under cover of “use”; a little later of “confidence” and “trust”’ (Maitland, Equity, p. 30). Cf. H. Coing, English Equity and the Denunciatio Evangelica of the Canon Law (1955) 71 Law Quarterly Review 223 at 235: ‘It is highly probable that [in enforcing uses for the benefit of third parties, the medieval chancellors] argued as follows: here is a promise, which ought to be exactly performed; there is a moral a reasonable duty towards the beneficiary, the cestui que use; its performance is a question of “fides” and “confidence”; and, more cautiously, Plucknett and Barton, St German’s Doctor and Student, p. xliii: ‘One of the regular applications of the denunciatio evangelica was to provide a remedy for beneficiaries under contracts who were not also parties to them. If we take it that, according to one school of thought, the beneficiary was regarded as having a contractual claim against the settlor and the feoffees, this would explain both why his rights were not originally binding upon a purchaser, and how they came to be so’. 156 Testamentary trusts constitute an obstacle to any contractual analysis: as Professor Lupoi has observed, quite apart from other considerations, ‘testamentary trusts . . . would in any case have impeded trusts from entering the field of contracts’: M. Lupoi, Trusts: a comparative study, trans. by S. Dix, 2000, p. 95. 157 C 33 / 71, f 517. 153 154

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mer did assure the same accordingly, and that . . . Bland, being survivor of the . . . overseers, did refuse to perform the trust in him reposed158.

But an emphasis upon reposing of trust was not confined to such cases. In Alcocke v. Cogningsbye (1623)159, for example, it was said that the plaintiff had conveyed freehold land to the defendants, and ‘by his deed dated the same . . . day . . . did declare the . . . conveyance to be made upon trust and confidence for the payment of certain sums of money to certain persons in a schedule to the. . .deed annexed’, to which the defendants answered and ‘confessed that the . . . conveyances and assurances were only made in trust for the complainant, . . . and confessed themselves to be ready and willing to convey and assure the . . . [land] according to the trust in them reposed’. The emphasis in these cases upon trust in the trustee recurs in contemporary reported discussion of the nature of trusts. In Delamere v. Barnard (1567)160 it was said that the use is not like a rent out of the land, but it is a thing collateral annexed to the person touching the land, and it is no more than a confidence for the use of the land, that is to say, a confidence that the feoffees, to whom the land is given, shall permit the feoffor and his heirs, and such persons as he shall appoint, to receive the profits of the land, and that the feoffees shall make such estates of the land as he shall limit.

Coke’s famous definition161 in Chudleigh’s Case (1594), while adding the feoffees’ estate in the land, retained the element of confidence in the person: a ‘use is a trust or confidence, which is not issuing out of land, but as a thing annexed in privity to the estate, and to the person touching the land . . . So that, he who hath a use hath not jus neque in re neque in rem, but only confidence and trust’162. The element of trust in the person led to the conclusion that a corporation aggregate could not be a trustee, ‘because it is a dead body, although it consist of natural C 33 / 83, f 685v. C 78 / 213, no 9. 160 1 Plowd. 346 at 352. 161 Or, as Maitland put it, his ‘definition or description’: Maitland, Equity, p. 43. 162 Chudleigh’s Case (1594) 1 Co. Rep. 120, at 121a – 121b; Coke upon Littleton, fo. 272b (where the latter part of the passage appears in more intelligible form as ‘neither jus in re, nor jus ad rem, but only a confidence and trust’). In Delamere’s Case and Chudleigh’s Case discussion, at common law, was in terms of the use, but the applicability of the definitions in those cases to the post-Statute of Uses trust is indicated by the distinction drawn between use and trust in Sir Moyle Finch’s Case (1600), where it was said that the beneficiary of a trust was ‘not like to cestui que use, for thereof there should be possessio fratris, and he should be sworn on juries in respect of the use, and he had power over the land by the statute of 1 R. 3. cap. [1]’: Coke, Fourth Institute, 1644, p. 85. For possessio fratris of a use see Jones, Trusts in England after the Statute of Uses, p. 195, and, for possessio fratis of a use and the nature of the beneficiary’s interest more generally, N. G. Jones, The Trust Beneficiary’s Interest before R. v. Holland (1648), in A. Lewis, P. Brand and P. Mitchell, eds, Law in the City: (Proceedings of the Seventeenth British Legal History Conference), London, 2005, 2007, p. 95. 158 159

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persons: and in this dead body a confidence cannot be put’163. It likewise led to the conclusion in Yelverton v. Yelverton (1599)164 that where William Yelverton ‘did of his own good will covenant with and trust Sir Thomas Cornwallis with the indenture to the use of William’s children’, a subsequent redelivery of the indenture at William’s request was no breach of trust, for, it is no breach of trust if any man of his own accord, minding to do good to another, do put one in trust with assurance and the party trusted do re-deliver it at the request of him which did trust him without the privity of him to whom the good was meant, for the party to whom the good was meant did not trust him but the party which did mean to do good.

It led also to the conclusion that the land itself was unaffected by the trust: it is absurd to say, that confidence and trust can be reposed in land which wants sense, and which in regard of sense is inferior to brute beasts, and it would be less absurd to say, that beasts may be trusted who have sense and want reason, than land which wants sense and reason also should be trusted165.

It has been said that Rolle J.’s view in R. v. Holland (1648) that ‘a trust is not a thing in action, but may be an inheritance or a chattel as the case falls out’166, marks the beginning of the departure from the influence of the use and presages Lord Nottingham’s policy of modelling equitable interests upon their legal counterparts. As the influence of the use recedes, so does the dominance of the notion of confidence reposed in the feoffee by the beneficiary[167], and the emphasis shifts rather to the beneficiary’s inter163 Chudleigh’s Case (1594) (sub nom. Dillon v. Fraine) Poph. 70 at 71. Though in practice charitable trusts in corporations were not uncommon. See, for example, Bailiffs and Commonalty of Ipswich v. Martin (1616) Cro. Jac. 411; Jones, Trusts in England after the Statute of Uses, p. 194. The question of the reposing of confidence was not the only difficulty: there was also a procedural question. In Croft v. Howell (1579) it was said ‘that no corporation can be seised to use, for none can have confidence committed to him but a body natural, who hath reason, and is capable of confidence, and may be compelled by imprisonment, by the order of the Chancellor of England, to perform the confidence, for that is the way which the party shall take to have it performed’: 2 Plowd. at 538 (emphasis added). A similar difficulty affected the King: see Yale, Lord Nottingham’s Chancery Cases, vol. II, pp. 90 – 91. 164 Bryson, Cases Concerning Equity, vol. I, pp. 270 – 271, and p. 225. The Chancery record reveals little of a requirement that the beneficiary know of, or accept the trust. It was presumably the case that an absence of knowledge of the trust by the beneficiary would not enable the trustee to transfer the trust property to a stranger (as opposed to the settlor) free of the trust. 165 Chudleigh’s Case (1594) 1 Co.Rep. 120, at 127a. And in Popham’s report: ‘a confidence cannot be in land, or other dead thing, but ought always to be in such a thing which hath understanding of the trust put in him, which cannot be no other than such an one who hath reason and understanding to perform what the other hath committed to him’: Poph. 70 at 71. 166 Style 21. 167 It is not clear whether the reference to confidence reposed in the trustee by the beneficiary concerns a third-party beneficiary, or a beneficiary who is also settlor. This ambiguity is present also in contemporary analysis. As Yelverton’s Case indicates, trusting by third-party beneficiaries (or its absence) could be significant, but it was rarely overtly discussed in contemporary sources (note added).

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est with its increasingly proprietary tinge, from the relationship to the equitable right, from power to property168.

R. v. Holland marked a turning-point: the ‘emphasis on the substantial nature of the trust interest is one of the main means of the development of trusts in Lord Nottingham’s hands’169; and ‘when the newer notion that the trust entitles the beneficiary to a proprietary interest in equity comes in and the element of confidence becomes less important, then we find the King or a corporate body seised to trusts’170. But even in Nottingham’s day the shift from trusting to trust, from relationship to equitable interest, had not entirely been achieved. So in Elliot v. Elliot (1677), Nottingham observed that between father and son the consideration of nature and blood is so predominant [that if a father purchase lands in the name of the son, or convey lands to a son] it shall be taken for an advancement and no trust. But . . . to say that in no case any trust shall be implied between father and son, and that a father can never trust a son, unless there be an express declaration of that trust in writing, seems very hard171.

And in Darrel v. Whitchcott (1678) two questions arose: 1. Whether Hampden Ashfield, in whom the legal estate was of Darrel’s fifth part of . . . [a] coal farm, were trustee for Sir Thomas Ashfield, of whom Sir Jeremy Whitchcott purchased, or a trustee for Darrel? 2. Admitting he were trusted for Darrel, whether Sir Jeremy Whitchcott’s new lease in thirds be likewise a trust for Darrel172?

In 1678 it was still possible to speak interchangeably of one being a trustee for another, and of one being trusted for another: trust as a fact, ‘a confidence actually placed in a trusted person’, had not yet given way entirely to an abstract legal construction173.

168 Yale, Lord Nottingham’s Chancery Cases, vol. II, p. 90. Though it was to uses in their proprietary guise that Matthew Hale referred in arguing in R. v. Holland that ‘the trust was not a thing merely in action, but an hereditament; and partly in possession’ (Style 20, at 21), and that ‘uses at the common law were not properly things in action, but inheritances descendible by the rules of the common law, and would have passed by grant or devise by the name of hereditaments’ (Aleyn 14, at 15). 169 Yale, Lord Nottingham’s Chancery Cases, vol. II, p. 91. Though even in the later sixteenth century the trust beneficiary’s interest was more substantial in Chancery than Edward Coke’s dicta on the subject might suggest: see Jones, The Trust Beneficiary’s Interest before R. v. Holland (1648). 170 Yale, Lord Nottingham’s Chancery Cases, vol. II, p. 91 (notes omitted). 171 Ibid. p. 568 (emphasis added). 172 Ibid. p. 687 (emphasis added). 173 See J. H. Baker, The Law’s Two Bodies, 2001, p. 43. With the abstraction of trust from confidence placed in another came the possibility of declaring oneself a trustee. In the context of the pre-Statute of Uses use a similar development towards abstraction enabled the rise of the covenant to stand seised in the early sixteenth-century. See above pp. 151 ff.

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2. Consent From the emphasis upon the reposing of trust it did not follow that trustees could be made against their will. In Holworthie v. Haviland (1625)174 it appeared to the court that Mathewe Haviland, father of one of the defendants, had provided in his will for certain leases to ‘remain as a security in the hands of the defendant William Pitt, and one William Pitt since deceased’ until Mathewe Haviland’s debts were paid, and for the payment of legacies to his children and grandchildren, and to the plaintiff. William Pitt, one of the defendants, asserting that ‘the . . . leases were assigned to him and . . . William Pitt, since deceased, in trust without his knowledge, privity or consent, and that he did never intermeddle therewith’, made offer ‘to assign the same over to the . . . [plaintiff] or to such as this . . . court shall think fit so as he may be discharged thereof ’, whereupon an assignment to the plaintiff was decreed. In Gilson v. St John (1600)175 it was found that the plaintiff, having bought certain houses, and having been at the whole cost and charge in making and procuring the assurance and conveyance thereof, did upon trust and confidence, which he. . .did then repose in . . . [the defendants], cause the conveyance and assurance . . . to be made unto the . . . [defendants] . . . and to their heirs, without their privity, hoping that they would make and pass any assurances thereof unto the complainant and his heirs, or to any other whom the complainant should appoint in fee simple, at any time upon request unto them made, and that albeit the. . .[defendants] afterwards did promise to assure the . . . houses to the complainant, or to such other person as he should appoint, yet that to do they did refuse.

The ground for the defendants’ refusal to convey was said to be that, after their promise, the plaintiff [had] made some doubt of his title, and therefore they would not be made instruments to do other wrong, nor enter into warranty of bargain and sale unto strangers, they having received no profit thereby, and the premises being conveyed to them without their privity176.

The court was of opinion that the defendants should convey to such as the plaintiff should appoint, but only in so far as this would not be to their prejudice, and a conveyance to the plaintiff was decreed. In these cases the defendants were anxious to be relieved of the land. To this there was no obstacle: they had not consented to the trust reposed in them, or been privy to it. So the defendant in Holworthie v. Haviland was permitted to assign the property to the plaintiff, or as the court should direct, ‘so as he may be discharged thereof ’. Moreover, even where a promise to convey as directed had been made 174 175 176

C 78 / 297, no 13. C 78 / 107, no 10. C 33 / 96, f 223v.

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upon learning of the trust, the promise was to be interpreted in the light of the original absence of privity and consent: in such circumstances no duty arose from the trust. But the absence of a duty did not prevent a plaintiff recovering land which he had conveyed upon trust. In Carey v. Danvers (1612)177 it appeared to the court that Dame Elizabeth Carey, one of the plaintiffs, had purchased a lease in the name of two trustees upon trust for herself. The trustees ‘being desirous to be unburdened of the . . . trust’, by Dame Elizabeth’s direction subsequently assigned the . . . lease to the . . . defendant and one Hodgkinson upon like trust, without the privity of the defendant, and that the defendant’s name was used therein at the motion and request of the said Hodgkinson, for that he would not be trusted therewith alone, and thought the defendant’s name would be a better countenance in suits that were like to arise for tithes than his own alone.

The plaintiffs ‘being for some respect desirous to draw back again the estate’ of the lease, Hodgkinson prepared a deed of assignment, which the defendant ‘refused to seal, contrary to the trust reposed in him’. It was decreed that he should do so. Between those anxious to be rid of the property, and those perhaps seeking to keep it for their own benefit, were those who refused to declare themselves. In Bertie v. Hussey (1634)178 the plaintiffs complained that they had assigned a lease to Sir Roger Bertie and the defendant, Sir Edward Hussey, the assignment being made, unto . . . Sir Roger Bertie and the . . . defendant . . . in trust, . . . without the knowledge of the . . . defendant, but yet in hope that . . . [he] would have accepted to the . . . estate for years under the trust aforesaid, . . . [and the plaintiffs] did afterwards acquaint the . . . defendant with the limitation of the . . . estate . . . and . . . upon what trust the same estate . . . was limited, . . . and having requested him to declare whether he would take upon him the said trust or no, he . . . did refuse to express or declare unto the. . .complainants whether he would accept the . . . estate . . . under the said trust, . . . or whether he would refuse to do so, . . . and did likewise refuse to waive or relinquish the use and estate . . . and to disclaim to have any estate or interest of, in, or to the . . . premises, . . . by means whereof the . . . complainants were altogether unsatisfied and could not receive any assurance that the trust . . . should be performed or undertaken.

And ‘thereupon, and for that it stands with equity that the . . . defendant should by some instrument under his hand and seal express and declare his acceptance of the . . . estate . . . under the trusts . . . limited, or otherwise should disclaim the same’, so that ‘the . . . complainants might know what to rely upon concerning the same’, the plaintiffs sought relief. The defendant answered that he had several times told the plaintiffs ‘that he did then and would at all times after disclaim the . . . estate and trust’, and that he 177 John Hodgkinson was described in the pleadings as ‘the complainants’ servant’. The defendant was Sir John Danvers. 178 C 78 / 419, no 5.

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neither ‘did nor does agree to any use or estate for years . . . limited to him, . . . nor did nor would accept of any estate . . . or any trust concerning the same’, and hoped ‘under favour of this . . . court [that it] was lawful for him [so to disclaim], being unwilling to incumber himself, being aged and infirm, with any trust whatsoever’. It was thereupon decreed that the plaintiffs recover the lease against the defendant and any claiming under him179.

3. Conscience and justified reliance If trusts may not be imposed without the trustee’s consent, it is a short step to the view that trusts are contracts.180 But the repeated assertion of litigants in Chancery that trustees had behaved contrary to the trust reposed in them, and an analytical treatment centred upon the reposing of trust, suggest a different approach. Looking to the settlor, consent or acceptance by the trustee was required to explain why the settlor’s reliance, his trusting, was justified: to show that the trusting was permitted, and that in transferring the trust property the settlor had not taken the risk that the trustee might refuse to accept the trust. It was this which concerned the plaintiffs in Bertie v. Hussey, seeking an acceptance or disclaimer from the intended trustee, so that they ‘might know what to rely upon concerning the same’181; and the risk of an un-accepted trusting is acknowledged in the plaintiffs’ observation in Gilson v. St John that they had made the conveyance ‘hoping’182 that the defendants would subsequently deal with the land as directed. On the reverse of the coin, the trustee’s conscience could be burdened only by that of which he was aware183. Conscience is not expressly emphasised in the 179 Similarly in Clifton v. Sacheverell (1673) Rep. Temp. Finch 32, and Hussey v. Markham (1676) Rep. Temp. Finch 258, bills to require trustees to accept trusts were decreed upon compliance, in both cases subject to conditions in favour of the trustees, while those not complying were decreed to release and transfer their interests. 180 Or at least ‘contractarian’. That ‘no one can be made to accept trusteeship’ is at the heart of Professor Langbein’s ‘contractarian account’ of trust law (together with the principle that ‘virtually all trust law is default law’): Langbein, The Contractarian Basis of the Law of Trusts, p. 650. 181 C 78 / 419, no 5. 182 C 78 / 107, no 10. 183 V. V. Palmer has likewise emphasised the element of conscience, but sees the burdening of the conscience as depending upon a promise, in this case a promise to perform the trust: ‘We do not necessarily escape from the substantive importance of promise simply by recasting the cases along the lines of unjust enrichment or injurious reliance. Good conscience is offended by violations of both principles. Unjust enrichment and causing false reliance are primarily elements of contractual morality. For example, the main factor that would have made a trustee’s enrichment “unjust” was not the fact that he was treating [trust] property as his own (the legal ownership was in fact his) but rather that he was doing so in breach of a promise he had made to hold it to the use of someone else’ (latter emphasis added) (Palmer, The Paths to Privity, p. 99).

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record184, but the significance of notice is clearly reflected in the cases concerning the effect of trusts upon those taking trust property from the trustee185. Francis Bacon observed in his reading on the Statute of Uses that if the feoffee sell the land for good consideration to one that hath notice, the purchaser shall stand seised to the ancient use; and the reason is, because the chancery looketh farther than the common law, namely, to the corrupt conscience of him that will deal in the land, knowing it in equity to be another’s186.

And Gilbert said, shortly after the end of the period, if a feoffee to an use, for good consideration doth enfeoff one who has not notice of the use, the use is gone, for here is no trust in him . . . but if he had notice, a trust might well be said to be reposed in him, because he took the land knowingly, with the uses187.

The purchaser with notice was bound by the trust because of his knowledge of it, which either demonstrated his corrupt conscience, thus placing him on the same footing as the trustee as a participant in the trustee’s wrongdoing, or showed that, like the trustee, he had trust reposed in him. The reposing of trust was bilateral in that the trustee’s consent, and his concomitant knowledge of the trusting, were required to establish his duty188. From consent 184 Though the complaint was frequent in Chancery that trustees had acted contrary to ‘right, equity, and good conscience’, and, as has been seen, conscience played an overt role in discussion of capacity to be a trustee (see pp. 165 – 166 above). 185 In the sixteenth-century cases ‘notice’, ‘knowledge’, and ‘privity’ appear interchangeable, and could be used together, e.g. ‘knew not of the trust’ (1589 in Ford v. Pomery, C 33 / 79, f 19); ‘had notice of and were privy to the trust and confidence’ (1584 / 85 in Metcalfe v. Fletcher, C 33 / 69, f 282v); ‘privy or knowing of that trust’ (1590 in Drewrye v. Danyell, C 33 / 79, f 812v); ‘not ignorant but made privy and acquainted with the former proceedings’ (1596 in Poole v. Gauntlett, C 33 / 91, f 116). There was, however, some perception of constructive notice: at the end of the period Lord Nottingham distinguished between ‘actual notice’ and ‘legal notice’, the latter arising, for example, upon a purchase of land subject to current Chancery litigation concerning a trust (Yale, Lord Nottingham’s ‘Manual of Chancery Practice’ and ‘Prolegomena of Chancery and Equity’, p. 253). The same point had been made by Egerton L.K. in Diggs v. Boys (1598) (Bryson, Cases Concerning Equity and the Courts of Equity 1550 – 1660, vol. II, p. 266 no. [276]): ‘[Where] a suit is pending for a trust and after[wards] upon the hearing the trust is proved, then that is a sufficient notice of [the] trust to any man which buys it hanging that suit’. 186 Rowe, The Reading upon the Statute of Uses of Francis Bacon, pp. 15 – 16. 187 J. Gilbert, The Law of Uses and Trusts, 3rd ed. by E. B. Sugden (1811), pp. 377 – 378 (first edition 1734, though in part at least probably written in the 1690s: see Macnair, The Conceptual Basis of Trusts, 209 n. 6); see also p. 12 ‘When one takes a feoffment, having notice of the several uses and trusts, there the party is supposed to take it under those uses and trusts; for the law will suppose a man’s actions rather just than otherwise’. The reverse of this coin was Ballow’s approach to the purchaser with notice as a participant in the wrong of the trustee (see Macnair, The Conceptual Basis of Trusts, 228). The approaches are identical in treating the element of notice as placing the purchaser on the same footing as the trustee. 188 It is possible to suppose that in principle a duty might follow from mere knowledge of trusting, without consent to it. As has been seen, this was not the contemporary approach to

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would easily follow an implied promise to perform the trust. In some cases indeed the promise was express, and where the settlor was also the beneficiary the distinction between trust and promise would tend to disappear189. The Dutton v. Pooletype cases demonstrate the same potential in three-party situations, where settlor and beneficiary were distinct. But the trustee’s duty did not require a promise: reliance and the consequent burdening of his conscience sufficed190. This was the paradigm of trusts in Chancery, turning upon the trustee’s conscience, not upon the expectations or loss of a promisee. A perception of three-party trusts as third-party beneficiary contracts may obscure this, and in the process render very puzzling the settlor’s inability to sue upon a such trust191.

V. Conclusion Discussion of third-party beneficiaries in equity in the period is never far from discussion of trusts. In trusts lay a potential answer to difficulties over privity; taking law and equity together, the question of privity was in one sense a question of the boundaries of trusts. But equity was more than the trust jurisdiction: to categorise all equitable relief for third-parties in the period under the heading of trusts would be to over-simplify. In the Dutton v. Poole-type cases specific performance was decreed in Chancery for a third-party, irrespective of privity, and (as in Cassy v. Fitton) without reference to trust, on the basis that a part-performed agreement in his favour should be executed. Such cases could be approached alternatively in terms of a trust of property coming to the promisor in reliance upon his promise: in explaining the promisor’s duty trust and contract were interchangeable, though the benefits for plaintiffs were weighted in favour of trust. It follows that trusts for third-parties outside Dutton v. Poole-type situations could likewise be perceived as contracts for the third-party’s benefit. But the contrusts, though the defendants’ arguments in Gilson v. St John and Holworthie v. Haviland indicate that an intermeddling with the trust property or taking of profits from it might debar a subsequent disclaimer. 189 Though, as has been seen, it could readily re-appear, for example, in the context of limitation of actions or upon the involvement of a third-party, such as a dead promisor / trustee’s heir. 190 The duty did not turn upon the presence of property in the trustee’s hands in which the third-party could be said to have a proprietary interest: a proprietary interest might follow from the burdening of the trustee’s conscience, but this was a consequence of the availability of relief for the third-party, not a cause of it. 191 This phenomenon awaits full explanation. It appears to have left few traces in the sources, perhaps because ‘there is never occasion to write down what everybody knows’ (S. F. C. Milsom, A Natural History of the Common Law, 2003, p. 76). But an approach not through promise to the settlor, but through the burdening of the trustee’s conscience in favour of the beneficiary, seems most likely to provide an answer.

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verse was not the case: it did not follow that since a promisor transferee could be seen as a trustee, a trustee must therefore be a promisor. The paradigm of a trust, at least in the period after the Statute of Uses (1536), was a duty arising not from a promise, but from an accepted reposing of trust. Beyond the promisor’s duty, the interchangeability of trust and contract was not perfect. As to potential defendants, a trust might be required to impose a duty upon one taking property from the promisor. As to potential plaintiffs, no suits in Chancery in Dutton v. Poole-type cases are known in which the plaintiff was the promisee’s executor. This may be an accident of litigation (and the likelihood of such suits would be reduced by the not-infrequent identity of promisor and executor), but a trust approach would suggest that the third-party beneficiary alone could sue. In Lord Nottingham’s Chancery a voluntary parol promise would not ground a decree, though it was not required that the plaintiff be linked to the consideration. In the Dutton v. Poole-type cases consideration was implicit in the promisee’s performance, and the promisor’s conscience having been burdened by the transfer of property to him in consideration of, or upon the trust of, his promise, his reciprocal performance would be ordered, even in favour of a volunteer. This was so despite the availability of an action at law, even where the promise was for payment of money. In the case of marriage agreements, relief for third-parties was available in Chancery from the fifteenth century, without need for formality, and hence, at least before the establishment of assumpsit, in the absence of an action at law. In the fifteenth-century cases at least, the suit could be brought either by the thirdparty beneficiary or by the promisee. With the development of the covenant to stand seised in the earlier sixteenth century, some agreements in consideration of marriage became immediate grants of a property interest to the beneficiary, and after the Statute of Uses (1536) were, in effect, conveyances. Outside the scope of the covenant to stand seised, informal marriage agreements continued to appear in Chancery, together with formal covenants to settle. The availability of specific performance in such cases had the potential to affect not only the promisor, but also non-beneficiaries taking property from him. The proprietary effect of specific performance could lead to the promisor’s characterisation as a trustee. But relief stemmed from specific performance of the promise, not from a declaration of trust. As in the Dutton v. Poole-type cases, marriage agreements did not raise questions of privity. And, likewise, consideration was present. It is not clear whether relief was given in the period for volunteers under marriage agreements. But if equitable intervention could be seen as no more than an answer to the inadequacy of damages, relief for a volunteer may have been possible. In Wiseman v. Roper the consideration was neither strong nor emphasised by the court, and though it ultimately became clear that equity would not assist them, relief for volunteers under formal marriage agreements was on occasion given after the period.

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Express trusts of obligations had been enforced in Chancery from the fifteenth century, giving recovery of a liquidated sum in the action of debt at common law. In contrast, unliquidated damages in covenant or assumpsit were a matter for the jury, and whether the covenantee or promisee for the benefit of a third-party might recover more than nominal damages at law is unclear. It was readily assumed in Wiseman v. Roper that the third-party would have an action at common law upon the writings in the covenantee’s name, seemingly for substantial damages; and in Dutton v. Poole the judges took the view that the promisee’s executor could be required to proceed at law. Wiseman v. Roper and Dutton v. Poole give no express indication that a trust was essential to such an action at law. But the position of a volunteer third-party, not addressed by either case, remains as yet hidden in the record.

LAURENT WAELKENS

Ius Quaesitum Tertio, Dutch Influences on Grotius In the present study on the comparative history of the relativity of contracts, Grotius appears as a pivot between the medieval theory and the modern conceptions of privity of contract and the rights of third parties. The special place of Grotius in the history of European law is due to his incredible ability to sum up in a few words the spirit of the law of his time and to the special role Holland played in his time in the new world of nations. He wrote at the end of the long period of merger of the civil law and the canon law. He saw the influence of more than a century of jurisprudence from the central courts of justice in the Netherlands. In certain domains he was marked by the Neo-Scholastic approach which mixed together civil law, canon law and moral philosophy. He wrote during the aftermath of the religious wars and the Spanish troubles in the Netherlands, during a period of consolidation of new ideas about law and society. By reading the quotations from Grotius in the other studies in the present volume, one might imagine that he developed a vast theory about the rights of third parties. In fact he treated it very briefly. In his Introduction to the Law of Holland (1621), Grotius (1583 – 1645) explained that acceptance of something for a third party is of no effect, unless it is for the service of God, for the poor, or for the profit of the accepter, for instance when he accepts to pay some compensation if he does not fulfil his duty to the third. But, since lawyers in Holland have especial regard for equity and the protection of rights, one could also admit that beyond these exceptions a third party could accept the promise if it has not been revoked before the acceptance1. In De iure belli ac pacis, he defended two major changes in the civil law. He rethought the civil law with the idea that it was no longer a system of law for 1 Inleidinghe tot de Hollandsche Rechts-Geleerdheid 3,3,38 (edited by L. J. van Apeldoorn, Arnhem 1939, I, p. 129): “Maer slechtelick iet te bedingen of aen te neemen voor een derde, uitgenomen voor die ghenen den welcke inschuld door eens anders daed kan aenkomen, waer van hier vooren is gesproocken, is krachteloos, ten zy zulcks geschiede ten dienste Gods, ofte voor den armen, ofte dat den aennemer zelve daer aen zy gelegen, of dat daer een straffe by gestelt zy, die den toezegger zal moeten dragen zoo hy zulcks niet en deede, maer alzoo by ons meer werd gezien op de billickheid, als op scherpheid van rechten, zoude oock buiten deze uitzonderingen een derde de toezegginge moghen aenneemen, ende alzoo recht bekoomen; ten waere den toezeggher voor de toezegging van de derde zulcks had wederroepen.”

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which the courts were responsible but rather a system of personal rights of the citizens2. He further refused the old idea built on the ius commune, that the civil law was a system of privileges for soldiers and warriors with status of freemen. Grotius defended the idea that in his Netherlands the civil law had to be seen as a system for every man as a result of his birth (natura)3. On the subject of the stipulation for third parties, he wrote in the following terms in De iure belli ac pacis: Si mihi facta est promissio, omissa inspectione an mea privatim intersit, quam introduxit ius romanum, naturaliter videtur mihi acceptanti ius dari efficiendi ut ad alterum ius perveniat si et is acceptet ita ut medio tempore a promissore promissio revocari non possit. Sed ego cui facta est promissio eam possim remittere. Quod si promissio in nomen eius collata est cui danda est res, distinguendum est an qui acceptat aut speciale mandatum habeat acceptandi aut ita generale ut talis acceptatio et inclusa censeri debeat an vero non habeat. Deficiente autem mandato, si alius cui promissio facta non est acceptet volente promissore, tunc erit effectus, ut promissori revocare promissionem non liceat antequam is quem spectat promissio eam ratam habuerit aut irritam. Sic tamen ut medio illo tempore is qui acceptavit remittere promissum non possit, quia hic non adhibitus est ad ius aliquod accipiendum, sed ad adstringendam promissoris fidem in sustentando beneficio, ita ut promissor ipse, si revocet, faciat contra fidem, non contra ius proprium alicuius. If a promise be made to myself, without considering whether I have any interest in it, a consideration that the Roman law has introduced, I look upon it, that by the law of Nature I acquire a right of accepting, that thereby the right of demanding the performance of the promise may pass to another, if he also will accept it; so that the promiser has no right in the mean time to revoke it; but I, who received the promise, may, if I please, remit it. Fot this sense is not against the law of nature, and also very agreeable to the words of such a promise; nor is it a matter of indifference whether another obtains a favour by my means or not. But if the promise be made directly to the person to whom the thing is to be given, we must then distinguish whether the accepter has a particular commission to accept it, or one so general as may be judged sufficient to include it; or whether he has no such commission at all. Where such a commission has been given before, there is no occasion to enquire, whether the person be a freeman or not, which the Roman laws insist upon, but the promise is compleat and in full force by that acceptance. Because a consent may be conveyed and signified by any third person, whose will is reputed mine, if impowered by me, and he readily takes it upon him. But if there be no such commission, and yet this third person, to whom the promise is not made, accepts it with the consent of the promiser; then has the promiser no power to revoke the promise, till he whom it concerns shall either approve or reject it; yet so, that in the mean time, he who has accepted of the promise has no power to remit it, because he was not employed to take any right upon himself, but only 2 De iure belli ac pacis 1,4,4: ius est qualitas moralis personae competens ad aliquid juste habendum vel agendum. 3 For the theory that civil law consists of privileges of warriors see L. Waelkens, De Romeinse oorsprong van de fundamentele rechten en vrijheden, in Tijdschrift voor Rechtsgeschiedenis 71 (2003), p. 187 – 196. For the through break of the idea that those ideas belong to everybody, see J. Dumont, La vraie controverse de Valladolid, Premier débat des droits de l’homme, Paris 1995 (about the rights of los Indios).

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to engage the promiser’s honour, in the performance of the intended favour; so that if the promiser should pretend to revoke it, he may be said to break his word, but not invade any man’s right4.

In these few lines, he summarised the extensive material about the rights of third parties which have been presented by Hallebeek in his contribution on medieval Roman law5 and by Dondorp in his study on canon law6. Indeed, the jurists of Grotius’ time were still working within the same tradition and thinking about the same medieval arguments which Hallebeek and Dondorp have quoted. In another joint study, they have stressed the Spanish roots of Grotius’ ideas about the relations between contracting parties and third parties7. Working out the Spanish roots which Wesenberg seemed to indicate, they concluded Grotius may have been influenced by Spanish doctrine, in which the ius quaesitum tertio was introduced by the ley Paresciendo (1348) of Alphonse IX and later worked out by Gomez and Covarruvias. In general, though, Grotius was most inspired by the tides and waves of Dutch revolutionary thinking. He was no doubt influenced on certain points by authors such as Gomez or Molina, and he asked for De Soto’s treatise on iustitia et iure when he was imprisoned in Loevestein; but for the Inleidinge, which is a work about the law of Holland, we must not suppose that he had other sources than the practice of the courtrooms in Holland. Nor for De iure belli ac pacis written in Paris must we suppose too easily that he relied on Spanish doctrine or suspect him of collaborating with the zealous Spanish canonists of his time8. Grotius is a monument, but we cannot read his works as absolute ideas carved by a genius into the foundations of human thought. The Inleidinge was written by a prisoner, De iure belli ac pacis by a displaced person, deprived of his rights and goods, a misunderstood genius, disowned by his rulers, desperate as a result of the crying abuses of the Spanish war and the House of Nassau, by the kind of obdurate Calvinists who invaded Holland from the south, and aggrieved by the injustice he personally suffered. It is somewhat exaggerated to pretend that De iure belli ac pacis is an autobiography, but its main message is that war and revolution must not in the future affect the civil rights of the individuals. That is the main reason why it had such a tremendous success in the German principalities bled dry by civil strife. On the other hand Grotius was always permeated by an extraordinary sensus iuridicus and sympathy towards his country. In Paris he tried to sum up the revolution in his own De iure belli ac pacis 2,11,18 (trans. The Rights of War and Peace (ed. Richard Tuck)). J. Hallebeek, “Ius quaesitum tertio” in Medieval Roman Law, supra, p. 61 – 108. 6 H. Dondorp, “Ius quaesitum tertio” in Medieval Canon Law, supra, p. 109 – 134. 7 H. Dondorp and J. Hallebeek, Grotius’ doctrine on adquisitio obligationis per alterum and its roots in the legal past of Europe, in Panta Rei, Studi in onore di Manlio Bellomo, Roma 2004, II, p. 205 – 244. 8 For the sources of De iure belli ac pacis see now R. Feenstra and C. E. Persinaire, Annotationes novae, in the new edition of Hugo Grotius, De iure belli ac pacis libri tres, Aalen 1993, p. 919 – 1074, especially at p. 944, showing that Grotius often copied citations to the Spanish authors. 4 5

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Netherlands, read by everybody for a century, and he glossed its influence on the progress of legal doctrine. He was not eager to promote Spanish culture. In De iure belli ac pacis he was thinking about a new structure for the law9. The two main elements of it were first the dropping of the Corpus iuris, a move promoted in the Netherlands since Nicolaes Everaerts, and secondly the rearrangement of the role of public authorities, somethinh which had also been brought into focus since the Troubles in the Netherlands. Most of Grotius’ ideas find their roots in the Netherlands, where we also find stipulations for third parties in daily practice. Let us examine the elements which fixed Grotius’ ideas about the rights of third parties. The problems of the theory of third parties arose mainly during the Middle Ages. The glossators had other visions about rights, acquisitions of rights and contracts than had their predecessors, and they did not understand certain informal relations in ancient Roman contract law, such as existed around the contract of societas. In the Roman law of Antiquity the informal relation between an institor and his principal could not only be seen as an agency, but also as a caretaking10 or a societas11. Contracting a societas was not a decision about founding a company, as it was in Medieval Roman law, but was also an informal and consensual way to act in daily business. Also when we read the Glossators’ discussion of guardianship, we move into another world. The medieval legists were astonished that in Roman law there was no way for a tutor to acquire property or possession in the name of his pupil, but they did not realise that there was a world of difference between their concept of possession and property as “rights in things” and the question of the ancient tutors who gained the right to bring claims by interdictum and rei vindicatio. In the Roman logic it is obvious that the tutor, who had to bring such claims, had to obtain them directly. The medieval legists however compared the old texts with their feelings that in the first place the pupil had to gain his rights and not the tutor his claims. It is no exaggeration to say that a large part of the theory of third party obligations flows from the medieval analysis of the Roman law; and we can not understand the influence of Grotius before having read the medieval theory about it, as analyzed by Hallebeek and Dondorp. A first change made by Grotius from the medieval heritage, was the removal of the matter out of the theory of the stipulation and oral contracts. Zypaeus (1580 – 1650), an Antwerp jurist contemporary of Grotius, who published in 1635 his Notitia iuris belgici in answer to Grotius’ Inleidinge, mentioned the reduced importance of the stipulation:

9 As shown brilliantly by R. Feenstra, La systématique du droit dans l’œuvre de Grotius, in La sistematica giuridica, Storia, teoria e problemi attuali, Rome 1991, p. 333 – 343. 10 D. 14,3,1. 11 See e.g. D. 14,3,13,2.

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Stipulationes hodie non frequentantur nec earum est necessitas12. Today stipulations are not frequent and we do not need them.

Until the 16th century, in the Netherlands as elsewhere, the matter of the rights of third parties was meanly seen in the commentaries about the stipulation. About 1475, Willem van der Tannerijen, justice of the Council of Brabant who described the daily practice of his court, wrote that the stipulatio alteri was always ineffective13. Shortly afterwards, at the law faculty of Louvain, there began the merger of the civil law and the canon law which would so strongly affect the law of obligations. Nevertheless, a majority of lawyers, mainly reformed scholars, tried to postpone this unwanted blending of the Roman law with all forms of medieval backwardness. At Louvain, Wesenbecius (1531 – 1586), a Calvinist who had to leave the university for that reason, had major inhibitions about the invocation of papal law. He stayed true to the legists. In his commentary or Paratitlum on D. 45,2 he mentions briefly the stipulations to uncertain persons, which have to be “declared”, and seems to reflect the classical theory that the stipulation for a third person needs a penalty clause14. During the second half of the 16th century and the Troubles in the Netherlands, some lawyers would press the civil law against their rulers and reject the canon law as a law of the catholic collaborators with the Spaniards. In this period canon law was largely diverted into moral philosophy, in the same way as can be observed in other catholic principalities like Cologne or Bavaria. At the end of the sixteenth century, however, we still find the civil law classicism at the University of Leiden, which after its foundation in 1574 became the leading law faculty in the Netherlands and stayed more distant from the canon law than did the University of Louvain. In Leyden Bronkhorst and Donellus preferred to treat the matter of the rights of third parties according to the civilian model of the legist’s and never quoted Spanish authors about privity of contracts. Donellus (1527 – 1591) treated the stipulation for third parties extensively in his De iure civili libri XII15. He explains in a very clear and systematic way the classic medieval view of the legists about the impossibility of the stipulatio alteri, with all the exceptions and modalities mentioned by Hallebeek in his analysis of the medieval doctrine. His way of doing it without quoting any canonist, is, for his time, a demonstration by a first-rate trapeze artist. Also Paulus Busius (1570 – 1617)16, a contemporary of Grotius and law professor at Franeker, still defended extensively this classical 12 F. Zypaeus, Notitia iuris belgici, Liber VIII De contrahenda stipulatione, ed. Antwerp 1640, p. 196. 13 W. van der Tanerijen, Boec van der loopender practijken der Raidtcameren van Brabant, ed. by E. Strubbe, Brussels 1952, p. 54. 14 Mattheus Wesembecius, Iuris civilis commentaria, Olim Paratitla in Pandectas iuris civilis et Codicis Iustiniani libros, Antwerp 1621, p. 404. 15 Ed. Opera omnia, Macerata 1828 – 1833, III, c. 553 – 590; about his lecture of this work in Leiden, s. M. Ahsmann, Consilia en Collegia, Groningen 1990, p. 69 – 72. 16 See R. Feenstra, Bibliografie van hoogleraren in de rechten aan de Franeker Universiteit tot 1811, Amsterdam 2003, p. 20 – 29.

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doctrine of the rights of third parties in his commentary on de verborum obligatione17, but he mentioned the canonists: Quid dicendum de iure canonico? Id stipulationem alteri factam confirmat. Sed hoc dicendum non est, per l. i. et 2 de nov. op. nunt. [C. 8,1,14,1 – 2]. Et diversum eodem iure cautum est, cum in eam rem persona publica exigitur, C. quamquam de usur. In 6 [C. 4,32,6]. Adde arg. C. cum inter [C. 7,60], de elect. C. non solent q. 7. Idque recte plerique sensere, Immola, Rom. Alc., hic Ioan. Fab . in § Alteri Inst. de inut. stip. [Inst. 3,19,19]. Nec ad rem facit quod iure canonico fidem seruandam esse cautum est. Male enim doctores qui eo iure id solum hac in re considerari putant non habita ratione utrum alterius intersit, quia id quoque nusquam relatum est, ut sine ratione diversum nonnulli opinentur, Butr. In c. Si cautio, de fi. instr. [X. 2,22,14]; Covar., in c. Quamvis, de pact., in 6; Bal. in l. Illud, C. de ss. eccl. [C. 1,2,19].18 Translation. – What about the canon law? It confirms the stipulation for a third. But that must not be said [ . . . ]. And in the same law is has been said otherwise, that in this case a public person has to be present [ . . . ]. And it is irrelevant that it has been said that credit must be given to the canon law. Erroneously certain jurists think they have to relay on the canon law in this matter without reasoning about the interest of the third, because it has never been reported that way. So it is without reason some defend the contrary opinion [ . . . ].

Grotius did not follow this trend. He clearly lifted the matter out of the frame of the stipulation and did not suppress the canon law. He assumed the merger of the law of obligation of the medieval legists with the ideas of the canonists. This typical feature of his works, which has been established in topics as pacta sunt servanda or studies about liability, is also obvious in his way of looking at the rights of third parties. His blend of roman and canon law has nothing to do with the Spanish influence, the “reconquista” after the Council of Trent (1545 – 1563) or the meddling of King Philip II with the University of Louvain. Grotius is the legatee of the noble merger of Roman and canon law which took place in the Netherlands in the rich period prior to the Troubles. For many Dutch scholars this period belongs to the repressed past, to the dark Middle Ages they left behind later in the sixteenth century when, crossing the rivers and fleeing the misery and intolerance of Flanders and Brabant, they reached the safer havens of Holland. But we cannot deal with the history of the ius commune in that complex century in the Netherlands without remarking the fusion between civil law and canon law which was largely proposed by Nicolas Everaerts (1462 – 1532), one of Europe’s major scholars during the Renaissance, writing a century earlier than Grotius. Recent studies have dealt with the central role played in the development of the law in the Netherlands by the Grand Council of Mechlin, founded in 147319, but its greatest president, Nicolas Everaerts, is almost forgotten. Even a recent study 17 Paulus Busius, Commentarii in Pandectas, Franeker 1614, Part VII, Liber XLV de verborum obligationibus, p. 11 – 12. 18 Ibid. p. 11 in fine -12 ineunte. 19 See e.g. the Chronologische lijsten van de geëxtendeerde Sententiën berustend in de Grote Raad van Mechelen, unter redaction of J. Th. de Smidt, 6 vol., Brussels 1966 – 1988.

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about his Topica did not reveal his originality20, although Grotius himself had already insisted on the special importance of his work. Everaerts opened the revolution of legal doctrine in the Netherlands, Grotius closed it. Nicolas Everaerts was professor in Louvain from 1493 on. In 1504 he acted as rector of the university. From 1497 to 1502 he was official of the bishop of Cambrai, with a seat in Brussels. From 1505 to 1510 Everaerts was justice in Mechlin and in 1510 he was appointed president of the Court of Holland in The Hague. From 1528 unto his death he was President of the Grand Council in Mechlin and the senior lawyer of the Netherlands. In The Hague he wrote the first version of his Topica, more than ten years after having left the University. It was published in Louvain in 1516. A second augmented edition was published after his death. These Topica were reedited twenty-eight times in the sixteenth century in Venice, Frankfurt, Basel, Lyon, etc. The major importance of the book stemmed from three revolutionary views: (1) Everaerts abandoned the order of the medieval sources; (2) he analyzed the logic of the lawyers themselves and their specific interaction with authoritative texts; and (3) he considered civil law and canon law on equal terms and blended them together21. These three major themes of the works of Everaerts would reshape the intellectual world of the lawyers in the Netherlands and strongly influence Grotius. Everaerts’ mixture of civil and canon law was typical for Louvain. Almost since the foundation of the university in 1425, doctoral studies were not defended in the law faculty or the canon law faculty, but in the collegium utriusque iuris. In his views about the ius quaesitum tertio, he blended the medieval doctrines described by Hallebeek and Dondorp. We quote largely from his Topica because it contains a good illustration of the typical legal thinking of the Netherlands during the 16th century. Note especially the mixture he made with stipulations and pacta and with civilian and canonist arguments. We find e.g. this kind of arguments in his locus Vi, energia seu efficacia iuramenti: . . . ex isto sequitur quod liceat alteri stipulari vel pacisici nemo possit, l. Stipulatio ista § Alteri ff. De verbo. oblig. [D. 45,1,38,17] et Si quis alii [D. 45,1,38,20] et § Alteri, Inst., De inutil. stipu. [Inst. 3,19,19], licet etiam de iure civili ex pacto nudo non oriatur actio, l. Iuris gentium § Sed cum nulla [D. 2,14,7,4], § Igitur [D. 2,14,7,4 i.m.] et § Quinino [D. 2,14,7,5] ff. De pactis, cum similibus, tamen si iuramentum in his casibus interveniat, sumabitur stipulatio inutilis et pactum nudum ex vi iuramenti, ita quod alteri acquiretur actio. Ita singulariter decidit Bartolus in dicta lege Si quis pro eo in sexto membro, et sequitur Ioannes de Imola in repetitione dicti can. Cum contingat [X. 2,24,28] in octavo casu principali et Antonius de Butrio ibidem in sextu casu et Alexander de Imola in dicta lege Stipulatio ista § Alteri [D. 45,1,38,17], et Hippolytus de Marsiliis in Practica sua22 in § se20 O. M. D. F. Vervaart, Studies over Nicolaas Everaerts (1462 – 1532) en zijn Topica, Arnhem 1944. 21 On his importance for the European doctrine see L. Waelkens, Nicolaas Everaerts, Un célèbre méconnu du droit commun (1462 – 1532), in Revista internazionale di diritto comune, Rome 2004, p. 157 – 165. 22 Hippolytus de Marsiliis (1450 – 1529), Practica causarum criminalium.

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cunda quaestionis 61 folio vero 85 et est glosa reputata singularis quae nulli non est nota in can. Quoties cordis oculus [C. I, qu. 7, c. 9] prima quaestione 7, quam bene declarant Panormitanus et Felin.23 in salutatione Gregoriana [X., Intr.]. Ex quo etiam sequitur quod, licet contractus iuris gentium initus cum absente non interveniente nuntio vel epistola non valeat l. Absenti ff. de dona. [D. 39,5,10], l. i. in fine ff. de cotrahen. emp. et vendi. [D. 18,1,1,2] et l. Consensu iuncta glosa ff. de actio. et obli. [D. 44,7,2], tamen si aliquis iuraverit dare absenti, etiam si nullus sit ibi, qui dictam promissionem recipiat nomine absentis, poterit virtute dictae promissionis iuratae conveniri per absentem, per ea quae singulariter volunt Antononius de Butrio, Panormitanus, Felin. et alii in dicta salutatione Gregoriana, et vult Petrus de Ancharano in consilio suo 2124 incipiente pro solutione dubiorum, in tertio dubio, et Baldus in rubrica C. res inter alios acta in versiculo Sed quid et Alexander de Imola in consilio 31 sexti voluminis circa finem, qui omnes allegant glossa in dicto can. Quoties cordis oculus [C. I, qu. 7, c. 9], et idem vult Lanfrancus in repetitione c. Quoniam contra falsam, in verbo Confessiones de probatione [X. 2,19,11] et Paulus de Castro in consilio 241 incipiente. . . . As a result it follows that, although nobody can stipulate or make an informal pact for another [ . . . ], and although following the civil law a naked pact does not lead to an action [ . . . ], if there is a oath in those cases, there will be a stipulatio inutilis or a naked pact empowered by an oath, so that a third will obtain an action. Bartolus decided it in the passage cited and was followed by Johannes de Imola, Antonius a Butrio, Alexander de Imola, Hippolytus de Marsiliis, and there is the famous gloss on ‘Quoties cordis oculus’ which is so well explained by Panormitanus and Felinus Sandaeus [ . . . ]. It is also clear that, although a contract by the ‘ius gentium’ had no value if it was made with an absent person and there was no messenger or letter [ . . . ], if someone swore that he would give to an absent person, even if there was no-one who received the promise in the name of the absentee, he could be summoned up by the absentee for what he promised by oath, as decided Antonius de Butrio, Panormitanus, Felinus Sandaeus and others [ . . . ], Petrus de Ancharano, Baldus, Alexander de Imola [ . . . ], Lanfrancus [ . . . ] and Paulus de Castro [ . . . ].

In his locus De tanquam he wrote about the stipulatio alteri which was possible in the presence of a notary or a judge, even when the latter acted privately. Again we see his typical blending of Roman law and canon law: Undecimo facit ad hoc quod, licet quis tanquam privata persona non possit alteri stipulari, tamen tanquam persona publica, ut quia est notarius vel iudex, potest alteri stipulari etiam in extraiudicialibus, ut est glosa singularis in § Si qui alii, Inst. de inuti. stipulat. [gl. ‘Nihil agit’ ad Inst. 3,19,4] et ideo notarii in eorum instrumenta semper dicunt: ‘Promisit mihi tanquam publicae personae recipienti et stipulanti, etc.’ Imo quod plus est, licet dicta verba ‘tanquam publicae personae, etc.’ non apponantur per notarium in instrumento, tamen subintelligitur, quia in eo quod facit officialis publicus, semper intelligitur facere nomine officii, dicta l. Post mortem in fi. [ ] et ita singulariter dicit Bald. In l. Nec ei § Satisdatio ff. de adopt. [D. 1,7,17,5] et ante eum Bartolus in l. 2 in fi. ff. Rem pupilli sal. fore [D. 46,6,2]. De hoc tamen articulo quotidiano an notarius vel iudex in extraiudicialibus possit alteri stipulari vide latius per Inno. et canonistas in c. Dudum, De conver. coniu. [X. 3,32,20] et 23 Felinus Sandaeus (1444 – 1503), Commentaria in V. libros decretalium, Venise 1497 – 1499. 24 Petrus de Ancharano (1330 – 1416), Consilia, Venise 1490.

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per Ioan. Fabr. In d. § Si qui alii [Inst. 3,19,4] et per Bar. et omnes in d. l. 2 proxime allegata [D. 46,2,2] et per Alex. De Imo. in l. Stipulatio ista § Si stipulor ff. de verbo. obli. [D. 45,1,38,20] et per Paul. de Castro in consilio suo 196 in nonis, incipiente In Christi etc., visis his quae narrantur in 2. dubio, et per Philipp. Decium in l. Contractus, De regul. iur. [D. 50,17,23] Quibus duobus ultimis locis habes mirabilem limitationem ad premissa, videlicet dummodo intervenerit ratihabitio, alias secus, ut latius ibidem. [ . . . ] Although a private person cannot stipulate for another, yet a public person, like a notary or a judge can stipulate for third parties, even outside the courts [ . . . ]. For that reason notaries always write in their acts ‘He promised to me as a public person who can receive and stipulate, etc.’ Even if they do not include the words ‘as a public person’, it is understood, because all that a public person does, he is understood to do it in the name of his function [ . . . ]. About this everyday problem whether a notary or a judge may stipulate for others outside the courts, see further Innocentius and the canonists [ . . . ], Jean Faure, Bartolus, Alexander de Imola, Paul de Castro and Philip Decius [ . . . ].

This new way of seeing the ius commune, shaped by the merger of roman law and canon law, which Nicolas Everaerts largely helped to disseminate through Europe by the spread of his Topica, reached Grotius by three routes: (1) through the law faculty of Louvain; (2) through the jurisprudence of the central law courts of the Netherlands; and (3) through the works of the Spanish naturalist lawyers. Let us start with the third way, because it is of lesser importance in this particular matter of the contract rights of third parties. In the University of Louvain we find no Spanish influence before the second half of the century and no Spanish influence on the lawyers before the end of the century. In 1505 Brabant and Castille were united under Philip the Handsome and Joanna of Castille, and the University of Louvain initiated exchanges with Spanish scholars; Vives, for example, studied in Louvain with Dullaert. In 1508 Francisco de Vitoria went to the College of St James in Paris and befriended there his professor Petrus Crockaert, who had studied in Louvain and stayed in contact with the university of the Netherlands25. In 1513 Vitoria followed Croquaert’s lectures on Thomas’s Secunda Secundae, which would form the base on which he would weave his theories about the ius belli and the rights of the citizens of conquered countries26. Vitoria probably went to Louvain in 152327. Another student of Crockaert, Miguel Ramirez became dean of the theologians in Louvain in 1516, before returning to Salamanca. From 1516 until 1519 Domingo De Soto was also in Paris, in the College of Montaigu, where he followed the courses of the future professor of Louvain Jan van Standonck. We can however not speak about a Spanish influ25 R. G. Villoslada, Pedro Crockaert OP, Maestro de Francisco de Vitoria in Estudios Eclesiásticos 14 (1935), p. 147 – 201. 26 See e.g. A. Ortiz-Arce et P. Marino, Le recours à la force dans l’œuvre de Vittoria, in: Actualité de la pensée juridique de Francisco de Vitoria, Brussels 1988, p. 81 – 96. 27 A. Truyol Serra, Les principales étapes de la vie de Vitoria, in Actualité de la pensée juridique de Francisco de Vitoria, Brussels 1988, p. 1 – 9; cf. N. Brengässer, Vit(t)oria, in Kirchenlexikon 12 (1997), c. 831 – 836.

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ence in Louvain before the mid-century, and it was limited to the theologians. From 1545 on the discussions at the Council of Trent seem more important for the mutual influence of Spain and the Netherlands than the exchanges between the universities. In Louvain there was clearly no Spanish influence on the lawyers. The first book to circulate with what were then new ideas about law and society was De Soto’s De iustitia et iure. It was read in the Netherlands after De Soto became confessor to Charles V, but it had nothing to do with law. De Soto mainly quoted Cicero, Isidore, Aristotle, St Paul, St Thomas, Buridan, St Augustine and St Ambrose. It is necessary to read fifty pages before encountering Ulpian and for the answer to the question “quid sit dominium?”, De Soto looked to Gerson. “Utrum homo sit vitae suae dominus ? – Solus deus est dominus vitae; respublica tantum vitae custos. . .” When Grotius asked for the book in Loevestein, he was thinking de veritate religionis christianorum and not about stipulations. The lawyers from Louvain did not quote their Spanish colleagues: there are no traces of Azpilcueta in the 16th century and no quotations of Covarruvias (1512 – 1577) during his life. There are no records of successful Spanish lawyers known as leading civil servants in the government of the Netherlands. Cases like that of Antwerp-born Martin del Rio28 who obtained a law doctorate in Valladolid in 1574 and who, as procurator-general of the Council of Brabant, became a notorious witch hunter, must not have impressed the law faculty. Nor was Vitoria read during the first half of the century. The publication of his works was forbidden by Charles V and we know no manuscripts of it in the Netherlands. The first edition of his De iure belli dates from 1557, after the abdication of Charles, and it was printed in Lyon, outside his territories. We must not downplay the role of Vitoria in the renewal of continental legal thinking in the 16th century29, but neither must we invent too early a Spanish influence on the theory of privity of contracts in the Netherlands. In the Southern Netherlands the first professor to quote the Spanish scholars was Henry Zoesius (1571 – 1627)30, who has studied in Spain and knew Gomez and Covarruvias. He was however against the possibility of forging an effective stipulatio alteri: “there is not only no civil action, but also no natural action and you cannot speak of a pactum nudum, as Gomez writes”. For Zoesius there was no possibility of making a contract in favour of a third party via a notary, because a notary was not a servus publicus. He acknowledged the possibility of using an oath, because the oath established the interest of the promisor, and here he quoted Covarruvias31. 28

R. Van der Aa, Martin Antoine del Rio, in Bibliographie nationale de Belgique, V, 476 –

491. 29 A. Truyol Serra, La conception de la paix chez Vitoria et les classiques espagnols du droit des gens, in Recueils de la Société Jean Bodin 15 (1985), p. 241 – 273 resumes in a few pages the basic doctrine of Vitoria. 30 Who must be a son of the Leiden professor Thomas Sosius (154..-1598) rather than his brother, as wrote van Kuyken (passum non repperi).

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Grotius was however not influenced by the Spanish naturalists through the works of his compeer Zoesius, but by going deeply in the works of Lessius. Lessius (1554 – 1623) studied in Rome with Francisco Suarez and lectured in the Maria Theresia College in Louvain32. His De iustitia et iure was one of the rare books Grotius had with him in Loevestein and in Paris, but there is no passage there about privity of contracts. So we cannot conclude that Grotius take over his ideas about the ius quaesitum tertio from Spanish scholars through Lessius, as he did for other topics. A second route for Lessius to have found the mixture of Roman and canon law was in the works of the followers of Everaerts in Louvain. Joachim Hopper (1523 – 1576) was the first in the Netherlands to write about natural law in his De iuris arte libri tres33. He became doctor utriusque iuris in 1553, in the same year as Peckius and Wamesius. Hopper used the notion of natural law in his book about obligations, and distilled this notion from the Corpus iuris to explain the contractual rights of third parties. In fact this notion of “natural law” was the new name given to the blend of Roman and canon law: Inventae enim sunt, inquit Ulpianus l. Stipulatio ista in § Alteri ff. de verb. obligat. [D. 45,1,38,17], huiusmodi obligationes ad hoc ut unusquisque sibi acquirat quod sua interest. Ceterum ut alii detur, nihil interest mea. Scio naturaliter beneficio affici hominem interesse hominis, l. Serv. ff. de ser. export. [D. 18,7,7], et ob id ea quae naturalia sunt uni per alterum acquiri, qualis est possessio, § Ex his, Supra, Per quas personas [Inst. 2,9,5]. Sed in civilibus contra, culpa est immiscere se rei ad se non pertinenti, videlicet ut ne materiam discordiae pariat, et ob stipulationem quae civilis est, non potest alteri per alterum quaeri34. Obligations are conceived that way, said Ulpian [ . . . ], that everyone acquires for his own what is in his interest. To give to another is not for my interest. I know that in the natural order, there is an interest for one man to benefit to another [ . . . ], and for that reason natural things, like possession, can be acquired by one person through another [ . . . ], but in the civil law it is different. There it is a fault to interfere in another’s affairs and to avoid a matter of discordance; nothing can be acquired by one person throgh another by a stipulation.

Petrus Peckius (1529 – 1598), who was regius professor until 1562 and then held the chair of civil law until 1582, wrote about pacta and about revocable contracts in favour of third parties when he treated the case of the donation sub modo35. 31 H. Zoesius, Commentaria ad Institutionum civilium libros IV, ad Inst. 3,19,19; Id., Commentaria ad digestorum seu Pandektarum juris civilis libros L, ad D. 45,1. 32 The College was at Lessius’ time the main Jesuit College of Louvain. Before it was given to the Jesuits, it was the house of Willem de Croy, who in 1517 became archbishop of Toledo. It was seized in 1773 and given by Maria Theresa to the University. 33 About the natural principles of the law J. Hopper, De iuris arte libri tres, Louvain 1553, p. 13 – 14. 34 J. Hopper, Ad Justinianum de obligationibus Peithanoon libri V, Louvain 1553, p. 31. 35 P. Peckius, De mortizatione bonorum, cap. 30, in Opera Omnia, Antwerp 1679, p. 475.

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The third professor of this group was Wamesius (1524 – 1590). He was ordinarius legum from 1555 to 1570 and then took the first chair of canon law until his death. He published many interesting consultations in which he mentioned the stipulatio alteri. He wrote that a stipulation for a third party was valuable if there was an interest for the stipulator, e.g. when the promisor must give something to his creditor or do something for him36. The presence of the third party was not enough to make the stipulation valid37. Every public person, like an alderman could make a valuable stipulation for third parties38. It is clear that also Grotius’ way of thinking about third parties rights was inspired by the merger of Roman law and canon law and the possibilities which where shaped by the fact that pacta went enforceable. We find these ideas in the world of Everaerts, but we find no clear lines of inspiration for Grotius, neither in the law faculty of Louvain nor in the works of Lessius. Wamesius however indicates clearly that the rights of third parties were introduced by the courts in the Netherlands. This third route by which the merger of Roman and canon law occurred between Everaerts’ time and Grotius’ time is again indicated by Zoesius: Stipulationes hodie non frequentantur nec earum est necessitas. Ex pactis actio datur per mores, forte ortos ex sententia interpretum qui iure canonico ex nudo pacto actionem tribuunt vel quod magis fidei datae in rebus licitis habenda sit ratio quam legibus verborum deferendum [ . . . ] Absenti per stipulationem seu simplicem acceptationem promissionis notarii publici acquiritur, papa. decis. 49 et 222. Unde et secretarii oppidorum recte pro absentibus stipulantur. Ex iis mediantibus nunc passim absentes in bonis immobilibus investiuntur39. Today stipulations are not frequent and they are not necessary. Following customary law a claim can be based on a pactum and this customary law is probably deduced from the decisions of those interpreters of the canon law who found an action on a naked pactum and who find that there is more reason to relay on the good faith in juridical acts than to defer to the words of the law. An absent person can acquire by the stipulation or the simple acceptance of a public notary [ . . . ]. Hence also city secretaries make stipulations for absentees and through their mediation it occurs commonly that absent persons invest in real property.

Indeed, in his discussion of the rights of third parties, Grotius was without doubt mostly inspired by the customary law and the jurisprudence of the central courts in the Netherlands. We must not forget that his Inleidinge was not a work about the doctrine of the ius commune, but was a book about the practice of the law applied in the County of Holland and the Council of Holland. 36 J. Wamesius, Responsorum sive consiliorum a ius forumque civile pertinentium Centuria IIa, cons. 97 n. 3 (ed. Antwerp 1641, p. 345). 37 Id., Centuria IIIa, cons. 88 n. 7 (ed. Louvain 1631, p. 275). 38 Ibid., n. 2 (ed. Louvain 1631, p. 274). 39 F. Zypaeus, Notitia iuris belgici, Liber VIII, De contrahenda stipulatione, Antwerp 1640, p. 196.

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As well in the jurisprudence of the Council of Holland, of which Nicolas Everaerts was president from 1510 until 1528, as in the jurisprudence of the Grand Council of Mechlin, which the same Everaerts led from 1528 until 1532, arguments from Roman law and from canon law were completely intermingled. In all the cases brought at the Grand Council of Mechlin during the 16th century there is this mixture of arguments from Roman and canon law. The abstracts of the sentences of the Grand Council have been published for the years 1465 – 158040, but the abstracts are so short that a ius quaesitum tertio in them. A better source is the analysis of the quotations of Roman and canon law sources in the appeals from Holland analysed by Alain Wijffels41. In an appeal from the Court of Holland a widow defended her right to collect annuities established by a contract in which she was not a party, founding her action on a decision of the Rota and the aequitas canonica42. Around 1540 the Grand Council dealt with a case where a spouse had, without the consent of her husband, bought a pension with a special clause that after her death it would go to the profit of a niece who had become a nun. The whole case turned on the necessity of the consent of the husband in the transaction, but the possibility of establishing a right for a third party was never discussed43. Alain Wijffels analysed all the quotations of passages of Roman and canon law in the jurisprudence of Mechlin in the appeals from Holland from 1460 to 1580. In his lists of quotations we find all the passages of the legists and the canonists Hallebeek and Dondorp cite in their studies of the rights for third parties in medieval Roman and canon law44. So we may conclude that the Grand Council was as sensitive to the arguments of the canonists as to those of the legists. The enforceability of third party rights went together with the enforceability of pacta nuda, and those were accepted in the jurisprudence of the Netherlands during the 16th century, as Florentinus de Cocq wrote: Dico pacta nuda de jure naturae contractus et naturaliter obligare. Hinc etiam pacta nuda alibi pariunt obligationem civilem aeque ac naturalem, ut hic in Belgio [ . . . ]. Requiratur intentio sese obligandi [ . . . ]. Moribus tamen nostris etiam nuda pacta inducunt obligationem45.

40 Chronologische lijsten van de Geëxtendeerde Sententiën berustende in het archief van de Grote Raad van Mechelen, ed. by J. Th. de Smidt, 6 voll., Brussels 1966 – 1988. 41 See A. Wijffels, Qui millies allegatur, Les allégations du droit savant dans les dossiers du Grand Conseil de Malines (causes septentrionales ca. 1460 – 1580), 2 voll., Amsterdam 1985. 42 See A. Wijffels, Qui millies allegatur (n. 40), I, p. 249; II, p. 1008: “Ymmo etsi forte presens non fuit, ex predicto tamen contractu sui mariti ius est sibi quesitum.” 43 Id., I, p. 319 – 320. 44 See A. Wijffels, Qui millies allegatur (n. 40), II, Annexes – Notes – Registres, Amsterdam 1985. 45 Florentinus de Cocq, De jure, justitia et annexis tractatus quattuor theologo-canonice expositi, Brussels 1587, p. 192 – 195.

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I say that naked pacts are contracts by natural law and are binding naturally. Hence in certain places they introduce as well civil as natural obligations, as here in Belgium [ . . . ]. There needs to be an intention to enter into an obligation [ . . . ]. In our customary law also naked pacts create obligations.

In the second half of the century the Grand Council had to check and coordinate the jurisprudence of all lower courts. The decision to do so was taken by Charles V in 1541, but the first homologated texts of customary law appeared in 1570, under the influence of Governor Alva. Most homologated texts were issued in the years 1610 – 1620. In those homologated customs we find rights for third parties. They are for example mentioned in the customs of Antwerp and in those of the Principality of Liege. In the customs of Roermond it is stated that stipulation and promises for third parties are forbidden following the “written law”, but are nevertheless admitted in the bench of Roermond. In those customary texts we find the practice that stipulations and promises for thirds are mainly made by aldermen and judges, so they are not so far from the “written law” as they pretend. . . 46. A special case of rights established in favour of third parties was the Antwerp life insurance policy of 1566 in which standard rules there was an explicit deviation from the Roman rule of alteri stipulari nemo potest47. In this contract it was possible to take out life insurance on behalf of the life of someone else, but it was also possible for someone to insure for a maximum of one year his own life in favour of third persons. The contractor had to prove his interest in doing so, e.g. because as long as he lived he received annuities for the benefit of the third persons. This kind of life insurance has been forbidden in 157148. If Grotius wrote in the Inleidinge that in Holland a third party could obtain a right by accepting a promise if it had not been revoked before acceptance, that was in the line of the law in the courts. If he repeated it in De iure belli ac pacis, this indicates that he was convinced the ideas he found in the Netherlands belonged tot the ius commune. The main reason for the acceptance of the rights of third parties in the Dutch courts was the influence of canon law on jurisprudence, as it had already been for a century when Grotius formulated his simple statement about the rights of third parties. While concluding let us quote for a third time the same passage of Zypaeus: [ . . . ] Unde et secretarii oppidorum recte pro absentibus stipulantur. Ex iis mediantibus nunc passim absentes in bonis immobilibus investiuntur49. 46 Ph. Godding, Le droit privé dans les Pays-Bas méridionaux du 12e au 18e siècle, Brussels 1987, p. 420 n. 736. 47 J. A. Goris, Etudes sur les colonies marchandes méridionales (Portugais, Espagnols, Italiens) à Anvers de 1488 à 1567, Louvain 1925, p. 385 – 392. 48 Costuymen van Antwerpen, Antwerp, Plantin, 1582, p. 262. 49 F. Zypaeus, Notitia iuris belgici, Liber VIII, De contrahenda stipulatione, Antwerp 1640, p. 196.

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With those latest words he puts his finger on a sore spot of the Netherlands of the early seventeenth century, where absence was not only an element of the law of stipulation, but the lot of the most active part of the population, like Grotius himself, who had been expelled from Holland by the leading Calvinists. Were the goods they left behind submitted to the law of pride, to the law of war and peace or to the civil law? Sweeping feelings of that kind affected Grotius, who was not only a cool-headed lawyer, but also a sensitive poet. His doctrine must always be framed in the culture of healing those social wounds left by the stirring Dutch sixteenth century.

DAVID J. IBBETSON and WARREN SWAIN

Third Party Beneficiaries in English Law: From Dutton v. Poole to Tweddle v. Atkinson The great case of Dutton v. Poole (1679) marks a watershed in the development of English law’s response to the problems of the third party beneficiary in the law of contract. It heralded a period of relative quiescence, which contrasts markedly with the uncertainly characterising the earlier part of the seventeenth century; the most noteworthy feature of the literature on the subject through the century and a half after Dutton v. Poole is that the case-law cited is largely drawn from before 1700. It was not until the first half of the nineteenth century that the issue came again into prominence; it was brought to a head in Tweddle v. Atkinson in 1861, establishing a more or less rigid rule – albeit subject to exceptions – that contracts took effect only between the parties to them and that consequently third party beneficiaries were excluded from suing or otherwise relying on them. Formally speaking, this remained the rule of the Common law until 1999, though substantial inroads were made into it through the twentieth century.1 Before the nineteenth century there was no such thing as a unitary law of contract, and it would consequently be a mistake to try to identify any single set of principles regulating the rights of third party beneficiaries. Everything depended on the way in which the agreement was framed. Many serious contracts were still made as they had been for centuries, in a document under seal. Such agreements would normally generate an action of debt,2 a claim for a fixed sum of money to which the plaintiff alleged he was entitled. So far as this area was concerned, the Common law had a strict parties-only rule: subject to one part-exception3, the only question 1 The principal study on the subject in this period is V. V. Palmer, The Paths to Privity (San Francisco 1992), pp. 84 – 236; though we do not always agree with Professor Palmer’s conclusions, we are indebted to his treatment. For contextual remarks in more general works on legal history, see D. J. Ibbetson, A Historical Introduction to the Law of Obligations (Oxford 1999), 207 – 208, 241 – 242; J. H. Baker, Introduction to English Legal History (4th edition, London 2002), 354 – 355; and, in the context of broader treatments of privity of contract, A. L. Corbin, “Contracts for the Benefit of Third Persons” (1930) 46 Law Quarterly Review 11, 17 – 25, A. M. Finlay, Contracts for the Benefit of Third Persons (London 1939), 12 – 31, R. Flannigan, “Privity – The End of an Era (Error)” (1987) 103 Law Quarterly Review 564, 564 – 572. 2 The action of covenant was by this time largely moribund. For details of the forms of action, see Baker, Introduction to English Legal History, 317 – 346. 3 For which see below, p. 193.

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was whether the plaintiff was a party. If he was he might sue; if not, not. Not all contracts were made in this way, though, and by the sixteenth century the action of assumpsit had emerged as a practically effective remedy on agreements not under seal. This was, at least in form, an action based on a unilateral promise. It was not easy, or at any rate not useful, to formulate any parties-only rule here, for there was no obvious way to determine whether any particular person was or was not a party. Recourse was therefore had to a different rule, that a person could sue only if the consideration had been provided by him or her. This was itself problematic, but it seems to have provided a workable solution to an otherwise intractable problem. Two principal forces inititated the changes in the law in the nineteenth century: the breakdown of the old system of forms of action, and the explicit articulation of legal rules in terms of abstract categories. These forces were separate though interrelated, and their combined effect was the emergence of an essentially homogenous “law of contract” which got its expression through treatises: significantly those of Joseph Powell in 1790, Joseph Chitty from 1826, Charles Greenstreet Addison from 1847, Stephen Martin Leake in 1867, Sir Frederick Pollock from 1876 and Sir William Anson from 1879.4 Rules which had their roots in the two different contexts were substantially assimilated to each other and set in a framework supplied by continental writers, most notably Robert-Joseph Pothier, whose Traité des Obligations appeared in an English edition and translation in 1806.5 Although the rule that consideration must move from the promisee was never forgotten, it was the parties-only rule found in the context of agreements under seal – and also in Pothier – that came to dominate the law of contract from the second half of the nineteenth century.

Sealed Deeds and the Parties-only Rule If there was a contract under seal between two or more parties,6 it was a clearly established rule of Common law that only a party to it could bring an action upon it. The rule is stated clearly and unequivocally in Bracton’s treatise in the thirteenth century,7 and no less clearly and unequivocally in Charles Addison’s treatise on contract first published in 1847: 4 J. J. Powell, Essay upon the Law of Contracts and Agreements (1790); J. Chitty, Practical Treatise on the Law of Contracts, not under Seal (1st ed., 1826); C. G. Addison, Treatise on the Law of Contracts and Liabilities ex Contractu (1st ed., 1847); S. M. Leake, The Elements of the Law of Contracts (1867); F. Pollock, Principles of Contract at Law and in Equity (1st ed., 1876); W. Anson, Principles of the English Law of Contract (1st ed., 1879). 5 W. D. Evans, trans., R. J. Pothier, A Treatise on Obligations, or Contracts (London 1806). 6 Such an agreement would normally be by bilateral indenture, but it need not be: Gilby v. Copley (1683) 3 Lev 138. 7 Bracton, f.18b (in S. E. Thorne, trans., Bracton on the Laws and Customs of England (Cambridge (Mass), 1968), 2.69). See further Professor Baker’s paper in the present volume, above, p. 35 – 60.

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It has always been a fixed rule of the common law, that a stranger to a DEED inter partes cannot maintain an action on the deed.8

This was not so much a feature of a law of contract, to be justified by reference to some rule that a contract changed the legal position of none but the parties to it, as a feature of the law applicable to deeds: it was equally applicable to grants of land.9 The only way that a non-party could have a claim was by claiming through a person who was a party, as in some way privy to such a person: by blood, by representation, or in certain cases by holding the same estate in land. The rule itself was clear; the only difficulty was to define who was a party to the deed. The basic rule was that if the document named certain persons as parties this was conclusive both positively and negatively: those persons were parties, other persons were not. This is succinctly formulated in a note in the fifth edition of Sir John Comyns’ Digest (1822): The effect of such an introduction is very great indeed, it being a solemn declaration that all the covenants comprised in that instrument are intended to be made between those parties and none other.10

This was clear at least as early as 1587. In Scudamore v. Vandenstene11 a charterparty was made by deed between Scudamore and others, shipowners, and Vandenstene, in which Vandenstene bound himself to the plaintiff shipowners and to Pitman, the ship’s master, to pay £600 should he fail to carry out certain covenants. The deed was signed and sealed by the shipowners, Vandenstene and Pitman. In an action brought by the shipowners, Vandenstene pleaded a release made by Pitman; the plaintiffs demurred. It was held that such a release would have been ineffective: although he had signed the deed, and despite the fact that the undertaking had been said to be made to him as well as the shipowners, he had not been named as a party; and it was this that was conclusive. The only situation in which a person’s having sealed the document might be relevant was where the parties were not expressly named in it, for example where it said simply “We have agreed”; here the fact that a person had affixed his seal would identify him as a party.12 Addison, Contracts (1st ed.), 238. Windsmore v. Hobart (1585) Hob 313, Godb 51, Cro El 58; Coke on Littleton f.231a; Coke, Second Institute, 673. The proposition had to be qualified in the case of the creation of interests in remainder, where the claim was through the original grantee. 10 Sir John Comyns, A Digest of the Laws of England (5th edition, by Anthony Hammond, 1822), Fait D2, note l. The same point is made by Hammond elsewhere: A. Hammond, Practical Treatise on Parties to Actions and Procedures (1817), 13. 11 (1587) Coke, Second Institute, 673, Cro El 56. To the same effect, Gilby v. Copley (1683) 3 Lev 138, 139, per Levinz J.; Vernon v. Jefferys (1740) 2 Str 1146, 7 Mod 358; Ex parte Williams (1820) Buck 13. See too C. Molloy, De Iure Maritimo et Navali, II.5.16 (in 5th edition, 1701, 235 – 236). 12 Nurse v. Frampton (1695) 1 Salk 214, 1 Ld Raym 28. 8 9

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This rule, repeated as unquestioned orthodoxy in the eighteenth century,13 continued to be applied in the nineteenth. In Berkeley v. Hardy,14 for example, an agreement under seal was made by Simmonds on behalf of and for the benefit of Berkeley. On the face of it Simmonds was was acting as Berkeley’s agent, but his authority to act had not been properly constituted. It followed that in the eyes of the law Simmonds had acted on his own behalf but for the benefit of Berkeley. This being so, it was held, he rather than Berkeley was the proper person to bring the action. Similarly, in Lord Southampton v. Brown15 a covenant was made to the Dowager Baroness Southampton to pay rent to Lord Southampton; it was held that the action had to be brought by her rather than him. It was irrelevant that she was acting as his guardian at the time of the agreement: on the face of the document the covenant was made with her, and this determined the issue.16 Though the rule was clear, its application might be problematic. A single document could be interpreted as containing two distinct agreements with different parties. The leading example of this was a seventeenth-century case, Salter v. Kidgley.17 An agreement was entered into between Salter and Rock whereby Salter leased land to Rock at a certain annual rent. Kidgley undertook to pay the rent, and sealed the agreement along with Rock. It was held in the Court of King’s Bench that the document embodied two separate agreements: one between Salter and Rock and one between Kidgley and Salter. It was on the latter that the present action was brought, and in this context it was of no relevance at all that Kidgley was not a party to the former. In the words of Holt C.J.: One party to a deed could not covenant with another who was no party, but a meer stranger to it; but one who is no party to a deed may covenant with another who is a party, and thereby oblige himself by sealing the deed.

Exactly the same approach was taken some 150 years later, in Wickham v. Hawker.18 A grant of land was made by two men, reserving to themselves and one Wickham the shooting rights over it. Wickham, it was argued, could gain no rights by this, but the Court of Exchequer held otherwise. Technically speaking, the purported reservation of the shooting rights took effect by way of a separate grant, so that the single document should be treated as two separate agreements; and although Wickham was not a party to the one he was a party to the other. C. Viner, General Abridgment of Law and Equity, Faits, F. (1826) 8 D & R 102, 5 B & C 355, 4 LJKB 184. 15 (1827) 6 B & C 718, 5 LJKB 253. It would have been different if the agreement had shown that the Dowager Baroness had made the lease of Lord Southampton’s lands, for then the consideration would have been provided by him; see below, p. 196. 16 See also Barford v. Stuckey (1820) 2 B & B 333, 5 Moore 23; Metcalfe v. Rycroft (1817) 6 M & S 75. 17 (1689) Carth 76. 18 (1840) 7 M & W 63, 10 LJ Ex 153. 13 14

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These rules applied only to deeds inter partes, i.e. to those which purported to be agreements between two or more people. The deed poll, which took effect unilaterally, was different. Here, it was said, any person named as a beneficiary in the deed could sue.19 The width of this principle is well brought out by the decision of the King’s Bench in Greene v. Horne.20 The plaintiff was owed money by one Pollard, who was arrested by the bailiff at his suit. The defendant then stood surety for Pollard, undertaking by deed poll that he would redeliver Pollard into the hands of the bailiff within the next year. When he failed to do so, Greene, the initial creditor, brought an action of covenant against him. It was argued that the action was not well brought since it was the bailiff rather than Greene who was party to the original deed. This was rejected. So far as deeds poll were concerned, the obligation was regarded as having been entered into with any person who was named as a beneficiary within it.21 These rules were of especial importance in insurance contracts, for they meant that an insurance broker could enter into a contract on behalf of a client without there having to be any formal agency;22 so long as the client was named in the insurance policy (which would normally be effected by deed poll) he could bring an action on it.23 Although the rules relating to deeds poll look like an exception to the partiesonly principle applicable to deeds inter partes, it is perhaps more accurate to see them as a moulding of those rules to the rather different context of the unilateral obligation. Where there was a bilateral (or multilateral) deed, the parties to the agreement were those identified as parties in the deed; where there was a unilateral deed poll all beneficiaries under the deed were to be identified as parties to it. The firmness with which the rule is stated, though, may conceal a crucially important qualification. Though the action had to be brought in the name of the party to the deed, there were circumstances in which the beneficiary might be able to initiate the action in his name. Such might have been the case, for example, with bail bonds. Where P brought an action against D and caused him to be arrested, D’s release could be effected by a bail bond given to the sheriff undertaking to pay a penalty in the event that D did not reappear. Though the bond was given to the sheriff, the sheriff might assign the bond and in such a case the action could be brought by P.24 But even in the absence of such an assignment, it was later said, P had an equity which would have enabled him to sue in the name of the 19 Scudamore v. Vandenstene (1587) 2 Co Inst 673, Cro El 56; Cooker v. Child (1673) 2 Lev 74, 3 Keb 115. 20 (1694) Comb 219, 1 Salk 197. 21 The two reports of the case appear to give different results; we have adopted the version in Salkeld. The divergence is immaterial, though, since the same principle is stated in both. 22 J. Weskett, A Complete Digest of the Theory, Laws, and Practice of Insurance (1781), 400 – 404. 23 See the remarks in Sunderland Marine Insurance Company v. Kearney (1851) 16 QB 935, 20 LJQB 417. 24 Stat 4 Anne c 3 s 20.

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sheriff.25 Claims of this sort formed part of the Equity jurisdiction in the seventeenth century and before,26 and they were clearly recognised in the nineteenth;27 there is no good reason to suppose that they had completely disappeared in the interim.

The Action of Assumpsit By the seventeenth century, actions brought on informal contracts were invariably framed within the action of assumpsit. Assumpsit was problematic. Though its primary function was to enforce contracts, it was in form an action in tort (or, in the contemporary language, trespass); and although it was in substance concerned with bilateral relationships, in form it was based on a unilateral promise.28 This hybrid nature was of immediate relevance to the question of the beneficiary’s action. Because the action was framed in promissory terms, there was considerable leeway in any discussion of who the parties to it were. While a contract, as a matter of language, was made with somebody, the promise was made to them, and there was room for a good deal of flexibility in the description of who that person was. Moreover, since there was no formal written document laying it out, from an evidentiary point of view it was not easy to see on what basis the jury was expected to determine whether the defendant’s unilateral undertaking was made to one person rather than to another. There was no room for even those minimal constraints which governed the action on the deed poll. There are traces of a parties-only rule in the action of assumpsit at the end of the sixteenth century, but such a substantive rule that the action had to be brought by the promisee must have had relatively little weight, always at risk of degenerating into a pleading rule requiring it to be alleged that the promise had been made to the plaintiff.29 Alongside this weak parties-only rule, a stronger rule came into play. In the second half of the sixteenth century the Common law had articulated the rule that a promise was enforceable only if consideration had been given for it: in essence, it had to be shown either that the promisor had received some benefit in exchange for the promise, or that the promisee had undertaken some charge.30 The function of consideration, however, was somewhat ambiguous. At first, it is likely that it was primarily centred on the promisor, explaining why he or she should be held to the promise, but by the middle of the seventeenth century its focus had shifted onto Lamb v. Vice (1840) 6 M & W 467, 471, 8 Dowl CP 360, 365. Ibbetson, Historical Introduction to the Law of Obligations, 80, 141. 27 Lamb v. Vice (1840) 6 M & W 467, 8 Dowl CP 360. cf Scholey v. Mearns (1806) 7 East 148 (perhaps more restrictive); Gibson v. Winter (1833) 5 B & Ad 96. And see below, p. 205. 28 Ibbetson, Historical Introduction ot the Law of Obligations, 135 – 140, 147 – 151. 29 See Professor Baker’s paper, above, p. 35 – 60. 30 Ibbetson, Historical Introduction to the Law of Obligations, 140 – 145, together with the references there cited. Not all forms of consideration fitted neatly into this mould of reciprocity, but the exceptional cases do not affect the present argument. 25 26

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the promisee, explaining why he or she should be entitled to receive the benefit. This shift, perhaps, lay at the base of the decision in Bourne v. Mason and Robinson,31 that a promise made to a debtor (who had provided consideration) to pay off his creditor did not give the creditor any right of action against the promisor. He was, in the words of the report, a stranger to the consideration.32 The interplay between these two different factors was at work behind the cases of the seventeenth century; they were finally winnowed out by the 1670s. The watershed, it appears, was the great case of Dutton v. Poole.33 A father wished to raise a marriage portion of £1000 for his daughter, one Grizil. In order to do this he planned to cut down and sell timber on his estate. In consideration that he not do this, his son and heir expectant promised that he would give £1000 to Grizil. The father died, the land descended to the son, but the money was not paid. An action was brought by Grizil’s husband, Sir Ralph Dutton, against the son. It was argued that since the promise had been made to the father, the action should have been brought by him or, after his death, his executor. After much debate, it was held in the King’s Bench that the action was well brought by the daughter’s husband. This decision was upheld in the Court of Exchequer Chamber. Clearly, though, it was a difficult case. It was not even alleged that the promise had been made to the daughter:34 the pleadings in the case, almost perversely, stress the negotiations between father and son, so much so that it may be that they were effectively modelled on the Chancery form found in the seventeenth century.35 Moreover, she had given no consideration for it. The former point may have been the more important but it seems to have been relatively easily disposed of. The latter gave more trouble, but it was eventually held that the consideration given by the father was sufficient to give the daughter an action, since there was a close relationship of blood between them and the father was under a natural obligation to provide for her. It would perhaps have been different if the beneficiary had been an independent third party,36 though the report of the decision of the Exchequer Chamber taken from the notebook of Lord Guilford hints at no such limitation: “The party to have the benefit may have the action, or the party from whom the consideration moved; but not both.”37 It is easy to have sympathy with the desire of the court to allow the bene(1670) 1 Vent. 6; 2 Keb. 454, 457, 527; discussed by Professor Baker, above, p. 35 – 60. 1 Vent 6. 33 (1679) 3 Keb 786, 3 Keb 814, 3 Keb 830, 3 Keb 836, 1 Freem 471, 1 Vent 318, 1 Vent 332, 2 Lev 210, T Jones 102, T Raym 302, BL MS Add 32521 f.28 (from the notes of Lord Guilford). 34 See the pleadings in the case, KB 27 / 1981 m.1123. 35 Berenger v. Berenger (1673) C 33 / 239 f.559v; Chamberlaine v. Chamberlaine (1678) C 33 / 249 f.433; Cassey v. Fitton (1678) C 33 / 251 f.180. See Dr Jones’ paper in the present volume, above, p. 139 – 140. 36 1 Vent 332, 333; 2 Lev 210, 212; T Jones 102, 103. 37 BL MS Add 32521 f.28 (“le party pur aver le benefit poet aver laccion cy bien come le party de que le consideracion move mes nemy ambideux.”). 31 32

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ficiary here to bring the action: it is not at all clear that the father’s executrix would have been able to recover damages since neither she nor her husband had suffered any loss, and in any event she was the only witness to the promise and would have been precluded from giving evidence had she been a party to the suit.38 Whether as a result of Dutton v. Poole or for some other reason, by the end of the seventeenth century the cacophony of controversy had been replaced by serene quietness. In the century after Dutton v. Poole the issue of whether a non-party could bring an action in assumpsit virtually disappeared from view. In Crow v. Rogers,39 almost the only case in the printed reports touching on the point, the plaintiff alleged that John Hardy was indebted to the plaintiff for £70 and the defendant agreed that he would pay the plaintiff the £70 in return for title to a house from Hardy. The plaintiff brought assumpsit and the defendant demurred. So far as we can judge from the printed report,40 the agreement was made between Hardy and the defendant, the plaintiff being no more than the beneficiary of the defendant’s promise. The defendant, however, did not demur on the basis that the plaintiff was not a party, but on the grounds that he was a stranger to the consideration; and it was for this reason that the action failed.41 The whole thrust of the case points to the consideration rule of Bourne v. Mason having eclipsed the partiesonly principle as the feature limiting the right of action in assumpsit. Cases both before and after Crow v. Rogers show just how weak the latter principle must have been. Already in 1711 Eyre J. seems to have regarded it as commonplace that the non-party might bring assumpsit on a promise made for his benefit, using this proposition to from this to justify the conclusion that where money was paid to one person to the use of another the latter might have an action of assumpsit for money had and received.42 The direction of the argument is significant: the action of assumpsit for money had and received to the use of the plaintiff was well established by 1700,43 and if it was worth the while of Eyre J. to justify this by reference to the general right of the third-party promisee the latter proposition must have seemed yet more unquestionable. In any event, it was a matter of the utmost simplicity for the plaintiff to allege that the promise had in fact been made to him, and See 3 Keb 786. (1724) 1 Stra 592. 40 We have not succeeded tracing the pleadings in the case, nor any manuscript report of the case. 41 Cf the marginal note to the report (already in the first edition): “A stranger to the consideration can maintain no action.” 42 Mayor and Aldermen of London v. Brasier (1711) Harvard Law School MS 1142 p. 458: “If the promise is made for my benefit I may maintain an accion for that promise, and if money is paid to my use it is my money, the legall interest is in me to have it” (English in original). The same focus is found in Sir Jeffrey Gilbert’s treatise on the law of contract, dating from c.1705, quoted by Professor Baker: Introduction to English Legal History, 355. 43 J. H. Baker, “The Use of Assumpsit for Restitutionary Money Claims”, in E. J. H. Schrage, ed., Unjust Enrichment (Berlin 1995), 31, 47 – 53. 38 39

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if any doubt about this arose on the evidence the court would be astute to suppose that the actual recipient of the promise had been as agent or attorney for the person providing the consideration;44 or to infer from the clearly evidenced undertaking to one person that a second promise had in fact been made to the person providing the consideration.45 Crow v. Rogers was not completely plain sailing, though. There was clearly a tension, if not an out and out conflict, between the decision in that case that a stranger to the consideration could not bring an action and the decision in Dutton v. Poole that the plaintiff in that case could do so. The most straightforward resolution of this friction was to reconceptualise Dutton v. Poole in such a way that it could be said that the beneficiary was not a stranger to the consideration. Picking up on a wisp of a remark in one report of the earlier decision,46 it came to be said that there was a distinction between a promise in favour of a mere stranger and a promise in favour of a close relative: in a case like Dutton v. Poole the daughter could be treated as within the consideration provided by her father.47 The silence of the eighteenth century requires some explanation. In part, no doubt, it can be attributed to the law’s having reached a point of stability. The rule that no action could be brought by a person who had not provided consideration, itself nothing at all to do with third-party beneficiaries but rather with the function of consideration, had prevented an action being brought by one class of promisee; and in these cases, assuming that some consideration had been given by somebody, the legal rules were sufficiently flexible to ensure that that person could be regarded as the promisee and that the contract could therefore be enforced. No less to the point, the interrelationship of the negative and positive rules meant that (leaving aside the special case of joint promisees) there was only one person in whom the right of action was vested. It followed that there was only one person in a position to execute a release, thereby avoiding the difficulties which might have followed had the Exchequer Chamber decision in Dutton v. Poole48 been given wider currency and generalised. On the face of it, the only problematic situation would have been where a promisee had provided the consideration but the promise 44 Sadler v. Paine (1582) Sav 23, 24, per Shute B.; Delabar v. Gold (1661) 1 Keb 121, 122 (although old, these are the cases still cited in Comyns’ Digest (5th ed., 1822), 1.304n). 45 Starkey v. Mill (1651) Style 296; Martyn v. Hind (1779) Cowp 437, 1 Doug 142 (promise to indemnify bishop if plaintiff wrongfully dismissed from curacy: action lies to plaintiff since promise to bishop evidence that had been granted curacy); Master, Wardens, and Commonalty of Feltmakers v. Davis (1797) 1 B & P 98, 102. 46 1 Vent 332, 333. 47 e.g. Gilbert, Contract (B.L. MS Harg 265), f.160; F. Buller, Introduction to the Law of Trials at Nisi Prius (1767), 124 – 125; Powell, Contracts, 1.353; S. Comyn, The Law of Contracts and Promises (2nd edition, 1824), 21; C. Petersdorff, Practical and Elementary Abridgment (1825), 2.437 – 438, abridging Dutton v. Poole; Addison, Contracts (1st edn.), 247 – 249. 48 Above, p. 197.

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had been made for the benefit of a third party who was a volunteer. Here the intended beneficiary, not having provided any consideration, would have been refused an action; but so long as the Common law adhered to its restrictive doctrine of consideration49 such a volunteer beneficiary would hardly have seemed to be in a strong position. Looked at from his point of view, it was hard to see why he should be able to sue at law where X had promised Y that he would make him a gift, but not where X had promised him directly that he would do so.50 Even if we are right in thinking that there was no general pressure to allow actions to be brought by volunteer beneficiaries, there may none the less have been special cases in which an action did seem to be demanded. Had there been a buildup of such cases, the general rule might have been compromised. In practice this did not occur: in so far as there were special cases, they were largely dealt with outside the Common law. Mercantile instruments, commercial documents potentially raising problems of claims by non-parties, were increasingly regarded as being governed by their own peculiar rules; and marriage gifts and family transactions analogous to that in Dutton v. Poole could be treated more effectively within the jurisdiction of the Court of Chancery.51 Each of these requires attention.

The Law Merchant Mercantile documents,52 particularly bills of exchange, created difficulties at Common law primarily because of the problem of fitting them in to the orthodox doctrine of consideration; but there was a second problem too, in that the action might be brought by someone other than the original payee. Normally this was achieved by the payee indorsing the bill to another, that person indorsing the bill to a third, and so on. By the middle of the seventeenth century it was recognised practice that the final indorsee might bring an action on it, and by the end of the seventeenth century such a practice was accepted without demur.53 The indorsee, 49 On which see W. M. Swain, ‘The Changing Nature of the Doctrine of Consideration, 1750 – 1850’ (2005) 26 Journal of Legal History 55. 50 It is just possible that the beneficiary might have been able to bring an action in the name of the promisee (see Bell v. Chaplain (1663) Hardres 321; still treated as good law in the middle of the nineteenth century (Addison, Contracts (1st ed.), 247), though perhaps limited to situations where the promisee and beneficiary were relatives. It would have been easy for the promisee to make the beneficiary his attorney to do so; the question is whether the beneficiary might bring the action without any formal appointment by the promisee. We have found no evidence of any such practice, but such a mechanism would have left few traces. 51 Palmer, Paths to Privity, 79 – 83. Professor Palmer adds two other factors, the enactment of the Statute of Frauds in 1677 and the Common law’s refusal to enforce trust promises. The former may perhaps have had a marginal effect, though there is no clear evidence of this; the latter we treat as an aspect of the consolidation of Chancery jurisdiction. 52 For what follows we are beholden to J. S. Rogers, The Early History of the Law of Bills and Notes (Cambridge 1995), 170 – 193.

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though, was not a third-party beneficiary so much as an assignee; even if brought in his own name rather than that of the initial payee, his claim was through the payee. Bills payable ‘to X or bearer’ were different, for here there was no necessity for any indorsement by X, the nominal payee. It followed from this that the bearer’s claim was independent of the payee’s, and that he could not be considered simply as an assignee. Whatever mercantile custom might have been, the courts were unwilling to give the bearer an action in his own name,54 though there is some reason to suspect that he might have been permitted to bring an action in the name of the original payee.55 He might have been merely the casual finder of the bill,56 or the original payee might already have received payment on it.57 Such actions did come to be allowed,58 but by this time statute59 had locked in place a distinction between the ‘custom of merchants’ and the Common law; however widely the custom of merchants was interpreted – and it was interpreted very widely indeed60 – the bearer’s right to bring an action on such an instrument was fixed behind a barrier, located within a set of special rules, from where it could not spread into the general Common law.

Equity The shearing off of mercantile instruments from the main stream of the Common law relieved one point of pressure. More important by far, though, was the increasing involvement of the Court of Chancery in situations involving third party beneficiaries. So central was this that Professor Palmer designates the period between 1680 and 1800 as the “Chancery Phase” in the development of privity of contract in England.61 We may point to three ways in which this occurred: the channelling of cases involving promises of gifts, especially gifts on marriage, into the emergent law of trusts; the provision of equitable remedies in “Dutton v. Poole” cases involving death-bed promises; and through suits in Equity by beneficiaries.

53 Rogers, Early History of Bills and Notes, 170 – 171. See Hodges v. Steward (1693) 1 Salk 125; Nicholson v. Sedgwick (1697) 1 Lord Raym 180, 3 Salk 67; Carter v. Palmer (1700) 12 Mod 380. 54 Horton v. Coggs (1691) 3 Lev 299; Carter v. Palmer (1700) 12 Mod 380; Jordan v. Barloe (1700) 3 Salk 67. 55 Hodges v. Steward (1693) 1 Salk 125, referring to a manuscript report of Nicholson v. Sedgwick (1697): Rogers, Early History of Bills and Notes, 174 n.14. 56 Nicholson v. Sedgwick (1697) 1 Lord Raym 180, 3 Salk 67. 57 Horton v. Coggs (1691) 3 Lev 299. 58 Grant v. Vaughan (1764) 3 Burr 1516. 59 Stat 3 & 4 Anne, c.9. 60 Rogers, Early History of Bills and Notes, 185 – 186. 61 Palmer, Paths to Privity, 84 – 158.

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Conventional wisdom attributes the institutionalisation of the English “trust” into something like its modern form to the chancellorship of Lord Nottingham (1675 – 1682).62 It remained, though, very slippery in conception, with a hybrid nature between property and contract.63 For present purposes it is its contractual aspect which is of relevance. A person wishing to undertake an obligation to transfer property (be it land, chattels, or money) to another might enter into a contract to do so, enforceable in the courts of Common Law, or alternatively declare himself trustee of that property for the other, creating a relationship enforceable in the courts of Equity. In structural terms, the two mechanisms were very similar. Neither the contract nor the declaration of trust required any particular form of words – indeed, the same language might be interpreted as creating either64 – though from 1677 there was a formal requirement that the declaration of trust had to be proved by a signed writing.65 And, just as with a contract, until the beginning of the nineteenth century where there was a declaration of trust the intended beneficiary would be able to enforce it only if he or she had given consideration;66 the only difference was that the courts of Equity took a more relaxed view of what constituted consideration, uncontroversially including within it marriage and natural love and affection. The important distinction between the two was not so much in the mechanism adopted as in the legal consequences. The contract, at Common law, gave to the beneficiary a right in personam, whereas the trust, in Equity, gave what amounted to a property right, a right in rem.67 The consequence of this was beneficiaries under a trust were rather better protected than their contractual counterparts: they could claim the property in full in the event of the trustee becoming insolvent, and in certain circumstances might be able to make a claim against third parties into whose hands the property had come. Unsurprisingly, therefore, the law of trusts took over some of the ground which might once have been the preserve of the law of contract. This had some consequences for the operation of arrangements for third-party beneficiaries, especially in the context of marriage settlements, where the parties’ fathers each undertook to settle land or other property on the marrying couple. Whatever doubts there might have been whether the couple were in fact parties to a contract to settle, there were no doubts at all that they had enforceable rights as beneficiaries under a declared trust. The use of the trust 62 Baker, Introduction to English Legal History, 309 – 310; D. E. C Yale, Lord Nottingham’s Chancery Cases (Selden Society vol 79, London 1961 – 2), 87 ff. 63 M. Macnair, “The Conceptual Basis of Trusts in the Later 17th and Early 18th Centuries”, in: R Helmholz and R Zimmermann, eds., Itinera Fiduciae (Berlin 1998), 207. 64 Macnair, “Conceptual Basis of Trusts”, especially at 234. 65 Statute of Frauds, 1677, s.7. 66 Mitchell v. Reynolds (1711) 1 P Wms 181; Colman v. Sarell (1789) 1 Ves Jun 50, 3 Bro CC 12 per Lord Thurlow LC; cp Ellison v Ellison (1802) 6 Ves Jun 656 per Lord Eldon L. C. M. Macnair, “Equity and Volunteers” (1988) 8 Legal Studies 172, 181 – 2. 67 Baker, Introduction to English Legal History, 309 – 310; cf Macnair, “Conceptual Basis of Trusts”, 221 – 224.

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mechanism, therefore, operated to siphon away potentially difficult cases, stifling objections which might have arisen had the contract mechanism been used. The second situation in which Equity came to supersede the Common law was that found in Dutton v. Poole, where a person allowed property to descend to another on the basis that provision would then be made for a third party. As Dr Jones shows,68 such cases were well established in the Chancery by the time that Dutton v. Poole was decided; it may be that the real anomaly of Dutton v. Poole was that the action was brought at Common law at all.69 Chancery was, undoubtedly, better suited to deal with this type of case. The fundamental problem of the plaintiff at law, that he or she might have been a stranger to the consideration, simply did not arise in Chancery. If a person received property subject to a trust to deal with it in a particular way, there was no requirement at all that the intended beneficiary should have given any consideration. There was no need, therefore, for the beneficiary to have been a close relation (whatever that might mean) of the promisee in order to be entitled to bring the action. The one potential drawback of the use of the Equitable jurisdiction was the rule of the Statute of Frauds that a trust had to be evidenced in writing, but this restriction was rapidly avoided by the development of the device of the ‘secret trust’. Where a person had received property subject to an informal obligation to do some specific thing with it, the Court of Chancery would uphold this as a trust notwithstanding the lack of writing. To do otherwise would allow the perpetuation of a fraud. The first reported case of the secret trust, Thynn v. Thynn,70 fits easily into this context. A son prevailed upon his father to name him executor of his will on the basis that he would be trustee for his mother (who had been named executrix in an earlier will); in addition, it was alleged, the will had been read to the dying father in an undertone such that he could not well hear it. On the father’s death, it was decreed that the son should hold the estate as trustee for his mother. Thirdly, and potentially most far-reaching, was the possibility that the beneficiary might bring a suit in Equity to enforce the contract. The problematic situation would have been where the beneficiary was a volunteer, where the requirement of consideration locked in place by Crow v. Rogers meant that he could not have brought an action at law.71 Some slight evidence for the recognition of such a claim in Equity is found in Tomlinson v. Gill in 1756.72 A man having died intestate, the defendant (who was the intestate’s father) promised his widow that if she allowed him to join her in taking out letters of administration of the estate he Above, p. 141. Above, p. 197. 70 (1685) 1 Vern 296; BL MS Harg 83 f.2 (where the facts are stated slightly differently, but not in any material respect). 71 Above, p. 198. 72 (1756) Ambler 330. We have relied heavily on the record of the case: C 33 / 408 ff.78v, 144, 234; C 33 / 410 ff.341v, 451v, 566v; C 33 / 412 ff.21v, 113v, 133v, 298, 316, 364. 68 69

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would pay all the debts due from her husband to the extent that the estate had insufficient assets to cover them. He did not do so, and an action was brought in Equity by the deceased husband’s creditors.73 There was no doubt that the widow and father, as administrators of the intestate’s estate, were liable to the extent of the estate; the issue in dispute was whether the defendant father was personally liable beyond that. The situation would have been straightforward if the promise had been made to the creditors and after adminstration had been granted; in such a case, they would have had an action at law against him, and had the claim succeeded he would have been personally liable if there had been any shortfall in the assets of the estate.74 But this was not the case: the promise had been made to the widow rather than the creditors, and it had been made before administration had been granted. Clearly no action could have been brought at law, since the promise was made to the widow (and, it might be added, the consideration was provided by her), but it was held none the less that the action was well founded in Chancery. In his report of the case, Charles Ambler (who had been counsel for the creditors) explained the reasoning of Lord Chancellor Hardwicke: He could not maintain an action at law, for the promise was made to the widow; but he is proper here, for the promise was for the benefit of the creditors, and the widow is a trustee for them.75

Professor Palmer suggests on the basis of this that the case was in fact an unremarkable one. On the assumption that the widow was already administratrix of the estate at the time the promise was made, he argues that she was already a trustee of the property for the benefit of the creditors; consequently the promise was not made to her in her personal capacity at all, but in her representative capacity as administratrix-trustee. On such a view the case was nothing more than a commonplace example of the beneficiary of a trust forcing the trustee to sue on the promise made to her.76 The Chancery record of the case, though, undermines this analysis. It makes clear that the widow had not taken out letters of administration when the father’s promise was made; she was not, therefore, in any sense a trustee of the estate at that time. If there was a trust, as Lord Hardwicke is reported to have said, then it could only have stemmed from the fact that the promise had been made to her for the benefit of her deceased husband’s creditors.77 That this is the correct view of the case is borne out by the wording of Lord Hardwicke’s judgment as it appears in the Chancery Decree Book: 73 The action was brought jointly against the two administrators, the widow and the intestate’s father, though the widow played little part in the litigation. 74 Hawkes v. Saunders (1782) Cowper 289; H. Swinburne, A Treatise of Testaments and Last Wills (6th edn., 1743), 395, citing Howel v. Trevanian (1588) Cro El 91, 1 Leon 93, Wheeler v. Collier (1595) Cro El 406, Moo 409, Haws v. Smith (1675) 2 Lev 122. 75 Ambler 330, 331. 76 Palmer, Paths to Privity, 130 – 134. 77 For this interpretation, see Corbin, “Contracts for the Benefit of Third Persons” (1930) 46 LQR 12, 18.

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His Lordship doth declare That the Creditors of the said John Gill the Intestate are intitled in this Court to have the benefitt of the Contract entred into by the defendant Robert Gill with the other defendant Catherine Gill the widow before the taking out administracion to the said John Gill by the said defendants.78

Whether we use the language of trust or not, Tomlinson v. Gill is evidence that the Chancery might allow an action by the third-party beneficiary of a contract. The decision is Tomlinson v. Gill may have been radical, but it does not seem to have heralded any torrent of third-party beneficiary actions in Chancery.79 The next reported case adopting this analysis is not until 1817, Gregory v Williams.80 One Parker, Williams’ tenant, owed him money; he also owed money to Gregory. In consideration that Parker would give up the tenancy and transfer to him his stock and other property, Williams undertook to pay first £900 owed to Gregory, then to satisfy himself of the money due to him out of the residue, and finally to pay any surplus over to Parker. Parker gave up the tenancy and transferred the other property to Williams, but Williams did not pay Gregory. It was clear that Gregory had no claim at law against Williams, for he was a stranger both to the agreement and to the consideration, but it was held by Sir William Grant MR that he was entitled to claim the £900 from Williams: Parker acts as his trustee; and Gregory may derive an equitable right through the mediation of Parker’s agreement . . . Gregory has a right to insist upon the benefit of the promise made to Parker.81

As in Tomlinson v. Gill, there was no pre-existing relationship between Gregory and Parker that would justify treating the latter as a trustee for the former; if he was a trustee, it was simply because he had entered into agreement for his benefit. It is impossible to say whether Tomlinson v. Gill and Gregory v. Williams were representative of any more general Equitable trend; but at the least they do show that so long as the promisee could be construed as a trustee the gratuitous beneficiary might have been able to bring a suit in Chancery in his own name to obtain an order that the agreement be performed.

The Rule under Pressure By the late eighteenth century, the Common law of contract knew two rules. The first, applicable to sealed deeds, was that only the parties to it could bring an action. The second, applicable to the action of assumpsit, was that only a person C 33 / 408 at f.79v. It was cited two years later, in Griffith v. Sheffield (1758) 1 Eden 73, but only as illustration of the trivial proposition that agreeing to join in a legal transaction counted as good consideration: Palmer, Paths to Privity, 134. 80 (1817) 3 Meriv 582. 81 (1817) 3 Meriv 582, 590. 78 79

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who had provided the consideration could bring the action, though lip-service continued to be paid to the ruling in Dutton v. Poole that a close relation of the person providing the consideration might be treated as falling within it;82 but, except in the Dutton v. Poole situation, it was essential that it be alleged that the promise had been made to the person bringing the action. There is some reason to think that there may have been a move towards a more relaxed attitude in the latter part of the eighteenth century. In his Introduction to the Law of Nisi Prius, first published in 1767, Francis Buller writes of the more generous attitude of the courts towards third-party beneficiaries by this time: Perhaps in these Days the other Cases would receive a different Determination, as the Courts have been more liberal than formerly in extending the Benefit of this Action.83

Some ten years later, as counsel in Martyn v. Hind, he argued for a broad interpretation of Dutton v. Poole;84 and ten years after that, as judge in Marchington v. Vernon, he is reported as having held that the mercantile rule relating to bills of exchange was of general applicability: Independent of the rules which prevail in mercantile transactions, if one person makes a promise to another for the benefit of a third, that third person may maintain an action upon it.85

Buller was not alone in taking a generous line. In Martyn v. Hind Lord Mansfield C.J. said that he did not see how any doubt could have arisen on the facts of Dutton v. Poole;86 and in Pigott v. Thompson Lord Alvanley C.J. (differing from the other judges of the court) thought that where A let land to B and B promised to pay the rent to C an action would routinely be granted to C on the basis that he was to be seen as some sort of trustee for A.87 Currency was given to it by its inclusion in a note discussing third party rights in Bosanquet and Puller’s Reports, where it was observed that “there was great contradiction in the older cases” on the subject.88 Martyn v. Hind and Marchington v. Vernon were occasionally cited in argument,89 but contemporary opinion was against them and they were said in 1822 to have had no influence on practice.90 So far as assumpsit was concerned, the books Above, p. 197. Buller, Introduction to the Law of Trials at Nisi Prius (1767), 125. It is possible that the generous approach could be traced back to the early part of the century, perhaps even to Dutton v. Poole itself: cf Mayor and Aldermen of London v. Brasier (1711) Harvard Law School MS 1142 p. 458 (above note 42). 84 (1779) Cowp 437, 439, 1 Doug 142, 144. 85 (1787) 1 B & P 101 note c. 86 (1779) 1 Doug 142, 146, 2 Cowp 437, 443. 87 (1802) 3 B & P 147, 148. Though the language used is reminiscent of that in Tomlinson v. Gill, it should be noted that Lord Alvanley looks to be speaking here of liability at Common law, not in Equity. 88 3 B & P 149 note a. 89 Bowen v. Morris (1810) 2 Taunt 374, 383; Phillipps v. Bateman (1812) 16 East 352, 370. 90 Com Dig (5th ed., 1822), I.304n at 305. 82 83

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continued to reassert the old rule: “the plaintiff must not be a stranger to the consideration”;91 “the consideration must move from the plaintiff ”.92 It was in this form that the issue arose in the leading case of Price v. Easton.93 WP owed money to the plaintiff; in consideration that he would work for the defendant for certain wages and would leave the money so earned in his hands, the defendant promised94 to pay to the plaintiff the sum owed. He did not do so. It was held in the King’s Bench that the plaintiff ’s action was not well brought. For Lord Denman C.J. the reason was clear: I think the declaration cannot be supported, as it does not shew any consideration for the promise moving from the plaintiff to the defendant.95

The reasoning of Littledale J. appears rather more equivocal between a partiesonly rule and a consideration rule, while Taunton J. said nothing about consideration at all: No privity is shewn between the plaintiff and the defendant. This case is precisely like Crow v. Rogers and must be governed by it.96 It is consistent with all the matter alleged in the declaration, that the plaintiff may have been entirely ignorant of the arrangement between William Price and the defendant.97

And, to give yet another twist, Patteson J. took a wholly formal position: After verdict the court can only intend that all matters were proved which were requisite to support the allegations in the declaration, or what is necessarily to be implied from them. Now it is quite clear that the allegations in the declaration are not sufficient to shew a right of action in the plaintiff. There is no promise to the plaintiff alleged.98

Though the rule that the consideration must move from the plaintiff was still doing duty in Price v. Easton and other cases,99 and was still appearing in this form 91 Colebrooke, Contract, 41 – 2 (but see below, p. 208); C. Petersdorff, A Practical and Elementary Abridgement of the Common Law (2nd edition, 1844), 3.40. 92 W. Selwyn, Abridgement of the Law of Nisi Prius (1808), 1.45; Comyn, Law of Contract, 20 – 21. 93 (1833) 4 B & Ad 433, 1 N & M 303. The latter report omits Lord Denman’s judgment. 94 It is not clear from the reports of the case whether the promise was laid to have been made to the plaintiff, to WP, or to neither; but it appears from the judgment of Patteson J. (below) that it was not to the plaintiff. 95 (1833) 4 B & Ad 433, 434. This was taken to have been the grounds of the decision in Tipper v. Bicknell (1837) 3 Bing NC 710, 715 and Tweddle v. Atkinson (1861) 1 B & S 393, 395. 96 4 B & Ad 433, 434. In 1 N & M 303, 307 the reference to privity was omitted. Littledale J may simply be using the term loosely without intending it to be seen as a separate doctrine: see Flannigan “Privity – The End of an Era (Error)” (1987) 103 L.Q.R. 564, 568. 97 4 B & Ad 433, 435; 1 N & M 303, 307 (worded slightly differently). 98 4 B & Ad 433, 435; 1 N & M 303, 307 (worded slightly differently). 99 E.g. Garrett v. Handley (1825) 4 B & C 664, 7 D & R 144.

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in the leading textbook by Chitty,100 there is some evidence of the parties-only principle coming up to the surface.101 Though this could have occurred as a simple countering of the expansive position of Buller J. that any third-party beneficiary might sue, another source of it is Pothier’s Traité des Obligations, whose influence was being very strongly felt in the English law of contract at this time.102 Despite the difficulty of reconciling it with his version of the Will Theory, he formulates a strong principle clearly derived from Roman Law: If I stipulate something for you in favour of a third person, the agreement is void. For by this obligation you contract no obligation to that third person nor to me. It is obvious that you contract none to the third person. For it is a principle that agreements can have no effect except between the contracting parties: consequently they cannot acquire any right to a third person who is not a party.103

Scots law, too, may have had some influence. Henry Colebrook’s treatment of the point, though in substance not accurate as a statement of English law, is explicitly derived from both Pothier and Erskine: [The third party] has acquired no perfect right of exacting performance of an engagement, which, previous to his acceptance of it and furnishing a consideration for it, the stipulator might release. But if a promise may be obligatory on the promiser by presumed acceptance on the other part, an obligation can be effectually constituted in favour of a third party, though he should be absent, and ignorant of the grant, or even yet unborn. The stipulation of a stranger may then be effectual, since the corresponding promise or grant may be binding.104

Probably most significant, though, was the emergence of a homogeneous “law of contract”, superseding the earlier reasoning dependent either on the forms of action or on whether the contract was under seal or not. The effect of this is visible in the case-law of the early nineteenth century, as consideration-based reasoning seeps across into the reasoning of actions based on sealed documents and reasoning based on a parties-only principle seeps across into actions of assumpsit. In Barford v. Stuckey, for example, an action based on a covenant under seal, Dallas C.J. gives as one reason for disallowing the beneficiary’s action that the consideration did not move from her;105 and Bosanquet and Puller’s note on Pigott v. Thompson106 moves seamlessly from the decision relating to a sealed document in Gilby v. Copley107 to the action of assumpsit in the instant case. Chitty, Contract (2nd ed., 1834), 46. e.g. Powell, Contracts, 1.353; Colebrook, Contract, 21; G. Spence, The Equitable Jurisdiction of the Court of Chancery (1846), 2.274 ff. 102 A. W. B Simpson, “Innovation in Nineteenth Century Contract Law” (1975) 91 LQR 247; Ibbetson, Historical Introduction to the Law of Obligations, 220 – 232. 103 Pothier, Obligations (trans. Evans) 1.1.5 § 1. 104 Colebrook, Contract (1818), 21; citing Pothier, Obligations, 53 – 56, and Erskine, Institutes, 3.1.8. 105 2 B & B 333, 335; the point is made in argument by Lens Sjt. See too Lord Southampton v. Brown (1827) 6 B & C 718, 5 LJKB 253 (above, p. 194). 106 (1802) 3 B & P 149. 100 101

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Charles Addison, in his treatise on contract (first published in 1847) devotes a substantial section to the single subject “Of the plaintiffs in actions ex contractu”,108 in which the rules of formal contracts are followed immediately by those applicable to the action of assumpsit. Addison’s treatment, it has to be said, is not wholly satisfactory, but his wrestling brings out well the problems underlying the subject. Inevitably, since he begins with the rights of action in contracts under seal, his starting point is a firm parties-only principle. Though the treatment of this varies slightly from edition to edition, the changes are in reality little more than cosmetic. It is in his analysis of the right of action on informal contracts that the instability in the law – or in the formulation of the law – becomes visible. From the first edition, the section dealing with informal contracts opens with a stark denial of the applicability of the parties-only principle: the right of action on a simple contract is not confined to the parties to it, the rules applicable to sealed documents have no place here. To illustrate this he cites the decision in Carnegie v. Waugh, a case which could be seen as belonging to the expansive tradition initiated by Francis Buller.109 A tutor dative110 granted a lease of land belonging to his infant ward, the lessee promising to pay the rent to the infant; it was held that the infant might properly bring an action for unpaid rent.111 There is perhaps a hint that this is based on some sort of agency analysis – the contract is not made with him explicitly, but by another on his behalf – but this smacks of ex post facto justification rather than a genuine precondition for the beneficiary’s right of action. Any situation where one person makes a contract for the benefit of another might fall to be analysed in this way. The broad principle is then qualified by the rule that the action cannot be brought by a stranger to the consideration,112 though this is given relatively little weight: “it is said” that the stranger to the consideration cannot sue, but very little evidence is needed to link the consideration with the promise. In other words, where the promise is made to one person, the law can be stretched to interpret the consideration as having been provided by that person.113 But the converse is true too: the law will go to great lengths to infer or imply a (1683) 3 Lev 138 (above, p. 11). Contracts (1847), 238. 109 (1823) 2 D & R 277. In fact, no reference is made to the earlier line of authority, the court being concerned solely with the question whether the Scottish contract by tack should be treated as a deed under seal at English law. 110 i.e. a tutor appointed by a court under Scots law. 111 Also cited are Fitzmaurice v. Waugh (1823) 3 D & R 273, Sutherland v. Pratt (1840) 13 LJ Ex 246; but neither is to the point. 112 Citing Price v. Easton (above note 93), Crow v. Rogers (above note 39); Bourne v. Mason (above note 31), Taylor v. Watson (1829) 4 M & R 259, Tomlinson v. Gell (1837) 6 Ad & E 564, 1 N & P 588. 113 The authorities for this are very weak. The only one of direct relevance is Curtis v. Collingwood 1 Ventr 297, 2 Lev 119, 3 Keb 435, discussed by Professor Baker above, p. 52 – 53. 107 108

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promise made to the person who in fact provided the consideration.114 It would seem to follow from this that the consideration restriction was in truth no restriction at all, and that the action could be brought either by the person with whom the contract was in fact made, or by the intended beneficiary of it. The limit on the right of action, if limit there was, was not to be found by reference to the person with whom the contract had been made or the person providing the consideration; it depended on which party had suffered loss by reason of the promisor’s failure to perform. Hence, in Oldham v. Bateman,115 where a promise was made to a guardian to educate a child and give him a capital sum when he came of age, it had been held that the action was properly brought by the child.116 The flavour of the fourth edition, published in 1856, is rather different. Still the existence of a parties-only rule applicable to sealed contracts is contrasted with its absence from the action of assumpsit, but the statement of the consideration rule is very considerably strengthened. A non-party may indeed bring an action, provided that the consideration moves from him. It was with the fifth edition (1862) that this shift of focus really began to bite. As in the fourth edition, the non-party may sue, provided that he provided the consideration; but the examples given of this are now very restricted indeed: an agent contracting on behalf of an undisclosed principal, and a holder of a bill of exchange or promissory note. The statement that the law required little evidence to link the promise and the consideration had disappeared. The analysis of Oldham v. Bateman has changed: it was not simply that the promise to educate the child was made to the guardian, but it was made at the request of the child, thereby recharacterising it more explicitly as dependent on a relationship of agency. The instability visible in Addison’s treatise is reflected in Tweddle v. Atkinson,117 which was destined to become the leading case on the subject. The plaintiff, the son of John Tweddle (deceased), married the daughter of William Guy (deceased). Prior to the marriage both fathers had promised to give the plaintiff a marriage portion, but this verbal agreement remained unperformed. The two fathers subsequently entered into a written agreement: Whereas it is mutually agreed that the said William Guy shall and will pay the sum of £200 to William Tweddle his son-in-law, and the said John Tweddle, father to the aforesaid William Tweddle, shall and will pay £100 to the said William Tweddle, each and severally the said sums on or before the 21st day of August 1855. And it is hereby further agreed by William Guy and John Tweddle that William Tweddle has full power to sue the said parties in any court of law or equity for the aforesaid sums hereby promised and specified. Martyn v. Hind (1779) Cowp 437, 1 Doug 142; Sadler v. Payne (1582) Sav 23, 24. (1637) H. Rolle, Abridgment des Plusieurs Cases et Resolutions, Action sur Case, Z pl 8. 116 See too Master, Wardens, and Commonalty of Feltmakers v. Davis (1797) 1 B & P 98, 102: where promise made to A for the benefit of B, B may claim on promise made to him and rely in evidence on the promise made to A. 117 (1861) 1 B & S 393, 30 LJQB 265, 4 LT 468, 9 WR 781. 114 115

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The £200 due from Guy remained unpaid at his death, and William Tweddle brought an action against his executor. Three important features need to be noted. First, the terms of the written agreement left no room for doubt that the contract had been made between the two fathers, and that William Tweddle was not a party to it; secondly, it was clearly and expressly the intention of the fathers that William Tweddle should have the power to sue, notwithstanding that he was not a party; and thirdly, the present case stood on all fours with Dutton v. Poole. Counsel for the plaintiff, George Mellish Q.C., rested his argument on the last point, but the Queen’s Bench refused to follow Dutton v. Poole, holding that family cases of this type were not exceptions to the general rule. More interesting, therefore, are the different ways in which the general rule was formulated. At this point the vagaries of nineteenth-century law reporting begin to cause problems for the legal historian. The four reports of the case formulate the argument of counsel for the defence, Edward James, in subtly different ways: the plaintiff could not sue because he was a stranger to the consideration;118 the plaintiff could not sue because he was a stranger to the agreement and consideration did not move from him;119 the plaintiff is a stranger to the contract and consideration, and there is no privity between him and the defendant;120 there was no privity between the plaintiff and the defendant’s testator.121 The reasoning of the judges is no less difficult to disentangle. According to the reports in Best and Smith, the Law Times, and the Weekly Reporter Wightman J. appears to have decided the case on the basis of the consideration doctrine, rejecting Dutton v. Poole: But there is no modern case in which the proposition has been supported. On the contrary, it is now established that no stranger to the consideration can take advantage of a contract, although made for his benefit.122

The report in the Law Journal, however, is rather different: But no modern case can be found to support such a proposition and on the contrary, it has always been held that no stranger can take advantage of a contract made with another person. . . . It is admitted that if the plaintiff was a mere stranger he could not maintain the action; and I think that as the marriage took place before the contract was made, no consideration ran from him, and, that being no party to the contract, he cannot recover.123

Here the focus is not on being a stranger to the consideration, but on being a stranger to the contract, with the consideration rule coming in only as an afterthought.124 118 119 120 121 122 123

4 LT 468, 469. 1 B & S 393, 395. 30 LJQB 265, 266. 9 WR 781. 1 B & S 393, 397 – 8; to the same effect 4 LT 468, 469 and 9 WR 781, 782. 30 LJQB 265, 267.

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For Crompton J. the main thrust for the denial of the action was to be found in the parties-only principle. He is said to have intervened in argument with an uncompromising statement of such a rule,125 and one report of his judgment is similarly framed: It would be monstrous to hold that a man was a party to the contract for one purpose and not for another, so that he might be able to sue, without being liable to be sued. It is said that he becomes a party to the agreement, but if so, he must be liable to be sued.126

But, as with the judgment of Wightman J., the other reports are not quite so clear-cut and are framed in slightly different terms: The modern cases have, in effect, overruled the old decisions; they shew that the consideration must move from the party entitled to sue upon the contract. It would be a monstrous proposition to say that a person was a party to the contract for the purpose of suing upon it for his own advantage, and not a party to it for the purpose of being sued.127

It is now clear law that the consideration must move from the party entitled to sue on the contract. It would be a monstrous proposition to make a child a party to the contract for one purpose, viz. to sue for his own advantage, and not for another to bear the liability.128 It is only the third judge, Blackburn J., whose judgment is reported more or less consistently; and this may simply be because he says nothing of importance about the third-party problem. The action was to be refused on the grounds that there was no good consideration for the promise. Like Addison’s treatise, Tweddle v. Atkinson reeks of uncertainty. Some works, notably Addison and Chitty under successive editorships, continued to ignore the parties-only principle in assumpsit, retaining the focus on the rule that the consideration must move from the promisee;129 but for others it was the parties-only principle which predominated. Very telling is a question in the Law Students Examina124 Note the second point concerning him too. Here, it was said, the agreement had been made after the marriage had been celebrated, and the consideration was therefore past. When promises based on marriage consideration had formed a routine part of the business of the Common law such an objection would have been brushed away on the basis that marriage was a “continuing consideration”; but these actions were now firmly embedded in Chancery, and the old explanation for allowing the claim at Common law long forgotten. 125 “[An] action cannot be brought by the person with whom the contract is not made” (30 LJQB 265, 266). 126 30 LJQB 265, 267. 127 1 B & S 393, 398. cf, more briefly, 9 WR 781, 782: the consideration must move from the party who sues. 128 4 LT 468, 469. 129 There is a hint of a move in the sixth edition of Addison (1869), where the heading “Strangers to the Consideration” included the proposition that a person not party to the agreement could not sue upon it. Astonishingly, the parties-only interpretation was not incorporated until the 22nd edition of Chitty, edited by J. H. C. Morris (1961).

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tions Chronicle for 1861, asking the meaning of the term “privity of contract”.130 Yet more telling is the model answer given a year later: The term “privity of contract” is used in various senses; thus it is said that in order to maintain assumpsit there must be a privity between the parties meaning a privity of contract’.131

So too, the first new textbook to appear after the decision in Tweddle v. Atkinson espoused it as authority for the parties-only rule: The legal effect of a contract is, as a general rule, confined to the parties to it. A contract cannot create a right or a liability in a person who is not a party to it.132

By the 1870s this had become the canonical interpretation, appearing both in Pollock’s treatise (1876) and that of Sir William Anson (1879): However the rule is now distinctly established, so far as the common law right of action is concerned, that a third person cannot sue on a contract made by others for his benefit even if the contracting parties have agreed that he may, and that near relationship makes no difference, This was decided by the Court of Queen’s Bench in Tweddle v. Atkinson.133 It was at one time thought that if a person who was to take a benefit under the contract was nearly related by blood to the promisee a right of action would rest in him. But this doctrine was finally laid to rest in the case of Tweddle v. Atkinson by the Court of Queen’s Bench. 134

130 131 132 133 134

(1861) 1 Law Students Examination Chronicle 224. (1862) 2 Law Students Examination Chronicle 5. Leake, Contracts (1867), 221. Pollock, Contract, 190 – 191. Anson, Contract, 200.

DAVID DEROUSSIN

La stipulation pour autrui de l’ancien droit français au XIXème siècle, ou comment se débarrasser d’une tradition gênante Pour bien comprendre les règles du droit français, spécialement celles posées par les articles 1119 à 11221 du Code civil, mais aussi pour saisir l’évolution de cette technique, « institution vivante »2 s’il en est, un bref retour au droit romain est nécessaire, comme y invitait d’ailleurs déjà en son temps Demolombe dans le premier tome de son Cours de Code Napoléon consacré aux contrats. Il est nécessaire « avant tout », écrit-il, « de rappeler la doctrine romaine ; car la doctrine française en est issue ; et on va voir même qu’elle serait peut-être d’une explication difficile dans notre Code, si nous n’avions pas le secret de son origine ! »3. Cette technique est en effet empruntée au droit romain qui envisageait, d’une part, la stipulation pour autrui, qui consiste à rendre un autre créancier et, d’autre part, la promesse pour autrui, qui consiste dans le fait de promettre le fait d’un autre : alium facturum promittere, comme il est dit aux Institutes de Justinien4. Dans ce dernier cas, qui vise essentiellement la stipulation stricto sensu et non les contrats de bonne foi5, celui qui a promis le fait d’un autre n’est pas lui-même considéré comme débiteur, puisqu’il ne s’est pas engagé en son nom, et le tiers n’est pas non plus obligé, car il n’a pas consenti (s’il s’agit de la stipulatio contrat verbis : il n’a pas prononcé les paroles rituelles). Du moins à l’époque classique, comme il est dit au Digeste, nemo alterum factum promittendo obligatur6, tandis qu’il est vraisemblable que, à l’époque ancienne, certains actes impliquaient, à la charge des tiers, certaines obligations, comme la promesse rem habere licere faite par le vendeur à l’acheteur7. 1 À propos des héritiers, la doctrine civiliste du XIXème siècle souligne que, dans l’article 1122 C.Civ., le terme stipuler doit être pris dans un sens général, synonyme de contracter et non pas dans un sens technique, opposé à promettre. Cf. Demante, Cours analytique de Code Napoléon, Paris, 1865, t. 5 (continué par Colmet de Santerre), nº 34 bis I. 2 L’expression est empruntée à Ph. Malaurie et L. Aynes, Droit civil, Les obligations, Paris, Cujas, 1990, 2ème éd., nº 668. 3 Cours de Code Napoléon, Traité des contrats, Paris, 1870, t. 1, nº 205. 4 Inst., III, 19, 21. 5 En effet, dans les contrats bonae fidei et les pactes, la liberté est toujours laissée au juge de rechercher la véritable intention des parties : il pourra donc chercher à savoir si le promettant a aussi entendu s’engager personnellement, auquel cas la stipulation est valable. 6 D. 45.1.38, Ulp. Voir aussi : D. 46.1.65 et Inst. III, 19, 3.

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Comme l’expliquait Demolombe dans son Cours de Code Napoléon, la raison pour laquelle le promettant n’est pas engagé, alors qu’il a été partie au contrat, ne tient pas aux « principes généraux » de la raison naturelle ou du droit des gens qui gouvernent les nations mais au ius civile romain, au « génie propre du peuple romain » et à la « physionomie toute nationale de sa législation »8 dans laquelle la stipulation, ancien contrat solennel, était rangée dans la catégorie des contrats verbis donnant naissance à une obligation strici iuris excluant toute recherche de l’intention des parties. Cependant, deux techniques ont été utilisées pour tourner ce résultat : la stipulatio poena, pratiquée également dans le cadre des stipulations pour autrui, et la clause de porte-fort. Par la première, celui qui promet le fait du tiers s’engage à payer au créancier une clause pénale dans l’hypothèse où le tiers n’exécute pas la prestation. Par la seconde, il s’engage à tout faire pour que le tiers exécute et, s’il échoue, son engagement sera sanctionné au moyen de l’action ex stipulatu : « effecturum te ut Titius det, faciat », faire en sort que Titius fasse ou donne quelque chose9. À chaque fois, le créancier dispose seulement d’une action contre le promettant, et non contre le tiers. Venons-en cette fois aux stipulations pour autrui. S’agissant du droit romain, le principe paraît simple : alteri stipulari nemo potest. . . coeterum ut alii detur, nihil interest mea10. Il semble cependant qu’il faille distinguer l’époque classique du bas-empire. Pendant l’époque classique, le principe de la nullité des stipulations pour autrui ne paraît pas général. Certes, la stipulation n’est pas seule concernée : le principe s’applique aussi aux autres contrats11. Mais il frappe en réalité les obligations portant sur un dare. La stipulation pour autrui qui aurait pour objet un facere est valable : le stipulant peut agir en justice. Cette distinction selon la nature de l’objet a été mise en évidence par Perozzi12. Elle peut, à défaut d’un passage d’Ulpien ne faisant aucune référence à la nature de l’objet13, s’appuyer sur deux textes. Le premier est tiré des Institutes de Gaius. Il n’évoque, pour la considérer comme inutilis, que la stipulation « si ei dari stipu7 Pour d’autres exemples tirés de l’époque ancienne, cf. J.-Ph. Lévy et A. Castaldo, Histoire du droit civil, Paris, Dalloz, 2002, nº 601. 8 Cours de Code Napoléon, Traité des contrats, Paris, 1870, t. 1, nº 206. 9 D. 45.1.83 pr. 10 D. 45.1.38.17 Ulp. 11 D. 50.17.3. 4 et 44.7.11 notamment. 12 Cité par J. Macqueron, Cours de droit romain, Les obligations, Aix-en-Provence, 1970, p. 386. 13 D. 45.1.38.17, Ulpianus 49 ad sab. : « Alteri stipulari nemo potest, praeterquam si servus domino, filius patri stipuletur: inventae sunt enim huiusmodi obligationes ad hoc, ut unusquisque sibi adquirat quod sua interest: ceterum ut alii detur, nihil interest mea. plane si velim hoc facere, poenam stipulari conveniet, ut, si ita factum non sit, ut comprehensum est, committetur stipulatio etiam ei, cuius nihil interest: poenam enim cum stipulatur quis, non illud inspicitur, quid intersit, sed quae sit quantitas quaeque condicio stipulationis ».

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lemur »14. Le second est de Paul15 et ne traite, lui aussi, que d’un dare : « per liberam personam quae neque iuri nostro subiecta est neque bona fide nobis servit, obligationem nullam adquirere possumus. plane si liber homo nostro nomine pecuniam daret vel suam vel nostram, ut nobis solveretur, obligatio nobis pecuniae creditae adquireretur: sed quod libertus patrono dari stipulatus est, inutile est, ut nec ad solutionem proficiat adiectio absentis, cui principaliter obligatio quaerebatur. . . ». Pourquoi ne frapper d’inutilité que les stipulations portant sur un dare ? Sans doute parce que, comme l’a montré H. Ankum, l’obligation de dare et celle de facere ne sont pas sanctionnées de la même manière en cas d’inexécution. La première l’est par une condamnation pécuniaire dont le montant correspond en principe à la valeur de la chose – quanti ea res est – alors que la seconde, parce qu’elle est une obligation incertaine, l’est par une condamnation prenant en compte l’intérêt du créancier à obtenir l’exécution : quanti interest. On comprend dès lors que le stipulant d’une obligation de facere pourra, même s’il a stipulé pour autrui, agir contre le débiteur s’il avait un intérêt à ce que la stipulation fût exécutée. C’est sur la base de cet intérêt qu’il sera dédommagé16. Les textes admettant la validité de la stipulation dans ce cas sont nombreux. Par exemple, la stipulation par laquelle le tuteur obtient d’un co-tuteur en faveur du pupille la satisdatio rem pupilli salvam fore. Un tel acte est favorable à l’intérêt du pupille, mais aussi à celui du tuteur puisqu’il reste comptable de la gestion de la tutelle, donc a intérêt à ce que le co-tuteur gère convenablement la tutelle17. Autre exemple : en cas de vente de la chose louée18. Le vendeur peut, par une lex spéciale accompagnant le contrat de vente, demander à l’acheteur, qui n’est qu’un tiers par rapport au locataire, d’entretenir le bail en cours. Si, après s’y être engagé, l’acheteur fait déguerpir le preneur, le vendeur aura contre lui une action, puisqu’il était de son intérêt que le bail fût maintenu, étant tenu d’indemniser le preneur en cas de trouble.

14 III, 103 : « . . . cuius iuri subiecti non sumus. unde illud quaesitum est, si quis sibi et ei, cuius iuri subiectus non est, dari stipuletur, in quantum ualeat stipulatio. nostri praeceptores putant in uniuersum ualere et proinde ei soli, qui stipulatus sit, solidum deberi, atque si extranei nomen non adiecisset. sed diuersae scholae auctores dimidium ei deberi existimant; pro altera uero parte inutilem esse stipulationem ». 15 D. 45.1.126.2, Paulus 3 quaest. 16 Cf. J. Macqueron, op. cit., p. 387. 17 D. 45.1.38.20, Ulpianus 49 ad sab. : « si stipuler alii, cum mea interesset, videamus, an stipulatio committetur. et ait Marcellus stipulationem valere in specie huiusmodi. is, qui pupilli tutelam administrare coeperat, cessit administratione contutori suo et stipulatus est rem pupilli salvam fore. ait Marcellus posse defendi stipulationem valere: interest enim stipulatoris fieri quod stipulatus est, cum obligatus futurus esset pupillo, si aliter res cesserit ». 18 D. 19.1.13.30. Sur quoi, voir plus généralement D. Deroussin, « Du contractuel au statutaire : la vente de la chose louée du droit romain à l’interprétation de l’article 1743 C.Civ. », Passé et présent du droit, nº 2. Pour d’autres exemples, cf. J. Macqueron, op. cit., p. 388.

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En revanche, celui qui a stipulé pour autrui un dare ne peut rien réclamer car la chose ne lui étant pas due personnellement, il ne peut obtenir sa valeur. Sauf à recourir à ce que J. Macqueron appelle un « expédient », qui vise à faire du stipulant un créancier véritable : la clause pénale et le fait de prendre soi-même, dans l’acte, la qualité de créancier à côté d’autrui. Le stipulant peut en effet exiger du promettant une stipulatio poena à son profit pour le cas où il n’exécuterait pas sa promesse au profit du tiers désigné. Il s’agit ni plus ni moins d’introduire dans la stipulation une condition. Ou bien, le stipulant peut contraindre le promettant à s’engager à la fois envers lui et un tiers (mihi et alteri). Dans ce cas, s’il n’exécutait pas au profit du tiers, le promettant pouvait être actionné par le stipulant. Mais dans quelle mesure ? Selon les Sabiniens, le stipulant peut exiger la totalité de la chose due car le promettant s’est engagé pour le tout vis-à-vis des deux créanciers ; selon les Proculiens au contraire, il doit se contenter de la moitié. C’est à cette dernière solution que se rallie Cl. Serres par exemple, dans son commentaire des Institutes de Justinien. Enfin, le stipulant peut contraindre le promettant à s’engager envers lui ou un tiers (mihi aut alteri). Dans ce cas, on a affaire à une obligation alternative : le débiteur peut se libérer en payant toute la dette à l’un ou à l’autre, tandis que, du côté des créanciers, seul le stipulant peut agir judiciairement. À partir du bas empire, cette distinction fondée sur la nature de l’objet de l’obligation – dare, facere – tend à s’estomper et la prohibition des stipulations pour autrui finit par se faire générale. On parvient au principe posé par les Institutes de Justinien : elles sont nulles, mais le stipulant pourra agir s’il a un intérêt au contrat conclu en faveur d’autrui19. Quant au tiers bénéficiaire, on lui accordera dans certains cas une action utile, ce qui peut se produire notamment en cas de dépôt ou de commodat réalisé par un dépositaire ou un commodataire, au profit du propriétaire20 ou lorsque la constitution de dot prévoit la restitution des biens aux enfants à naître, au profit de ces derniers21. C’est donc d’une prohibition générale par son domaine d’application, quoique nuancée par l’admission de certains tempéraments que l’ancien droit français va héritier. Et même sous l’empire du Code civil, parce qu’il a cru bon de répéter cette prohibition dans une disposition spéciale, il est resté, selon l’expression de Demolombe, quelque chose de la « roideur primitive »22 du droit romain dans le droit français, où les promesses (passivement) et les stipulations (activement) pour autrui sont également dénuées de tout effet sauf, là encore, les tempéraments, fina19 III, 19, 3 : « Alteri stipulari, ut supra dictum est, nemo potest: inventae sunt enim huiusmodi obligationes ad hoc, ut unusquisque sibi adquirat quod sua interest: ceterum si alii detur, nihil interest stipulatoris... » et III, 19, 20 : « si quis stipuletur alii cum eius interesset, placuit stipulationem valere ». 20 C.J. 3, 42, 8. 21 C.J. 5, 14, 7. 22 Cours de Code Napoléon, Traité des contrats, Paris, 1870, t. 1, nº 207.

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lement assez nombreux, qui viennent d’être passés en revue et que la doctrine française reprend bien volontiers à son compte. Cependant, « il s’en faut qu’elle [la prohibition des stipulations pour autrui] ait, dans nos temps modernes, l’importance qu’elle a eue dans les temps anciens ». Certes, « à la première lecture », les textes du Code civil pourrait laisser penser le contraire, spécialement la « formule concise et un peu dogmatique »23 de l’article 1119 C.Civ. Mais une fois « l’apparence presque énigmatique de la forme » dépassée, le sens de cet article se laisse découvrir dans sa « simplicité presque naïve ». Or cette signification doit nécessairement se concilier avec « les mœurs de nos sociétés modernes », souligne Demolombe. Dans ce dernier tiers du XIXème siècle, ces prohibitions, « règles abstraites », ne peuvent « guère s’expliquer que par l’histoire d’où elles procèdent » et elles ont perdu l’importance, « un peu scolastique peut-être », qu’elles avaient autrefois. Autant dire que la règle de droit, loin d’être figée, doit évoluer avec le groupe social auquel elle est destinée. L’affirmation, en elle-même et de nos jours, est banale. Elle l’est moins quand on la trouve sous la plume du Prince de l’exégèse. Telle pourrait finalement se résumer l’histoire des règles romaines dans le droit français. Passée la timidité du droit médiéval (I) et de notre ancien droit (II), la majeure partie de la doctrine civiliste et la jurisprudence, à partir de la seconde moitié du XIXème siècle, vont déployer tous leurs efforts pour limiter le plus possible, voire mettre en cause frontalement les prohibitions héritées d’un passé jugé désormais révolu (III).

I. Les actes pour autrui dans le droit coutumier médiéval français Commençons notre enquête à partir du moment où éclot en France une doctrine coutumière, et plus spécialement avec Ph. de Beaumanoir. Dans ses Coutumes de Beauvaisis, il aborde la question à deux occasions, dans le chapitre XXXIV relatif aux « convenances ». Au nº 1004, il indique que « convenance puet bien estre fete a autrui persone qu’a la moie pour moi et en mon non, tout soit il ainsi que je ne l’eusse pas commandé ou que je n’en seusse mot ». L’affirmation paraît bien générale et impliquer l’admission généreuse des stipulations pour autrui. Mais les illustrations qui suivent immédiatement tempèrent l’enthousiasme qu’elle peut susciter. Elles se situent toutes dans la sphère familiale et, placées en opposition aux cas de représentation régulière, par procuration, elles montrent simplement que les membres de la famille (« ma fame », « mon fil aagié », « aucun de ma mesnie, qui sont a mon pain et a mon pot ou a mon louier ») peuvent recevoir « convenances » ou « creantemens » pour le compte du père même sans procuration (« se je n’en ai aucun 23

Ibid., t. 1, nº 209.

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establi procureeur »). Mais il s’agit seulement –autre limite- de rendre la condition du père meilleure : si la femme ou le fils peuvent agir ainsi, c’est seulement au « pourfit » et non au « damage » du père24. Ces conditions remplies, l’acte sera opposable par le père au cocontractant de la femme ou du fils. Celui qui a promis ne pourra répliquer au père : « je ne vous ai nules convenances ». Difficile donc de donner à ce texte une portée générale, permettant d’accueillir favorablement et indistinctement les stipulations pour autrui – elles seules, puisque le texte ne parle pas des promesses pour autrui –. D’autant que l’on peut dresser le même constat à partir du second passage où la question des effets du contrats est abordée. Au nº 1038 en effet, Beaumanoir souligne que « l’en se puet bien aidier de convenance qui a esté fete a autre persone qu’a la sieue ». Là encore, l’affirmation paraît à première vue générale. Pourtant, comme au nº 1004, elle doit être immédiatement nuancée par les exemples qui la contextualisent : « si comme se je fes aucune convenance pour ma fame, ou pour mes enfans, ou pour mon pere, ou pour ma mere, ou pour mon frere, ou pour ma suer, ou pour mon oncle, ou pour m’antain, ou pour mes neveus ». Tous, on le voit encore, ont rapport à la sphère familiale. Surtout – autre restriction –, les contrats dont il s’agit ici sont ceux par lesquels « je convenance aucune chose pour aus [mes parents] oster de prison ». L’hypothèse visée n’est donc rien autre chose que celle dans laquelle un membre de la famille tente d’obtenir la libération d’une « persone si prochaine de lignage », parce que « resons naturele donne que l’en soit mout courouciés de l’anui que l’en fet a tort » à celle-ci. On ne saurait donc l’analyser comme recelant le principe général de la validité des actes pour autrui25, d’autant que, au nº 1039, Beaumanoir explique clairement que celui pour le compte de qui le contrat a été fait n’est pas nécessairement obligé : « Tout soit il ainsi qu’aucuns face convenance pour autrui pour bien, nepourquant cil pour qui il le fet ne l’est pas tenus a delivrer s’il ne le li fist fere ou s’il ne l’en donna pouvoir ». En revanche, Beaumanoir connaît la technique du porte-fort. Il faut prendre garde, écrit-il, à la teneur du contrat lorsque ce dernier porte sur une chose qui n’appartient pas à celui qui s’oblige ou sur le fait d’un autre. S’il s’est agi d’une simple promesse – « je vous dis. . . que Jehans vous donra .x .lb. » –, alors son auteur n’est pas « pour tant obligiés a fere loi fere ». Mais si au contraire l’auteur de la promesse a exprimé clairement son intention de s’engager pour le cas où le débiteur désigné n’exécuterait pas, alors une obligation est contractée à sa charge. C’est le cas s’il déclare : « je ferai tant vers Jehan qu’il vous donra .x .lb. . . ». Si Jean n’exécute pas, il conviendra alors que le promettant « face du [sien] » Comment les choses évoluent-elles à partir du XIVème siècle en droit coutumier français alors que, de son côté, la doctrine savante s’efforce de contourner la prohi24 Alors que s’ils sont établis procureurs, ils peuvent recevoir « creantement aussi bien contre moi comme pour moi » : Ph. de Beaumanoir, Coutumes de Beauvaisis, éd. A. Salmon, Paris (1900), 1970, t. 2, nº 1004. 25 Comp. J.-Ph. Lévy et A. Castaldo, Histoire du droit civil, Paris, Dalloz, 2002, nº 600.

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bition posée par le droit romain26 ? Une tendance générale semble se dessiner en faveur de la validité des actes pour autrui. J. Boutillier, dans sa Somme rural, sous le paragraphe « De stipulation à autre non présent », explique par exemple qu’il est permis à un père de faire promettre à un débiteur de payer une somme à sa fille. La stipulation ainsi conclue par le père est valable mais, tant que la fille est sous l’autorité du père –mainbournie-, seul ce dernier pourra agir en paiement, ès qualité, dit Charondas dans son commentaire (« à cause de la puissance paternelle ») et en se fondant sur cette stipulation27. Mais la prudence s’impose. D’une part, Boutillier, dans le même paragraphe, enseigne que la stipulation par laquelle le stipulant fait promettre par le débiteur qu’il versera une somme à un tiers (somme qui a été préalablement prêtée au promettant par le stipulant par exemple) n’est pas « certaine ». Cela dit, le stipulant pourra toujours se retourner contre le tiers désigné s’il a reçu la somme, au moyen de l’action de la gestion d’affaires28. Les annotations de Charondas sur cet exemple sont claires : si alteri stipulari nemo potest, cela doit s’entendre seulement de l’action que réclamerait le tiers bénéficiaire, et qu’il faut refuser, et non pas de celle qu’il faut admettre au profit du stipulant pour récupérer sa somme29. D’autre part, il réaffirme la prohibition romaine des stipulations faites au profit d’une personne non présente, tout en faisant remarquer que certains sont d’opinion contraire : « Iaçoit ce que aucuns sont d’opinion qu’on peut bien promettre & obliger à personne qui n’est pas present, soit en seconde, ou tierce personne ; neantmoins dist la loy escrite qu’il n’y a point de stipulation qui vaille ne tienne à celuy qui present n’est »30. Mais ces hésitations n’empêchent pas la multiplication, en pratique, des actes pour autrui, comme par exemple les contrats de constitution de rente prévoyant que les arrérages seront payés à la mort du père au fils ou à la femme au décès du mari. De même qu’elles n’empêchent pas le recours aux clauses pénales – on admet ainsi que la clause peut prévoir, en cas d’inexécution du contrat, le versement d’une indemnité à un juge31 –. Cf. J.-P. Lévy et A. Castaldo, op. cit., nº 600. J. Boutillier, Somme rural, par L. Charondas, Paris, B. Macé, 1603, titre XLII, p. 312 : « si tu fais à ta fille promettre par aucun en forme de stipulation qu’il luy bailleroit aucune quantité d’argent, sçachez que jaçoit ce que ta fille soit en ta mamburnie : pour ce ne demeure que stipulation ne vaille & tienne. Mais ta fille tant qu’elle soit en ton pouvoir, ne la peut demander, mais tu la peuz demander. . . par vertu de ladite stipulation. . . car à toy en compete ». 28 Ibid. : « s’il advient que aucun face promettre, qui autant vaut au langage que stipuler, à aucun que l’argent que presté luy a, ou que on luy doit, rendre à un autre qui n’est mie present, Sçachez que telle stipulation n’est pas certaine, ne n’a mie tres-parfaicte action contre celuy qui ainsi est stipulé de le demander. & touteqfois si payé estoit à celuy à qui il est ainsi promis, si le pourroit repeter celuy qui ainsi l’auroit fait promettre à celuy qui receu l’auroit par celle stipulation, par action de besongnes factes, & le devroit ravoir par loy ». 29 Ibid., p. 315. 30 Ibid., p. 313. 31 J.-P. Lévy et A. Castaldo, op. cit., nº 600. 26 27

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II. Les hésitations tardives de l’ancien droit français 1. Le fondement de la prohibition À l’époque moderne, alors que l’école du droit naturel moderne, en la personne de Grotius, critique assez largement l’interdiction des stipulations pour autrui – dès lors que le stipulant et le bénéficiaire sont d’accord, le contrat peut produire un effet au profit de ce dernier, écrit Grotius32 –, la doctrine française continue à hésiter. Il y a ceux qui, allant à l’essentiel, ne prennent pas le temps d’évoquer les tempéraments à l’effet relatif des contrats et à la nécessité d’un consentement directement exprimé par ceux qui, concrètement, peuvent être désignés comme parties à l’acte. C.-J. de Ferrière, dans son Dictionnaire de droit, se contente ainsi de rappeler que l’obligation faite au profit d’un « étranger », « sans un pouvoir spécial », c’est-à-dire en dehors de toute hypothèse de représentation juridique, est nulle. La raison, écrit-il, en est simple : les contrats « ont été inventés pour que celui au profit de qui ils sont faits, augmente son patrimoine, suivant cette maxime de Droit, que notre intérêt est la mesure, la règle et le fondement de toutes les conventions : or nous n’avons aucun intérêt qu’une chose soit donnée à un autre »33. Avant lui, Domat affirmait aussi solennellement le principe de la prohibition, en le fondant sur la nécessité du consentement de chaque partie à l’acte : «comme les conventions se forment par le consentement, personne ne peut en faire pour un autre. . . . Et on peut encore moins faire prejudice par des conventions à des tierces personnes ». En note, Domat renvoie directement à la règle romaine alteri stipulari. . . . Seules exceptions envisagées par lui : la représentation juridique et la promesse de porte-fort34. Cela dit, Domat ne limite pas nécessairement le rayonnement du lien contractuel aux seules parties à l’acte. Mais il se fonde alors non pas sur la technique de la stipulation pour autrui, mais sur la bonne foi : nécessaire dans les conventions, elle est due par les contractants « à tous ceux qui peuvent avoir interêt à ce qui se passe entre eux »35. D’autres en revanche, parce qu’ils commentent les textes romains qui constituent le siège de la matière, sont plus diserts. Ils entrent même parfois dans une De iure belli ac pacis, II, 11, 18. C.-J. de Ferriere, Dictionnaire de droit et de pratique, Paris, Veuve Brunet, 1769, t. 2, vº obligation, p. 253. On notera simplement pour mémoire que l’Interprétation des Institutes donnée par E. Pasquier au XVIème s. n’évoque pas, à notre connaissance, la question des actes pour autrui (lnterprétation des Institutes de Justinian, publiée par le duc Pasquier, Paris, 1847). 34 J. Domat, Les loix civiles dans leur ordre naturel, Paris, 1697, Liv. I, tit. I, sect. II, III (tome 1, p. 71). Au VI, Domat évoque la promesse de porte fort, pour dire que l’absent « n’entre dans la convention » qu’après l’avoir ratifiée. Il faudrait ajouter aussi (V) tous ceux qui, du fait de leur fonction, ont le droit de traiter pour d’autres : les tuteurs, curateurs, administrateurs, maîtres des communautés. . . . 35 Ibid. Tit. I, sect. III, XIII (t. 1, p. 85). Par exemple, le dépositaire ne doit pas rendre la chose déposée au déposant s’il prend connaissance que ce dernier a volé la chose. 32 33

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casuistique assez complexe, révélatrice de la diversité des situations susceptibles de se présenter au juriste mais aussi d’une relative confusion entre celles qui relèvent véritablement de la catégorie des actes pour autrui et celles qui, voisines, se rapprochent plus de la technique de la représentation ou de la simulation. Les commentaires rédigés par le juriste méridional Cl. Serres, dans la seconde moitié du XVIIIème siècle, illustrent parfaitement cette tendance. Aux hypothèses relevant des stipulations ou promesses pour autrui sont mêlés des exemples mettant en jeu soit la simulation – lorsque l’on achète pour soi, de ses deniers, mais sous le nom d’un autre, comme par exemple le mari sous le nom de sa femme, ce nom est censebitur simulate appositum et il suffit que l’on se mette en possession de la chose pour en devenir « le véritable maître »36–, soit du pouvoir d’agir, qu’il se fonde sur une procuration expresse – le mandataire, le tuteur, le curateur ou l’administrateur « pour ceux dont il régit les biens » – ou tacite comme, par exemple, dans le cercle familial, le père pour son fils. Quant aux hypothèses de stipulations ou promesses pour autrui, son attention se porte essentiellement sur la question du paiement de l’obligation et de la libération du débiteur. Quand on a stipulé pour soi ou un autre, le paiement fait par le débiteur entre les mains de « l’autre » est censé le libérer mais, comme ce dernier ne peut pas « profiter du payement ou de la chose », il doit restituer à celui qui a stipulé. Quand cette fois on stipule pour soi « et » pour un autre, la dette se divise – sauf si l’objet de l’obligation n’est pas divisible, il revient alors entièrement au stipulant-, mais seul celui qui a stipulé est véritablement créancier et profite du paiement. L’autre moitié a été stipulée inutilement : elle n’accroît pas au stipulant et ne peut profiter à celui qu’il a désigné37. À la même époque, Pothier consacre des développements beaucoup plus longs à cette question. Il évoque d’ailleurs la stipulation pour autrui, dont il réaffirme la prohibition, à deux reprises au moins. D’abord, dans l’article V de la deuxième section du premier chapitre de la première de son Traité des obligations, où elle est traitée dans le détail38, mais sans être véritablement analysée par rapport aux principes du consentement. Contrairement à Domat, qui rattache explicitement la prohibition des stipulations pour autrui au caractère personnel et nécessaire du consentement, elle regarde selon lui la question de l’objet des contrats : seul ce que la partie contractante a stipulé pour elle-même peut être l’objet d’un contrat. Et lorsqu’il évoque dans l’article VI, De l’effet des contrats, le principe de l’effet relatif d’après lequel l’obligation résultant d’une convention, « étant formée par le consentement et concours des volontés des parties »39, ne peut produire effet contre un tiers, « ni donner de droit à un tiers dont la volonté n’a pas concouru à former la 36 Cl. Serres, Les institutions du droit français suivant l’ordre de celle de Justinien, Paris, Cavelier, 1760, p. 473. 37 Ibid., p. 470. 38 Traité des obligations, dans les Traités sur les différentes matières de droit civil. . ., Paris, 1781, 2ème éd., tome 1, p. 27 et sv. 39 Traité des obligations, op. cit., nº 87.

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convention », les exemples fournis sont étrangers à la question de la stipulation pour autrui, de même que les exceptions citées40. Pour résumer les positions de Pothier, on peut donc retenir que le principe de la prohibition de la stipulation pour autrui trouve selon lui son fondement essentiellement dans l’effet relatif des contrats – le tiers qui n’est pas partie ne peut acquérir aucun droit-, d’une part et, d’autre part, dans le fait que le stipulant n’a aucun intérêt « appréciable à prix d’argent ». Mais à aucun moment, explicitement ou implicitement – par la place qu’occupent les développements dans le plan du Traité – il n’est fait mention, comme Domat l’y aurait invité, de la question du consentement. Une remarque identique pourrait être faite à propos du commentaire des Institutes de Justinien donné par le jurisconsulte méridional Cl. Serres. Sans faire référence à la liberté du consentement, son raisonnement s’appuie sur le manque d’intérêt du tiers : « régulièrement on ne peut pas stipuler ni acquérir pour autrui, parce que les stipulations & obligations n’ont été introduites qu’afin que chacun puisse faire son profit ou son avantage »41. 2. Les tempéraments à la prohibition Si cette fois l’on laisse de côté la question du fondement de la prohibition des actes pour autrui pour analyser les tempéraments qu’il convient d’admettre pour en limiter la portée en pratique, plusieurs enseignements peuvent être tirés des développements rédigés par Pothier, qui passe pour une bonne partie de la doctrine du XIXème siècle comme celui qui a entendu réaffirmer la prohibition romaine42, et, plus généralement, de la doctrine d’ancien régime. Pothier en effet enseigne que la stipulation pour autrui est valable même si le tiers bénéficiaire n’était pas présent à l’acte dès lors que le stipulant a un intérêt personnel et appréciable en argent à stipuler. Cela peut arriver dans plusieurs cas, notamment lorsque le stipulant est luimême obligé par ailleurs envers le créancier. Étant dans l’impossibilité de satisfaire lui-même cette obligation, il demande à un autre de l’accomplir à sa place. Il est alors censé stipuler pour lui, puisqu’il évitera ainsi les dommages-intérêts qui 40 Pothier n’évoque que deux exceptions à l’effet relatif des contrats (nº 89 et 90) : à l’égard des cautions, qui profitent des conventions intervenant entre le créancier et le débiteur sans y avoir pris part et des bénéficiaires des substitutions puisque, lors de l’événement par lequel la substitution s’ouvre, ils acquièrent le droit contre le grevé de réclamer les biens compris dans la substitution. En revanche, Pothier refuse de voir dans le contrat d’atermoiement conclu entre un débiteur « qui se dit hors d’état de faire honneur à ses dettes » et la plupart de ses créanciers une exception au principe de l’effet relatif. Selon lui, ce n’est pas le contrat d’atermoiement qui s’impose par lui-même aux créancier non signataires : c’est l’homologation qu’en fait le juge, lorsqu’il considère l’atermoiement conforme à « l’intérêt commun des créanciers ». 41 Cl. Serres, Les institutions du droit français suivant l’ordre de celle de Justinien, Paris, Cavelier, 1760, p. 470. La formule rappelle celle de C.-J. de Ferrière citée plus haut. 42 La critique, car c’en est une, est notamment formulée par E. Fuzier-Herman, Le Code civil annoté, Paris, 1936 (continué par R. Demogue), t. 3, sous l’art. 1119.

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résulteraient de la non-exécution. C’est là que se trouve son intérêt personnel et appréciable en argent43. D’ailleurs, un arrêt du 22 février 1772 de la chambre des enquêtes lui donnera de ce point de vue raison, en indiquant que la stipulation pour autrui est valable quand bien même le tiers bénéficiaire n’y était pas présent, dès lors que le stipulant a un intérêt personnel et appréciable à stipuler Le premier enseignement que l’on peut tirer de tout cela est clair : tout est fait pour limiter la prohibition posée par le droit romain. D’une part, on recourt à la notion d’obligation naturelle. Si la convention qui consiste à stipuler quelque chose pour un tiers est « nulle », du moins ne l’est-elle que civilement. Aucune obligation « civile » n’est contractée ni envers celui qui a stipulé, qui ne devra aucune indemnité (il peut y « manquer impunément »), ni envers celui qui est désigné comme débiteur. La prohibition n’a donc lieu que dans le for extérieur, à l’égard des obligations civiles44. Au contraire, dans le for de la conscience, l’engagement est valable. Car l’intérêt du stipulant, même s’il n’est pas appréciable à prix d’argent, « ne laisse pas d’être un véritable intérêt » : il s’agit d’un intérêt de « pure affection » pour le bénéficiaire, en conséquence duquel ce dernier peut exiger, dans le for intérieur, l’accomplissement de la promesse ou une indemnité du stipulant, mais non du tiers désigné. La stipulation pour autrui donne donc naissance à une obligation naturelle, ce qui donne l’occasion à Pothier de citer ici Grotius45. D’autre part, les tempéraments imaginés à Rome sont répétés. C’est ainsi que ce qui concerne un tiers peut, à défaut de constituer l’objet de la convention, l’affecter d’un mode ou d’une condition46. Le fait d’un tiers peut être une condition de mon engagement ou, en convenant par exemple d’une donation, le donateur peut imposer au donataire une charge au profit d’un tiers. Dans le cas de la donation sub modo au profit d’un tiers47, Pothier rappelle le droit accordé par le droit romain du bas empire au tiers contre le donataire, à l’effet de l’obliger à satisfaire à la charge imposée. Mais il précise que ce droit ne naît pas, à proprement parler, de la donation qui, comme tout contrat, ne vaut qu’inter partes. Il naît de l’équité naturelle : le donataire ne peut « sans perfidie », sans blesser l’équité naturelle, retenir la chose sans exécuter la condition sous laquelle elle lui a été transmise. Reste la question de savoir si la charge imposée au profit d’un tiers peut être supprimée ou Pothier, Traité des obligations nº 58. Ibid., nº 55. 45 L. 2, c. 11, n. 18. 46 Traité des obligations, op. cit., nº 70. 47 Pour Cl. Serres, op. cit., cette donation est valable, sans mandat, par l’effet du consentement de celui en faveur de qui on a stipulé. Sa ratification est nécessaire, conformément à l’art. 5 de l’ordonnance de 1731 sur les donations : tant qu’il n’y a pas ratification, le donateur peut révoquer la donation. Si la donation a été faite à deux personnes, dont une seulement l’a acceptée, elle se divise mais l’autre moitié n’accroît pas à l’acceptant (Cf. Brodeau sur Louet, lettre D, ch. 4 et Ricard, Traité des donations, tome 1, part. 3, chap. 4, sect. 4, n. 479. 43 44

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modifiée sans son intervention. Certains, comme Grotius, Duarène ou Ricard tiennent pour l’affirmative, puisque le tiers n’est pas partie à l’acte de donation. Son droit n’est donc pas un droit irrévocable, sauf à partir du décès du donateur. D’autres en revanche soulignent que la clause par laquelle la charge est imposée doit être comprise comme enfermant en elle une « seconde donation, ou une donation fidéicommissaire » faite par le donateur au « tiers ». En acceptant la donation, le donataire donne en même temps effet à cette « seconde donation » et fait naître, sur la tête du « tiers », un droit irrévocable, irrévocable parce que contenu dans une clause faisant partie d’un acte qui, à partir de son acceptation, devient irrévocable : une donation. Sans prendre parti, Pothier signale simplement que l’ordonnance sur les substitutions (part. 1, art. 11 et 12) donne raison aux seconds. Mais si, ce faisant, elle règle la question pour l’avenir, celle-ci « demeure entiere pour ce qui se seroit passé avant l’Ordonnance »48 . Quant à l’acte par lequel l’on promet sans se porter fort49 qu’un autre fera ou donnera quelque chose, sans rien promettre pour sa part, il n’oblige en principe personne : ni celui qui était présent à l’acte, puisqu’on ne peut supposer qu’il ait entendu s’engager personnellement, ni celui qu’il désigne comme débiteur, puisqu’il n’a pu l’engager sans son consentement. Il n’en reste pas moins, écrit Pothier qui reprend ici une présomption imaginée à Rome dans le cadre des contrats de bonne foi, que dans ce cas, l’on doit présumer « facilement » que le promettant a eu l’intention de s’engager per se, « quoique cela ne soit pas exprimé »50. Du fait de cette présomption, il pourra être tenu des dommages-intérêts résultant de l’inexécution de la promesse. Par exemple, cette présomption peut être tirée du fait que le stipulant a consenti à payer une « certaine peine » ou des dommages-intérêts en cas d’inexécution. Alors en effet on supposera qu’il n’a pas simplement entendu promettre le fait d’un autre, mais s’est porté fort. Enfin, on n’hésite pas à accorder au créancier adiectus solutionis gratia, qui par ailleurs a qualité pour recevoir le paiement fait entre ses mains par le débiteur, une action contre le promettant en vue de se faire payer51. Mais – deuxième enseignement – cette volonté d’accueillir assez favorablement les actes pour autrui conduit parfois à obscurcir les développements en mêlant les hypothèses relevant strictement des actes pour autrui à d’autres mettant en jeu des notions ou techniques différentes, ce qui apparaît nettement lorsque Pothier enTraité des obligations, op. cit., nº 73. On remarquera à ce titre que l’on peut se porter fort pour un mineur et que la promesse reste valable même si l’acte est annulé à l’égard du mineur pour cause de minorité : Cass. 16 février 1814, cité dans les Pandectes françaises, Nouveau répertoire de doctrine, de législation et de jurisprudence, Paris, 1893, vº obligations nº 7393. Demante, Cours analytique de Code Napoléon, Paris, 1865, tome 5 (continué par Colmet de Santerre), nº 31 bis, juge néanmoins cette pratique « dangereuse ». 50 Traité des obligations, op. cit., nº 56. 51 Voir L. Charondas le Caron, Répertoire du droit français, L. X, rép. 46. 48 49

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visage les cas dans lesquels il faut considérer que nous stipulons en réalité pour nous-mêmes alors que la convention fait mention d’un autre. Le premier cas est bien différent de la stipulation pour autrui. C’est celui dans lequel il est stipulé que la chose due sera payée à un tiers désigné au contrat. Ce tiers n’intervient pas à la convention, il est simplement censé avoir reçu pouvoir du créancier pour recevoir le paiement à sa place : la créance naît bien sur la tête de celui qui a contracté et non sur la sienne. Il n’intervient donc que ès qualité de mandataire ou de donataire, si le créancier a agi dans un esprit de pure libéralité 52. Le deuxième cas au contraire nous rapproche de la matière : c’est celui dans lequel le stipulant, qui stipule pour un autre, a tout de même un « intérêt personnel et appréciable à prix d’argent » à ce que l’obligation soit exécutée53, ce qui peut arriver de deux manières. En premier lieu, il se peut que le stipulant soit lui-même obligé par ailleurs envers le créancier. Devant accomplir une prestation au profit d’une personne, mais étant dans l’impossibilité d’y satisfaire, il demande à un autre d’accomplir à sa place ladite prestation. Alors, il est censé stipuler pour lui. Re ipsa, « je stipule pour moi et à mon profit ». Puisque le stipulant évite les dommages-intérêts qui résulteraient de la non-exécution, il a un intérêt personnel et appréciable en argent à ce que cet autre fasse ce qu’il devait faire. En second lieu, il peut s’agir tout simplement de l’application des règles de la gestion d’affaires, à laquelle la doctrine du XIXème siècle aura elle aussi souvent recours. Lorsque par exemple je demande à un maçon d’accomplir des travaux sur la maison d’une personne alors que je ne suis pas, par ailleurs, obligé envers cette dernière, j’ai un intérêt pécuniaire à ce que le maçon accomplisse la prestation promise puisque je me suis chargé, finalement, de gérer à son insu les affaires de cette personne. Or, comme gérant d’affaire, je suis comptable de la gestion dans laquelle je me suis spontanément immiscé. Le troisième cas est celui dans lequel on stipule pour ses héritiers, puisqu’ils sont « en quelque sorte la continuation de nous-mêmes »54. Mais encore faut-il que l’héritier apparaisse ès qualité dans la convention. La convention serait donc sans effet si son bénéficiaire devenait par la suite héritier du stipulant dès lors qu’il n’a pas été mentionné comme tel. Il n’est pas question pour autant d’exiger une désignation expresse : la qualité d’héritier peut ressortir des circonstances. Pothier se range ainsi à l’avis de Bruneman, contre celui de Julien, pour régler le sort de la convention par laquelle un créancier s’engage à ne pas exiger la dette ni de son débiteur « ni d’une telle sa fille », appelée à devenir son héritière. Cette qualité, quoique encore virtuelle, doit être prise en compte et, selon Pothier, la convention doit être interprétée de sorte à lui faire produire effet non seulement vis-à-vis du Traité des obligations, op. cit., nº 57. Ibid., nº 58. 54 Ibid., nº 60. Comp. art. 1122 C.Civ. : « on est censé avoir stipulé pour soi et pour ses héritiers et ayants cause, à moins que le contraire ne soit exprimé ou ne résulte de la nature de la convention ». 52 53

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débiteur mais aussi à l’égard de cette fille, même si elle a été désignée nommément et non ès qualité de successeur : « je suis censé stipuler pour ma fille en sa future qualité de mon héritiere, quoique cela ne soit pas exprimé »55. Plus généralement, chacun est censé avoir implicitement contracté pour soi et ses héritiers : qui paciscitur, sibi, heredique suo pacisci intelligitur, encore que l’on puisse restreindre l’effet de la convention à certains seulement des héritiers (s’ils ont vocation à devenir créanciers, ils ne le deviendront que pour leur part si la créance est divisible, sinon pour le tout). Par ailleurs, la maxime qui paciscitur, sibi. . . souffre des exceptions : lorsque le fait qui constitue l’objet de l’obligation est personnel au débiteur ; lorsque la convention est invoquée contre les dispositions d’un contrat de mariage ou, enfin, lorsqu’elle prévoit expressément que le débiteur s’engage seul : « mais il faut que cela soit exprimé clairement clairement dans la convention »56. Pour finir, le quatrième cas concerne les ayants-cause, c’est-à-dire tous ceux qui succèdent à titre particulier, singulier, à leur auteur, même à titre gratuit. D’ailleurs, la convention portant sur telle chose qui m’appartient est censée implicitement avoir été faite pour moi et pour mes ayants-cause, sans qu’il soit besoin de l’exprimer au contrat57. Car en stipulant pour soi, l’on est censé stipuler pour tous ceux qui nous représentent ou nous représenteront relativement à la chose objet de la convention, spécialement les acquéreurs. Mais en vertu du principe inclusio unius sit exclusio alterius, on est pas censé avoir stipulé pour ses ayant-cause lorsque l’on a déclaré explicitement stipuler pour soi et ses « héritiers », puisque cette appellation désigne les successeurs universels58.

III. Audace jurisprudentielle et doctrinale sous l’empire du Code civil 1. Les dispositions du Code Sous l’appellation générique « stipulation pour autrui », le Code civil français distingue en réalité deux situations : celle dans laquelle le terme stipuler est pris dans son acception technique : faire jouer à un autre le rôle de créancier (art. 1119); et celle dans laquelle on promet le fait d’un autre. Le Code civil, suivant en cela Pothier et Domat, affirme ainsi à l’article 1119 de manière concise mais pas nécessairement solennelle59 le principe d’après lequel Ibid., nº 62. Ibid., nº 63. 57 Ibid., nº 68. 58 Ibid., nº 69. 59 L’article 1119 est si l’on peut dire « noyé » dans un ensemble de dispositions (14 articles) concernant le consentement. 55 56

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« on ne peut, en général, s’engager, ni stipuler en son propre nom que pour soimême ». Quant à la promesse de porte-fort (art. 1120 C.Civ.), elle n’est pas strictement une véritable exception à l’article 1119 C.Civ. puisque le promettant promet son propre fait : celui qui promet contracte finalement lui-même une obligation de faire qui s’éteint, comme exécutée, dès que le tiers contracte pour lui l’obligation, même s’il ne l’a pas encore effectivement exécutée. À ces deux dispositions il convient d’ajouter celle de l’article 1121 C.Civ. d’après laquelle « on peut pareillement stipuler au profit d’un tiers, lorsque telle est la condition d’une stipulation que l’on fait pour soi-même ou d’une donation que l’on fait à un autre. Celui qui a fait cette stipulation ne peut la révoquer, si le tiers a déclaré vouloir en profiter ». Lors de la discussion précédant l’élaboration du Code civil, c’est au nom de la nécessité du consentement que la prohibition des stipulations pour autrui est envisagée. Le tribun Mouricault, par exemple, lors de son discours devant le Corps législatif, analyse la stipulation pour autrui à travers le prisme du consentement : sa prohibition est une conséquence de la nécessité du consentement60. En cas d’acception par le tiers bénéficiaire, le consentement du tiers bénéficiaire étant réuni à celui des autres parties, le contrat est « scellé par trois volontés »61 qui ne peuvent plus y déroger. Mais l’intérêt personnel entre aussi en ligne de compte. Dans les deux hypothèses évoquées par l’article 1121 C.Civ. par exemple, c’est l’intérêt personnel à l’exécution de la stipulation par le promettant qu’a le stipulant qui justifie l’octroi d’une action en résolution en cas d’inexécution de la part du promettant.

2. Restrictions doctrinales et jurisprudentielles au principe de la prohibition (XIX – XXème s.) Quelques auteurs ont vu là un archaïsme condamnable, notamment Ortolan dans son Explication des Institutes de Justinien (sur les §§ 3 et 4) ou Demangeat, dans son Cours élémentaire de droit romain62, tous deux romanistes. Mais, jusqu’aux années 1850, la jurisprudence applique fidèlement l’article 1119 C.Civ. et, en dehors des deux exceptions admises par l’article 1121, sanctionne par la nullité les actes pour autrui. Deux arrêts suffiront à illustrer cette application stricte des principes du Code. 60 Séance du 17 pluviôse an XII-7 février 1803 (Fenet, op. cit., t. 13, p. 417). Les travaux préparatoires ne sont pas d’un grand secours. La collection de Fenet renseigne peu, mais pas moins que la Conférence du Code civil de Maleville (Paris, Didot, 1805, p. 11) où l’on apprend seulement que le Tribunat est intervenu pour insister sur l’idée que « l’intention de la loi est sans doute que aussi-tôt la stipulation faite, l’irrévocabilité soit opérée par la seule déclaration du tiers qu’il veut en profiter ». 61 Mouricault (Fenet, op. cit. t. 13, p. 418). 62 Au t. 2, p. 211.

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Le premier, rendu par la Cour d’appel de Rennes en 1848, souligne que la déclaration faite par l’acquéreur, dans le contrat de vente, qu’il achète pour un tiers (pourtant désigné) ne suffit pas à permettre à ce tiers d’agir directement contre le vendeur pour réclamer l’exécution de la vente63. Le second, rendu par la Cour de cassation en 1857, affirme qu’il n’y a pas une stipulation pour autrui valable mais une double mutation de la propriété lorsque l’acquéreur déclare acheter la chose pour le compte d’une commune tout en se constituant débiteur du prix64. Néanmoins, la jurisprudence de la seconde moitié du siècle finit par s’inscrire dans une logique inverse et tente, chaque fois qu’elle peut découvrir l’existence d’un intérêt du stipulant à l’accomplissement de l’acte, de consolider l’opération. Son rôle dans l’évolution du droit français en la matière est alors essentiel et les auteurs ne manquent pas de le reconnaître, souvent pour s’en féliciter. En voyant dans les deux exceptions posées par l’article 1121 C.Civ. de simples illustrations, non limitatives, d’un principe plus général selon lequel l’acte pour autrui est valable dès lors qu’il recèle, du point de vue du stipulant, un intérêt, même moral comme on le verra par la suite, elle fait en effet « alors figure de législateur secondaire, par délégation ». Il faut dire que, en la matière comme s’agissant de l’enrichissement sans cause, de l’action oblique ou de la responsabilité civile, les formules laconiques du Code invitaient le juge à « faire le nécessaire »65. La doctrine, pour sa part, a choisi d’accompagner cette nouvelle tendance. La fin du XIXème siècle marque d’ailleurs le point de départ d’un véritable foisonnement doctrinal, à l’occasion duquel de nombreuses thèses notamment sont consacrées à la question, comme celle d’Éd. Lambert66 qui milite en faveur d’une admission élargie de la stipulation pour autrui en droit français. Remplissant son office, la doctrine dégage les raisons et fondements juridiques de cette jurisprudence nouvelle en se livrant notamment à une analyse de la nature juridique de la stipulation pour autrui à laquelle il nous faut nécessairement nous arrêter (3) avant de décrire tous les mécanismes auxquels elle a recours pour faire dans le droit français une place de plus en plus grande aux stipulations pour autrui (4). On 63 Rennes, 15 décembre 1848 (Sirey 1850, 2, 276). Seul un mandat, de la part de l’acquéreur partie à l’acte de vente, lui permettrait de revendiquer la chose entre les mains du vendeur. 64 Civ. 5 mai 1857 (Dalloz 1857, 1, 250). 65 L. Josserand, « Les accidents d’automobiles et l’arrêt solennel du 13 février 1930 », Évolutions et actualités, Conférences de droit civil, Paris, Sirey, 1936, p. 53. 66 La stipulation pour autrui, Thèse Droit, Paris, 1893, p. 2. On pourrait citer encore, pour se limiter aux thèses de la fin du XIXème s.: J. Coulazou, De la stipulation pour autrui dans l’assurance. . . , Thèse Droit, Paris, 1890 ; M. Vigne, Rapports de la gestion d’affaires et de la stipulation pour autrui, Thèse Droit, Paris, 1892 ; E. Champeau, La stipulation par autrui et le principe qu’on ne peut acquérir. . ., Thèse Droit, Paris, 1893 ; C.-J.-E. Naples, De la stipulation pour autrui et de la gestion d’affaires,Thèse Droit, Paris, 1897 ; G. le Bray, Des rapports de la stipulation pour autrui avec la gestion d’affaires, Thèse Droit, Paris, 1899. Le mouvement ne s’est pas arrêté et continue encore aujourd’hui (voir, récemment : J.-M. Roux, Le rôle créateur de la stipulation pour autrui, Thèse Droit, Aix-Marseille III, 2000).

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finira en passant en revue, de manière évidemment non exhaustive, quelques exemples de stipulations pour autrui valables.

3. L’analyse de la nature juridique de la stipulation pour autrui Deux questions au moins méritent d’être traitées ici. D’une part, la question de la stipulation pour autrui a-t-elle nécessairement rapport à celle du consentement ou ne peut-on pas plutôt la rapprocher de celle de l’objet du contrat ? D’autre part, et plus concrètement, quelle est exactement la situation juridique du tiers bénéficiaire, la validité de la stipulation étant admise par ailleurs ?

a) La prohibition de la stipulation pour autrui, entre protection du consentement et objet du contrat aa) Le consentement et la présomption de porte fort Colmet de Santerre, continuant le Cours de Demante, envisage traditionnellement la prohibition de la stipulation pour autrui sous l’angle du consentement : d’une part, le consentement « ne peut évidemment former de lien » qu’entre les personnes desquelles il émane ; d’autre part, « il ne saurait lier les parties ellesmêmes. . . si la volonté du promettant n’est pas de s’engager lui-même, mais d’en engager un autre »67. Cette manière de voir explique que, pour une bonne partie de la doctrine civiliste après le Code civil, les art. 1165 et 1351 sont interprétés comme une protection au profit de ceux qui n’ont pas consenti et se présentent donc, de ce point de vue, comme des garanties de l’individualisme. C’est ce qu’explique par exemple Boistel, dans le Livre du centenaire dédié au Code, en 190468. En plaçant la prohibition de la stipulation pour autrui dans l’orbite du consentement, le Code semblait fermer la voie aux innovations en refusant de penser les stipulations et promesses pour autrui relativement à l’objet du contrat et à ses effets (comme exception à l’effet relatif induit par le caractère personnel du droit de créance), c’est-à-dire en refusant de les penser de manière objective. Il n’en fut rien cependant car, en se plaçant sur le terrain du consentement, le Code invitait dans le même temps la doctrine à voir dans cette matière avant tout une question d’interprétation de la convention formée par les parties, comme le souligne par exemple Demolombe : il s’agit finalement de savoir si, dans une convention, « le consentement doit toujours émaner de la partie contractante elle-même »69. 67 Cours analytique de Code Napoléon, Paris, 1865, t. 5 (continué par Colmet de Santerre), nº 29. 68 A. Boistel, « Le Code civil et la philosophie du Droit », Le Code civil 1804 – 1904. Livre du centenaire, rééd. Paris, Dalloz, 2004, p. 49. 69 Delomombe, op. cit., nº 209.

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La doctrine s’est donc emparée, sous cette forme, de la prohibition pour en limiter, voire en anéantir, la portée. Par faveur aux actes pour autrui, elle a cherché à présumer l’existence d’une obligation de porte-fort. Dans les pas de Pothier, la jurisprudence et la doctrine française, au XIXème siècle, recueillent favorablement la présomption de porte fort70 que Pothier voulait généraliser, en s’appuyant sur l’article 1156 C.Civ. : « à plus forte raison doit-on admettre cette doctrine dans notre droit moderne, où la bonne foi et le bon sens président à l’interprétation de toutes les conventions »71. Mais quelle ampleur lui donner ? Pour certains, tout cela n’est qu’un simple problème d’interprétation de la volonté du promettant : en promettant le fait d’un autre n’a-t-il tenu qu’un « propos de conversation » ou a-t-il entendu s’engager sérieusement, c’est-à-dire personnellement ? Or, prenant appui sur l’article 1157 C.Civ. (lorsqu’une clause est susceptible de deux sens, il faut privilégier celui qui peut avoir quelque effet), ils affirment que, de ces deux interprétations, c’est celle qui fait produire un effet juridique à l’acte qui doit être privilégiée, sauf évidence contraire. C’est le choix qu’opère la jurisprudence72. La promesse de porte-fort doit donc être sous-entendue de manière systématique, comme le souligne R. Saleilles73. Le raisonnement est curieux. Il consiste à se servir des règles relatives à l’interprétation des contrats, qui supposent l’existence du contrat, pour répondre à la question de savoir s’il y a contrat ou non ! Mais aussi curieux soit-il, ce raisonnement est pleinement assumé afin de réduire « à néant » volontairement la partie de l’article 1119 C. Civ. relative à la promesse pour autrui, ce dont il n’y a lieu ni de s’ « étonner » ni de se « plaindre ». C’est ce que pensent Larombière et Marcadé74, ou encore Demante et Colmet de Santerre qui enseignent que si l’on ne peut s’engager en son nom que pour soi-même et que nul ne peut promettre qu’une autre personne 70 Par l’effet de la promesse de porte-fort (art. 1120 C.Civ.), celui qui promet contracte finalement lui-même une obligation de faire. De ce point de vue, et strictement, la promesse de porte-fort ne constitue pas véritablement une exception à l’article 1119 C.Civ. puisque le promettant promet son propre fait. Son obligation s’éteint, comme exécutée, dès que le tiers contracte pour lui l’obligation, même s’il ne l’a pas encore effectivement exécutée. Sur la promesse de porte-fort, cf. J. Boulanger, La promesse de porte-fort et les contrats pour autrui, Thèse Droit, Caen, 1933. 71 Pandectes françaises, op. cit., nº 7387. L’auteur des Pandectes semble bien avoir recopié cette phrase du Cours de Demolombe, op. cit, nº 216 : « À combien plus forte raison faut-il admettre cette doctrine, dans le droit français moderne, où le bon sens et la bonne foi doivent être, plus que jamais, considérés comme les règles fondamentales de l’interprétation des conventions ». Mais, conformément à l’ordonnance de 1731, on rappelle que la prohibition des stipulations pour autrui interdit aux notaires d’accepter pour un absent une donation, en se portant fort pour lui (Duranton, op. cit., nº 221). 72 Voir : Civ., 28 décembre 1926 (Sirey 1928, 1, 273, note H. Vialleton) : les parents, donateurs (donation-partage) avaient simplement déclaré accepter au nom de leur fille. La Cour d’appel, puis la Cour de cassation ont décidé qu’il fallait y voir une promesse de porte-fort. 73 R. Saleilles, Théorie générale de l’obligation, nº 152, qui note ainsi qu’une telle interprétation de l’article 1120 vide finalement de sa substance l’article 1119 C.Civ. 74 Id.

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fera ou non quelque chose, la présomption posée par Pothier, « qui devait bien souvent réduire à néant le principe [de la prohibition] », doit être appliquée « en sorte que la règle romaine ne doit plus actuellement subsister que comme une pure abstraction, régissant des hypothèses improbables, et incessamment remplacée par l’exception »75. La promesse de se porter fort n’a en effet rien de « sacramentel », écrit Colmet de Santerre. Il suffit que, dans la convention, figure « toute autre phrase qui exprimerait la même pensée, en quelques termes que ce fût ». Plus généralement, les règles posées par le Code civil pour l’interprétation des conventions sont mobilisées en faveur des promesses pour autrui : puisqu’il faut interpréter le contrat pour lui donner un sens, il faut supposer que les parties « ont voulu faire un acte valable plutôt qu’un acte nul ». Conformément à l’article 1157 C.Civ. (potius ut valeat quam ut pereat), il faut supposer qu’une personne a entendu déterminer telle autre à s’obliger lorsque, dans le contrat, elle a dit promettre que cette dernière s’engagerait. Il est vrai, note Colmet de Santerre, « qu’on arrive ainsi à réduire à néant la partie de l’article 1119 C.Civ. qui concerne la promesse pour autrui ». En effet, elle ne trouve à s’appliquer désormais que lorsque l’on peut prouver que le promettant n’a voulu contracter aucune obligation, « ce qui est une hypothèse chimérique, car il est impossible de comprendre alors dans quel but la promesse a été faite »76. La conception du contrat comme acte par nature raisonnable77 commande néanmoins une telle conclusion. Demolombe l’affirme aussi franchement et sa position, amplement argumentée, mérite quelques développements. Après avoir écrit qu’il n’est pas nécessaire, dans le contrat, de prendre « précisément » la qualité de porte-fort – expression qu’il juge d’ailleurs «un peu étrange » mais qu’il conserve parce qu’elle est « il est vrai, depuis longtemps usitée » –, que cette formule peut être remplacée par « toute autre expression équivalente » de laquelle « il résulterait que les parties ont entendu faire un contrat », il se demande s’il ne conviendrait pas d’aller « plus loin ». Il pose alors clairement la question de savoir s’il ne faut pas a priori décider que tout engagement pris en son propre nom par une personne pour un tiers « implique virtuellement, de sa part, la promesse de porte-fort ». Surtout, il y répond par l’affirmative, malgré l’article 1119 et ce que cet « argument de texte semblerait avoir d’irrésistible »78, pour plusieurs raisons. Premièrement, parce que cette présomption « tendait à prévaloir » dans notre ancien droit. « On présume facilement », disait Pothier que Demolombe cite longuement, ainsi que Vinnius et Grotius. Bel exemple, pour le Principe de l’Exégèse, d’un retour au passé pour interpréter le Code ! Deuxièmement, parce qu’il ne s’agit ici que d’une question d’interprétation – « avons-nous eu, oui ou non, en prometDemante, op. cit., nº 29 bis. Demante, op. cit., nº 31 bis III. 77 Voir notre « Le contrat à travers le Code civil », Genèse du Code civil des français, Sénat, 22 – 23 novembre 2004, à paraître dans la collection : « Les colloques du Sénat ». 78 Demolombe, op. cit., nº 215 et 216. 75 76

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tant à Paul le fait de Pierre, l’intention de nous obliger ? » – et que cette question doit être résolue par l’affirmative dès lors que « les circonstances seront telles que cette question pourra s’élever ». Car, ou la promesse n’est jamais qu’un « propos vague de conversation » et alors, juridiquement, elle n’est pas une promesse, donc un contrat, ou bien elle « apparaît avec la physionomie et le caractère d’un contrat » et, alors, le promettant est obligé comme n’importe quel cocontractant. Or, précise Demolombe, c’est bien cette dernière branche de l’alternative « qui sera toujours la plus fréquente », étant rare que l’on parle pour ne pas s’obliger. C’est donc le lieu d’appliquer l’article 1157 C.Civ. et, pour interpréter la volonté des parties, de se référer, comme l’enseignait Vinnius, aux circonstances de l’espère, à la nature de l’affaire, à l’existence de relations antérieures entre les parties. . . Bref, « presque toujours », écrit Demolombe, dans les affaires civiles et pas seulement dans les affaires commerciales « où les dissidents eux-mêmes sont bien près d’en convenir », il faudra conclure que la « simple promesse du fait d’un tiers sera obligatoire ». Et que l’article 1119 soit de facto anéanti, « absorbé » par l’article 1120, l’on ne doit « ni s’étonner ni s’en plaindre ». Le motif ? La promesse de porte-fort, explicite ou présumée, « joue un rôle important dans la pratique des affaires ; elle est. . . très utile ». Un seul regret : que les rédacteurs du Code « ne l’aient peut-être pas suffisamment réglementée »79. Cela dit, les positions de Larombière, Marcadé, Colmet de Santerre ou Demolombe, si elles paraissent majoritaires et refléter le sentiment plutôt général de la doctrine vis-à-vis d’une tradition quelque peu gênante, ne sont pas exclusives. D’autres, comme Laurent, sont plus nuancés et tiennent à rappeler que la présomption ne peut résulter que des « inductions tirées des faits de la cause »80. C’est là une manière de rappeler que si, comme l’écrivait Pothier, cette présomption doit être facilement établie (par exemple à partir l’existence d’une clause pénale81), elle ne saurait revêtir un caractère de systématicité dans la mesure où les obligations juridiques, en principe, ne se présument pas et où l’article 1120 C.Civ. dispose expressément que la promesse de porte-fort doit être stipulée par les parties. Plus radicalement, Duranton s’attache précisément à critiquer la possibilité entrevue par Pothier de présumer facilement que le promettant a voulu s’engager. Certes, dans les promesses pour autrui, il faut comprendre que le promettant a voulu promettre lui-même pour le cas où le tiers n’exécuterait pas la prestation promise : le promettant a nécessairement dû vouloir faire « quelque chose d’utile. . . puisqu’on suppose que la convention a été faire sérieusement ». Il est « de principe » que les conventions doivent être interprétées « dans un sens suivant lequel 79 Ibid., nº 218 : « de ce que l’on a étendu la convention de porte-fort au-delà de ses limites, il n’en demeure pas moins vrai qu’elle peut rendre, dans la pratique, de grands services ». 80 Pandectes françaises, op. cit., nº 7388. 81 Mais pas à partir d’une signature portée sur un acte conclu par un autre, par laquelle un individu déclare « approuver » cet acte : cette signature ne vaut pas promesse de porte-fort (cf. Bourges 24 février 1832, Sirey 1832, 2, 539 et Dalloz 1832, 2, 128).

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elles puissent produire quelque effet » (art. 1157 C.Civ.). Vraie en droit civil, cette opinion a « encore bien plus de force dans les matières commerciales », où la bonne foi doit régner sans partage et « où l’on s’attache encore plus à l’intention des contractants » qu’à la lettre du contrat82. Mais, curieusement, par un argument textuel peu probant –l’article 1119 dit « en principe »-, Duranton tient que le Code a entendu s’éloigner de l’avis de Pothier pour revenir aux règles plus strictes du droit romain. Dans le système du Code selon lui, la règle est donc ce que Pothier regardait comme l’exception, admettant facilement ladite présomption de porte fort, à l’effet de ruiner la portée du principe de la prohibition : « il faut dire, au contraire, du moins sous le Code, que celui qui a simplement promis le fait d’un tiers ‘n’est pas facilement présumé s’être porté fort pour ce tiers’ ». Admettre une telle présomption, du moins la généraliser aussi largement que le souhaitait Pothier, rendrait selon lui superflu l’article 1120 C.Civ., dont l’objet est précisément de consacrer la validité des promesses de porte fort. La présomption doit donc être, à son avis, limitée aux cas dans lesquels la promesse du fait du tiers peut être considérée comme la cause ou la condition de l’acte que le promettant conclut alors pour lui-même83. Se rangent également à cet avis Aubry et Rau selon qui, en matière civile, cette présomption de porte fort ne doit « pas trop facilement » être admise, contrairement aux matières commerciales où cette « intention [de se porter fort] doit, en général, se présumer »84. Reste une question, relativement à la promesse de porte-fort. Suffit-il d’avoir fait tout ce qui était possible pour provoquer le débiteur à exécuter pour être libéré ? La doctrine répond par la négative. L’inexécution, objectivement constatée, engage la responsabilité du promettant, comme l’enseignait déjà Vinnius, dans son Commentaire sur les Institutes que cite Duranton. N’est-ce pas en effet le promettant qui s’est « principalement obligé », même s’il s’est obligé sous une condition dont il a pu « raisonnablement »85 prévoir le non accomplissement ? Cela dit, la liaison de la prohibition des stipulations avec la protection du consentement a fini elle-même par être critiquée. bb) La recherche d’un autre fondement Se souvenant de la méthode de Pothier, certains n’hésitent pas à mettre en cause « la place où les rédacteurs » ont évoqué la question. Delvincourt et Toullier, par exemple, critiquant l’ordre adopté par le Code, précisent que les articles 1119 et sv. devraient être reportés à la section relative à l’objet et à la matière des conventions. Cours de droit français suivant le Code, Paris, t. 10, nº 209, p. 189 et sv. Duranton, op. cit., nº 215. 84 En tout état de cause, la présomption doit résulter des « circonstances », C. Aubry et C. Rau, op. cit., t. 2, § 346, note 8, p. 478. 85 Duranton, op. cit., nº 216. 82 83

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D’ailleurs, Aubry et Rau choisissent, après Zachariae, de placer les développements très brefs qu’ils consacrent à la stipulation pour autrui dans un paragraphe relatif aux « effets juridiques des contrats »86. La prohibition des stipulations et promesses pour autrui se trouve ainsi directement liée à l’explication de la portée de l’article 1165 C.Civ. : les conventions ne peuvent être opposées aux tiers ni être invoquées par eux. Le droit de créance, droit personnel, n’a qu’un effet relatif. Quant à Demante et Colmet de Santerre, après avoir établi que nul ne peut acquérir pour soi le droit d’exiger l’accomplissement d’un certain fait, au profit d’une personne étrangère, ils soulignent que « cette règle. . . n’est pas. . . une simple interprétation de volonté, c’est la conséquence des principes généraux sur les obligations ». En effet, une telle convention ne peut obliger le promettant envers lequel le stipulant n’a pas de moyen de sanction, faute d’intérêt pécuniaire à l’accomplissement de l’obligation. Et celui en faveur de qui la convention a été faite ne peut s’en prévaloir, « parce que c’est à son égard une res inter alios acta »87. De la même manière, Duranton, avec également Demolombe88, est l’un des rares à justifier la prohibition des stipulations pour autrui sur le fondement de l’article 1165 C.Civ., c’est-à-dire de l’effet relatif des contrats89, lequel aurait pu être mobilisé davantage puisqu’il renvoie expressément, à titre d’exception, à l’article 1121 C.Civ. Mais la référence à l’article 1165 apparaît chez lui plus nettement que chez Demolombe. Certes, ce dernier souligne que « ce n’est pas sans raison. . . que certains auteurs » rattachent la règle de l’article 1119 à celle de l’article 1165 C.Civ. En conséquence est-il permis de « fonder » la règle de l’article 1119 sur ce « principe élémentaire : res inter alios acta aliis nec nocere nec prodesse potest ». Mais ce fondement se cumule avec celui de la nécessité du consentement et paraît, en comparaison avec les développements de Duranton, secondaire. Demolombe rappelle en effet que, au fond, le sens de l’article 1119 reste que l’on n’est pas obligé « lorsque l’on n’a pas eu l’intention de s’obliger ». L’article 1119 est ainsi ramené dans l’orbite du consentement et de son interprétation. La promesse de porte-fort, quant à elle, puisqu’elle n’a rien de sacramentel, n’est rien autre chose non plus que, en définitive, « une question d’interprétation de volonté »90. De ce point de vue, les articles 1119 et 1120 ne font qu’exprimer « deux vérités on ne peut plus élémentaires ». Et l’auteur de conclure : « à la rigueur, nous aurions pu nous en passer » ! S’il n’est pas loin de partager ce reproche fait au plan du Code, Demolombe le trouve donc un peu sévère et choisit d’excuser les rédacteurs du Code d’avoir été « naturellement portés à consacrer une doctrine aussi accréditée par les traditions du droit romain et de notre ancien droit français »91. 86 87 88 89 90 91

C. Aubry et C. Rau, Cours de droit civil français, Paris, 1844, 2ème éd., t. 2, § 346. Demante, op. cit., nº 30. Demolombe, op. cit., nº 212. Duraton, op. cit., nº 223. Demolombe, op. cit., nº 214. Cours de Code Napoléon, Traité des contrats, Paris, 1870, t. 1, nº 209.

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Cette critique du plan adopté par les codificateurs ne s’éteindra pas avec le siècle. Elle continue au XXème siècle, notamment sous la plume du doyen de Lyon L. Josserand. À ses yeux, le Code civil a eu tort d’aborder la question des stipulations et promesses pour autrui comme il l’a fait. À propos des effets du contrat, il a eu tort de ranger sous une rubrique « dispositions générales » (art. 1134 et 1135) à la fois les obligations de donner et de faire qui, en réalité, ne sont pas des effets mais des objets de l’obligation, la question de l’interprétation des contrats, différente de celle des effets et, finalement, celle du rayonnement du contrat à l’égard des tiers, mais sans évoquer alors celle de la stipulation pour autrui. En meilleure logique que dans le Code civil, la stipulation pour autrui mériterait selon lui d’être traitée en cette occasion. Et cette pour cette raison que si l’article 225 du Projet de code des obligations qu’il a rédigé pour la République du Liban à la fin des années 20 affirme bien l’effet relatif du contrat (dans une formule qui réunit les articles 1165 et 1119 du Code civil), les articles 227 à 231 dudit projet admettent, en lui consacrant plus de place que dans le Code civil, la stipulation pour autrui92. La doctrine récente n’est pas non plus toujours d’accord avec l’ordre de présentation adopté par le Code et prend avec lui des libertés. Elle choisit souvent de traiter de la stipulation et des promesses pour autrui dans le cadre de développements plus généraux consacrés à ce que l’on peut désormais appelés les contrats pour autrui : catégorie qu’elles forment avec les actes qui mettent en œuvre la technique de la représentation juridique (parfaite ou imparfaite selon que le cocontractant a su ou pu savoir que le représentant agissait au nom et pour le compte du représenté)93. Déconnectés de la question du consentement, ces actes pour autrui font la matière de l’étude du rayonnement du lien contractuel94. b) La situation juridique du tiers bénéficiaire de la stipulation aa) La théorie de l’offre En partant de l’article 1121 C.Civ., une partie de la doctrine civiliste du XIXème siècle a entrepris d’expliquer la situation du tiers bénéficiaire, dans les cas où la validité de la stipulation pour autrui peut être admise, en se fondant sur la notion d’offre. Dans les pas de l’ancien droit, le Code civil consacre en effet dans son article 1121 l’idée que l’« on peut pareillement stipuler au profit d’un tiers, lorsque telle est la condition d’une stipulation que l’on fait pour soi-même ou d’une donation 92 Voir : D. Deroussin, « L. Josserand, le Code civil et le Code libanais des obligations et des contrats », Le Code civil français et le dialogue des cultures juridiques, Colloque international de Beyrouth des 3, 4 et 5 mai 2004, Université Saint Joseph (à paraître). 93 Voir, par exemple, la présentation adoptée par Ph. Malaurie et L. Aynes, op. cit., p. 361. Sur la catégorie des contrats pour autrui : G. Flattet, Les contrats pour le compte d’autrui, Th. Droit, Paris, 1950. 94 Voir par exemple : F. Terré / Ph. Simler / Y. Lequette, Droit civil, Les obligations, Paris, Dalloz, 2002, 8ème éd., nº 511.

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que l’on fait à un autres. Celui qui a fait cette stipulation ne peut la révoquer, si le tiers a déclaré vouloir en profiter »95. Par l’effet de cette acceptation, qui peut être réalisée par les héritiers du bénéficiaire en cas de décès, la révocation ou modification de l’offre n’est plus permise au stipulant96 puisque, finalement, le consentement du tiers bénéficiaire « étant réuni à celui des autres parties, le contrat se trouve réellement scellé par trois volontés »97 qui ne peuvent plus y déroger. Mais, comme le rappelle Demante, le bénéfice de la stipulation « n’est pas acquis au tiers tant qu’il n’a pas manifesté l’intention d’en profiter »98. En effet, l’opération doit être analysée, dans les rapports entre le stipulant et le tiers bénéficiaire, comme une « offre de libéralité » qui, pour être parfaite, doit être acceptée par le bénéficiaire de son vivant. La jurisprudence veille donc à permettre au stipulant de révoquer son offre tant qu’elle n’a pas été acceptée99, cette révocation pouvant, comme l’acceptation d’ailleurs100, se réaliser aussi bien de manière expresse que de manière tacite, et même après que l’offre a été acceptée, si le stipulant s’est réservé cette possibilité dans l’acte, comme cela arrive parfois dans les polices d’assurance sur la vie101. Par ailleurs, la révocation régulièrement intervenue n’interdit pas au stipulant de réclamer pour son compte l’accomplissement de la prestation promise 95 Dans les deux hypothèses évoquées par l’article 1121 C.Civ., le stipulant a un intérêt personnel à l’exécution de la stipulation par le promettant. Cet intérêt justifie qu’on lui octroie l’action en résolution en cas d’inexécution de la part de ce dernier. 96 Ou aux deux parties à l’acte s’il peut être établi que les deux ont agi dans l’intention de gratifier le tiers (Demante, Cours analytique. . . , op. cit., t. 5, nº 33 bis VI) ou si le promettant a un intérêt à ce que l’obligation souscrite par lui soit exécutée au profit du tiers (F. Labori, Répertoire encyclopédique du droit français, Paris, 1895, t. 11, vº stipulation pour autrui, nº 12). Il faut distinguer cette question de l’hypothèse dans laquelle le contrat principal est résolu à la demande du stipulant après que le tiers a déclaré accepter le bénéfice de la stipulation. 97 Mouricault (Fenet, op. cit., t. 13, p. 418). 98 Demante, op. cit., nº 33 bis VI. 99 Cass. 27 décembre 1853 (Sirey, 1854, 1, 81). 100 L’acceptation peut résulter du fait, pour le tiers bénéficiaire, d’agir en justice pour réclamer à son profit l’exécution de la stipulation, comme cela a été jugé par la cour de Rennes le 12 janvier 1812 (cf. F. Labori, op. cit., nº 11). L’acceptation n’est soumise à aucune forme particulière, même s’il s’agit d’une libéralité (Cass. 5 novembre 1818 et 27 janvier 1819, cités par Labori, op. cit., nº 9). L’article 1973 C.Civ. en dispose ainsi explicitement à propos des constitutions de rente viagère qui prennent la forme d’une libéralité. Cf. Demolombe, op. cit., t. 1, nº 248 : « la stipulation faite par le stipulant au profit du tiers, constitue un offre à son adresse » et peut être acceptée comme « toute offre quelconque », c’est-à-dire, par analogie avec l’article 932 C.Civ. relatif aux donations, dans un acte séparé et postérieur. Aubry et Rau, Cours de droit civil, Paris, 1844, 2ème éd., t. 2, § 346, note 10 soulignent aussi que l’intention d’accepter le bénéfice de la stipulation peut être déclarée dans un acte sous seing privé « ou même manifestée tacitement ». Elle n’est pas assujettie aux formalités prescrites en matière de donation, comme l’a rappelé un arrêt de rejet de la Cour de cassation (Req. 5 novembre 1818, Sirey, 1819, 250). Enfin, il a été jugé que l’acceptation peut intervenir après le décès du stipulant, s’il n’a pas usé de son droit de révocation (Cass. 22 juin 1859, cité dans Jurisprudence du XIXème siècle, ou Table décennale alphabétique et chronologique du recueil général des lois et des arrêts (1851 à 1860), Paris, 1862, vº stipulation pour autrui, p. 564). 101 Cf. la jurisprudence citée par F. Labori, op. cit., nº 10.

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par le débiteur si elle est de nature à pouvoir être exécutée à son profit « sans aucune aggravation au préjudice du promettant »102. Techniquement, que signifie le fait de parler d’offre ? Considérer la stipulation pour autrui comme une offre faite par le stipulant implique que l’acceptation par le bénéficiaire donne lieu juridiquement à une deuxième convention entre lui et le stipulant. C’est notamment l’opinion du belge Laurent103, Toullier104, de Larombière105 et de Demolombe qui souligne que « la stipulation faite par le stipulant au profit du tiers, constitue un offre à son adresse » et que, bien qu’elle forme une « clause accessoire » au contrat principal, elle ne se confond pas « absolument » avec lui. Il y a donc deux actions distinctes : celle du stipulant et celle du tiers bénéficiaire, qui n’ont ni la même nature ni les mêmes attributs106. Mais une telle analyse, très vite critiquée d’ailleurs107, gomme la particularité du mécanisme de la stipulation pour autrui et ne rend pas compte du droit positif puisqu’elle implique de regarder le tiers bénéficiaire comme un ayant cause du stipulant alors que la jurisprudence, dès le XIXème siècle comme on le verra bientôt, ne considère pas que son droit a transité par le patrimoine du stipulant, dans le but évidemment de placer le tiers bénéficiaire à l’abri des créanciers du stipulant. D’autres, comme Thaller dans une note sous l’arrêt du 2 mars 1887 de la Cour de Besançon108, affirment également que se forme, par l’effet de l’acceptation, une deuxième convention mais, cette fois, entre le tiers bénéficiaire et le promettant qui fonde l’action du premier contre le second, la première convention intervenant entre le promettant et le stipulant, le premier s’engageant envers le second à offrir au tiers bénéficiaire la prestation convenue. Si offre il y a, elle procède donc cette fois-ci du promettant et non du stipulant, ce qui présente l’avantage de permettre de penser le rapport direct existant entre le tiers bénéficiaire et le promettant. Mais elle pèche par un aspect. La situation du tiers n’est pas sûre tant qu’il n’a pas accepté le bénéfice de la stipulation : elle reste soumise, avant l’acceptation, à l’aléa que constituent la mort du promettant ou la révocation qu’il peut faire de son offre, alors qu’en droit positif, seul le stipulant est habilité à révoquer la stipulation pour autrui avant son acceptation. Offre du stipulant, offre du promettant ? Il semble bien que ni l’une ni l’autre de ces analyses doctrinales ne correspond aux solutions jurisprudentielles, notamment celles qui visent l’assurance sur la vie109. La jurisprudence a au contraire opté pour Demolombe, op. cit., t. 1, nº 251. Voir Éd. Fuzier-Hermann, op. cit., p. 102. 104 Tome 6, nº 251. 105 Commentaire sous l’article 1121 C.Civ., nº 7. 106 Demolombe, op. cit., t. 1, nº 248. 107 Voir : L. Josserand, Cours de droit civil, t. 2, nº 299 ou R. Demogue, t. 7, nº 815. 108 Dalloz, 1888, 2, 1. 109 Ainsi, c’est parce qu’elle considère qu’il n’y a ni offre ni aliénation de la part du stipulant que la Cour de cassation a pu affirmer qu’il n’est pas nécessaire qu’il jouisse de la capa102 103

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une autre voie, considérant l’acquisition du droit du tiers bénéficiaire comme une acquisition originaire et non pas une acquisition dérivée. Se moquant de rattacher à tout prix les divers actes pour autrui dans des cadres juridiques existants, elle voit en eux des espèces d’un genre autonome. Elle juge que le droit au profit du tiers bénéficiaire naît « directement dans son patrimoine »110, c’est-à-dire qu’il ne transite pas par celui du stipulant lors même qu’on ne peut considérer le tiers comme ayant été représenté dans l’acte intervenu entre le stipulant et le promettant. Dans un tel système, l’acceptation « ne fait que confirmer une acquisition antérieure » et met fin au droit de révocation du stipulant111. Elle ne contredit pas l’idée que le tiers bénéficiaire dispose, dès la conclusion de la stipulation, d’un droit direct contre le promettant, comme l’affirme la Cour112. bb) Le recours aux règles de la gestion d’affaires Pour expliquer cette solution, une autre partie de la doctrine a, abandonnant toute référence à la notion d’offre, tenté d’analyser la stipulation pour autrui et la situation du tiers bénéficiaire à travers le régime de la gestion d’affaires, quasicontrat connu depuis Rome. Là encore, comme à travers la notion d’offre, il s’agissait de faire entrer les solutions jurisprudentielles dans des cadres juridiques connus et donc de ramener la stipulation pour autrui dans le sein des opérations juridiques existantes. Mais il a fallu pour cela combattre certaines oppositions doctrinales. Pour certains, comme Labori113, la seule manière de ne pas réduire à néant la disposition de l’article 1119 C.Civ. est de conserver à la gestion d’affaires son domaine propre, qui suppose qu’elle ait pour objet la conservation ou l’entretien de biens appartenant déjà au bénéficiaire de la stipulation. Duranton n’hésite pas pour sa part à s’en prendre directement à Pothier sur ce point. On se souvient que Pothier admettait la validité de la stipulation lorsque le stipulant, par ailleurs tenu envers un créancier à une obligation de faire – construire une maison –, contracte avec un autre pour faire exécuter son obligation par ce dernier – contracter avec un maçon pour faire construire la maison –. Allant plus loin, il l’admettait lorsque l’obligation de faire n’était pas encore souscrite. Il considérait alors le stipulant comme un gérant d’affaires et, comme tout gérant, il le tenait comptable de sa gestion, justifiant ainsi le recours à un tiers pour accomplir une prestation au profit du géré. Or aux yeux de Duranton, Pothier commet ici l’erreur d’anticiper l’effet sur cité de disposer (Civ. 9 mars 1896, Sirey 1898, 1, 225). Le prodigue peut donc faire seul une assurance sur la vie. 110 F. Labkri, op. cit., nº 18. 111 Cf. Cass. 16 janviers 1888 (Dalloz 1888, 1, 97 et Sirey 1888, 1, 121) et 8 février 1888 (Sirey 1888, 1, 129). 112 Civ. 21 juin 1896 (Sirey 1896, 1, 361). 113 Pandectes françaises, op. cit., nº 7.

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la cause et d’anéantir en réalité la prohibition des stipulations pour autrui : ces stipulations, même sans mandat, seraient « toujours » valables puisque, en les faisant, le stipulant gère les affaires d’un autre en lui devant compte de sa gestion114. Autrement dit, la gestion d’affaires ne peut être qu’antérieure à la stipulation. Aussi Duranton tient-il à souligner que toutes les exceptions « ne détruisent point le principe posé par l’article 1119 »115 et que l’acception, la ratification par le tiers bénéficiaire d’une stipulation pour autrui ne saurait la rendre valable, les articles 1165 et 1121 C.Civ. devant être interprétés strictement et dans la fidélité au droit romain116. D’autres au contraire n’hésitent pas à franchir le pas. Demante et Colmet de Santerre117, par exemple, pensent qu’il faut systématiquement valider les stipulations pour autrui sur la base de l’intérêt pécuniaire en assimilant ces hypothèses à celle de la gestion d’affaires. Demolombe se montre encore plus disert sur ce point. Il estime que la théorie de la gestion d’affaires se rattache à celle de la stipulation pour autrui tout en soulignant qu’elles se livrent entre elles « une sorte de combat » par lequel la théorie de la stipulation pour autrui pourrait bien finir par « succomber », alors qu’elle a déjà reçu « de rudes échecs »118 ! Reprenant Pothier, il distingue trois hypothèses. Dans la première, l’intérêt pécuniaire à ce que l’affaire du tiers soit bien gérée existe, relativement au stipulant, avant qu’il ne s’entremette dans cette gestion. Alors, la stipulation qui interviendrait pourrait parfaitement être considérée comme étant faite « dans le cours » de la gestion, de sorte que le stipulant, gérant d’affaires, a bien un intérêt à ce que la gestion par lui commencée soit bien « continuée et bien conduite ». Demolombe n’y voit rien autre chose que l’application de l’article 1375 C.Civ.119. Dans la deuxième hypothèse, l’intérêt, relativement au stipulant, naît « au temps de la convention », dans la mesure où le stipulant ne s’était pas auparavant entremis à gérer les affaires du tiers en cause. C’est ici, déclare-t-il, que « va s’engage. . . la lutte entre les principes de la gestion d’affaires et les principes de la stipulation pour autrui ». Est-il possible, pour sauver la stipulation faite au profit de ce tiers, de la considérer comme étant, dans le même temps, constitutive d’une gestion d’affaires à son profit ? Répondre par l’affirmative reviendrait à « mettre Duranton, op. cit., nº 230. Ibid., nº 235. 116 Ibid., nº 237. 117 Demante, op. cit., t. 5, nº 33 bis. Au nº 30, le mandat et la gestion d’affaires sont considérés comme des exceptions à la prohibition des stipulations pour autrui. Mais il faut que le gérant d’affaires ait annoncé prendre « la qualité de gérant d’affaires » (nº 33 bis III). Alors, on peut renvoyer aux règles du mandat, d’après lesquelles, d’une manière générale, le mandataire engage son mandat pour les dettes qu’il contracte même lorsqu’il agit en son propre nom, dès lors qu’il s’agit d’exécuter la mission (ibid., nº 32 bis). 118 Demolombe, op. cit., nº 236 . 119 Ibid., nº 237. 114 115

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l’effet avant la cause » et réduire la deuxième partie de l’article 1119 C.Civ. à l’état de « lettre morte »120. C’est pourtant dans cette voie que Demolombe s’engage. La stipulation en cause constitue alors selon lui le premier acte de la gestion d’affaires dans laquelle s’engage ainsi le stipulant. Il s’agit bien d’un acte isolé et unique, mais « il faut bien apparemment que la gestions d’affaires commence par un premier acte, qui sera toujours, au début, un acte isolé et unique ! ». Quoi qu’il en soit, les juristes romains n’hésitaient pas pour leur part à valider la stipulation pour un tiers, même isolée, dès lors qu’elle s’applique à une chose appartenant au tiers et « il en serait certainement de même dans notre droit ». Il suit en cela fidèlement Pothier et, pour étayer sa démonstration, il passe à la troisième hypothèse, indiquant que les arguments qu’il y développera valent également pour la deuxième. Quelle est donc cette troisième hypothèse ? C’est celle dans laquelle, au moment de la stipulation faite pour le tiers, le stipulant n’avait pas et n’a toujours pas un intérêt à la réalisation de cette stipulation. Aux yeux de Pothier, un tel acte se présente bien comme une stipulation pour autrui inutile « dans le for extérieur », puisqu’il n’admettait de valider une stipulation pour autrui qu’à la condition qu’elle constituât réellement un quasi-contrat entre le maître et le gérant. Pour Demolombe en revanche, il s’agit d’un acte qu’il faut, « le plus souvent », déclarer valable, parce qu’il représente une « utilité pratique »121. Reprenons l’exemple qu’il développe : Paul, « mon parent ou mon ami », est parti en voyage. Il habite une maison voisine de celle de Pierre par le terrain duquel il accède à sa propre maison. Or, Pierre s’apprête à vendre sa maison et son terrain. L’acquéreur tolèrera-t-il, comme le faisait Pierre, de laisser passer Paul sur son terrain ? Pour m’en assurer, je stipule en mon nom mais pour ce dernier « que Pierre réservera, dans le contrat de vente, une servitude de passage pour la maison de Paul, et que celui-ci lui payera, pour cette cause, une somme de 10 000 francs ». Voila comme Demolombe tente « d’établir que ces stipulations devraient être presque toujours maintenues ». Certes, la stipulation ne porte pas directement sur un bien faisant actuellement partie du patrimoine de celui que l’on voudrait considérer comment le géré, maître de l’affaire, et elle vise non pas à conserver, réparer certains de ses biens mais à augmenter son patrimoine. Mais ces arguments, applicables par exemple s’agissant de l’acceptation des donations, ont-ils la même force « dans les contrats ordinaires de la vie civile » ? Selon Demolombe, « aucun principe de droit ni de raison » n’interdit de considérer une telle stipulation comme une gestion d’affaires et donc de la valider122. Notamment, le fait que le géré puisse refuser de Ibid., nº 238. Ibid., nº 239. C’est aussi la thèse soutenue dans les Pandectes françaises, op. cit., nº 7448. 122 Demolombe s’appuie sur la Dissertation sur les effets de la ratification des actes d’un gérant d’affaires (nº 64) publiée par Labbé, un arrêtiste de la fin du XIXème siècle : « ne fautil pas poser comme principe, en matière de gestion d’affaires, qu’un gérant peut faire spontanément, sous la condition de la ratification, tout ce qui peut être fait par un mandataire ? ». 120 121

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ratifier l’acte, puisqu’il ne vise qu’à augmenter son patrimoine, n’est pas une circonstance propre à influer sur le sort de la stipulation : « pour qu’un acte fait par une personne, dans l’intérêt d’un tiers, puisse être valable, il n’est pas indispensable qu’il soit, par lui-même, nécessairement obligatoire de la part de celui dans l’intérêt duquel il a été fait ». Argument en est pris de l’article 1998 C.Civ., d’après lequel « le mandant est tenu d’exécuter les engagements contractés par le mandataire, conformément au pouvoir qu’il lui a été donné. Il n’est tenu de ce qui a été fait au-delà, qu’autant qu’il l’a ratifié expressément ou tacitement ». Selon Demolombe, le mandataire qui excède les bornes de sa procuration doit en effet être considéré comme gérant d’affaires et l’acte qu’il a ainsi accompli est valable, puisque le géré a le choix de le ratifier ou non. Quelle conclusion convient-il de déduire de cet article 1998, se demande alors Demolombe ? Tout simplement, mais généralement, « que l’on peut stipuler valablement, pour autrui, au nom d’autrui ». Partant de cette prémisse, et puisqu’il n’est question finalement que d’un problème d’interprétation de la volonté, la stipulation faite en son propre nom mais pour un tiers pourra être considérée comme valable chaque fois qu’on pourra établir que le stipulant a entendu « faire un acte sérieux et valable ». Et comme cette stipulation est réalisée dans l’intérêt d’autrui, il faut présumer qu’elle l’a été au nom d’autrui, puisque l’on ne saurait imaginer que le stipulant ait eu l’intention « naïve par son impossibilité même » d’acquérir pour lui « une action dont le bénéfice serait pour un autre ». En « conséquence », écrit alors Demolombe, « en droit », la stipulation faite par un individu pour un tiers peut être interprétée « en ce sens qu’elle a été faite, d’après la commune intention des parties, dans l’intérêt du tiers, et par suite au nom du tiers ». En « fait », cette interprétation « devra, le plus souvent, être admise, surtout si la convention a été rédigée dans un acte, soit authentique, soit même privé, et si les clauses en ont été précisées »123. On voit ici toutes les virtualités que contenait finalement la mise en relation de la stipulation pour autrui avec le consentement, puisqu’elle permet de mobiliser toutes les règles présidant à l’interprétation du consentement dans le but de faire produire à l’acte des effets juridiques. Pratiquement, le raisonnement ainsi tenu permettrait, selon Demolombe, de donner une « une base juridique » à la déclaration de command, connue aussi sous l’appellation élection d’ami. Enfin, ce panorama des positions doctrinales relatives à la nature juridique de la stipulation pour autrui ne serait pas complet s’il omettait d’en signaler une dernière, consistant à soutenir que le tiers bénéficiaire dispose en réalité d’une créance d’un type particulier et d’origine unilatérale 124.

123 124

Ibid., p. 225. Voir : L. Josserand, Cours de droit civil, t. 2, nº 304.

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4. La faveur envers la stipulation pour autrui En plus de la promesse de porte-fort, on a cherché à multiplier (b), en les justifiant (a), les exceptions à la prohibition des actes pour autrui. a) La recherche de moyens de validation des actes pour autrui Comme c’était l’usage dans l’ancien droit français, la doctrine et la jurisprudence sous l’empire du Code civil sont d’avis que la stipulation pour autrui est valable quand elle est accompagnée, à la charge du stipulant, d’une clause pénale, même si par ailleurs le stipulant n’a pas d’intérêt pécuniaire direct et immédiat à l’acte125. Pour que cette clause échappe à la nullité qui pourrait l’affecter du fait que la stipulation, elle-même, est prohibée, on tente d’expliquer qu’elle se présente en réalité comme l’obligation principale : « malgré l’ordre des termes de la convention », c’est la stipulation au profit du tiers qui doit être analysée comme son accessoire126. À quoi Aubry et Rau, suivant finalement Pothier, semblent répondre, plus franchement, que la validité de la clause pénale en l’espèce est véritablement une exception au principe d’après lequel la nullité de l’obligation « primitive et principale » à laquelle se rapporte la clause pénale entraîne ipso iure la nullité de cette dernière, l’obligation engendrée par l’a clause pénale n’étant qu’une obligation « secondaire et accessoire » : cette nullité « recevrait cependant exception » chaque fois que la nullité de l’obligation principale « serait le résultat de l’absence d’un lien de droit que la stipulation d’une clause pénale aurait pour objet de suppléer »127. Autre moyen d’accueillir favorablement les stipulations pour autrui : la recherche d’un intérêt personnel appréciable en argent. Comme le rappelle Labori, la prohibition posée par l’article 1119 C.Civ. est fondée sur le défaut d’intérêt du stipulant. D’où les exceptions chaque fois que le stipulant a un intérêt appréciable en argent à l’exécution de l’engagement pris par le débiteur128. Colmet de Santerre souligne aussi qu’on stipule alors pour soi-même quand on a un intérêt à l’exécution de la stipulation faite au profit d’un autre129. Il peut s’agir bien évidemment d’une stipulation pour autrui avec charge (plus que la condition, qui supposerait que le contrat principal – la stipulation ou la donation – n’est pas formé tant que la condition n’est pas réalisée). Alors, l’existence d’un intérêt pécuniaire fait qu’il est « impossible » de refuser une action en justice au stipulant. Colmet de Santerre propose même de généraliser l’article 953 C.Civ., relatif aux donations impliquant l’accomplissement d’une prestation au profit d’un tiers, à toutes les aliénations, à 125 126 127 128 129

Comme cela ressort des Pandectes françaises, op. cit., nº 7443. C’est ce qu’explique Duranton, op. cit., nº 227. Aubry et Rau, op. cit., t. 2, § 310, p. 329. Labori, op. cit., vº stipulation pour autrui, nº 3. Demante, op. cit., nº 33.

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titre onéreux comme à titre gratuit130. En effet, l’article 1184 C.Civ., qui permet l’action en résolution en cas d’inexécution, pourrait être utilisé contre le promettant. Se fondant sur l’article 1121 C.Civ., c’est aussi ce que proposent Duranton, Larombière, Aubry et Rau, Laurent, Demolombe et Baudry-Lacantinerie 131, argument pris du caractère seulement énonciatif dudit article, qui ne cite que la donation. C’est également la thèse développée dans les Pandectes françaises de Rivière, continuées par Weiss : l’article 1121 renferme une « règle » qu’il faut « généraliser », de sorte que la stipulation pour autrui soit valable « toutes les fois et par cela seul que le stipulant a un intérêt appréciable en argent » à l’exécution de l’engagement pris par le débiteur132. Sous cette condition, que formulaient déjà les Institutes de Justinien133 ou Pothier134, et dès lors que l’acte est fait sous la condition que l’acquéreur accomplira une certaine prestation au profit d’un tiers, il doit être valable, qu’il soit à titre onéreux ou à titre gratuit. D’ailleurs, l’article 1973 C.Civ., qui permet la constitution d’une rente viagère sur la tête et au profit d’un tiers, n’est-il pas une « application de ce principe »135. Mais l’intérêt pécuniaire peut-il aussi résulter de l’existence d’une clause pénale accompagnant la stipulation ? Certains, comme Duranton136, en doutent : la clause pénale n’est-elle pas un accessoire et l’accessoire ne doit-il pas nécessairement, pour produire un effet juridique, se rattacher à un élément principal qui a une existence juridique en soi ? Or la stipulation principale, pour autrui, est nulle. Mais d’autres n’hésitent pas à répondre par l’affirmative137. Plus généralement, l’intérêt du stipulant peut n’être que médiat, indirect, éloigné. C’est l’avis de Larombière, de Demolombe138, que l’on trouve également formulé dans les Pandectes françaises, souvent très proches d’ailleurs, sur la question de la stipulation pour autrui, de ce dernier139. Mais peut-il être seulement moral ? Certains arrêts de la Cour de cassation l’admettent. En janvier 1888 par Ibid., nº 33 bis. Cf. F. Labori, op. cit., nº 4. 132 C’est, selon l’auteur, « encore la doctrine généralement reçue », Pandectes françaises, op. cit., nº 7438. 133 Inst., III, 19, 20. 134 Traité des obligations, op. cit., nº 58. 135 F. Labori, op. cit., nº 4. 136 Tome 10, nº 227 ou Larombière, sur l’article 1119, nº 6. 137 Voir les auteurs cités par F. Labori, op. cit., nº 5. 138 Larombière (sous l’art. 1119, nº 8), cité par Demolombe dans son Cours de Code Napoléon, op. cit., nº 233. Par exemple, doit être tenue pour valable la stipulation faite par un mandant ou un bailleur qu’une somme d’argent sera fournie à son mandataire ou preneur : l’intérêt qu’il a à « la bonne exécution » de son mandat ou à la bonne exploitation de ses propriétés « suffit », quoiqu’il ne soit qu’indirectement personnel par rapport à lui. 139 Pandectes françaises, op. cit., nº 7439. 130 131

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exemple, la Cour déclare solennellement que « le profit moral résultant des avantages faits aux personnes désignées suffit à constituer un intérêt personnel dans le contrat »140. Quelques mois plus tard, la Chambre des requêtes décide que, en stipulant pour soi, on peut stipuler en même temps pour un tiers « lorsqu’on a un intérêt direct et immédiat, fût-il même purement moral, à cette stipulation »141. La doctrine, pour sa part, est divisée. Demolombe s’y oppose142, comme le faisait déjà Pothier. Ces divisions persistent encore aujourd’hui143. Toute la question est de savoir si, à défaut d’intérêt pécuniaire, l’obligation peut être considérée comme suffisamment causée. La conception classique de la cause144 invite à répondre par la négative. Notion juridique, donc abstraite, la cause classiquement entendue renvoie en effet seulement à l’idée d’un déplacement de valeur et décrit l’échange réalisé par le contrat de manière objective, l’absence de cause se vérifiant d’ailleurs lorsque la valeur promise n’a pas été reçue. Elle consiste dans la considération de la contrepartie espérée de l’autre145 ou encore, comme le dit Bigot, « dans l’intérêt réciproque des parties ou dans la bienfaisance de l’une d’elles », s’agissant des actes à titre gratuit146.

b) Quelques exemples de stipulations pour autrui valables La faveur avec laquelle les tempéraments à l’ancien et embarrassant principe alteri stipulari nemo potest ont été reçus et amplifiés en droit français avant et surtout après le Code civil peut enfin se mesurer à travers les très nombreuses hypothèses dans lesquelles la jurisprudence et / ou la doctrine recourent à eux pour expliquer le régime juridique de telle ou telle pratique. On se contentera d’en donner quelques exemples, tant la liste est longue – si longue que la doctrine a cherché à établir des classifications et typologies147 – en commençant par le plus fameux peut-être. 140 Cass. 16 janvier 1888 (Sirey 1890, 1, 407 et Dalloz 1888, 1, 291. Voir les Pandectes françaises, op. cit., nº 7442 : « celui qui stipule pour autrui en même temps que pour luimême fait acte valable, bien que son intérêt direct et immédiat soit purement moral »). 141 Req. 30 avril 1888, cité par Éd. Fuzier-Hermann, op. cit., p. 93. 142 Op. cit., t. 1, nº 211. 143 Cf. Ph. Malaurie et L. Aynes, op. cit., nº 670. 144 Voir notre « Le contrat à travers le Code civil », op. cit. 145 Fenet, op. cit., t. 13, p. 53. Et pas seulement la contrepartie (Cf. H. Capitant, De la cause des obligations, Paris, 1927, 3ème éd., nº 14). 146 Présentation au Corps législatif et exposé des motifs par Bigot (Fenet, op. cit., p. 228). C’est sans doute cette référence à l’intérêt qui incitera J. Ray (Essai sur la structure logique du Code civil français, Thèse Lettres, Paris, F. Alcan, 1926, p. 122) à voir dans l’homme du Code un « calculateur ». 147 Notamment, Planiol (au tome 7, n° 355) qui distingue selon que l’application des règles de la stipulation pour autrui s’inscrit dans un cas prévu par la loi ou les règlements ou qu’elle résulte d’une initiative jurisprudentielle (voir Éd. Fuzier-Hermann, op. cit., p. 99).

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La théorie de la stipulation pour autrui a en effet servi de moule au XIXème siècle à l’assurance vie au profit d’un tiers, alors qu’un avis du conseil d’état du 28 mai 1818 et une ordonnance royale du 12 juillet 1820 déclarent qu’il n’est pas permis d’assurer sur la vie autrui sans son consentement et que, en conséquence, les contrats des compagnies d’assurance doivent contenir une clause indiquant que l’assurance sur la vie d’un tiers ne pourra être contractée sans son consentement148. Les règles relatives aux stipulations pour autrui – articles 1121 et 1165 C.Civ. – ont donc été utilisées pour expliquer l’action directe et le droit du tiers sur l’assurance stipulée à son profit : c’est en effet en vertu de l’article 1165 C.Civ. que celui qui stipule qu’une somme sera versée à son décès à un tiers qu’il désigne le rend créancier contre l’assureur. C’est l’avis de la jurisprudence149 et aussi celui d’une bonne part de la doctrine, qui considère la stipulation pour autrui comme le « fondement rationnel pratiquement suffisant »150 du contrat d’assurance sur la vie réalisé au profit d’un tiers. Mais l’assurance sur la vie n’est pas le seul type d’assurance au profit d’un tiers à avoir été validé par la doctrine et la jurisprudence sur le fondement de la stipulation pour autrui. Il en est ainsi également de l’assurance contre l’incendie qui, lorsqu’elle est souscrite au profit d’un tiers déterminé ou indéterminé, est appréhendée comme une forme de la stipulation pour autrui faisant naître une action directe au profit du tiers contre la compagnie d’assurance, comme cela a été jugé plusieurs fois par des cours de province ou la cour de cassation151. Ou encore de l’assurance maritime conclue « pour le compte de qui il appartiendra », une clause devenue « de style dans les polices », peut-on lire à la fin du XIXème siècle152, et de la police d’assurance contre les accidents souscrite par un employeur au bénéfice de ses employés153. 148 Cité par L. Balleydier et H. Capitant, « L’assurance sur la vie au profit d’un tiers et la jurisprudence », Le Code civil 1804 – 1904. Livre du centenaire, rééd. Paris, Dalloz, 2004, p. 526. 149 Voir Cass. 2 mars 1881 (Sirey. 1881, 1, 145) et Cass. 22 juin 1891 (Pandectes françaises, op. cit. nº 7537) qui affirme que le contrat d’assurance sur la vie, lorsqu’il bénéficie à un tiers déterminé, « comporte essentiellement l’application de l’art. 1121 C.civ. ». En conséquence, l’assuré peut toujours, avant l’acceptation par le tiers bénéficiaire, changer la personne du bénéficiaire, tandis que l’acceptation, qui peut intervenir après le décès de l’assuré, agit rétroactivement au jour du contrat. Voir aussi L. Balleydier et H. Capitant, art. précit., p. 529. 150 L’expression est empruntée à F. Labori, op. cit., nº 23. Labbé paraît bien seul à soutenir encore, en cette fin du XIXème siècle, que l’assurance sur la vie doit s’analyser comme une simple hypothèse de gestion d’affaires : voir sa note sous Cass. 7 et 12 février 1877 au Sirey 1877, 1, 393. 151 Arrêts des Cours d’appel de Grenoble (12 mars 1883 au Sirey 1884, 2, 12) et d’Amiens (10 juin 1887 au Dalloz 1889, 2, 177) et de la Cour de cassation (Cass. 5 mars 1888 à la Gazette du Palais 1888, 1, 411). Cf. F. Labori, op. cit., nº 25. 152 L’assurance pour le compte de qui il appartiendra vise le cas dans lequel un transporteur de marchandises souscrit une assurance pour le compte de celui qui sera propriétaire des marchandises au moment du sinistre. 153 F. Labori, op. cit., nº 25.

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Si l’on quitte le terrain de l’assurance, la technique de la stipulation pour autrui a également servi à valider plusieurs types d’opérations. En premier lieu, ce que la doctrine du XIXème siècle désigne sous l’appellation « contrats d’utilité publique », c’est-à-dire des contrats passés par des personnes morales de droit public (État, communes, grandes compagnies publiques notamment) lorsque, à l’occasion de ces contrats, étaient insérées des dispositions en faveur des tiers. Par exemple, la jurisprudence n’hésite pas à appliquer les règles de la stipulation pour autrui lorsque, dans un acte de concession de distribution des eaux figurent des dispositions au profit de tous les habitants de la commune154. De la même manière, un arrêté préfectoral peut conditionner l’autorisation d’une course automobile à l’acceptation, par les organisateurs, d’une obligation d’indemnisation les tiers en cas d’accident155. En deuxième lieu, les règles de la stipulation pour autrui ont été appliquées s’agissant des cessions de dette (lorsqu’un stipulant contracte en faveur de son créancier pour s’acquitter de sa dette), de transport, de rente viagère (il est vrai expressément autorisée par l’article 1973 C.Civ.), de prêt ou de dépôt (lorsqu’il est prévu que la chose prêtée ou déposée devra être restituée à un autre que le prêteur ou le dépositaire) et de libération en faveur des tiers, lorsque la stipulation a pour effet non pas de faire naître un droit d’action au profit du tiers mais de faire en sorte qu’il sera libéré de l’une de ses obligations. En troisième lieu, elles ont été exploitées156 pour, dans le cadre du contrat de transport de voyageurs, dont on a fini par dire qu’il impose au transporteur une obligation de sécurité consistant dans le fait d’acheminer son client d’un point à un autre sain et sauf157 – obligation de sécurité analysée comme une obligation de résultat-, faciliter l’indemnisation des proches du voyageur en cas d’accident mortel. Tiers au contrat de transport, le proche qui entend, dans ce cas, réclamer personnellement une indemnisation (on suppose donc qu’il n’agit pas ès qualité d’héritier) devrait agir par la voie délictuelle, voie difficile s’il en est. Pour faciliter son indemnisation, la jurisprudence choisit au contraire de lui permettre d’agir sur le fondement contractuel en supposant que le voyageur a, en contractant avec le transporteur, stipulé en faveur de ses proches. Par l’effet de cette présomption, et si les proches acceptent le bénéfice de cette stipulation pour autrui, il existe désormais entre le transporteur et les proches de la victime un lien contractuel, qui permet à ces derniers d’invoquer à son encontre l’obligation de sécurité, obligation de résultat, précitée. Ils n’ont donc pas à prouver l’existence d’une faute, qu’exigerait une action en responsabilité délictuelle 158. Enfin, et sans viser à l’exhaustivité, rappelons qu’elle a même servi de forme juridique aux stipulations faites par les syndicats au profit de leurs membres159. Au 154 155 156 157 158

Ibid., nº 26. Req. 4 février 1890 (Dalloz 1891, 1, 366). Par une jurisprudence aujourd’hui abandonnée. Voir Civ. 21 novembre 1911 (Dalloz 1913, 1, 249 et Sirey, 1912, 1, 73). Req., 6 décembre 1932 (Dalloz 1933, 1, 137).

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terme d’une longue évolution160, les exceptions au principe de l’effet relatif des contrats se sont donc renforcées en droit français, au point que les stipulations et promesses pour autrui constituent une catégorie juridique à part entière, celle des contrats pour autrui, où les actes issus d’une représentation parfaite ou imparfaite les ont rejoints. Voilà de quoi distinguer, s’il le fallait encore, le système juridique français du système de common law qui, malgré l’adoption de la technique de la représentation et de certains tempéraments aux prohibitions héritées du droit romain, reste assez largement « allergique »161 à ces types de stipulations et promesses.

159 Cf. R. Saleilles, « Le Code civil et la méthode historique », Le Code civil 1804 – 1904. Livre du centenaire, rééd. Paris, Dalloz, 2004, p. 119. 160 Évolution qui se poursuit au XXème siècle : voir les cas imaginés par la doctrine ou la jurisprudence et cités par Ph. Malaurie et L. Aynes, op. cit., p. 368 et sv. 161 L’adjectif est emprunté à Ph. Malaurie et L. Aynes, op. cit., p. 361.

MARTIN PENNITZ

Ius quaesitum tertio: German Legal Doctrine and Practice in the 18th and 19th Century I. Introduction 1. Consideration of the problem of contracts for the benefit of third parties (ius quaesitum tertio) in the period concerned leads to a more general question at the same time: how does the emancipation from a Roman rule like alteri stipulari nemo potest take place? And what are the reasons, why a principle which is accepted by legal theory and practice for such a long time – disregarding some explicit exceptions – is now seen as an exception itsself?1 In “Germany” the first indication of this turning away from the Roman rule can be picked up at the end of the 17th century2 and the development comes to a close, when modern sources of the German “Rechtskreis” – like the German Civil Code (BGB) of 1900 or the General Civil Code of Austria (ABGB) in the amended version of 1916 – establish the concept of a so-called “real” third party beneficiary contract.3 Because of the fact that the Reception of the rule alteri stipulari nemo potest is the starting point of our discussion German legal theory concentrates on an agreement between two parties, which requires a promise (promissio) as well as an 1 For Roman law and its exceptions cf. the contribution by Jan Hallebeek (in this publication), sec. II.2, and for the opposite view of the 19th century: Georg Beseler, System des gemeinen deutschen Privatrechts, vol. I, 3. ed., Berlin 1873, p. 410: “Die einzelnen Fälle, in denen der Vertrag zu Gunsten Dritter besonders häufig und deutlich hervortritt, wie bei dem Erbvertrage, der Gutsabtretung, der Ehestiftung, der Lebensversicherung, den Staatsverträgen, sind daher nicht als Ausnahmen von der Regel, sondern als Beispiele ihrer Anwendung zu betrachten”. 2 See Ulrich Müller, Die Entwicklung der direkten Stellvertretung und des Vertrages zugunsten Dritter, Stuttgart u. a. 1969, p. 112: “Der Usus Modernus Pandectarum bedeutet demnach für Deutschland in etwa dasselbe, was die niederländische Schule für Holland bedeutete, nämlich die Epoche der Loslösung vom römischen Recht und seine Ersetzung durch entgegenstehendes Gewohnheitsrecht”; also cf. the contribution by Laurent Waelkens (in this publication), n.12 ss. 3 §§ 328 ss. BGB and §§ 881 s. ABGB; for today’s legal practice cf. Martin Schermaier (in this publication), esp. sec. II – III. One can also add the provisions of the Swiss Law of Obligations of 1881 / 1912 (art. 128 / 112); just as in Germany and Austria the legislature of Switzerland follows the doctrine of the Austrian Josef Unger (cf. sec. V. 7); in this respect see Rudolf Gmür, Das schweizerische Zivilgesetzbuch, Bern 1965, p. 21 s.

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acceptance (acceptatio).4 From the very beginning the lawyers of the late 17th century did not stick to the narrow and strict concept of stipulatio, a verbal contract of Roman law (obligatio verbis contracta), but dealt with the problem of contracts for the benefit of third persons with regard to every valid agreement, that is to any sort of informal pact (pactum). Hence they discussed the situation where an agreement had been entered into by two persons, the promisor and the promisee, whereby the promise was made in favour of a third person. Starting from this definition (and in the following we will use this terminology) it is necessary to distinguish a (real) contract for the benefit of third persons from other legal institutions (“Rechtsinstituten”), and in particular from agency. Therefore we have to add that the promisee accepts the promise in his own name and wants to continue as a party to this contract all the time.5 Unlike in the case of a so-called “unreal” third party beneficiary contract, promisor and promisee have the intention that the third person shall acquire an enforceable right. Although the third party has to acquire his right “immediately”, that is without any action on his part, it is possible that he will be able to sue only at a definite time after the conclusion of the agreement. On the other hand the third party acquires a right of his own, and therefore his right is “independent” of any legal position of the promisee. As a result, we can make a distinction between contracts for the benefit of third parties and dogmatic solutions based on another line of thought. There it is stated that in principle the promisee assigns his right to the third, which can take place by means of a tacit assignment or an actio utilis; though to some extent the term of actio utilis is used in the broader sense “successful claim”. 2. If we now focus on the concept of a “real” contract for the benefit of third parties, its legal status in the German Rechtskreis is not homogenous during the 18th and 19th century, nor is it appropriate to speak of a steady development or pro4 Cf. Iustinianus I. 3.15 pr.-1 with regard to stipulatio: Verbis obligatio contrahitur ex interrogatione et responsu, cum quid dari fierive nobis stipulamur. . . . / In hac re olim talia verba tradita fuerunt: spondes? spondeo, promittis? promitto, fidepromittis? fidepromitto, fideiubes? fideiubeo, dabis? dabo, facies? faciam. – In the later ius commune an obligation based on an unilateral promise is only known in exceptional cases, e.g. a promise “in the public interest” or “for charitabe purposes”; see Bernhard Windscheid, Lehrbuch des Pandektenrechts, vol. II, Düsseldorf 1865, § 304, p. 155 s. For this reason some lawyers refer to the law of succession: E.g. Alois Brinz, Lehrbuch der Pandekten, vol. IV, 2. ed. Erlangen / Leipzig 1892, §§ 584 s., who generally sticks to the Roman rule alteri stipulari nemo potest (p. 391); other cases like life insurance contracts, where legal practice grants third parties their own rights, are considered as transactions mortis causa (p. 395); in respect of the argumentation of Brinz cf. Konrad Zweigert / Hein Kötz, Einführung in die Rechtsvergleichung, 3. ed., Tübingen 1996, 456; of a similar approach of legal practice below n. 85; and of the doctrine of Heinrich Siegel below n. 174 s. and n. 193. 5 In a decision of 10. 6. 1873 the higher court of trade, the Reichoberhandelsgericht (ROHG) Leipzig, Gruchot’s Beiträge 17 (1873), p. 611 – 614, draws a distinction betweeen contracts for the benefit of third persons and agency without authority (without a mandate) in that way.

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gress of legal thinking. As with the political situation in the German Empire after 1648 legal theory and adjudication prove to be split up into many segments. In fact there is only a little evidence of legal practice in the 18th century, since complete summaries of leading cases and decisions of the territorial courts of appeal (supreme courts)6 are not established until the 19th century.7 But although the practice of the courts dealing with our problem differs from territory to territory, there is no reason to be uncertain whether we have to suspect substantial changes in the supreme court practice within each of these territories, because many of the decisions of the early 19th century place particular emphasis on leading cases of the 18th century and the established practice of any particular territorial supreme court. Therefore the case law of the 19th century can be regarded as pars pro toto for quite a long period. Both principles, the rule alteri stipulari nemo potest and the idea of pacta sunt servanda, have an important effect on doctrinal discussion as well as on the law in force; depending on the particular territory or the relevant school of legal thought we find a set of different concepts to judge a pactum in favorem tertii. We can point to several reasons for such a lack of legal uniformity. On the one hand the traditional Roman view was criticized by natural law theory which impressed a great part of the doctrine during the 18th century; but at the beginning of the 19th century a revival of strict Roman legal thinking took place, when the scholars of the historical school emphasized the importance of studying the sources of positive (Roman) law. On the other hand it became controversial whether the rule alteri stipulari nemo potest was an object of the Reception in Germany at all or – at least – to what extent it could be accepted as law in force; therefore parts of legal theory and practice refer to German customary law, particularly with regard to special facts of a case. Given the wide range of decisions which were pronounced within the scope of our topic, for comparative purposes we will concentrate on two types of contracts: contracts between members of a family,8 such as contracts of inheritance, 6 There is no supreme court for the whole of Germany in the period concerned: The courts of appeal in the German territories were courts of highest instance, they have different names like “Ober-Appellationsgericht” (OAG), “Ober-Tribunal” (ObT) etc.; these institutions were founded in the course of the 17th century, when the Reichskammergericht lost parts of its jurisdiction; cf. Erich Döhring, Geschichte der deutschen Rechtspflege seit 1500, Berlin 1953, p. 5 s.; 27 ss. 7 Cf. esp. J. A. Seuffert’s Archiv für Entscheidungen der obersten Gerichte in den deutschen Staaten (SeuffA), which was established in 1847 and continuously informs about new decisions, but also refers to earlier judgments. Whereas in the 18th century one can only be based on private summaries: These summeries often report spectacular cases which are suitable for a broader audience, but they are not that useful in our context; see Heinrich Gehrke, Die privatrechtliche Entscheidungsliteratur Deutschlands, Frankfurt am Main 1974, p. 34 ss. in connection with 23 ss., 48 ss.; id. in Helmut Coing (ed.), Handbuch der Quellen und Literatur, vol. II / 2, München 1976, p. 1349 s.; 1356 – 1358. 8 This also reminds of the Roman criterion maxime propter affectionem personarum in Paulus D. 24.3.45 in fine; cf. Hallebeek (supra, n. 1), sec. II.2 (xi), n. 24; whereas the case of a pact to restore a dowry (dos) is only mentioned in doctrinal treatises of the later ius com-

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matrimonial property agreements or contracts for the transfer of rural property (“Gutsüberlassungsverträge”), will inform us about the applicability and the scope of German customary law; and variations on the taking over of debts in favour of a third person will enable us to follow up the disputes within legal doctrine trying to solve the problems of third parties beneficiary contracts within the framework of advanced Roman law. 3. Apart from centrifugal tendency we can enumerate only a few driving forces towards the unification of German law during the 18th and 19th centuries. First of all there is the idea of a generally accepted law of nature or reason. In our context, the comments of Hugo Grotius were consulted by the exponents of the Usus modernus pandectarum, and their interpretation of Roman law had a significant effect on the legal practice of the time. Secondly, we can refer to law reform by codification, for example in Bavaria (1756), in Prussia (1794), in Austria (1811) and last of all in Saxony (1865). In this way natural law became the law of actual political units; therefore we can speak of a unification of law with regard to some territories.9 Finally, in the late 19th century we can point to the precedents of the Reichsgericht, although this supreme court had to stick to the territorial law in force.10 In other words a “real” unification of law in the German Rechtskreis is only reached, when the codifications of private law of the German Empire and of Switzerland as well as the amended version of the Austrian Code come into force.11

II. Attempts to establish rights of third parties from the late 17th century 1. In 1689 the famous law faculty of Wittenberg had to decide the following case.12 Part of an estate held in fee was sold at a certain price with the consent of mune; see e.g. Josef Unger, Die Verträge zu Gunsten Dritter, in (Jhering’s) Jahrbücher für Dogmatik 10 (1869), p. 81. 9 In some parts of Germany, particularly in the territories on the left side of the Rhine and in Baden, the French Code civil became the law in force; cf. Franz Wieacker, Privatrechtsgeschichte der Neuzeit, 2. ed., Göttingen 1967, p. 345 s.; Werner Schubert, Französisches Recht in Deutschland zu Beginn des 19. Jahrhunderts, Köln / Wien 1977, esp. p. 70 ss., 594 ss. and for French law the contribution by David Deroussin (in this publication), esp. sec. II. 10 Cf. E. Zimmer, art. Reichsgericht, in HRG IV (1990), col. 576 – 580, 577 and below sec. V.8. 11 Cf. Wieacker (supra, n. 9), p. 466 and Döhring (supra, n. 6), p. 32 ss. 12 Johannes B. v. Wernher, Selectarum observationum forensium, T. I, ed. nov., Jenae-Lipsiae 1756, obs. 182, suppl. novum, p. 175. For the general effect of German law faculties on the case law of the territories cf. Döring (supra, n. 6), p. 26 s. and n. 60 and Gehrke (supra, n. 7), p. 1346 s. and n. 2. This is particularly true in the case of Wittenberg, where the deciding committee of the law faculty and the Schöffenstuhl were one and the same institution; cf. Adolf Stölzel, Die Entwicklung des gelehrten Richterthums in den deutschen Territorien, vol. I, Stuttgart 1872, p. 230 and n. 195.

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the feudal lord. The parties agreed that the seller should be granted the usufruct for life, and the buyer was accordingly allowed a credit in respect of the purchase money. After a while the purchaser (the promisor) bound himself towards the seller as well as towards the second liege man (the promisee) to pay the true value of the feudal estate to the two sisters of the seller; hence, if the value of the estate had increased by the time of the seller’s death, the buyer would not be allowed to rely on the fixed purchase price.13 After the seller’s death the buyer refused to fulfil the additional agreement in favour of the wife of the other liege man. He objected that he and the sisters of the seller had not entered into any agreement; and according to Roman law if somebody stipulates in favour of a third party there is no valid legal act. As the two sisters were the heirs-at-law of the seller, the buyer was only prepared to pay the fixed price. His argument was rejected by the ordo Vitembergensis: the law faculty pointed out that in accordance with German law in force it was possible to acquire an obligation in favour of another person if the third party ratified the agreement.14 On that basis the wife of the second liege man had acquired an actio personalis ex pacto. In its decision the law faculty refers explicitly to the doctrine of Johannes Schilter and to a leading case of the summum tribunal of Wismar which was published by David Mevius.15 Similar decisions justify the third party’s claim, quoting the doctrines of Johannes Brunnemann and Samuel Stryk.16 Futhermore, it seems to be of particular importance that the scholars of the Usus modernus pandectarum mentioned above refer to the doctrine of Hugo Grotius17 when they try to emancipate 13 Both the buyer and the other liege man were brothers-in-law of the seller, which means that they were married to the two sisters of the seller. 14 Wernher (supra, n. 12), p. 175: “Dennoch aber und dieweil heutigen Tages nach denen in Teutschland üblichen Rechten, Stipulatio alii facta, wenn selbige von demjenigen, cui facta, ratihabiret wird, allerdings verbindlich . . .”. 15 Cf. David Mevius, Decisiones super causis praecipuis ad summum tribunal regium Vismariense delatis, P. IV, Francofurti ad Moenum 1654, dec. 112 (p. 416) refering to the decision of the tribunal of Wismar of 1656: In this decision another leading case of 1571 was quoted which was published by Ernst Cothmann, Responsorum juris seu consiliorum ac consultationum, ed. ult., vol. II, Francofurti 1662, resp. 54: But both decisions lead in another direction, because they are dealing with the repayment of a mutuum, which is called in by a third party. Therefore they are in accordance with Roman law, where it is possible to lend money alterius nomine; cf. the sources by Max Kaser, Romisches Privatrecht, vol. I, 2. ed., München 1975, p. 263 and n. 27 and by Werner Flume, Rechtsakt und Rechtsverhältnis, Paderborn u a. 1990, p. 95 – 98. So we can make the point that the case of a so-called “Folgebrief” discussed by Cothmann and the similar reference of Maevius to bearer certificates and the law of bills of exchange belong to the exceptions of the rule alteri stipulari nemo potest accepted by Roman law. 16 Cf. the two decisions of the law faculty of Würzburg (Bavaria) of 1846 (with reference to Wernher, Stryk and Leyser) which were published by Gustav Emminghaus, Pandekten des gemeinen Sächsischen Rechts, Jena 1851, p. 540, no. 3; 864, no. 1. In addition see Friedrich E. Pufendorf, Observationes juris universi, T. II, ed. nov., Darmstadii 1786, obs. 38 § 20 in connection with § 19 (p. 117 s.) and Johann U. v. Cramer, Wetzlarische Nebenstunden, T. 57, Ulm 1766, no. 7, p. 142 n. g; for the latter decision also cf. below sec. II.3.

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themselves from Roman law and its rule nemo alteri stipulari potest. Therefore it is necessary to look briefly at the ideas of Grotius and at their effect on German legal doctrine and practice. 2. In his De iure belli ac pacis libri tres of 1625 Grotius formulates a theory of the perfect promise (promissio perfecta), but at the same time he stresses the fact that the promisee has to accept the promise; only by means of the acceptatio is he able to acquire a right.18 After this explanation the great Dutch scholar turns to the so-called acceptatio pro altero facto, an acceptance made for a third party. In this connection he mentions the cases of authorized and unauthorized agency, but he also raises another question of greater relevance to us that arouses our special interest: if someone accepts the promise in his own name on the condition that the promisor will give something to a third person (promissio mihi facta de re danda alteri), what are the legal consequences?19 First of all, this promise is classified as a valid act because – contrary to Roman law – there is no need for a special interest of the promisee; it should be a matter of interest for everybody whether another person receives a favour through him. In other words the theory of Grotius is based on freedom of contract and on the freedom of the will of the contracting parties. After the acceptance of the promise the promisee is given the right of effecting the transfer of the right (ius) to the third party, provided that the third also accepts (videtur mihi acceptanti jus dari efficiendi, ut ad alterum jus perveniat, si et is acceptet). Although the interpretation of the passage is controversial, its wording has to be considered as key to understanding: The promisee acquires a right (ius), because the promisor binds himself towards the latter; and “in the meantime” (medio tempore), until the third party has accepted, the promisee is able to remit the promise. But it is not explained in detail what will be the effect of the acceptance of the third: if we take Grotius at his words (ad alterum jus perveniat),20 the 17 Cf. in general Reinhard Voppel, Der Einfluß des Naturechts auf den Usus modernus, Köln u. a. 1996, 140 ss. (with regard to Schilter), 153 ss. (to Stryk), 155 ss. (to Böhmer), 164 ss. (to Leyser). 18 Hugo Grotius, De jure belli ac pacis libri III, ed. nova, Amsterdami 1646, II.114 ss. in connection with II.11.14 ss.; cf. II.11.14: Ut autem promissio jus transferat, acceptatio hic non minus quam in dominii translatione requiritur, . . . Cf. Gerhard Wesenberg, Verträge zugunsten Dritter, Weimar 1949, p. 114 – 117; Müller, (supra, n. 2), p. 125 – 132; Walter Bayer, Der Vertrag zugunsten Dritter, Tübingen 1995, p. 37 – 40; Harry Dondorp / Jan Hallebeek, Grotius’ Doctrine on “adquisitio obligationis per alterum” and its Roots in the Legal Past of Europe, in “Panta rei”. Studi M. Bellomo, vol. II, Roma 2004, esp. p. 234 ss. and Waelkens (supra, n. 2), n. 2 – 9. 19 Grotius (supra, n. 18), II.11.18: . . . Si mihi facta est promissio, omissa inspectione an mea privatim intersit, quam introduxit jus Romanum, naturaliter videtur mihi acceptan(t)i jus dari efficiendi, ut ad alterum jus perveniat, si & is acceptet: ita ut medio tempore a promissore promissio revocari non possit; sed ego cui facta est promissio eam possim remittere. Nam is sensus juri naturae non repugnat, & verbis talis promissionis maxime congruit. neque nihil mea interest si per me alter beneficium acquirat. . . . 20 A different view is taken by Bayer (supra, n. 18), p. 39 and n. 156; Bayer concludes that “die Akzeptation des Dritten . . . nur Voraussetzung dafür ist, dass der Promissar ver-

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third seems to acquire a right because he has accepted (si et is acceptet) and the promise has not been remitted in the meantime. 21 At any rate that was the conclusion of the law faculty of Wittenberg, when the members of its committee had to decide a case in 1715. With reference to the doctrines of Grotius, Schilter and Stryk the ordo Vitembergensis stated22 that the third party acquires a right per pactum after he has accepted the agreement in his favour; in this respect it does not matter, whether there was an explicit or a tacit acceptance. In the meantime the contracting parties should be free to remit their agreement, though a unilateral revocatio pacti was rejected by the committee. 23 3. If we now turn back to the effect of Grotius’ theory on the German scholars of the Usus modernus pandectarum, it is interesting in which way our problem was tackled by the first generation of these jurists. They ask whether one person is able to acquire an “obligation” for another person;24 the broad formulation of their langen kann, daß die versprochene Sache (ius) an den Dritten geleistet wird”. But I do not think that ius can be interpreted as object of the contract; Grotius refers to a promissio . . . de re (!) danda alteri; from which one can deduce that the word ius bears the meaning of the “right” of the third party which is acquired by acceptation. This interpretation seems to be corroborated by Hugo Grotius, Introduction to the Jurisprudence of Holland, ed. R. W. Lee, Oxford 1926, p. 320 – 323, where Grotius states in his Inleidinghe of 1621, that according to equity “a third party may accept the promise, and thereby acquire a right, unless the promiser (!) has revoked his promise before (sc. the acceptance of the third)” (III.3.38); cf. Waelkens (supra, n. 2), n. 1. 21 See the note before. 22 Wernher (supra, n. 12), p. 175: “Dieweil aber dennoch heute zu Tage auf teutschem Boden auch per pactum einem Tertio ein Jus dergestalt acquiiret werden kann, wenn solcher daraus entweder so fort Klage anstellet, oder sonsten es verbo, vel factis, accepiret, und approbiret, . . . gestalt denn so lange von diesem Tertio dergleichen Acceptation nicht geschehen, denen Paciscenten solches Pactum hinwiederum aufzuheben frey stehet, . . . dahingegen dergleichen revocatio pacti, in favorem tertii initi, von einem Paciscenten alleine keineswegs geschehen, und hinterzogen werden mag”. In this way the committee almost literally cites Samuel Stryk, (Praelectiones Viadrinae) de cautelis contractuum necessariis, ed. nov., Berolini 1741, sec. 2, cap. 5, §. 3, p. 184 (see below n. 35). But the decision gives only a vague hint of the facts of the case: “Ob gleich die übrigen Puttrich’ischen Kinder den Vergleich, darinnen ihnen der Verkauf verschrieben, nicht mit vollzogen, sie auch sonsten denselben bisher nicht acceptiret, oder ratihabiret, . . .”. 23 In 1840 a similar decision was passed in this territory (Saxony-Wittenberg) by the court of appeal, the OAG Dresden; cf. Ferdinand Busch, Doctrin und Praxis über die Gültigkeit von Verträgen zu Gunsten Dritter, Heidelberg 1860, p. 98, no. 16; Emminghaus (supra, n. 16), p. 541, no. 7 and sec. III.2 n. 59. 24 Johannes Schilter, Praxis iuris Romani in foro Germanico, 2. ed., T. I, Ienae 1698, ex. 18, § 27, p. 269: “. . . quo quis alteri obligationem acquirere contra iuris civilis regulas intendit . . . ; Johannes Brunnemann, Commentarius in 50 lib. Pandectarum, 2. ed., Francofurti ad Viadrum 1674, ad D. 2.14.25 & 26, n. 3, p. 114: “. . .regula ista de non quaerenda alteri obligatione no(n) amplius observatur . . .”; Samuel Stryk, Specimen usus moderni pandectarum, 5. ed., Halae Magd. 1717, ad D. 2.14, § 12, p. 280: “E contrario hodie alteri per alterum acquiri obligationem posse, asserit Dn. Mev(ius) . . . , q(u)am sententiam non puto repudiandam”. Cf. Huberta Bauer, Die Entwicklung des Rechtsinstituts der freien gewill-

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question shows us that – contrary to the doctrine of Grotius – no distinction has yet been made between contracts in favour of third parties and agency.25 In this respect one may see an analogy with Roman law, because the rule alteri stipulari nemo potest is also connected with both legal institutions.26 From all that, we can conclude that the doctrine of Grotius was not adopted in its totality; but nevertheless the Dutch scholar had focused doctrinal attention on our problem. As the representatives of the Usus modernus – and some of the territorial courts of appeal as well27 – felt incapable of breaking with Roman law tradition at that moment, a compromise with regard to pacta in favorem tertii had to be found. In this respect the scholars reasoned in the following way. In a first step they make the point that the agreement in favour of the third party is a valid act between the contracting parties; therefore the promisor has bound himself immediately towards the promisee, since according to existing law everybody has to keep a pactum so as not to be guilty of an infringement of the fides promissi.28 In addition to this, Brunnemann also refers to the argument of Grotius that it is in the interest of everybody that another person should receive a favour through him.29 In a second step they point out that the third party is able to make use of the act of the promisee. Schilter makes the point that strictly speaking there is no legal bond between the contracting parties and the third person, but nevertheless this relationship can be cured of nullity. If the third party ratifies the act of the promisee, the lack of consent does not matter any longer;30 because according to the law in force a ratikürten Stellvertretung seit dem Abschluß der Rezeption in Deutschland bis zur Kodifikation des BGB, Berlin 1963, p. 26 ss. 25 Cf. Bauer (supra, n. 24), p. 30 or Müller (supra, n. 2), p. 121 s. 26 Cf. e.g. Fritz Schulz, Classical Roman Law, Oxford 1951 (repr. Aalen 1992), p. 487 s.: “The true reason (sc. underlying the nullity of alteri stipulari) was simply this: Classical private law excluded on principle direct agency; this principle was rather inadequately expressed in the well-known maxim: ‚per extraneam personam adquiri nobis non potest’. From this maxim it followed immediately that the promisor was not bound to the third person and that the later had no action against him”. 27 For it cf. below sec. III.3. 28 Schilter (supra, n. 24), ex. 18,§ 27, decis. / rat. dec. no. 1, p. 269 s.: “Verum quoniam hodie quoq(ue); ex pacto regulariter actio competit, . . . promissor contra fidem datam & factum proprium venit, licet consensus expressus alterius, cui obligationem quaeri intenditur (,) ab initio deficiat”; Stryk (supra, n. 24), ad D. 2.14, § 12, p. 280: “. . . nam & hoc casu promissi fidem violasse nefas est. . . . Cum ergo in pactis hodie vinculum naturalis obligationis attendatur, cui mores efficaciam agendi tribuunt, non video, quare non per alterum illa naturalis pacti obligatio acquiri possit”; id., de cautelis, II.5 § 3, p. 184. 29 Brunnemann (supra, n. 24), ad D. 2.14.25 & 26, n. 3, p. 114: “. . . Et sane hominis interest, ut homo alter beneficio à se afficiatur. Utinam omnibus prodesse possim, optimorum votum est”; also cf. id., Commentarius in Codicem Justinianeum, ed. post., Lipsiae 1699, ad C. 8.39.3, n. 5, p. 1014 referring explicitly to the Jus naturale. 30 Schilter (supra, n. 24), ex. 18,§ 27, decis. / rat. dec. no. 2, p. 269 s.: “. . . atque (sc. hodie) actus ab initio invalidus ex post facto convalescere possit, . . . quod consensus ratihabitionis ex post facto semper sequatur, quotiens tertius actionem in factum utilem ex tali pacto intendit”.

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habitio has to be treated analogously to a mandate,31 and consequently the former agreement is changed with retroactive effect (ex tunc). The third person now has to be seen as principal and therefore he acquires an actio utilis ex facto, without the need of any assignment.32 Brunnemann and Stryk follow a similar path to reach an acceptable solution: Both scholars point out that the third is able to ratify the act of the promisee, and after the ratihabitio the latter can be considered as his manager without mandate (negotiorum gestor). Therefore equity requires that the benefit (utilitas gestionis), which includes the right to sue (jus petendi), is transfered to the principal; for this reason Stryk grants the third party an actio utilis.33 Futhermore, when Stryk deals with the legal situation before ratification he refers explicitly to the doctrine of Grotius as regards the third party benficiary contract (arg. citra mandatum);34 but whereas the Dutch scholar stressed that the promisee has the right to release the promisor from the obligation, Stryk only allows a termination of the agreement by mutual consent.35 From a modern point of view one may object that the promisee has the intention to accept the promise only in his own name, and the idea of agency without authority is therefore wholly irrelevant.36 But the scholars of the Usus modernus mentioned above clearly have another rule of advanced Roman law at the back of their minds, and they apply it mutatis mutandis to pacta in favorem tertii: according to a text of Ulpianus everyone is able to ratify legal transactions which were entered into contemplatione tua (sua) by another person.37 Consequently these jurists comWith reference to Roman law; cf. Kaser (supra, n. 15), vol. I, 2. ed., p. 579 n. 25. Schilter (supra, n. 24), ex. 18, § 29, resp. / 1. exc., p. 270 s.: . . . , apparet, iuris Germanorum moribus . . . potius placuisse regulam universaliorem: ratihabitionem mandato comparari, & reducere negotium ad id tempus, quo contractum fuit. . . . ita ut nulla cedendae actionis subtilitate opus habeat tertius, sed ipso iure competat actio. 33 See Stryk, (Tractatus) de actionibus forensibus, Halae Magd. 1697, sec. I, mem. 3, § 18, p. 49 citing id. (supra, n. 24), ad D. 2.14, § 12, p. 280: “. . . Nil enim obstat, quo minus ex ratione Juris Gentium alteri per alterum obligatio acquiri possit, modo tertii ratihabitio postmodum accesserit. Gerit enim ita stipulator negotium alterius, & hinc aequitas ipsa postulat, ut utilitas gestionis, quorsum & jus petendi pertinet, in alterum transeat. Cf. in addition Brunnemann (supra, n. 29), ad C. 8.39.3, n. 5, p. 1014: “Et cur non liceat alteri negotium a me ipsius gratia gestum ratum habere?”; id. (supra, n. 24), ad D. 2.14.8 & 10, n. 24, p. 110: “. . . neque hoc absurdum putem ex pacto tertii mihi competere actionem, si tertii factum ratum habeam, quia ille meum negotium gessit”. 34 For Grotius cf. above n. 19 ss. Stryk (supra, n. 24), ad D. 2.14, § 12, p. 281: An vero si citra mandatum pro alio pactus fuero, ego promissori obligationem remittere possim, antequam alter ratihabuerit, de eo agit Grot(ius) de J. B. & P. lib. 2. c. 11. §. 18. 35 Stryk (supra, n. 22), de cautelis, II.5 § 3, p. 184: “. . . scilicet tum demum tertio acquiri obligationem, si vel facto, vel verbis, illam obligationem acceptaverit seu probaverit: quamdiu enim tertius ignorat contractum in sui gratiam inter alios gestum, liberum est, non uni, sed utrique contrahentium, a contractu illo in totum resilire”. 36 See above n. 5. 37 E.g. Mevius (supra, n. 15), P. II (1654), dec. 95 and Stryk (supra, n. 24), ad D. 3.5, § 2, p. 372 s. are reasoning in this way. Cf. Ulpian D. 3.5. 5. 11 i.f.: . . . ratihabitio constituet tuum 31 32

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bine different elements of modern legal doctrine: they consider a stipulatio alteri as valid act and refer to the idea of agency at the same time. 4. But this attempt at a solution of our problem is left behind by the next generation of jurists. They suppose that the third party does not in fact ratify the act of the promisee, but accepts the promise which has been made in his favour. Therefore it is necessary neither to refer to an assignment of the claim nor to an actio utilis.38 The relevant summary of Christian F. Glück shows that this line of thought becomes the prevailing opinion of the doctrine of Usus modernus pandectarum at the end of the period.39 In other words a pactum in favorem tertii gives the third party the chance to acquire an irrevocable and transmissible right by means of acceptance. Although the scholars do not state it explicitly, they seem to regard the pactum as a contractual “offer”, such that if the third accepts the promise / offer, he too becomes a party to the agreement. It follows therefore that a (real) third party beneficiary contract is still lacking. But legal practice takes a step forward: according to the decision of 1715 cited above, committees of law faculties and courts of appeal take the view that the acceptance can also be carried out impliedly. Therefore all that is necessary is that the third party sues on the contract; in other words he can already exercise his right.40 On the other hand there is no irrevocable right for the third to accept the promise. The contracting parties are free to revoke the pactum before the third party has expressly accepted or impliedly done so by bringing an action. According to the overwhelming doctrine Augustin Leyser states that the promisor binds himself immediately, but that the promisee has the right to remit the promise; in this respect Leyser does not quote Grotius, but refers to a decision of the law faculty of negotium, quod ab initio tuum non erat, sed tua contemplatione gestum, and for Roman law Kaser (supra, n. 15), vol. I, 2. ed., p. 588 n. 17. 38 Cf. e.g. Wernher (supra, n. 12), T. I, obs. 182, n. 32: “Plane si res integra est, & tertius in quem utilitas promissionis redundare debet, eam (!) acceptavit, ipso jure adversus promittentem actionem habet, . . .” and a decision of the law faculty of Wittenberg of 1707 (loc. cit., n. 35); E. F. Pufendorf (supra, n. 16), T. II, obs. 28, § 20: “. . . postquam tertius promissa (!) jam acceptavit”; or Christian Wolff, Grundsätze des Natur- und Völckerrechts, Halle / Magd. 1754, § 433: “. . . Weil aber der andere [tertius] dadurch, daß ich [promissarius] es annehme, kein Recht erhalten hat, . . . so kann das Versprechen, ehe der andere es (!) angenommen, zwar nicht wiederrufen werden, ich aber kann mich desselben begeben”; similar Grotius in his “Introduction” (Inleidinghe); cf. above n. 20. 39 Christian F. Glück, Ausführliche Erläuterung der Pandecten nach Hellfeld, ein Commentar, vol. IV / 2, 2. ed., Erlangen 1843, § 343, p. 564 s.: “Es wird daher heutigen Tages weder eine förmliche Cession, noch das Rechtsmittel der sogenannten nützlichen Klage erfordert, um dem Dritten, zu dessen Besten ein Vertrag geschlossen worden, daraus ein Recht zu verschaffen; sondern es genügt, wenn er nur die zu seinem Besten geschehene Zusage acceptieret hat, ehe die eigentlichen Paciscenten, welches ihnen ohne Zweifel freysteht, davon zurück getreten sind, . . .”; only after that Glück refers to the question of agency (loc.cit. § 343 i.f.). 40 Cf. the decision of the law faculty of Wittenberg of 1715, above n. 22.

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Helmstedt of 1724.41 For a similar line of thought we can refer to a legal opinion (consilium) which was given by the fratres Becmann in 1777. A father and a landlord entered into an agreement for payment on condition, that an estate should be conveyed to his son, who was at present under age; in the meantime the father was allowed to manage the estate. Later on the father wanted to convey the estate to another child, but the legal experts denied any such alteration of the initial agreement: among other things they explained that the son had accepted the promise of the landlord after he had attained his majority; therefore one had to speak of a ius quaesitum of the third party.42 Finally, Christian Wolff also dealt with another aspect of our problem: if the promisee informs the third party, he binds himself towards the tertius.43 5. But apart from the prevailing opinion we find other statements which seem very similar to our modern doctrine of a “real” contract in favour of third parties. First of all one can refer to a decision of the Reichskammergericht (Wetzlar) of 1765,44 which was published and discussed by Johannes U. v. Cramer. A couple concluded an agreement of marriage (pactum nuptialis), and among other things they agreed that the husband had to pay a certain amount of money to the son of 41 According to Diocletianus C. 3.42.8, cf. Hallebeeek (supra, n. 1), sec. II.2 (xiii), someone deposited an amount of money on condition that it should be restored to a third party. Shortly after the promisor informed the third party, but he received no reply. Several weeks later the depositor ordered that the money should be restored to him, because he was the debtor of the third and the latter had not given his approval to the transaction. But now the third party brought in an action against the former depositee (promisor) and sued for payment of the money. The court of first instance found for the plaintiff. But the law faculty of Helmstedt stated that the promisee had the right to release the promisor from his obligation and dismissed the action. Cf. Augustin Leyser, Meditationes ad Pandectas, vol. VII, LipsiaeGuelpherbyti 1744, spec. 519 (ad D. 45.1), med. 4 / 5, p. 829 – 832; but Leyser does not distinguish between a third party beneficiary contract and agency. For the law faculty of Helmstedt and its good reputation cf. Alois Schikora, Die Spruchpraxis an der Juristenfakultät zu Helmstedt, Göttingen u. a., p. 79, 271 – 273. 42 Fratres Becmann, Consilia et decisiones, Goettingae 1784, pars I, resp. 5, esp. n. 7 and n. 10, p. 89 ss.; 92 s.; 95: Since “1) es keinem gegründeten Zweifel unterworfen; daß [der Sohn] . . . durch die Convention . . . an diesem Colonat ein ius quaesitum erhalten, . . . der Sohn nach erlangter Maiorennitaet sich vielfältig erkläret, daß er auf dieses Colonat freyen würde, und also dadurch die vor ihm und in seinem Namen geschehene acquisition zureichend ratihabiret und acceptiret . . . hiernächst 2) der Vater das diesem seinem Sohn . . . völlig acquirirte Recht aus dem in den Zweifelsgründen angeführten Ursachen zu entziehen auf keine Weise vor befugt zu halten”. But they also make a point in eventu that the father acquires the estate as the legal representative of his son under age; for this line of argumentation cf. below sec. III.3 (esp. next to n. 69). 43 Wolff (supra, n. 38), § 433: “. . . Und weil ich [promissarius] will, daß das Versprechen gelten soll, wenn ich es dem andern [tertius] bekannt mache; so verspreche ich ihm wenigstens stillschweigend, wenn er es annimmt, davor zu sorgen, daß das Versprechen gehalten werde”. In other words the promisee obligates himself to the third that he will not to use his right to release the promisor. 44 Cf. Filippo Ranieri, Die Arbeit des Reichskammergerichts in Wetzlar, Wetzlar 1988, p. 5 s.; 15 s.; 20 s.

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his wife if she died first. But soon after the death of the wife her son also died, and shortly after the husband died too. When the son’s wife sued the heirs of the husband, the question was raised whether it was necessary that the son should have survived the husband of his mother. It was held that an actio ex pacto was admissible without any such legal requirement. v. Cramer observes that one can speak of a pactum in favorem tertii; therefore, ex Moribus Germanicis the third party should acquire an irrevocable and transmissible right immediately;45 but in order to explain the judgment one can also refer to the fact that the mother was regarded as a legal represantative of her son.46 In his comments on the dicision of the Reichskammergericht v. Carmer in particular supports the doctrine of Justus H. Böhmer. To a certain extent his remarkable theory seems to anticipate the modern view of contracts in favour of third parties. As to the law in force Böhmer follows the thought of Stryk or Schilter,47 but natural law theory has to change the perspective of ius positivum. According to ius naturale the promisee as well as the third person should acquire an enforceable right (ius perfectum). As the contracting parties enter into an agreement in favour of a third person one has to presume conclusively that they want to grant him a perfect right. And there is no reason to deny that the contracting parties are capable of it. The promisor as an owner (dominus) expresses his will to transfer his ius to the third, and at the same time nobody can doubt a similiar interest of the promisee.48 As a consequence one has to contradict Grotius: although the third party has not made any statement in the meantime (medio tempore),49 neither the promisor nor the promisee should be able to revoke their agreement.50 45 v. Cramer (supra, n. 16), T. 57, p. 136 – 148, esp. 142: “. . . und also der Zweifel entstehen könnte, wie Er ex Pacto Tertii ein Jus unnd jetzo seiner Erblasserin eine Action daraus nehmen könne; So ist doch auch richtig, daß sine Mandato, Consensu & Ratificatione ex Pacto Tertii irrevocabile ein Jus und Action erworben werden könne”; in this context v. Cramer in particular refers to J. H. Böhmer; also cf. id. (supra, n. 16), T. 107 (1770), p. 407 ff., esp. 434 – 436. 46 v. Cramer (supra, n. 16), p. 143; for a similar line of thought cf. the fratres Becmann, next to n. 42. 47 In his treatise Böhmer strictly separates ius positivum from ius naturae: Cf. Justus H. Böhmer, Exercitationes ad pandectas, T.II, Hannoverae-Gottingae 1747, ex. 28 (ad D. 2.14), I.§ 9, p. 270; II.§ 4, p. 303 – 307; for the ius Romanum novum, loc. cit., I.§ 24, p. 298. Müller (supra, n. 2), p. 145 or Bayer (supra, n. 18), p. 50 s. ignore the different foundations of Böhmer’s argument. 48 Böhmer (supra, n. 47), I.§ 5, p. 262 s.: “. . . ut non tantum stipulanti, sed etiam tertio, in cuius utilitatem pactum initum est, ius perfectum acquiratur, idque etiam ex voluntate et intentione praesumta paciscentium, qui id egisse videntur, ut tertius ius efficax, perfectumque acquiratur, . . .”. 49 For the doctrine of Grotius (arg. medio tempore) cf. above sec. II.2. 50 Böhmer (supra, n. 47), I§ 6, p. 265: “Inde vero fluit, a) medio tempore, i.e. antequam tertii consensus accesserit, illud promissum a stipulatore citra iniuriam tertii remitti non posse, cui eventualiter ius adquirere volui: b) promittentem a suo promisso medio tempore recedere non posse”.

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6. On the other hand parts of legal doctrine and practice clung to the principles of Roman law: the summum tribunal of Wismar in 1660 generally stated that a third party has no claim.51 The most famous exponent of this line of thought was Benedict Carpzov,52 and many other jurists followed his opinion: Heinrich Hahn, for example, refers to the rule nemo alteri stipulari potest as law in force, and a contradictory consuetudo particularis has to be proved to the court;53 and later on Gottfried Hufeland54 rejects explicitly the prevailing opinion of the Usus modernus pandectarum.

III. „Case law” in the territories based on the ius commune and German customary law 1. Supreme court practice of the German territories, as well as legal doctrine shows a notable lack of uniformity. In this section we will concentrate on territories where the received Roman law (ius commune) has a significant effect on our topic, whereas section IV will deal with legal practice based on territorial codifications. In order to illustrate the differing opinions on third party beneficiary contracts agreements between members of a family as well as payment agreements and the taking over of debts shall be taken as examples. 51 Mevius (supra, n. 15), P. VIII, dec. 220, p. 359 s.: “. . . ut subsistat stipulatio, & ipsi stipulanti inde actio quaeritur, minime vero ut & ille, cujus nomen stipulatione continetur, in sui commodum inde agere possit”; for that reason the action of the third party had to be dismissed; in the same way the law faculty of Gießen in decisions of 1696 and 1706; cf. Müller (supra, n. 2), p. 117. On the other hand in 1658 the tribunal of Wismar – cf. Döhring (supra, n. 47), p. 26 – deals with a transfer of property from father to son and states that the creditors of the father can sue the son successfully; the judges justified this exception to the Roman rule by the priciples of the law of succession (“successio anticipata”): Mevius (supra, n. 15), P. VI, dec. 319, p. 108 s.; also cf. above n. 15. 52 Benedict Carpzov, Definitiones forenses. Iurisprudentia forensis Romano-Saxonica, ed. nov., Lipsiae 1703, P. II, const. 33, def. 25 – 27, p. 621 ss., (def. 27: Subsistit quidem stipulatio alteri facta, si ipsius stipulatoris intersit, sed nulla inde actio tertio acquiritur) with reference to a decision of 1629: “Hat Maevius euch versprochen und zu gesagt / euretwegen dem Sepronio 100. Reichsth. zu zahlen . . . , daß ihr ihn zu Erfüllung derselbigen (Zusage) zu belangen wol befugt / der Sempronius aber hat dannenhero wider ihn keine Klage und Zusprüche”. 53 Heinrich Hahn, Observata theoretico-practica, 3. ed., Coloniae Agrippinae 1675, ad D. 45.1, obs. 4, p. 363: “. . . Caeterum quod hodie ex vulgari consuetudine regula illa (de non quaerenda alteri obligatione) non amplius observetur, ut statuit Cothman(nus) . . . meritò negamus. . . . Nulla itaque est consuetudo generalis regulam nostram quae sustulerit, sed si qua contra eam allegatur, illa probanda est”. 54 Gottlieb Hufeland, Lehrbuch des in den deutschen Ländern geltenden gemeinen Civilrechts, vol. I, Gießen 1808, n. 404, p. 152 f. with reference to the Roman sources (“Aus Verträgen entsteht kein neues Recht für einen dritten”) and by adding: “A.M. sind Mevius . . . Stryk . . . Leyser . . . Hopfner . . .”; but apart from the exceptions of Roman law pacta in favorem tertii are “selbst unter den Contrahenten nicht gültig”. Other jurists are cited by Bayer (supra, n. 18), p. 52 s.

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2. The general view of the court of appeal (OAG) of Darmstadt (Hesse-D.) manifests itself in a decision of 1852,55 which refers to the prevailing doctrine of the Usus modernus pandectarum (i.e. to Glück) as well as to the settled practice of this court.56 It was found that the third party was able to acquire an irrevocable right, provided that he accepted the promise in his favour; so that an assignment or an actio utilis was not considered necessary.57 The same judgment was reached in 1845 with respect to a contract of inheritance in favour of a third person: referring to Georg Beseler, the point was made that after the death of the promisee (the testator) the third party acquires an irrevocable right, even if he has not himself made an act of adhesion to the contract (“Beitrittserklärung”).58 Similarly the OAG Dresden (Kur-Saxony) emphasized that the alteri stipularirule was not a subject of Reception,59 so the creditors of a seller are granted an action if an estate is alienated on condition that the buyer shall pay them off with parts of the purchase money. The court of appeal refers to its established practice as well as to the doctrine of Wernher and Glück.60 But one has to ascertain each time whether it was the intention of the contracting parties to grant the creditor a claim; only then can he sue both his debtor and the buyer, provided that the creditor has accepted the promise. Otherwise the agreement only has effect on the contracting parties: it would aim at the advantage of the seller, who need not take care of the payment himself.61 We find the same reasons in a decision of the higher court of trade (HAG) of Nürnberg; according to Bavarian practice it was held that filing of action had to be considered as an acceptance of the third party.62 A similar case was decided by the “Spruch-Colleg” (committee) of the law faculty of Rostock (Mecklenburg-Schwerin): a contract was concluded in favour of a debtor (promisee) and the promisor settled the debt; soon afterwards he wanted to recover from the debtor, but the promisee was granted a peremptory defence (exceptio).63 Seuffert’s Archiv (SeuffA) 10, no. 152 [= Busch (supra, n. 23), p. 127 s., no. 39]. Cf. above sec. II.4. With reference to the decisions of 1820, 1825, 1826, 1843 and 1845. 57 For a similar decision see OAG Darmstadt (1856): C. Matthiae, Controversen-Lexikon des röm. Civilrechts (T. I), Leipzig 1856, p. 403, no. 12 [= SeuffA 8, no. 29; Busch, p. 126 s., no. 37]. 58 SeuffA 8, no. 64 (1845) [= Busch, p. 127, no. 38]. But the opinion of Georg Beseler, Lehre von den Erbverträgen, T. II / 1, Göttingen 1837, p. 76 – 78 is slightly different: According to Prussian law Beseler maintains that the contracting parties have to give their approval to the adhesion of the third; but the very fact that the third declares his adhesion does not seem to be sufficient. 59 Busch, p. 98, no. 16 (1840) [= Matthiae (supra, n. 57), p. 399, no. 1; Emminghaus (supra, n. 16), p. 541, no. 7]; also cf. SeuffA 3, no. 312 (1847). 60 Busch, p. 99 – 102, no. 17, (1844) [= Emminghaus, p. 541 s., no. 10 (only a cut version)]; SeuffA 6, no. 21 (1852) [= Matthiae, p. 402, no. 9]; SeuffA 16, no. 38 (1862). 61 Busch, p. 105 – 108, no. 20 (1850). Also cf. Busch, p. 102 – 104, no. 18 (1847 / 48) [= Matthiae, p. 401 s., no. 8]. 62 SeuffA 21, no. 38 (1866). For Bavaria cf. sec. IV. 2. 63 SeuffA 19, no. 33 (1840). 55 56

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Finally, with regard to contracts of inheritance the OAG Dresden – like the OAG Darmstadt – refers to the doctrine of Beseler: in order to acquire an irrevocable right the third party has to adhere to the contract unless the testator has died.64 3. In the 19th century one can still find decisions which refer – in accordance with the doctrine of Stryk or Schilter – to negotiorum gestio.65 To give an exemple the territorial supreme court, the Oberlandesgericht (OLG) of Wolfenbüttel (Braunschweig-W.) stated generally 1843 that the third person has to be considered a party of the contract and that he acquires an actio utilis provided that he has ratified the act of the promisee; and contrary to Roman law a special interest of the latter is important only for the question whether the promisee acquires an action too.66 On the other hand German customary law is applicable to contracts of inheritance in favour of third parties: therefore the third acquires a right by means of his acceptance, and all that is required is that he sues on the agreement of the contracting parties. Futhermore, according to Beseler, it was decided that the third party also acquires an irrevocable right after the death of the testator.67 The same view was taken by the Obertribunal (ObT) of Stuttgart (Württemberg).68 But if contracts in favour of third parties are entered into to provide for one’s own children or for other closely related members of the family we find a different approach. In 1859 the court of appeal of Wolfenbüttel had to decide the case of a contract for the transfer of an estate. The son bound himself towards the father (promisee) that he would leave the property by will to his nephew. Soon afterwards the son died and his father wanted to convey the estate to another person, but it was held that the father had already lost his ownership. He had concluded the contract as a representative of his grandchild (his son’s nephew) and the latter had therefore acquired an irrevocable right.69 4. Other territorial supreme courts refer to the Reception of the Roman rule alteri stipulari nemo potest in principle, but German customary law was applied to some exceptional cases. The OAG Celle (Hannover) emphasizes that a taking over of debts70 or a contract of inheritance71 can only bind the contracting parties; but SeuffA 3, no. 74 (1849) [= Busch, p. 104 s., no. 19; Matthiae, p. 401, no. 6]; cf. above n. 58. Cf. above sec. II.3. 66 Matthiae, p. 402 s., no. 10 (1843) with reference to Pufendorf (supra, n. 16), vol. II, obs. 38 §§ 12 s., § 19; Pufendorf himself refers to Brunnemann and Stryk; moreover he cites Mühlenbruch and v. Savigny; in addition cf. Matthiae, p. 400, no. 3 (1843); CassH: SeuffA 12, no. 284 (1857), no. 142 (1858) [= Busch, p. 136, no. 43]. 67 LG Wolfenbüttel: Matthiae, p. 399, no. 2 (1835); OAG: SeuffA 11, no. 133 I – II (1849, 1850) [= Busch, p. 128 – 133, no. 40 s.]; with regard to a joint and mutual will: SeuffA 14, no. 131 II (1859); 16, no. 182 (1860). 68 SeuffA 7, no. 273 (1854) [= Busch, p. 122 s., no. 33]; also cf. SeuffA 15, no. 214 (1841). 69 CassH: SeuffA 14, no. 131 (1859). 70 SeuffA 18, no. 128 (1859); 19, no. 135 (1865); 25, no. 102 (1868); 28, no. 22 (1872) with reference to negotiorum gestio; 32, no. 318 (1877). 64 65

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the court adds that German customary law has to be applied to special contracts, for example to contracts for the transfer of rural property, to partition agreements between members of a family or similar agreements of maintenance like marriage contracts and so-called Alimentationsverträge (contracts of annuity for life).72 The same types of contracts are enumerated in a decision of the OAG Lübeck (Hanseatic town).73 In other words, the practice of these courts separates the area of application of Roman law from that of German customary law. In this context we can refer in particular to the practice of the OAG Jena (Saxonia-Weimar-Eisenach). As a basic principle the court of appeal states that a contract in favour of a third person only binds the contracting parties; cases of the taking over of debts are decided that way, unless the third party can rely on an exception mentioned in Roman sources.74 In a case of 1845 someone granted a loan and the parties agreed that the money should be repaid to the grandchild of the lender. Later on the debtor alienated an estate on condition that the buyer had to pay the amount of the loan to the grandchild. On that the Saxonian court confirmed a judgment of the law faculty of Halle and stated that the grandchild had acquired a right, because the loan seemed to be transferred to the buyer.75 But in 1868 the court departed from these precedents: based on a decision of the law faculty of Göttingen the OAG Jena referred to German customary law and emphasized that a third party was able to accept an agreement in his favour.76 Other exceptions of German law had been acknowledged before this. A co-heir, for example, bound himself towards the other heirs that he would answer for the deceased’s debts. According to the doctrine of Glück the court granted each creditor an action, although he was not a party of the contract.77 German customary law was also applied to contracts for the transfer of rural property: if the transferee of an estate had promised to give something to his brothers and sisters “as their portion of the inheritance”, they were granted an irrevocable right after the death of the transferor (promisee).78 71 SeuffA 5, no. 299 (1852) with reference to Carl F. Eichhorn, Einleitung in das deutsche Privatrecht mit Einschluß des Lehnsrechts, 3. ed., Göttingen 1829, § 343 IV, p. 803 ff., 805. 72 SeuffA 21, no. 40 (1865); in the case of a contract for the transfer of rural property the judges refer to the law of succession (“successio anticipata”) in order to explain the exception: 52, no. 88 (1896). 73 SeuffA 7, no. 68 (1825) [= Busch, p. 123 – 125, no. 34] with regard to a contract of inheritance; but analogously to a donatio sub modo – for C. 8.54(53).3 cf. Hallebeeek (supra, n. 1), II.2 (xv) – and with reference to the law of succession it was held that the third acquires an actio utilis after the death of the testator; also cf. SeuffA 23, no. 220 (1868); SeuffA 32, no. 218 (1875) contains a reference to the settled practice of the court. 74 As a leading case cf. Busch, p. 109 s., no. 23 (1845) [= Emminghaus, p. 539 s., no. 1]; with regard to contracts of inheritance: SeuffA 7, no. 22 (1845); Busch, p. 110 s., no. 24 (1845) [= Emminghaus, p. 541, no. 8]. 75 SeuffA 21, no. 38 (1845); for that exception of Roman law cf. above n. 15. 76 SeuffA 23, no. 219 (1868). 77 Busch, p. 111, no. 25 (1840) [= Emminghaus, p. 541, no. 9]; also cf. SeuffA 8, no. 30 (1852) [= Busch, p. 115 s., no. 30; Matthiae, p. 403, no. 13].

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5. The well documented practice of the OAG Cassel (Hesse-C.) was also based on Roman law, but the judges found another answer to our problem.79 As a first step they generalized the Roman exception of donatio sub modo; therefore one could conclude that in advanced Roman law the third party must be granted an actio utilis provided that the promisee himself had an interest in the performance to the third party. In addition the court of appeal emphasized that the action of the third party was founded on an implied assignment.80 From a modern point of view the third does not acquire an independent right of his own which has to be considered a criterion of a “real” contract in favour of third parties; but in the case of a taking over of debts the creditor has an actio in personam anyway,81 provided that there is a corresponding intention of the contracting parties.82 We find the same line of argument in cases of marriage agreements83 and of contracts for the transfer of rural property:84 in order to grant an actio utilis in favour of members of the family the court referred to the special interest of the promisee. But other decisions were based on German customary law: it was said that the children immediately acquire a transmissible right against the promisor, because they were represented by their father (promisee); or the court on these facts refers to the law of succession and to the legal conception of the so-called anticipated inheritance (successio anticipata).85 6. Other territorial supreme courts, like the OAG Kiel (Schleswig-Holstein) or the OAG Wiesbaden (Nassau), rejected the judgment of the court of appeal of Cas78 SeuffA 2, no. 213 (1845) [= Busch, p. 111 s., no. 27]; but if there was no reference to the “portion of the inheritance”, the brothers and sisters had – in accordance with the doctrine of Beseler (cf. above n. 58) – to adhere to the contract: Busch, p. 111, no. 26 (1844). 79 Cf. esp. F.G.L. Strippelmann (ed.), Neue Sammlung bemerkenswerther Entscheidungen des Ober-Appellations-Gerichtes zu Cassel, Cassel 1848, p. 30 ss. Only during 1807 – 1813 had the court of appeal to apply French law: According to art. 1121 of the Code of Westphalia [= Code civil] the judges refer to the doctrine of the late Usus modernus and state that the third is able to accept the promise (cf. above sec. II.2): Busch, p. 73 – 75, no. 2 (1828); p. 87 – 89, no. 11 (1836) [= Strippelmann, p. 31 – 33., no. 2; p. 42 – 44, no. 11]. 80 Cf. e.g. the case of the buyer of an estate who bound himself towards the seller to pay money to the wife of the latter; the wife was granted an actio utilis, because her husband had a valuable interest: Busch, p. 71 – 73, no. 1 (1825) [= Strippelmann, p. 30 s., no. 1]. 81 Busch, p. 75 s., no. 3 (1828); p. 85 – 87, no. 10 (1836); p. 89 – 91, no. 12 (1836); p. 91 – 93, no. 13 (1837) [= Strippelmann, p. 33 s., no. 3; p. 41 s., no. 10; p. 44 s., no. 12; p. 46 s., no. 13]. 82 Busch, p. 84 s., no. 9 (1836) [= Strippelmann, p. 40 s., no. 9]. 83 Busch, p. 79 – 81, no. 6 (1833) [= Strippelmann, p. 36 s., no. 6]. 84 Busch, p. 91 – 93, no. 13 (1837); p. 94 s., no. 14 (1837) [= Strippelmann, p. 46 s., no. 13; p. 47 s., no. 14]. 85 Busch, p. 81 s., no. 7 (1834) [= Strippelmann, p. 37 s., no. 7]; Busch, p. 95 – 98, no. 15 (1847) [= Matthiae, p. 400 s., no. 5]; SeuffA 3, no. 32 (1847). For the reference to the law of succession (successio anticipata) cf. Christian L. Runde, Über die erfrühte Erbfolge (successio mortis causa anticipata) im Gebiete des deutschen Privatrechts, in Zeitschrift für deutsches Recht 7 (1842), esp. p. 18 s. and above n. 51 as well as n. 71.

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sel and denied any generalization of the actio utilis;86 the practice of these courts does not separate an area of application of German customary law, but it sticks to Roman law and its exceptions. In the case of marriage contracts in favour of members of the family, for example, the judges dismissed their action.87

IV. Territorial Law Codes and the legal practice based on these codifications 1. Up to now we have concentrated on the various opinions of legal doctrine and practice based on the rules of ius commune and advanced Roman law; but the set of different concepts to judge the problem of pacta in favorem tertii increases, if we take into account the codification programms in Germany from the second half of the 18th century. In the following we will look briefly at the most important Civil Codes of that time, the codifications of Bavaria, Prussia, Austria and Saxony;88 in this context we will address the issue of the effect of the relevant provisions on the practice of territorial courts. 2. In the Codex Maximilianeus Bavaricus civilis (CMBC) of 1756 Roman law is embodied as subsidiary law.89 Nevertheless the Roman rule alteri sipulari nemo potest is not applicable in Bavaria, because in section IV.1 § 13 no. 2 the Bavarian Code deals explicitly with contracts in favour of third parties. Apart from cases of legal representation (sec. IV.1 § 13 no. 1) the Bavarian Landrecht (Reformation) considers pacta in favorem tertii as valid acts provided that the third person has ratified or accepted the promise made in his favour.90 Its wording reveals that this section was codified at the transition from the elder to the more recent and subsequently prevalent doctrine of the Usus modernus pandectarum;91 and this assumption is confirmed by the comments of Wiguläus A. v. Kreittmayr, where we find OAG Wiesbaden: SeuffA 21, no. 37 II (1864); no. 37 I (1839). OAG Kiel: SeuffA 9, no.44 (1842) [= Busch, p. 136 – 138, no. 44]. 88 For the territories on the left side of the Rhine and for Baden cf. above n. 9 and Carl Gareis, Die Verträge zu Gunsten Dritter. Historisch und dogmatisch dargestellt, Würzburg 1873, p. 176 – 179. 89 Sec. I.2 §§ 9, 12, 13 CMBC; also cf. Wieacker (supra, n. 9), p. 326 s. 90 Sec. IV.1 § 13 CMBC: “1mo Kann für alle jene, welche man von väterlicher Gewalt, Curatel, Anwaltschaft und sonst von Rechts wegen zu vertreten hat, stipulirt werden. Für andere Dritte hingegen gehet solches 2do nur so weit an, als ihnen dieses nützlich seyn mag, und nach der Hand ratificirt oder angenommen wird. . . .”. 91 Wigulaeus X. A. v. Kreittmayr, Anmerkungen über den Codicem Maximilianeum Bavaricum civilem, vol. IV, München 1765, cap. I § 13, p. 1379 s.: “Man halt dahero auch heut zu Tag sowohl in schola als praxi fast unanimiter dafür, daß gedachte Regul nur in jure romano civili & stricto allein, sonst aber weder in jure naturali, noch canonico, germanico, & consuetudinario findirt seye [with reference to Böhmer etc.] . . . unser Codex . . . bestätigt vielmehr die neuere Rechts-Lehr . . .”. 86 87

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references to Stryk and Wolff.92 According to the prevailing doctrine v. Kreittmayr states that the third has to accept the promise, because nobody is allowed to impose something on the other against his will, not even by means of a beneficial act; therefore the idea of negotiorum gestio was pushed into the background. And in the meantime, before the third party has accepted the promise, the contracting parties are able to revoke the contract by mutual consent (mutuo consensu). The indefinite terms of sec. IV.1 § 13 no. 2 CMBC had a significant effect on the practice of the OAG Munich. In principle the Bavarian supreme court granted the third party an independent right and denied that any assignment on the part of the promisee was required.93 But in 1853 the court referred to negotiorum gestio in order to found an action in favour of a landlord94 where two co-tenants had entered into the agreement that one of them would pay the total amount of the rent money. On the other hand, in a decision of 1859 the OAG Munich departed from its precedents. An estate was alienated and the buyer bound himself towards the seller (promisee) to pay parts of the purchase money to a near relative of the latter. It was held that the right of the third party would depend on her acceptance, but a filing of action was considered to be a sufficient acceptance. 95 Finally, in 1866, the court had to decide the case of a buyer who had taken over the debts of the seller. In addition to the former reasons it was said that after the acceptance of the promise the third party and the promisee had concluded a contract of their own; but the court seems to contradict itself, when it states at the same time that a filing of action has to be considered as an acceptance by the third party.96 Apart from that, the later practice of the OAG Munich interpreted the term “ratification” of sec. IV.1 § 13 n. 2 CMBC as “acceptance”. 97 In the case of contracts of inheritance in favour of near relatives it was held generally that the contracting parties were able to revoke their agreement. It was only after the death of one of them or after the third party had adhered to the contract that he would acquire a transferable right, unless the contracting parties had explicitly granted him an immediate right.98 92 Cf. sec. II.3 – 4, esp. n. 33 ss.; n. 38; and v. Kreittmayr (supra, n. 91), Vol. IV, p. 1380: “. . . und gleichwie hiernächst Notorii juris ist, quod invito ac nolenti non obtrudatur beneficium, so ergibet sich von selbst, daß das Pactum in favorem tertii keinen Bestand habe, sofern solches von ihm nicht angenommen oder ratificirt wird [with reference to Stryk; Wolff etc.]. Ehe und bevor die Ratification erfolgt, können Paciscentes das Pactum mutuo consensu widerum aufheben . . . , nach der Ratification aber gehet solches ohne Mitbewilligung des Tertii nicht mehr an”. 93 Cf. esp. Seuffert’s Blätter (SeuffBl) 22, p. 320 (1857); SeuffBl 40, p. 303 s. (1874). 94 SeuffBl 23, p. 268 s. (1853) with reference to Mevius, Stryk, Glück and Kreittmayr. 95 SeuffBl 22, p. 320 (1857); also cf. SeuffBl 43, p. 95 (1877). 96 SeuffA 21, no. 41 (1866) [= SeuffBl 32, p. 119 – 127]; on the other hand the court rejects the doctrine of Bähr (cf. sec. V.4), who refers to an implied assignment. 97 SeuffBl suppl. 2, p. 184 – 187 (1869); SeuffBl 40, p. 303 s. (1874); SeuffBl 47, p. 124 (1881). 98 SeuffBl 43, p. 395 – 397 (1877); SeuffBl suppl. 8, p. 154 – 157 (1888).

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3. Unlike the Codex Maximilianeus the sections I.5 §§ 74 ss. of the Prussian Code, the Allgemeine Landrecht (ALR) of 1794, strictly separates contracts in favour of third parties from the question of agency; generally they are considered as valid acts inter partes.99 For the rest Roman law has a significant effect on the Prussian codification.100 The third party only acquires an action by adhering to the contract and becoming a party to the contract himself. But he can only adhere to it with the consent of the “main contracting parties”; and until that they are able to modify or even to revoke their agreement.101 In this respect it is also characteristic how the sections I.5 §§ 74 ss. ALR passed into law: when the draft of the codification was published and the governments of all Prussian provinces were invited to comment, some of the so-called Monita made the suggestion for improvement that the third party should be able to adhere to the contract by acceptance of the promise or by filing of action. But the editors of the final draft rejected the proposal on the grounds that the third had not yet acquired a ius quaesitum; the pactum in his favour would just give him an expectation of a future right; but the entitlement to the claim would require that he had already acquired such right.102 Before the ALR came into force the Prussian supreme court, the ObT Berlin, referred to the acceptance of the third party;103 and also after 1794 the judges stuck to the established practice contra legem and stated that the performance of the con99 Cf. sec. I.5 § 74 ALR: “Auch die Vortheile eines Dritten können der Gegenstand eines Vertrages seyn.” § 75: “Der Dritte selbst aber erlangt aus einem solchen Vertrage, an dessen Schließung er weder mittelbar noch unmittelbar Theil genommen hat, erst alsdann ein Recht, . . .”. Contrary to Roman law the Prussion courts did not refer to a special interest of the promisee. In this respect cf. e.g. a decision of the supreme court of 1845 – Entscheidungen des Ober-Tribunals Berlin (ObT-E), vol. 12 (1846), p. 150 – 154: A house was alienated on condition that a third party should have the right of repurchase. To be granted an action the seller (promisee) need not prove his own interest. 100 Cf. Franz Förster / M. E. Eccius, Theorie und Praxis des heutigen gemeinen preußischen Privatrechts, vol. I, 5. ed., Berlin 1887, p. 431 or the judgement of the Reichsgericht of 19. 9. 1881, Gruchot’s Beiträge 26 (1882), p. 899. Therefore, in the case of a donatio sub modo the lower court (AG) of Hamm, Gruchot’s Beiträge 2 (1858), p. 245 – 250 (1856), stated that the third party must adhere to the agreement. 101 Sec. I.5 § 75 ALR: “Der Dritte selbst aber erlangt . . . [cf. above n. 99] erst alsdann ein Recht, wenn er demselben mit Bewilligung der Hauptparteyen beygetreten ist”. § 76: “Bis dieser Beytritt erfolgt, kann der zu seinem Vortheile geschlossene Vertrag nach dem Einverständniß der Contrahenten geändert, oder gar aufgehoben werden”; and in addition § 77: “Ist aber dem Dritten der Antrag zum Beytritt einmal geschehen, so müssen die Contrahenten seine Erklärung über die Annahme abwarten”. According to sec. I.12 § 646 ALR the same has to be said of contracts of inheritance in favour of third parties; cf. ObT-E 53, p. 76 s. (1864) – As already mentioned above (see n. 58) the doctrine of Beseler (Lehre von den Erbverträgen, 1837) was inspired by that rule. 102 Cf. Friedrich W. Bornemann, Systematische Darstellung des preußischen Civilrechts mit Benutzung der Materialien des ALR, vol. II, 2. ed., Berlin 1842, § 137, p. 232 n. 2; Christian F. Koch, Das Recht der Forderungen nach gemeinem und preußischem Recht, vol. II, 2. ed., Berlin 1859, § 145, p. 553 s. 103 For a decision of 1768 cf. Ludwig E. Heydemann, Einleitung in das System des preußischen Civilrechts, vol. I, 2. ed., Leipzig 1861, p. 203 n. 332.

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tract or a filing of action had to be treated as an adherence to the agreement by the third party. Only at the beginning of the 19th century did the requirement of a formal adhesion gain acceptance by the higher tribunal of Berlin.104 As far as the “adhesion with the consent of the main contracting parties” (sec. I.5 § 75 ALR) was concerned the court expounded the terms in the following way: only the person of the promisee is adressed by the Code, because it is in his interest whether the third receives a favour through him.105 However, with regard to a taking over of debts the question of a right of the third was controversial. Some decisions refer to an adhesion to the contract,106 in some it is denied that one can speak of a pactum in favorem tertii, because the third gains no “benefit” in the true sense;107 but in the case of a contract of annuity for life on condition of a transfer of the general property the court stated that creditors acquired an action against the transferee.108 In the later practice of the court109 the case of contracts for the transfer of rural property is considered as one of the very few exceptions to the legal requirement that the third has to adhere to the agreement. Often such contracts are entered into on condition that the promisor binds himself towards the conveyer (father or mother) that he will pay part of the price to his brothers and sisters. Since 1846 the higher tribunal had stated that these persons should acquire an action, even though they had not adhered to the contract before the death of the promisee. Even if the conveyer had concluded the contract in his own name, he would have at the same time acted as a legal representative of the other children110 or of his spouse.111 But despite this “representation theory” the court denied any irrevocable right to the third party before his ancestor had died or agreed to the third’s filing of the action;112 104 For decisions of 1816 and 1833 cf. Christian F. Koch, ALR, vol. I.1, 4. ed., Berlin 1862, p. 227 n. 69. 105 ObT-E 10, p. 350 (1845); ObT-E 39, p. 27 – 42 (1858). 106 Cf. e.g. ObT-E 50, p. 335 – 341 (1863). 107 Cf. e.g. ObT-E 26, p. 8 – 14 (1853); see Koch (supra, n. 104), 226 n. 68 in fine. 108 ObT-E 7, p. 67 – 78 (1841). 109 Still of a different opinion: OLG Hamm (1834), in Neues Archiv für preußisches Recht 3 (1837), p. 1 – 8, but the decision of the lower court was criticised by the editor of the journal (p. 9 s.). 110 See the famous judgment in pleno of 1946, ObT-E 14, p. 68 – 80, with reference to earlier decisions which contradiced each other [for an extract of that decision (p. 73 – 76) cf. SeuffA 3, no. 90 (1846) and Schermaier (supra, n. 3), n. 4)]; according to Beseler the judges explicitly reject the idea of a successio anticipata; cf. n. 58 and n. 85. This judgement was confirmed by the decisions ObT-E 18, p. 237 s. (1849) and Gruchot’s Beiträge 6 (1862), p. 245 – 250 (1862). In the case of a divorce settlement the court stated that contracts for the transfer of rural property had to be considered as an example; therefore German customary law was not applicable to other agreements in favour of children of the contracting parties; cf. ObT-E 72, p. 21 s. (1873). 111 According to ObT-E 38, p. 22 – 27 (1858) this also held for a wife-to-be. 112 Criticised e.g. by Förster / Eccius (supra, n. 100), vol. I, 5. ed., p. 437 s. or Gareis (supra, n. 88), p. 172 – 174.

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not until that moment was the third able to transmit the right under a contract in his favour.113 4. With regard to the Austrian Gerneral Civil Code of 1811, the Allgemeine Bürgerliche Gesetzbuch (ABGB), § 881 in its original version was often interpreted in the following way:114 a third party beneficiary contract is not considered as a valid act, unless another section of the Code admits an exception to this general rule.115 In order to understand the wording of the law one has to consult the debate on the draft bill of the Austrian Civil Code (Ur-Entwurf). From this we see that § 881 was dealing with the question whether someone is able to conclude a contract “in the name of ”, but not “in favour of ” another person.116 On the other hand, § 1019 ABGB has a significant effect on our topic. Although Franz v. Zeiller had intended this paragraph only to be applied to the contract of mandate (mandatum) the legislative committee reworded the section to make it applicable to contracts in favour of third parties.117 Therefore the third party was able to acquire an action provided that he was given a notice either by the promisor or the promisee.118 Later on in the 19th century, it became controversial whether the section referred to a “real” contract for the benefit of third parties, because a unilateral notice grants him a right; according to another opinion § 1019 ABGB must be interpreted within the meaning of the prevailing doctrine of the Usus modernus pandectarum, according to which the third party had to accept the promise in his favour.119 113 ObT-E 34, p. 39 – 48 (1856); Gruchot’s Beiträge 14 (1870), p. 899 s. (AG Hamm, 1867) and Gruchot’s Beiträge 18 (1874), p. 382 – 384 (1873); ObT-E 75, p. 325 – 333 (1875). 114 § 881 ABGB in its former version: “Außer den von den Gesetzen bestimmten Fällen kann zwar niemand für einen Andern ein Versprechen machen oder annehmen. . . .”. 115 This interpretation was already based on Franz v. Zeiller, Commentar über das ABGB, Wien-Triest 1811, vol. III, § 881, no. 7 – 8, p. 53 – 55. Cf. Gareis (supra, n. 88), p. 179 or Josef Krainz, System des österreichischen allgemeinen Privatrechts, vol. II, Wien 1907, § 320 B, p. 85 s. n. 8. 116 Therefore § 881 ABGB refers to agency / legal representation or to ratification with regard to negotiorum gestio. Cf. Julius Ofner, Der Ur-Entwurf und die Beratungsprotokolle des Österreichischen ABGB, Wien 1889, vol. I, p. xcii (III § 24); vol. II, 16 s. and Horaz Krasnopolski, Zur Lehre von den Verträgen zu Gunsten Dritter nach österreichischem Recht, in Grünhut’s Zeitschrift 22 (1895), 577 ss., esp. 586 – 594. 117 Ofner (supra, n. 116), vol. II, p. 565 n. 2, 771 n. 3 in comparison with id., vol. I, p. c; vol. II, p. 52 s., 565. Cf. Krasnopolski (supra, n. 116), p. 594 – 605. Julius Ofner, Der Auftrag zu Gunsten eines Dritten nach österreichischem Recht, in Grünhut’s Zeitschrift 18 (1891), 313 ss., esp. 328 – 331 is of a different opinion. 118 § 1019 ABGB: “Wenn der Machthaber den Auftrag, einem Dritten einen Vortheil zuzuwenden, erhalten und angenommen hat; so erlangt der Dritte, so bald er von dem Machtgeber oder Machthaber davon benachrichtiget worden ist, das Recht, gegen den einen oder den Andern Klage zu führen”. 119 The requirement of an acceptance is advocated e.g. by Armin Ehrenzweig, Die sogenannten Zweigliedrigen Verträge, insbesondere die Verträge zu Gunsten Dritter nach gemeinem und österreichischem Rechte, Wien 1895, p. 84 ss.; of a different opinion: Krasnopolski

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A few decisions of the Austrian Supreme Court of Vienna (OGH) mention the legal requirement of an acceptance, 120 but according to the established practice the third party acquired his action by means of a unilateral notice. In 1878, for example, the court had to decide the case of a taking over of debts.121 An estate was alienated on condition that the buyer would pay a debt on mortgage of the seller. It was held that the third party was already notified under the terms of § 1019 ABGB once the contract was recorded in the land register (Grundbuch); therefore he was entitled to the claim,122 and both the debtor (promisee) and the promisor were jointly and severally liable.123 With regard to contracts between members of a family in favour of near relatives, such as contracts for the transfer of rural property or for a taking over the whole of another person’s property or goods, the court also referred to the requirement of a unilateral notice: but if the transferor acted as a legal representative of the third party, notice would be regarded as having been given.124 5. Similar to the ALR the Civil Code of Saxony of 1863 / 65, the Bürgerliche Gesetzbuch für das Königreich Sachsen (Saxonian BGB) separates agency (§§ 788 ss.) from contracts for the benefit of a third party.125 If it is intended by the contracting parties, the promisee as well as the third party acquires a claim (§ 853).126 But the third party is only granted a right of his own127 after he has (supra, n. 116), 609 – 616. Also cf. Max v. Stubenrauch, Commentar zum österreichischen ABGB, 8. ed., vol. II, Wien 1903, § 881 II, p. 45 s.; § 1019, p. 241 s. 120 Cf. Julius Glaser / Josef Unger (ed.), Sammlung von Civilrechtlichen Entscheidungen des k.k. obersten Gerichtshofes (GlU), no. 1193 (1860); no. 1227 (1860). 121 GlU no. 7774 (1878); cf. no. 747 (1859); no. 4344 (1871); no. 10826 (1885). 122 For a similar decision cf. GlU no. 7845 (1880): A contract for the transfer of rural property was entered into on condition that the transferee would pay a life annuity to the wife-to-be of the transferor. 123 Also cf. GlU no. 10800 (1885). 124 GlU no. 423 (1857); no. 4313 (1871). 125 § 853 Saxonian BGB: “Aus einem Vertrage, durch den Jemand dem Anderen eine Leistung an einen Dritten verspricht, in der Absicht, dem Anderen und dem Dritten verpflichtet zu sein, erwirbt sowohl Derjenige, welchem das Versprechen gegeben wurde, als auch der Dritte ein Recht auf die Erfüllung gegen den Versprechenden”. – § 854: “Der Dritte und, sofern es sich nicht um eine rein persönliche Leistung handelt, dessen Rechtsnachfolger, erwerben ein von dem Willen Desjenigen, welcher sich die Leistung hat versprechen lassen, unabhängiges selbständiges Recht aus dem Vertrage von der Zeit an, wo sie dem Vertrage beitreten oder die zu Gunsten des Dritten gereichende Leistung annehmen”. – § 855: “Bis zu der Zeit, wo der Dritte oder dessen Rechtsnachfolger ein selbständiges Recht aus dem Vertrage erlangt haben, kann Derjenige, welchem die Leistung an den Dritten versprochen wurde, den Anderen von der übernommenen Verbindlichkeit befreien”. – § 856: “Einen Verzicht des Dritten oder seiner Rechtsnachfolger auf die versprochene Leistung muß Derjenige, welchem zu Gunsten des Dritten Etwas versprochen ist, gegen sich gelten lassen”. 126 For similar practice of the OAG Dresden cf. above n. 61. Eduard Siebenhaar, Lehrbuch des Sächsischen Privatrechts, Leipzig 1872, p. 519 n. 2 correctly states, that § 853 has to be considered as a rejection of the concept of negotiorum gestio; cf. sec. II.3. 127 The section refers to an “independent right” (“unabhängiges, selbständiges Recht”); for the modern meaning of the term cf. above next to n. 5 and below n. 164.

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adhered to the contract or after the promisor has already performed the contract (§ 854); and up to that moment the promisee will be able to remit the promise (§ 855).128 Apart from that, similar sections deal with contracts of inheritance and marriage agreements in favour of third parties.129 But the wording of §§ 853 ss. seems ambiguous. In his comments on the Saxonian Code Eduard Siebenhaar concludes in accordance with the principles of Roman law that at first the right of action is acquired by the promisee; but after the third party has adhered to the contract, the right is transfered to the latter.130 On the other hand Paul Grützmann states that the contract for the benefit of third parties has to be considered as an offer of the promisor which was confirmed by the promisee; therefore the third party is able to accept the promise and to become a party of the contract, though the promisee is only given the right of claiming the performance to the third party.131 In 1867 we find the first decisions of the court of appeal of Dresden with reference to §§ 853 ss.132 A sale was concluded with a condition in favour of a third party. According to its established practice,133 the court stated that the third party was able to adhere to the contract by accepting the promise or by bringing an action.134 The promisee was only allowed to demand performance in favour of the third; but once the third party had adhered to the contract, the promisee had to prove his interest to the court.135 And in the case of a taking over of a debt it was held that the creditor did not acquire a right of his own, unless he gave a notice of acceptance both to the debtor (promisee) and also to the promisor.136

128 And according to § 856 the right of the promisee is extinguished provided that the third has abandoned his right; that is strongly reminiscent of Grotius (arg. ius dari efficiendi . . . , si & is acceptet); cf. above n. 19. 129 §§ 1704, 2553 Saxonian BGB; for the taking over of a debt also cf. §§ 1405 s. (with reference to § 854). 130 Eduard Siebenhaar, Commentar zu dem bürgerlichen Gesetzbuche für das Königreich Sachsen, vol. II, Leipzig 1865, ad § 853, p. 117; also cf. id. (supra, n. 126), Lehrbuch, p. 517 s. 131 Paul Grützmann, Lehrbuch des königlich Sächsischen Privatrechts, vol. II, Leipzig 1889, p. 49 – 51, esp. n. 6 and n. 8 s. The practice of the court is in accordance with Grützmann’s doctrine: Cf. Annalen des königl. Sächs. OAG zu Dresden (Ann.) 21 [= 2.F. 3], p. 469 s. (1874). 132 Cf. Ann. 11 [= N.F. 3], p. 483 s. 133 Cf. above n. 61 and Ann. 22 [= 2.F. 4], p. 460 (1876) or OLG Ann. 4, p. 471 (1882). 134 Ann. 13 [= N.F. 5], p. 121 s. (1868); 17 [= N.F. 9], p. 424 (1871) and explicitly OLG Ann. 19, p. 68 s. (1896). The third has to be a persona certa; cf. Ann. 16 [= N.F. 8], p. 121 s. (1870). 135 Cf. Ann. 22 [= 2.F. 4], p. 23 – 27 (1875): In the case of a sexual assault of infants the offender bound himself towards the father and the latter had to sue for performance in favour of his children. 136 Ann. 17 [= N.F. 9], p. 424 – 427 (1871). But if the debtor (promisee) remits the promise afterwards, the creditor is able to sue for damages; also cf. the doctrine of Wolff above n. 43.

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V. Legal doctrine and practice during the second half of the 19th century 1. In the previous section we looked at those territories that specifically recognized the third party beneficiary contract in their Codes, but we could not trace a significant legal development. Legal doctrine and practice stuck to the concepts of late Usus modernus pandectarum based on the principles of Roman law and German customary law. The question of a right of third parties was not taken up again by legal doctrine until the middle of the 19th century, and at the end of the period concerned the new approach of a “real” contract for the benefit of third parties gained acceptance and was embodied in the modern codifications of Germany, Austria and Switzerland. The increasing interest in doctrine at that time can be explained by two facts. Based on several assumptions legal practice grants an independent right to sue to third parties, but these solutions lack conviction from a dogmatic point of view: it is a contradiction in terms that some courts consider a filing of action as if the third party had accepted the promise (or offer); because his right to sue requires that the third has acquired the ius quaesitum by accepting the promise. The same has to be said in relation to the theory of representation. If a parent – the usual case – concludes a contract in his own name, he or she does not act as a legal representative of the children. In addition, the death of the promisee, which is considered as a decisive criterion in the case of contracts of inheritance or of contracts for the transfer of rural property, only accounts for the fact that the right to remit the promise cannot be used any longer; but there is still no explanation for a ius quaesitum of the third party.137 On the other hand the requirements of trade and intercourse seem to demand an independent right of third parties. One can, for example, refer to the Prussian court practice which in exceptional cases departed from the legal requirements of an adhesion “by the consent of the main contracting parties”. But jurists became generally aware of the need for legal reform during the second half of the 19th century,138 when new types of contracts in favour of third parties, such as widow’s pensions139 and life insurance contracts, came into use. Because these contracts aimed at a secure maintenance, it seemed necessary to grant independent rights to the widows or to other near relatives and to reject any legal requirement of an acceptance by the third party or of his or her adhesion to the contract. 137 Cf. e.g. criticism of the legal practice of his time by Heinrich Siegel, Das Versprechen als Verpflichtungsgrund im heutigen Recht, Berlin 1873, p. 150 – 152; for the last argument Hermann Buchka, Die Lehre von der Stellvertretung bei Eingehung von Verträgen, RostockSchwerin 1852, p. 194; see also below n. 145. 138 Cf. Unger (supra, n. 8), p. 69 n. 88a; 75 n. 95. 139 Pfeiffer, Die rechtlichen Verhältnisse der Wittwencassen, Zeitschrift für deutsches Recht 9 (1845), p. 440 ss., esp. 484 – 486 referring to two decisions of the OAG Cassel of 1837 and 1841. Also cf. OLG Wolfenbüttel, SeuffA 12, no. 167 (1847); OAG Rostock, SeuffA 33, no. 12 (1872).

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2. In the cases mentioned above the practice of the territorial supreme courts gradually grew accustomed to granting third parties their own rights; this had a significant effect on legal doctrine and legislation. In 1864, for example, the Prussian Higher Tribunal granted a widow a claim under a life insurance contract which was concluded in favour of the former wife of the deceased. Referring to the general terms and conditions of the insurance company as well as to the intention of the insurance holder it was held that the widow need not herself adhere to the contract. Similarly the Court of Appeal of Munich held in 1868 that a widow acquired a right of her own, because the amount of policy never became part of the property of the deceased; therefore it had to be separated from the estate of her husband and would pass to the widow ipso iure.140 Particularly in the case of a bankruptcy of the estate such precedents gained vital importance. 3. On the other hand the exponents of the so-called Historical School of Law, for example Friedrich C. v. Savigny or Karl A. v. Vangerow141 had from the early 19th century again revived the Roman sources; therefore they rejected the view that a third party could acquire a right of his own. Both scholars refer to the rule alteri stipulari nemo potest and deal with our question from the viewpoint of agency; but 140 Preuß. ObTrib Berlin E 51, p. 43 – 52 (1864), with refence to a disposition mortis causa, but this argumentation was changed by E 72, p. 90 – 95 (1873); OAG München, SeuffBl E1, p. 367 s. (1868). - Also cf. OLG Darmstadt, SeuffA 46, no. 48 (1888); ObTrib Stuttgart, SeuffA 24, no. 155 (1870); 35, no. 165 (1879); OLG Celle SeuffA 36, no. 155 (1880); OLG Rostock, SeuffA 42, no. 52 (1884); ObGh / OLG Bayern, SeuffA 26, no. 176 (1868); SeuffBl 46, p. 253 – 256 (1880); SeuffA 41, no. 138 (1885); OGH, GlU no. 5467 (1874); no. 5801 (1875); no. 6559 (1877); OAG Dresden, Ann. 11 [= N.F. 3], p. 139 – 144 (1866); OLG Ann. 7, p. 524 – 535 (1884); 16, p. 175 – 180 (1894). 141 Friedrich C. v. Savigny, Das Obligationenrecht als Theil des heutigen Römischen Rechts, vol. II, Berlin 1853, § 59, p. 74 ss., esp. 82 s.: “Auch ist ein innerer Grund gar nicht vorhanden, eine Praxis des heutigen Rechts anzunehmen, wodurch die [Roman] Regel aufgehoben worden wäre, dergestalt, daß nunmehr der Dritte, zu dessen Vortheil der Vertrag geschlossen wird, daraus ein Klagrecht erworben hätte, ohne dazu durch Auftrag oder Genehmigung in ein Verhältnis der Stellvertretung gekommen zu seyn”; because: “Fast immer werden die Verträge der hier vorausgesetzten Art von Anfang an in diesem Sinn gedacht seyn, so daß dabei der unmittelbar Handelnde als negotiorum gestor des Dritten sich betrachtet, und eben dadurch verliert die ganze Regel, sobald nur die Genehmigung erfolgt, ihre ganze Wichtigkeit”. - Karl A. v. Vangerow, Lehrbuch der Pandekten, vol. III, 7. ed., MarburgLeipzig 1869, § 608, p. 296: “M. E. ist bei allen Verträgen zu Gunsten eines Dritten die Alternative unvermeidlich: entweder geht die Absicht der Kontrahenten darauf, daß dem Dritten daraus unmittelbar ein Recht erworben werden soll, oder eine solche Absicht ist nicht erweislich. Im ersten Fall ist der Promissar unverkennbar ein wahrer, wenn auch unbeauftragter, Stellvertreter, und es gelten also natürlich, sobald der Dritte ratihabirt, ganz die vorher dargestellten Grundsätze. Wenn aber eine solche Absicht nicht erweislich ist, so kann ich schlechterdings keinen andren Rechtsgrund für ein Klagerecht des Dritten entdecken, als wirkliche, freiwillige Zession von Seiten des Promissars”. Cf. in addition Anton F. J. Thibaut, System des Pandekten-Rechts, vol. I, 9. ed, Jena 1846, § 388, p. 330 s.; Carl F. F. Sintenis, Das practische gemeine Civilrecht, vol. II, Leipzig 1847, § 102, esp. p. 352 s. and n. 4; Ludwig Arndts, Lehrbuch der Pandecten, München 1852, §§ 233; 245 s., p. 354; 368 ss.; Georg F. Puchta, Lehrbuch der Pandekten, 9. ed., Leipzig 1863, §§ 256; 273 ss., p. 396 s.; 419 ss.

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this way of legal thinking seems to return to the doctrine of early Usus modernus pandectarum and neither satisfied the standards of legislation nor met the practical requirements of that time.142 Similarly, Hermann Buchka maintained in 1852 that there were only two possibilities for third parties to acquire a claim: on the one hand the promisee can assign his action to the third party, but if he has acted as a legal representative of the third there is a legal fiction that the action has already been assigned (actio utilis); on the other hand – according to the doctrine of Schilter143 – the third party acquires ex tunc a right of his own by means of ratification (ratihabitio).144 Therefore Buchka criticized courts’ decisions in the case of contracts of inheritance which were based on the doctrine of Beseler. He agreed with Beseler that the right to remit the promise in favour of the third cannot be used any longer after the death of the promisee; but the third party is not able to acquire a transmissible right, unless he has ratified the act of the promisee. In consequence, Buchka denies that a contract in favour of a nondum conceptus can be considered as a valid act, because a ratification seems to be out of question.145 4. In this context Buchka rejected a theory which is advanced by F. Strippelmann on the basis of the established practice of the OAG Cassel.146 According to Roman law Strippelmann assumes that a third party is not able to acquire a right of his own, because the promisee has to assign his claim to the third. But every valid agreement in favour of a third – and in particular a taking over of debts – should be interpreted as an implied assignment of the claim.147 Therefore the third party must be granted an actio utilis provided that the promisee himself has an interest in the performance to the third. Without having to adhere to the contract, the third party or his heir acquires the right to sue immediately, whereas the promisee is able to bring the actio directa or to remit the promise in the meantime.148 Only con142 Cf. the comment of Rudolf v. Jhering, in (Jhering’s) Jahrbüchern für Dogmatik 24 (1886), p. 138: “. . . erst unsere moderne Theorie hat in der Lehre von den Verträgen zu Gunsten Dritter denselben Schritt für das Verkehrsrecht gethan, den die römische für das Erbrecht bereits gemacht hatte, . . .”. 143 See above n. 31. 144 Buchka (supra, n. 137), p. 187 – 189; 192 s.202 s.; esp. 210 ss. 145 Cf. above n. 58 and Buchka (supra, n. 137), p. 211 – 214; but in the case of contracts of inheritance which impose duties in favour of a third on the heir (“fideicommissarische Auflagen”) Buchka refers to the law of succession and grants third parties an action (p. 194 ss.). 146 See above sec. III.5 und Strippelmann (supra, n. 79), p. 1 – 29. 147 Strippelmann (supra, n. 79), p. 13: “Aus diesen Gründen läßt sich demnach der Satz rechtfertigen, daß aus einem jeden Vertrag zum Vortheile eines Dritten diesem dergestalt Rechte erworben werden, daß er mit der dem Promissar dadurch verschafften Klage utiliter aus dem Vertrage selbst klagen kann, vorausgesetzt, daß der Promissar bei der Erfüllung des letzteren selbst interessirt ist”. Also cf. Christian F. Mühlenbruch, Die Lehre von der Cession der Forderungsrechte, 3. ed., Greifswald 1836, p. 147 n. 297 or Karl A. Unterholzner, Lehre des römischen Rechts von den Schuldverhältnissen, vol. I, Leipzig 1840, p. 195 with reference to the actio utilis which was often granted by the practice of the courts. 148 Strippelmann (supra, n. 79), p. 19 – 26.

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tracts for the transfer of rural property are regarded as an exception to the rule, because that case is covered by the law of succession (successio anticipata).149 Without using the term of assignment Otto Bähr advanced a similar and very influential doctrine in 1863.150 Bähr directs his attention to the legal relationship between promisor and promisee (the so-called “Deckungsverhältnis”) and states that only this valid relationship meets the Roman prerequisite of an interest on the part of the promisee.151 One can, for example, refer to the situation where the promise in favour of a third is intended as a gift to the latter. But in the majority of cases contracts – such as sales, contracts of inheritance or a taking over of debts – are concluded on condition that the promisor should pay parts of the price to a third party; and the same is true of widow’s pension contracts. Bähr concludes that by accepting a promise in favour of a third party the promisee implicitly gives the latter authorization to sue. Without having to adhere to the contract the third party can bring the actio utilis (based on a fictious mandate);152 in the meantime the contracting parties are able to revoke the contract, whereas the third acquires no legal position of his own, unless the promisee dies or the promisor sends him a promissory note; and the same applies to contracts for the transfer of rural property.153 5. Unlike the theories mentioned before, Ferdinand Busch denied in 1860 that Roman law had a decisive effect on our problem any longer; examining the decisions of various territorial supreme courts Busch refers to an established German practice which grants third parties a right to sue. Only as far as a taking over of debts is concerned is it necessary to disagree with legal practice from a theoretical point of view. Any talk of a “benefit” of the third party has to be considered as a contradiction in terms, because the latter is already entitled to enforce the claim against the promisee.154 Apart from that Busch emphasizes – according to the preStrippelmann (supra, n. 79), p. 26 s. Otto Bähr, Über die s.g. Verträge zu Gunsten Dritter, in (Jhering’s) Jahrbücher für die Dogmatik 6 (1863), p. 131 – 186: His doctrine was often cited by the territorial supreme courts; cf. OAG Darmstadt, SeuffA 20, no. 220 (1866); das OAG Lübeck, SeuffA 23, no. 220 (1868); od. das OAG Rostock, SeuffA 33, no. 12 (1872); 42, no. 52 (1884). For the OAG München see above n. 96. Furthermore, his theory had decisive effect on art. 203 II of the Dresden Draft of Obligations of 1866: “An seiner Stelle [i.e. of the promisee] kann der Dritte verlangen, daß die Leistung an ihn erfolge, . . .”; cf. Unger (supra, n. 8), p. 108 and also below n. 189. 151 Bähr (supra, n. 150), p. 135 s.; 137 – 139. and n. 7; 146 s.; 155 s.; also cf. id., Über die Verträge zu gunsten Dritter und über die Schuldübernahme, in AcP 67 (1884), p. 157 ss., esp. 176. 152 Therefore the promisor is allowed to put forward defences which he would be able to set up against the promisee; cf. Bähr (supra, n. 150), p. 146 s.; 155 s. 153 In detail Bähr, (supra, n. 150), p. 159 ss. 154 Busch (supra, n. 23), p. 3 s.; 6 s. This argument was strongly critzised on the grounds that there could be no doubts about an interest of the third: Because in the case of a taking over of debts the debtor (promisee) as well as the promisor would be jointly and severally liable; cf. e.g. Bähr (supra, n. 150), p. 142 s. 149 150

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vailing doctrine of the Usus modernus – that the third party generally has a right to accept the “offer” of the contracting parties,155 and thus nothing more is required on his part than initiating legal action (condictio ex lege);156 in the meantime the contracting parties are able to revoke their agreement, but after the acceptance the third party acquires a transmissible right.157 In line with the Prussian Code, Gerhard Beseler had demanded in 1837 that a third party must adhere to the contract “with the consent of the main contracting parties” (cf. sec. I.5 § 75 ALR)158, but afterwards he changed his opinion. Since the Roman rule is not applicable in Germany, the third party is granted an irrevocable right provided that he has “appropriated” that right by a declaration of acceptance; furthermore, the right of the latter must be separated from the right of the promisee. On the other hand, the contracting parties are allowed to revoke their agreement by mutal consent, before the third party has acquired such a right of his own. Finally, in opposition to Buchka, Beseler emphasizes that the contracting parties are able to conclude an effective contract in favour of a nondum conceptus.159 6. Arguing against a uniform concept of contracts in favour of third parties Bernhard Windscheid advanced an intermediate opinion in 1865. Generally an agreement in favour of a third party has to be considered as a valid legal act with regard to the contracting party, but the third party can acquire a claim in two different ways. On the one hand the scholar states that contracts for the transfer of property, like contracts for the transfer of rural property, can be treated analogously to a donatio sub modo; therefore the third is immediately granted a right, because the promisee has ordered it, and this can be compared to a testamentary disposition. On the other hand he refers to contracts, such as a taking over of debts or life insurance contracts, where if the promisor has the intention to bind himself towards the third party, the latter is able to “accept” the offer of the promisor and thus to conclude a new contract; for this purpose nothing more is required on his part than initiating legal action. Except for these types of contracts one has to stick to Roman law and its explicit exceptions.160 In 1875 Windscheid had changed his opinion: according to German customary law in force the third party acquires an action provided that items of property have been transfered to the promisor by the contract and thus the latter binds himself in favour of the third party. So far as legal 155 Busch (supra, n. 23), p. 34; 36 – 38: “Der Abschluß des Vertrages begründet also für den Dritten ein Recht und aus diesem Recht folgt wieder die Befugnis desselben, den zu seinem Vortheil gereichenden Vertrag zu acceptiren; eine Befugnis, die nur durch den im Vertrage selbst ausgesprochenen Willen der Contrahenten beschränkt werden kann”. 156 Busch (supra, n. 23), p. 45. 157 Busch (supra, n. 23), p. 45 ss. 158 Beseler, Erbverträge II / 1 (supra, n. 56), p. 76 ss. Only if the promisee has died, Beseler allows an exception to the rule (p. 78 s.). 159 Beseler, System I (supra, n. 1), p. 409 – 413. 160 Windscheid (supra, n. 4), § 316, p. 185 ss., esp. 190 ss.

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“argumentation” is concerned, Windscheid now accedes to the doctrine of a “real” third party beneficiary contract.161 7. His change of mind had a reason. In the meantime Josef Unger had written an outstanding essay with decisive effect on legal doctrine and practice; though one must not forget that Böhmer – based on natural law theory and freedom of will – had already advanced a similar doctrine more than a hundred years before.162 Referring to the Roman law “of his time” (“heutiges römisches Recht”)163 Unger emphasizes that the third party acquires an “original” right ipso jure, that is an independent right, because promisor and promisee enter into an agreement only in his favour. For that reason the promisee does not generally acquire a contractual right himself, and thus an actio utilis or the idea of assignment seems completely out of place; in this respect Unger refers in paticular to the case of a release of debts.164 On the other hand the third party immediately acquires his right, without any act on his part; therefore the contracting parties have no right to revoke their agreement. According to this rather narrow legal construction165 the case of a taking over of debts is not considered as a third party beneficiary contract in the true sense, because the interest of the third party is only an additional purpose of the contract.166 Although the basic ideas of Unger’s theory met with vast consent and became the prevailing doctrine, it seemed necessary to extent its restricted area of application and to reconcile it with legal practice. Immediately after the publication of Unger’s essay Franz Regelsberger observes in a review167 that the promisee often has a legitimate interest in the performance to the third party; although there is no doubt that his right differs from that of the third party, he should be able to acquire an action. In this respect one has to refer to the special type of contract or – as in the case of a taking over of debts – to the intention of the contracting parties.168 On the other hand contracts for a release of debts cannot be considered appropriate examples of contracts in favour of third parties, because in such cases the third party does not acquire any claim. Futhermore, the case of a life insurance contract directs attention towards the fact that third party beneficiary contracts can be 161 Bernhard Windscheid, Lehrbuch des Pandektenrechts, vol. II, 4. ed., 1875, § 316, p. 216, and § 316a, p. 219 s. with reference to Unger, Regelsberger, Gareis and Siegel (§ 316a n. 9). 162 Cf. above sec. II.5. 163 Unger (supra, n. 8), p. 58; 60; for this purpose Unger generalizes singular statements in Roman sources: Cf. p. 22 – 55, esp. 63: ” . . . L. 26 C. 5.12 . . . und der Ausspruch Justinian’s in der L. un. C. 4.11 ist für das heutige Recht zu generalisieren”. 164 Cf. esp. Unger (supra, n. 8), p. 62 s.; 65 s. and p. 51 ss.; 85. 165 Unger (supra, n. 8), p. 61 – 68. 166 Unger (supra, n. 8), p. 81 ss., esp. 87 – 89. 167 Cf. the review of Ferdinand Regelsberger, in Kritische Vierteljahrsschrift 11 (1869), p. 559 – 569. 168 Also cf. Heinrich Dernburg, Pandekten, Berlin 1886, § 18, p. 52.

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revocable or alterable, and thus the third party should not acquire his right “immediately”. Finally, stressing the importance of legal relationship between promisor and promisee (so-called “Deckungsverhältnis”), Regelsberger supports an essential element of Bähr’s doctrine.169 Subsequently, the question of legal relationship between promisor and promisee was taken up and explored in detail by the doctrines of Gareis and Siegel.170 Carl Gareis makes the point that – according to the principle of freedom of contract – the legal position of a third party depends on the intention of the contracting parties. Therefore the third party acquires an immediate right provided that the promise can be considered either as consideration in the case of contracts for the transfer of a property or as modification of already existing debts; in this respect Gareis refers, for example, to contracts for the transfer of rural property171 or to cumulative assumptions of debts.172 But it also accords with freedom of contract that the contracting parties do not conclude a contract in favour of a third party, but intend to make the third party a contractual offer (so-called collective offer, “Collectivofferte”) instead. It follows that one has to check each time, whether the contracting parties had bound themselves towards the third party and granted him a “right to accept”, because it is also possible that they want to reserve the right to revoke the contract for themselves.173 On the other hand Heinrich Siegel stresses the fact that the promisor binds himself towards the promisee. In this respect one can refer, for example and in accord with Bähr,174 to an obligation based on the animus donandi, because the (unilateral) obligation of the promisor must generally be regarded as the focus of contracts in favour of third parties. According to the intention of the contracting parties the third party is granted an “immediate” right, which means that he acquires the right without any act on his part, though it may be enforcable only after a lapse of time or be revocable.175 Later on Franz Regelsberger concludes from these arguments that on the one hand a third party beneficiary contract results in a valid obligation (intended or not intended as a gift to the third party), because the promisor binds himself towards the promisee (“Deckungsverhältnis”); but on the other hand the third party acquires his right at the cost of the promisee, and his legal relationship to the latter (the so-called “Valutaverhältnis”) has to be considered as the basis of his acquisiRegelsberger (supra, n. 167), p. 565 s. Cf. Gareis (supra, n. 88), p. 141 s. with explicit reference to Unger. 171 And the same is true of some exceptions to the Roman rule, like the case of donatio sub modo (C. 8.55.3) or of a pact to restore a dowery (D. 24.3.45); cf. Gareis (supra, n. 88), p. 212 s. 172 Gareis (supra, n. 88), p. 258; and one can also add the cases of a deposit (C. 3.43.8) or marriage contracts (p. 220 s.). 173 Gareis (supra, n. 88), p. 147 s.; 268 – 274. 174 Cf. above sec. V.4, next to n. 151. 175 Siegel (supra, n. 137), p. 142 – 159, esp. 149 s., 158 s. 169 170

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tion of a right.176 Therefore, referring to his legal relationship to the promisee, the promisor is able to put forward defences, when he is sued by the third party: he is allowed, for example, to raise the objection that the agreement of the contracting parties, and thus his obligation, is void, but he is not able to put in a set-off claim to which he would be entitled against the promisee.177 8. Finally, the question arises, whether these radically new ways of legal thinking have a significant effect on the practice of the German supreme court, the Reichsgerichts. Particularly in the case of life insurance contracts178 from 1879 the court referred to the doctrines of Windscheid and Gareis in order to harmonize the application of Prussian law with the legal practice based on the rules of ius commune. With regard to such contracts, or to widow’s annuity contracts,179 it was held that the parties had concluded a legal transaction inter vivos which granted third parties an independent right without any act on their part.180 But an adhesion to the contract as well as the death of the policy holder nevertheless seem relevant, because by it the third party acquires an irrevocable right.181 In Prussian cases of contracts for the transfer of rural property which also have to be considered as legal transactions inter vivos the German supreme court arrives at a similar conclusion. The third party acquires an independent and revocable right provided that the promisee acts as a legal representative of the third;182 but apart from this the court states that such rules referring to contracts in the rural sphere cannot be applied analogously to other contracts beween near relatives.183 With regard to the application of the ius commune it was otherwise held that the third party had to accept the promise / offer in order to acquire a right of his own; but if he sued on the contract, this had to be considered as an acceptance on his part.184 Besides, an immediate right could be acquired by a third party according 176 Ferdinand Regelsberger, in W. Endemann (ed.), Handbuch des deutschen Handels-, See-, und Wechselrechts, Leipzig 1882, p. 473 – 478, esp. 475. Also cf. e.g. the decision of the OAG Lübeck, SeuffA 32, no. 218 (1875) which refers to the legal relationship betweeen promisee and third party. 177 Regelsberger (supra, n. 176), p. 478 and also Gareis, p. 241 ss.; on the other hand cf. above n. 151. 178 Cf. above n. 140. In this way Gruchot’s Beiträge 24 (1880), p. 889 – 891 (1880); 26 (1882), p. 899 – 901 (1881). 179 Entscheidungen des Reichsgerichts in Zivilsachen (RGZ) 1, no. 135 (1880) or Gruchot’s Beiträge 27 (1883), p. 965 – 967 (1883). 180 Cf. RGZ 1, no. 68 (1880); Gruchot’s Beiträge 28 (1884), p. 895 – 897 (1884); and SeuffA 48, no. 284 (1892) with reference to the established practice. 181 Gruchot’s Beiträge 39 (1895), p. 129 – 133 (1894) and 28 (1884), p. 895 – 897 (1884). 182 RGZ 2, no. 74 (1880); RGZ 3, p. 72 (1880), Gruchot’s Beiträge 29 (1885), p. 831 – 835 (1885); RGZ 29, no. 44 (1892). 183 Gruchot’s Beiträge 33 (1889), p. 861 – 867 (1889) referring to the purchase of inheritance on the part of a son. 184 RGZ 7, no. 41 (1882); SeuffA 49, no. 157 (1894); RGZ 32, no. 40 (1894).

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to rural customary law.185 Apart from this the promisee generally had the right to sue for performance to the third party.186 In the case of a taking over of debts one has to ascertain each time whether it was the intention of the contracting parties to grant the creditor a claim;187 but one has to presume such a right in the creditor provided that a contract for the transfer of general property was concluded.188 In this way the practice of the German supreme court at least contributed to a unification of law within the area of application of ius commune.

VI. The formation of a “real” third party beneficiary contract in the course of the Drafting Process of the German Civil Code (BGB) The prevailing doctrine of Unger in a final version based on the comments of Windscheid, Gareis, Siegel and Regelsberger manifests itsself in the German Civil Code (BGB),189 as earlier in the Swiss Law of Obligations of 1881 (OR 1881).190 In this respect the draft bill (“Vorentwurf”) of the editor Franz v. Kübel who was entrusted with the law of obligations already expresses the basic concept of the eventual provisions of the BGB.191 First of all v. Kübel emphasizes that a third 185 RGZ 16, no. 27 (1886). RGZ 35, no. 59 (1895) already refers to the §§ 412 s. of the socalled First Draft of the German Civil Code (BGB). 186 RGZ 21, no. 34 (1888). 187 RGZ 2, no. 16 (1880); RGZ 32, no. 40 (1894); RGZ 33, no. 39 (1894). 188 RGZ 17, no. 22 (1887). 189 Franz Ph. v. Kübel, Entwurf eines bürgerlichen Gesetzbuches für das Deutsche Reich. Recht der Schuldverhältnisse, Berlin 1882, in W. Schubert (ed.), Die Vorlagen der Redaktoren. Recht der Schuldverhältnisse I, Berlin / New York 1980, p. 499; 503 refers to these scholars as well as to the Swiss draft bill of 1878. 190 Cf. art. 128 II OR 1881: “Auch der Dritte, bezw. seine Rechtsnachfolger, können selbständig die Erfüllung fordern, wenn dies die Willensmeinung der Kontrahenten war. In diesem Falle kann der Gläubiger den Schuldner nicht mehr entbinden, sobald der Dritte dem Letzteren erklärt hat, von seinem Rechte Gebrauch machen zu wollen”. – In principle the wording of art. 112 II of the Swiss Law of Obligations of 1911 is nearly identical with the former version of the OR 1881; but – influenced by the German Civil Code – the third party is also granted a right of his own provided it complies with the general custom (i.e. “wenn es der Übung entspricht”). On the other hand art. 128 I OR 1881 (= Art. 112 I OR 1911) resembles art. 203 I of the Dresden Draft of Obligations of 1866: “Hat sich Jemand, welcher auf eigenen Namen handelt, eine Leistung an einen Dritten zu dessen Gunsten versprechen lassen, so ist er berechtigt, zu fordern, daß an den Dritten geleistet werde”; but cf. n. 150. – Similarly § 881 I of the Austrian Civil Code in the amended version of 1916 first of all refers to the right of the promisee to effect the performance to the third; apart from this the legal provisions are in accordance with certain sections of the BGB (§§ 328; 333; 334); only in the case of contracts for the transfer of rural property do we find a special provision for interpretation (§ 881 III). 191 On the whole the sections 5 – 7 of the draft bill correspond to § 328 I-II in connection with §§ 333; 335 of the German Civil Code (BGB); the same holds for sec. 9 in comparison to § 334 BGB. Sec. 8 of the draft bill was intended as an addition to sec. 5 – 7 (= § 335 BGB)

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party may be granted an immediate and independent right, but his legal position depends on the intention of the contracting parties; one has to see each time whether the third party acquires such a right, whether he can sue immediately or whether his right is revocable. In case of doubt the promisee also acquires a right to demand performance in favour of the third party; besides, the promisor is able to put forward defences, when he is sued by the third party. On the other hand, an objection raised to the doctrine of Unger is taken into account:192 v. Kübel states that the contracting parties must not be allowed to impose a right on the third party without his consent and possibly against his will; therefore the editor concludes that the ius quaesitum of the third should be subject to a resolutive condition: if the third refuses his consent, he abandons his right ex tunc.193 In this context the system of the draft bill seems to be of particular interest. According to the doctrine of Siegel the editor v. Kübel maintains that the third party is granted a right based on the promisor’s unilateral declaration of will; therefore he deals with pacta in favorem tertii in connection with “unilateral promises” and right after the legal provisions with regard to the “general offer” (“Auslobung”), that is a public promise of a reward for a performance of an act or a result.194 But the system of the draft bill was already criticized by the First Commission195. For this reason the so-called First Draft deals with contracts for the benefit of third parties at a more neutral place, that is under the heading of “general provisions” referring to transactions inter vivos.196 Finally, the debate on the Second Draft linked our topic with the conclusion of contracts and the consent of the contracting parties;197 but a remnant of Siegel’s doctrine still can be traced, because the heading of the sections 328 ss. of the German Civil Code runs as follows: “Promise of performance in favour of a third party”.198 Futhermore, the draft bill of v. Kübel as well as the First Draft are characterized by their emphasis on the intention of the contracting parties, which has a decisive which seemed superfluous later on. For the debate on the draft bill cf. Horst. H. Jakobs / Werner Schubert (ed.), Die Beratung des bürgerlichen Gesetzbuches. Recht der Schuldverhältnisse I, Berlin / New York 1978, p. 494 ss. 192 v. Kübel (supra, n. 189), p. 507 s. and Benno Mugdan (ed.), Die gesamten Materialien zum BGB für das deutsche Reich, Berlin 1899, p. 151. On the other hand Gareis (supra, n. 88), p. 247 and Regelsberger (supra, n. 176), p. 477 only state that a third party does not need to exercise his ius quaesitum. 193 Jakobs / Schubert (supra, n. 191), p. 495; 496. 194 v. Kübel (supra, n. 189), p. 504 s., 483 ss.; also cf. below n. 196. 195 Jakobs / Schubert (supra, n. 191), p. 502. 196 Cf. Mugdan (supra, n. 192), p. 151 and Entwurf eines bürgerlichen Gesetzbuches für das Deutsche Reich. Erste Lesung, Berlin / Leipzig 1888, p. 76 ss. (§§ 342 s. of the First Draft referring to unilateral promise), esp. 91 (§§ 412 – 416), whereas the First Draft dealt with the “general offer” (“Auslobung”) elsewhere (§§ 581 ss., p. 127 ss.). 197 Jakobs / Schubert (supra, n. 191), p. 513 (Pre-Commission of the Reichsjustizamt); 518 (Second Commission). 198 Cf. Mugdan (supra, n. 192), p. 704.

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effect on the concept of the third party beneficiary contract.199 On the one hand, both drafts refrain from putting forward conditions of validity, whereas the doctrine of Busch, for example, had considered necessary a “real benefit” of the third and Gareis had referred to the requirement of a “consideration” in this context.200 On the other hand, according to the concept behind the drafts the courts must ascertain each time whether the parties have concluded a “real” contract in favour of the third, because they are also allowed to stipulate the prerequisite of an acceptance on the part of the third or his adhesion to the contract; and even an agreement which entitles the promisee to demand performance to himself is considered as a valid act.201 As expected the First Draft was criticized on the grounds that it fails to regularize explicitly the most of the problems of legal practice and leaves them to the discretion of the judge; therefore subsidiary law was considered necessary in order to meet the prerequisite of legal certainty as well as the requirements of trade and intercourse.202 The Second Commission complies with these suggestions. For this reason the German Civil Code not only refers to the intention of the contracting parties, but also to the typical “object of contract”; in addition, the BGB establishes “rules of interpretation” and presumptions with regard to cases of practical importance, like cumulative assumptions of debts, contracts for life insurance or an annuity and contracts for a taking over the whole of another’s person property as well as for the transfer of rural property.203

VII. Conclusion In 1884 Otto Bähr tried to defend the idea of an actio utilis in favour of third parties and thus objected violently to the prevailing doctrine which had to be considered a “modern invention” of Josef Unger: “In meinen Augen ist die Klage, welche aus einem ‘Vertrage zu gunsten Dritter’ diesem Dritten zusteht, noch immer die actio utilis, . . . Regelsberger dagegen vertheidigt – ja was vertheidigt er denn? Römisches Recht ist es nicht. Deutsches auch nicht. Es ist eine moderne Erfindung, welche, soweit ich es überblicke, von Unger herrührt”.204 199 v. Kübel (supra, n. 189), p. 503 s.: “In Absicht auf das Forderungsrecht des Dritten dagegen stellt der Entwurf Alles auf den erweislichen Willen der Vertragschließenden”. Mugdan (supra, n. 192), p. 149: “. . . und nur die Möglichkeit gegeben ist, durch den Vertrag auch das Recht des Dritten zu begründen, so kann nur der Wille der Vertragschließenden darüber entscheiden, welchen Inhalt der Vertrag haben soll. . . Die Auslegung des Einzelfalles muß ergeben von welchem Umstande sein Recht abhängig sein soll, . . .”. 200 v. Kübel (supra, n. 189), p. 505 s.; cf. above n. 154 and 171 s. 201 v. Kübel (supra, n. 189), p. 503; 506; Mugdan (supra, n. 192), p. 149. 202 Cf. esp. Otto Gierke, Der Entwurf eines bürgerlichen Gesetzbuchs und das deutsche Recht, Leipzig 1889, p. 220 – 222 (with further references). 203 Mugdan (supra, n. 192), p. 704; 706; 1238 referring to §§ 328 II; 329 s. BGB; for the translation of these provisions cf. Schermaier (supra, n. 3), in the appendix.

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Apart from the doctrines of Böhmer and Cramer which had not been able to gain general acceptance during the 18th century the theory of Unger actually established radically new criteria for dealing with pacta in favorem tertii. In particular, he stresses the fact that a third party acquires an independent and immediate right which is granted ipso iure, and thus an actio utilis or the idea of assignment seems competely unnecessary. But in addition, separating contracts for the benefit of third parties from any type of agency Unger also maintains that the legal position of the third depends on the intention of the contracting parties;205 in this respect – as we have tried to demonstrate above – he could refer to legal opinions which had been expressed earlier. On the other hand, at the end of the 17th century legal doctrine and practice were determined by another standard of law, that is by the Roman rule alteri stipulari nemo potest. Although Roman law admits some exceptions to the rule that no right shall be acquired by an extraneus, it nevertheless proves to be the starting point of the following discussion. Therefore the first step on the road of emancipation from the Roman rule is taken, when it is held that an agreement in favour of a third party has to be considered as a valid act, because – contrary to Roman law – for everybody it should be a matter of interest whether another person receives a favour through him. Apart from some opposite opinions this way of legal thinking which goes back to natural law theory gains general acceptance in most of the German territories. But on that basis the relevant and decisive question arises, whether the third party himself is granted a right to sue. In this respect legal doctrine and practice proves to be varied and divided up into many territorial fragments; and even if scholars or supreme courts support a right of the third party, we find ourselves confronted with totally different ideas about how his claim has to be established – or rather constructed – and what are its legal consequences. Early attempts at a solution explain that the third party acquires a right on the grounds that his legal position can be identified with that of the promisee. A pactum in favorem tertii has to be regarded as an unauthorized act on the part of the promisee; therefore the third is able to ratify the act of the latter and may be seen – analogously to a mandate and with retroactive effect – as principal himself; or the promisee has to be considered as a manager without mandate (negotiorum gestor) and thus the third acquires a right to demand the benefit (utilitas gestionis) which includes the assignment of the promisee’s claim. In particular, referring to 204 Otto Bähr, Über die Verträge zu gunsten Dritter und über die Schuldübernahme, in AcP 67 (1884), p. 157 ss., 158, with reference to an essay of Regelsberger (Über die Verträge zu gunsten Dritter und über die Schuldübernahme in AcP 67 / 1884, p. 1 ss.). 205 In addition to his controversial theory that the promisee does not acquire a claim (cf. n. 164) Unger (supra, n. 8), p. 63 makes a significant reserve: “Natürlich muß es feststehen, daß die Parteien den Vertrag auch wirklich zu Gunsten des Dritten schließen wollten. . . . Es kann aber auch vorkommen, daß der Vertrag sowohl zu eigenen als auch zu fremden Gunsten geschlossen wurde: dann entstehen zwei selbständige von einander unabhängige Ansprüche auf dieselbe Leistung”.

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an assignment of the action scholars try to interpret the third party beneficiary contract as a sort of “indirect” agency, but such a conception does not seem to correspond to the presumed intention of the contracting parties; and the same holds true for the concept of an implied assignment or a so-called actio mandata which is used as an argument later on, although the third party at least acquires an immediate right by it. As far as the rural sphere is concerned legal practice partly applies German customary law and states that special contracts entered into by near relatives grant third parties rights of their own; in this respect some courts refer to the law of succession (successio anticipata); others to the fact that the promisee has acted as a legal representative of the children or of his spouse. Although this approach leads in the direction of immediate and independent rights of third persons, the arguments used by the courts do not get the legal institution of a third party beneficiary contract any further from a dogmatic point of view: on the one hand this attempt at a solution cannot be applied to many similar cases, and on the other one has to focus on transactions inter vivos taking into account that the promisee usually does not act as a legal representative of the third, but concludes the contract in his own name. For this reason codifications from the second half of the 18th century support the prevailing doctrine of the late Usus modernus pandectarum. According to the socalled “theory of acceptance”206 the third party beneficiary contract implies a promise or an offer which can be accepted by the third, but in this context we have to distuinguish between several different versions of its basic idea. With regard to the system of the Prussian Code (ALR), for example, Gareis refers to a so-called “collective offer”207; in order to acquire a right of his own the third person has to adhere to the contract “with the consent of the main contracting parties” and by it he becomes a “contracting party” himself; but as soon as the proposal to adhere to contract has been made, the “main” contracting parties have bound themselves towards the third party and must await his declaration of will. On the other hand legal doctrine based on the Civil Code of Saxony sticks to a theory quite different from that of the ALR: as the third only needs to accept the promise (or “offer”) on the part of the promisor, the contracting parties must be allowed to revoke their agreement in the meantime. Besides, it is part of the ius controversum whether the acceptance of the third party should be interpreted as a new and second contract. Another point of great practical importance is that legal practice has modified this concept at an early stage of the period concerned: regarding the filing of an action as an acceptance the courts grant the third party a right of his own, but if he accepts the promise explicitly or by conduct, he is able to acquire an irrevocable and transmissable right before that time. See e.g. v. Kübel (supra, n. 189), p. 497; also cf. Schermaier (supra, n. 3), next to n. 8. Gareis (supra, n. 88), p. 43 ss., esp. 45 n. 1; also cf. Gilbert Dold, Stipulations for a Third Party. A Comparative Study with Special Reference to Continental Law, London 1948, p. 50 ss. 206 207

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Finally, during the second half of the 19th century new types of contracts, like widow’s pension and life insurance contracts, come into use in Germany. As the insurance holder (promisee) aims at a secure maintenance of the beneficiaries and especially at their protection against heirs or creditors of the estate, it seems to be necessary to grant independent rights to the widow or to other third parties and to reject any legal requirement of their acceptance or adhesion to the contract. Therefore both the idea of freedom of contract208 – which was made, for example, the focal point by the First Commission – and the requirements of trade and intercourse give rise to the ultimate success of Unger’s “invention”.

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MARTIN J. SCHERMAIER

Contracts for the Benefit of a Third Party in German Law I. The German approach* Under German law, a contract may confer a benefit on a third party with immediate effect without having to satisfy any particular formalities. § 328 BGB states that “a contract may stipulate performance for the benefit of a third party, so that the third party directly acquires the legal right to enforce performance”. Nevertheless, the BGB generally observes the “relativity” of contractual obligations. Therefore, a third party may only derive his own rights from those of another in the case of a contract for the benefit of a third party and some other cases1.

1. “. . . that the third party acquires the right directly” Those familiar with developments in the 19th century2 will know that it was not easy to accept that a third party could enforce a claim in his own right. Third party rights were included in the BGB for two reasons. First, despite previous attempts to the same effect, it was Windscheid’s influence which made it possible to conclude genuine contracts for the benefit of third parties on the basis of freedom of contract3. Second, legal practice gradually grew accustomed4 to granting third parties their * The translation of the German version has been procured by Christopher Dallimore, LL.M. I am indebted to Stefan Vogenauer (Oxford) for critically reading through the text. 1 Collected in J. Denck, Die Relativität im Privatrecht, JuS 1981, 9. 2 Cf. the contribution by M. Pennitz (in this book), p. 251 ff., still very instructive G. Wesenberg, Verträge zugunsten Dritter. Rechtsgeschichtliches und Rechtsvergleichendes, Weimar 1949, 123 et seq. 3 B. Windscheid, Lehrbuch des Pandektenrechts, vol. II, already in the 1st ed., Düsseldorf 1865, § 316 (186 et seq., esp. 190 f.), argument fully developed in the 4th ed., Berlin 1878, § 316a (217 et seq.) up to the 8th ed. (revised by Th. Kipp), Frankfurt 1900, § 316a (p. 283 f.). 4 The judgment of the Prussian Ober-Tribunal of 25 August 1846 (Seuff Archiv 3 No. 90) is well-known, in which – contrary to ALR 5 I § 75 – a claim of several third parties from one contract for transfer of property was accepted without each party having to join the contract. Instead, the court assumed that the testator recognised the claim as the representative of the children. Regarding this decision and related criticism by Kirchmann (J. v. Kirchmann, Die Werthlosigkeit der Jurisprudenz als Wissenschaft, ein Vortrag gehalten in

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own rights under life insurance contracts and contracts for the transfer of property5. The draft Bill (“Vorentwurf”) by v. Kübel therefore made the acquisition of a right by the third party conditional on the intention of the contractor rather than the intention of the third party6. This basic approach remained unchanged during the legislative procedure. In recognising contracts for the benefit of third parties, German law departed from its Ius Commune heritage in one important respect and replaced the strict alteri stipulari nemo potest with a solution based on the intention of the contractual parties. The contract for the benefit of third parties had gradually developed during the 19th century. For example, Savigny argued that a contract in favour of third parties was a case of unjustified agency and that the third party’s right to bring an action depended on the authorisation of the transaction for his benefit (“representation theory”)7. In the second half of the 19th century it was still argued that the third party’s right to bring an action only existed if, when and provided that he had joined the contract concluded between the promisor and promisee (“affirmation theory”)8 or that the creditor had assigned his claim to him (“assignment theory”)9. It was a radically new approach when the Austrian Joseph Unger proposed that the third party acquired “the right intended for his benefit directly (i.e. immediately)”10. Thereby,11 a distinction was also drawn between the law on agency, delegation (delegatio) and assignment (cessio). der Juristischen Gesellschaft zu Berlin, Berlin 1848, 21 f.) cf. in detail W. Bayer, Der Vertrag zugunsten Dritter. Neuere Dogmengeschichte – Anwendungsbereich – Dogmatische Strukturen, Tübingen 1995, 64 et seq., esp. 76 f.; K. Zweigert / H. Kötz, Einführung in die Rechtsvergleichung auf dem Gebiete des Privatrechts 3rd ed., Tübingen 1996, 455 f. 5 For details on how life insurance contracts have given rise to a new theoretical understanding see Bayer (supra fn. 4) 103 et seq. 6 §§ 7 – 10 of Bill No. 11; cf. H. H. Jakobs / W. Schubert (ed.), Die Beratung des Bürgerlichen Gesetzbuchs in systematischer Zusammenstellung der unveröffentlichten Quellen, Schuldrecht I (§§ 241 – 432), Berlin / New York 1978, 493. For details to the legislation process cf. Bayer (supra fn. 4) 108 et seq. and Pennitz (in this book), p. 251 ff. 7 F. C. v. Savigny, Das Obligationenrecht als Theil des heutigen Römischen Rechts, Vol. 2, Berlin 1853, 74 et seq.; According to Bayer (supra fn. 4) 78 “the theory of representation” characterises the notion underlying the decision of the Prussian Ober-Tribunal (supra fn. 4) that the creditor, as the representative of the third party, gives notice that the latter has joined the contract. 8 E.g. G. Beseler, System des gemeinen deutschen Privatrechts, Berlin 1853, § 108 (p 482 et seq.); O. Stobbe, Handbuch des deutschen Privatrechts, vol. 3, Berlin 1878, § 172 (p 110 et seq.). 9 O. Bähr, Über die sogenannten Verträge zu Gunsten Dritter, Jher. Yearbook No. 6 (1863), 131 et seq. 10 J. Unger, Die Verträge zugunsten Dritter, Jher. Yearbook No. 10 (1871), 1 et seq., verbatim 63. 11 Mainly by the fact that Gareis, Siegel and finally Windscheid followed the view of Ungers (with substantial modification); cf. C. Gareis, Die Verträge zugunsten Dritter, Würzburg 1873; H. Siegel, Das Versprechen als Verpflichtungsgrund, Berlin 1873 (reprint Aalen 1969), 142 et seq.; concerning Windscheid see supra fn. 3.

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2. Differences between agency, assignment and delegation Agency (§§ 164 ff. BGB) refers to the situation where one party (B) acts in the name of a third party (C) and concludes a contract with A on his behalf. This contract gives rise to claims with direct effect for and against C. However (and this is where there is considerable difference with the contract for the benefit of third parties), the representative (B) does not become A’s contractual partner12. Under a contract for the benefit of third parties, B and not C becomes A’s contractual partner. Nevertheless, C acquires his own contractual right against A. Therefore, C’s position under a contract for the benefit of third parties is similar to a case of assignment (cessio) or delegation (delegatio). As far as assignment (§§ 398 ff. BGB) is concerned, C (as the new creditor) acquires B’s existing rights by concluding his own contract with B. In the case of delegation, B’s instruction to A to perform in favour of C does not grant the third party any of his own rights vis-à-vis A. C only obtains his own right to enforce performance if A accepts the instruction to perform in C’s favour13.

Contract for the benefit of a third party

Agency

Assignment (cessio)

Delegation (delegatio)

A common feature of all these methods of benefiting third parties is that C can choose whether or not to acquire a claim against A. This principle also applies to a contract for the benefit of third parties: although C acquires the claim against A ipso iure (§ 328 I), he can still reject it (§ 333). In practice, this similarity (i.e. that the benefit to a third party depends on his intention) means that it is sometimes difficult to identify the method by which the contractual party actually intended to 12 See also U. Müller, Die Entwicklung der direkten Stellvertretung und des Vertrages zugunsten Dritter, Cologne 1969, 13. 13 “Accepted instruction” (Angenommene Anweisung), cf. § 784 BGB.

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benefit the third party. Assignment and contracts for the benefit of third parties share another feature: the debtor may set up against the assignee all defences which, at the time of the assignment of the claim, existed against the assignor (§ 404). The promisor can also do this in the case of a contract for the benefit of third parties (§ 334)14. On the other hand, the promisor and promisee may also exclude all or only some defences against C15. As a rule, this is not possible in the case of assignment which does not require an agreement between A and B in order to be effective.

3. Agency and contracts for the benefit of third parties The difference between a contract for the benefit of third parties and a contract concluded by an agent can prove especially problematic16: A father (B), who had been appointed by the court to be the legal guardian of his adult but incompetent daughter (C), had opened different savings accounts at a bank (A) and paid in some money. At the same time, B opened a trading account in C’s name and used it to carry out transactions of a company owned by his son. When the father died, C demanded that A pay her the credit on the savings account. A refused to make the payment because it had used the savings to pay off the debt on the trading account.

Despite the fact that the trading account was opened in C’s name, the bank (A) could not demand that C settle the account. B could only have imposed such an obligation on C with the authorisation of the guardianship court (§ 1822 no. 8). Such authorisation would not have been necessary for the savings accounts, which had been set up in C’s name. However, in this respect, A objected that it had not intended to conclude any contract with B which stipulated performance in favour of C (§ 328). B had only set up the savings accounts in C’s name as protection against claims pertaining to the trading account. C protested that her father (B) had acted as her agent (§§ 1793, 164) and that the savings accounts had therefore been opened for her benefit from the outset. The validity of C’s claim therefore depended on whether A and B had intended to conclude a contract for the benefit of a third party or whether B had acted as C’s agent. As regards a contract for the benefit of third parties, A and B must have agreed that C was to acquire a chose in action. Such an agreement would have been absent if A and B had only opened the savings accounts as security for the trading account. However, if B had acted as C’s agent, then the crucial issue would have been whether A had been aware of the agency. Any further agreement 14 For an overview see J. Gernhuber, Das Schuldverhältnis. Begründung und Änderung, Pflichten und Strukturen, Drittwirkungen (Handbuch des Schuldrechts, vol. 8), Tübingen 1989, § 20 IV 3 (494 et seq.). 15 E.g. BGHZ 93, 271 (see infra under IV 1). 16 The following case reproduces (in simplified form) a set of facts decided in 1970 by the OLG Schleswig (WM 1970, 733 et seq.).

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between A and B (to the effect that the savings were to be used as security for A’s claims) would have been void.17. This formed the basis for the court’s decision18. Accordingly, the contract pertaining to the savings accounts had not been concluded between A and B but between A and C (represented by B). The crucial difference between a contract for the benefit of a third party and one concluded by an agent therefore depends on whether B had concluded the contract with A in his own name or on behalf of a third party (i.e. C). In the many cases where legal representatives conclude contracts (e.g. parents for their children, guardians for their wards), this question can only be answered by interpreting the agreement between A and B19.

II. Modern practice and its history 1. Cases of § 328 BGB When formulating § 328, the fathers of the BGB were mainly thinking of contracts relating to life insurance, life annuities and the transfer of property, i.e. “support contracts”20. The interpretative rule contained in § 330 makes this clear. However, since 1900 legal practice has categorised many other contracts under § 328, which are not limited to the “care” which the promisee (B) owes the beneficiary (C). a) Insurance contracts Life insurance contracts (usually in favour of the surviving spouse)21 are probably the prime example of insurance contracts for the benefit of third parties. However, other insurance contracts also beg the question whether a contract concluded between A and B can benefit a third party22. Statistically, the most important cases are those in which the insured owner of a motor vehicle (B) permits a third party (C) to use his vehicle and the latter causes an accident. Can C claim the benDue either to § 1805 (according to the court, WM 1970, 736) or § 1822 no. 10. Departing from the usual practice in such cases of presuming a contract for the benefit of the person named in the savings book, cf. infra II 1 d. 19 Cf. also D. Medicus, Schuldrecht I: Allgemeiner Teil, 13th ed., Munich 2002, § 760 for an example of a contract for treatment which a mother (B) concluded with a doctor (A) on behalf of her child (C). 20 Cf. Wesenberg (supra fn. 2), 20 and 134 et seq.; Ph. Heck, Grundriß des Schuldrechts, Tübingen 1926 (reprinted Aalen 1974), 144 f. 21 An important case (RGZ 51, 403), see infra under II 2 a. 22 For an overview see, e.g. W. Bayer, Die Einbeziehung Dritter in den Versicherungsvertrag, in: Karlsruher Forum 1998: Einbeziehung Dritter in den Vertrag (edited by E. Lorenz), Karlsruhe 1999, 51 et seq.; Gottwald, in: Münchener Kommentar zum BGB, Vol. 2.: Schuldrecht Allgemeiner Teil (§§ 241 – 432, FernAbsG), 4th ed., Munich 2001, § 328 n. 74 et seq. 17 18

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efit of insurance which A has granted B by virtue of contract? The answer is straightforward in the case of compulsory third party insurance schemes, which are linked to the insured risk (e.g. the operation of a vehicle). Any person who causes the loss insured against and who has acted with due authority23 can claim the benefit of the insurance24. However, it is more difficult to say whether third parties can also claim the benefit of non-life insurance schemes. The “tenant cases” are well known in this respect25: House-owner B enters into a fire insurance policy with insurer A. The policy obliges A to compensate B for any fire damage which has not been caused by gross negligence. B lets his house to C. Owing to a slight act of negligence, C causes a fire that seriously damages the house. Can A claim the amount of compensation he has paid to B from C?

A can only assert a claim against C if the latter does not have the same rights as B under the contract concluded between A and B. A’s claim will fail if C can claim compensation from A for the damage that has occurred. The BGH held that a tenant (C) could not enforce his own claim for compensation26, despite strong arguments to the contrary. After all, it was in the interest of both the landlord (B) and tenant (C) that C obtained rights under the contract and, from A’s point of view, it was irrelevant whether B or C lived in the house and used it27. Nevertheless, the BGH did not allow the insurer (A) to enforce his claim against the tenant (C). This was because the interest on the rent, which C paid to B, also included the insurance premiums. Therefore, C effectively paid the insurance premiums which B owed A. Due to this fact, the BGH held that B had impliedly waived compensation for fire damage in relation to C insofar as the insurer (A) would compensate the loss. The latter could only have proceeded against C on the basis of B’s statutorily assigned claim (§ 67 VVG). However, it was not possible to do so because B had waived this claim.

23 E.g., if C takes the car of B, who has compulsory third party insurance, without his consent and thereupon causes an accident, the insurer A can claim the amount of compensation he has paid to the injured party from C. 24 Insurer A therefore compensates damage caused by C; this is laid down e.g. in the General Conditions for Motor Insurance. Cf. generally H. Schirmer, Die Rechtsstellung mitversicherter Personen in der Haftpflichtversicherung, in: Festschrift für Karl Sieg, Karlsruhe 1976, 451 et seq. – however, the insurance contract does not grant the injured party his own contractual claim for compensation; cf. Bayer (supra fn. 4), 171 et seq.; MüKo / Gottwald (supra fn. 22), § 328 n. 82. 25 E.g. BGH VersR 1990, 625; BGH VersR 1991, 462; BGH VersR 1992, 311; BGH VersR 1996, 320. 26 E.g. BGH VersR 1996, 320, 321. 27 See H. Honsell, Der Regreß des Sachversicherers nach § 67 VVG bei Gebrauchsüberlassung an Dritte im österreichischen Recht, in: VersR 1985, 301 et seq.

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b) Maintenance contracts Support contracts also include maintenance contracts for the benefit of third parties. An agreement between separated or divorced spouses concerning maintenance payments for their children does not grant the latter their own right to enforce payment28. By contrast, there will be a genuine contract for the benefit of the third party if the father of the illegitimate child promises its mother to pay for the child’s support29, or if one party to a maintenance agreement promises to pay an amount in excess of the statutory minimum. Therefore, if the parents (A) of bride (C) promise the bridegroom (B) that they will meet their daughter’s wedding expenses, C can enforce their promise30. c) Trusts In contracts where A agrees to administer B’s property on the basis of a trust and make transfers to third parties (C), the latter may obtain their own claims against A31. Liquidation agreements are typical examples32: An architect (B) owed the building contractor (C) DM 7,000 for services rendered. Owing to the fact that B was facing claims from other creditors, he sold a piece of land and used the proceeds to settle the claims of his major creditors. He left DM 99,000 with his lawyer (A) instructing him to pay the amount to his other creditors, including C. However, C was unaware of this instruction. When B’s assets were eventually claimed in bankruptcy, the receiver (X) and C both claimed the sum of DM 7,00033.

The problem with this case lies in the fact that, as a rule, the amount left with A belongs to the bankrupt’s estate34 (that is, provided it has not been paid to the creditor already). Therefore, C would have to register his claim against B as a debt in bankruptcy. His debt would only be satisfied if B had sufficient assets to satisfy all registered debts. However, if C had his own right to enforce payment against the trustee (A), then he would be able to enforce satisfaction of the whole debt. The BGH decided that the trust agreement between A and B (which instructed A to satisfy certain creditors of B) meant that C also had a right to enforce payment of BGHZ 31, 210, 218; more detailed references in Bayer (supra fn. 4), 145 at B6 87. BGHZ 5, 302, 304 et seq. 30 RGZ 64, 204, 206 f. 31 Concerning the difference between this form of third-party claim and the English “constructive trust” cf. W. Lorenz, Contracts and Third-Party Rights in German and English Law. Contract Beneficiaries in German Law, in: The Gradual Convergence, ed. B. S. Markesinis, Oxford 1994, 64, 82 f. 32 Concluded earlier according to the Composition Act 1935, nowadays concluded as an “insolvency plan” in accordance with §§ 217 et seq. of the Insolvency Act 1994 (in force since 1 January 1999). 33 BGH WM 1971, 378. 34 Since 1 January 1999: concerning the “flood of insolvencies”, cf. § 35 InsO. 28 29

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the debt owed by A. The trust agreement between A and B was therefore a contract for the benefit of third parties35. C could therefore enforce payment of the whole DM 7,000. The purpose of the trust meant that the agreement between A and B amounted to a contract for the benefit of third parties: B’s creditors (i.e. C) could only be persuaded to postpone enforcement of their claims or even to waive part of their claims if they could be certain of acquiring “direct claims against the trustee to enforce payment of any debts from the trust assets”36. d) Savings accounts in the name of third parties The following set of facts has been decided by the superior courts several times under various guises37: A grandmother (B) opened two savings accounts at bank (A) on behalf of her granddaughter (C). After B’s death one of her daughters (C’s aunt) took one of the savings books for herself. C demanded the return of the savings book arguing that she was entitled to the amount of the savings.

This case38 presents two problems. On the one hand, it is doubtful whether B had intended to conclude a contract with the bank for C’s benefit; on the other hand, the whole affair could be categorised under donatio mortis causa, in which case the rules under § 2301 would apply instead of those under §§ 328 et seq.. Concerning the first problem, it must be noted that C’s benefit does not depend on ownership of the savings book. On the contrary, C will be able to claim the return of the savings book if she is the beneficiary of the savings account by virtue of the contract between A and B. The ownership of a written acknowledgment of debt follows the claim (§ 952). However, did B conclude an effective contract with the bank (A) for C’s benefit when she opened the savings book in her name? The BGH did not answer that question and referred the matter back to the Oberlandesgericht Cologne for the hearing of further evidence. The BGH held that the outcome depended on whether B had intended to depart from the normal order of succession and bequeath her savings to C in the event of her death. In this respect, B’s intention was unclear: she had indeed opened the savings book in C’s name but had not given her the savings book39. 35 Similarly RGZ 117, 143, 149; BGH WM 1966, 445. Later BGHZ 109, 49, 52; however, in the latter case it is unclear why certain debtors are preferred if A has a double trust. 36 BGH WM 1971, 378, 379. 37 RG Recht 1925, No. 444; RG LZ 1928, 619; BGHZ 41, 95; BGH WM 1974, 450; BGH NJW 1975, 382; BGHZ 66, 8; BGH NJW 1984, 480. 38 BGHZ 46, 198. 39 This balance has been struck on an individual basis since RGZ 60, 143; cf. A. v. Tuhr, Einzahlung auf fremdes Sparkassenbuch, in: LZ 1918, 883; further references in Bayer (supra fn. 4), 147 et seq.

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A different question is how one should assess the relationship between B and C if the former had actually intended to grant C a claim against A. Owing to the fact that B had not given C the savings book before her death, one must assume that she had only intended to grant C the savings upon her death. Accordingly, the facts resemble a case of donatio mortis causa pursuant to § 2301 (i.e. B makes a gift to C on condition that she survives her). However, the BGB lays down strict formal requirements40 governing the validity of a donatio mortis causa in order to protect the testator. That said, § 331 refers to the situation where A promises B to perform in favour of C in the event of B’s death. This arrangement is similar to our case. Discussions on this subject have been dominated by the relationship between § 2301 and §§ 328, 331 ever since the “Bonifatius case”41: Shortly before his death, a vicar (B) transferred securities to A with instructions to give them to the Bonifatius Association (C). B intended to give the securities to C as a gift. A could only give the securities to C four days after B’s death. B’s lawful heiress demanded that C surrender the securities.

Those who regard this case as a donatio mortis causa must support the heiress: owing to the fact that B and C did not adhere to the form stipulated by § 2301 the gift could only be effective if it had been completed whilst B was still alive (§§ 2301 II, 518 II). On the other hand, those who consider B’s instruction to A to be a contract for the benefit of a third party in the event of another’s death (§§ 328, 331), must grant the securities to C. Therefore, what is the difference between donatio mortis causa and the contract for the benefit of third parties? Recent judgments regard §§ 328, 331 as leges speciales in relation to the law of succession42. This might be correct43: in the case of a contract for the benefit of third parties, B does not make a grant to C directly but by involving the debtor (A). For this reason, the issue turns on the agreement between B and A and not the one between B and C. That said, § 2301 is only based on the agreement between B and C. Nevertheless, the testator (B) does not really need protection if he instructs someone (A) to make a disposal who will not obtain any advantage therefrom44. In the event, the Reichsgericht dismissed C’s claim and found in favour of the heiress: the heiress was already owner of the securities by the time A had handed 40 This is usually the notarial record in the presence of both B and C simultaneously; cf. §§ 2301 I sentence 1, 2276 I. 41 RGZ 83, 223; most recently, G. Otte, Der Bonifatiusfall – RGZ 83, 223, in: Jura 1993, 643 et seq.; K. Schreiber, Unentgeltliche Zuwendungen auf den Todesfall, Jura 1995, 159 et seq. 42 Cf. BGH NJW 1965, 1913, 1914; BGHZ 41, 95; BGH NJW 1984, 480, 481; BGH NJW 1987, 3131. 43 This is sometimes clearly rejected in academic writing; cf. e.g. D. Medicus, Bürgerliches Recht, 19th ed., Cologne / Berlin 2002, n. 396 et seq.; for the prevailing opinion see e.g. Gernhuber, Schuldverhältnis (supra fn. 14), § 20 V (502 et seq.). 44 Nevertheless, the BGH found a way of affording greater protection to the interests of heirs than the interests of third party beneficiaries; see infra II 2 b.

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them to C. Therefore, a transfer to C required her consent in order to be effective (§ 929). Due to the fact that she had not given her consent, B’s gift to C could not be completed. With this objection, attention focuses on the relationship between C and B (underlying debt relationship), which still causes uncertainty in academic writing and case law regarding contracts for the benefit of third parties in the event of death (§ 331)45. e) Quality assurance and product liability If a manufacturer (A) promises that his goods will possess particular qualities, he usually concludes a contract of guarantee with the end-purchaser (C). The guarantee statement included with the goods constitutes an offer by the manufacturer, which the purchaser accepts tacitly (§ 151). In the absence of the guaranteed qualities, the purchaser (C) will have a direct claim against the manufacturer (A). The new law of obligations also grants the purchaser (C) rights against the end-seller (B) if the goods do not correspond to the manufacturer’s advertising statement (§ 434 I sentence 3, § 437). However, under certain circumstances, the manufacturer may make a promise which does not lead to the conclusion of a contract of guarantee (between A and C) or give rise to guarantee claims (of C against B). One example is the case BGHZ 75, 75: C ordered double-glazing from B. It was manufactured by A and sold with the guarantee that any defective panes would be replaced within a period of 5 years from the date of delivery. B was aware of this guarantee but C was not. The panes were delivered to B on October 9, 1969. On September 19, 1974 C notified B that some windows were defective. Between the panes a layer of film had retracted and condensation had accumulated. The condensation clouded the panes. B denied any liability. A also refused to replace the panes because he was only informed of the defect on October 28, 1974. By this time, the guarantee period had already expired.

The BGH awarded C compensation. The contract of sale between A and B incorporated the 5-year guarantee. The contract of guarantee had directly granted C rights, despite the fact that he was unaware of them. This was because the contract was intended to benefit the end-consumer (C) and not the dealer (B). It was in B’s interest that C has his own right to claim compensation because this would protect him against C’s claims during the statutory guarantee period46. However, the fact that C had discovered the defect within the contractual guarantee period meant that he could enforce his claim against A despite the expiry of the guarantee period. After all, A had guaranteed that his windows would remain free from defects for a period of five years. However, this did not mean that C had to enforce his claims within five years. Cf. in greater detail infra under II 2 b. BGHZ 75, 75, 77 f. – C’s claims against B owing to breach of contract were (§ 477) and still are (§ 438 I 3) statute-barred. 45 46

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Therefore, the BGH granted the third party (i.e the end-consumer) rights arising under a guarantee of quality. However, ten years earlier it had dismissed an endconsumer’s claim for compensation owing to the damage that a certain product had caused to his property. In the “fowl pest” case, the BGH instead directed the plaintiff (C) to sue A for compensation in tort47: C ran a chicken farm. He had his chickens inoculated against fowl pest by a vet (B). Shortly after the inoculation, a bout of fowl pest broke out which infected and eventually killed most of the chickens. It turned out that the vaccine used by B and manufactured by A was incorrectly prepared. C sued A for compensation.

The BGH did not consider a contract for the benefit of third parties (which A and B could have concluded), despite the fact that B also had an interest in being released from C’s guarantee claims. On the whole, the BGH considered A’s liability according to the principles of the “contract with protective effect for third parties”48. The court dismissed the claim because B had not been responsible for C’s welfare and his “injury” had not affected B as well49. In view of BGHZ 75, 75 this finding is highly contentious. However, the decision was due to A’s personal characteristics on the one hand and the unclear extent of liability on the other. In the “double-glazing case”, A had guaranteed all customers that his panes would remain free from defects whereas in the “fowl pest case” it was most unlikely that A had intended to accept liability for injury suffered by his customers. In the former case, A was only liable ipsius rei nomine50 whereas in the “fowl pest case” C claimed consequential damages which could not be quantified. This is the reason why A had not intended to accept any liability in relation to third parties. In the event, the BGH instructed the plaintiff (C) to sue A in tort (§ 823 I) and the law has been left stranded in the realms of “products liability” to this day.51

f) Contract for the carriage of goods Third party rights under contracts for the carriage of goods have an interesting history. Today, § 421 HGB grants the recipient (C) the right to enforce delivery of the goods transported by the carrier (A) as soon as the goods have arrived at their destination. Therefore, the contract for carriage concluded between the sender (B) BGHZ 51, 91 (“Hühnerpest-Fall”). For details see III. 49 BGHZ 51, 91, 96. 50 According to the formulation adopted by Marcian / Julian D. 18,1,45. 51 Concerning product liability see e.g. C.-W. Canaris, Die Produzentenhaftung in dogmatischer und rechtspolitischer Sicht, JZ 1968, 484 et seq.; W. Lorenz, Beweisprobleme bei der Produzentenhaftung, AcP 170 (1970), 367 et seq.; G. Hager, Zum Schutzbereich der Produzentenhaftung, AcP 184 (1984), 413 et seq.; H.-D. Steinmeyer, Der Vertrag mit Schutzwirkung für Dritte und die Produzentenhaftung, Der Betrieb 1988, 1049 et seq.; of fundamental importance H.J. Kullmann / B. Pfister, Produzentenhaftung (loose-leaf), Berlin since 1980. 47 48

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and the carrier (A) grants the recipient of the goods his own rights. The sender can issue instructions to the carrier concerning carriage before the goods have arrived at the place of delivery (§ 418 II HGB). Once the goods have arrived he can no longer change or prejudice C’s right to sue A for delivery of the goods. The former provision (§ 435 HGB)52 did not draw this limit clearly enough: the sender had the right to issue instructions until the recipient had commenced legal action for delivery of the goods. Theoretically, it was difficult to argue that the recipient had his own right. Nevertheless, this argument was accepted by the predominant strand of legal writing53. The unclear definition of the former provision (§ 435 HGB) can be traced back to § 405 ADHGB54. Here too, the right of the recipient (C) to enforce delivery of the goods depended on the sender (B) not having issued any “contrary instructions” to carrier (A). Nevertheless, § 405 ADHGB was not interpreted to the effect that the contract between the sender (B) and carrier (A), granted the recipient (C) his own right. C had the right to enforce “delivery of the goods” because B had assigned the right to him. As long as B was issuing instructions to A, he had not yet made such an assignment55. Following the codification of § 328 BGB, § 405 ADHGB was interpreted to the effect that the contract for carriage incorporated a contract for the benefit of third parties56. g) Other contracts In a number of similar situations the existence of valid contracts for the benefit of third parties is presumed: people who travel with their families in a taxi conclude a contract of carriage in favour of themselves and all members of their family57. Package tour contracts can also grant the customer his own right against the contractual partner of the tour operator to enforce performance.58 Parents who take their child to the doctor conclude a contract with the latter for medical treatment in favour of their child59. The credit card contract concluded between the 52 § 435 HGB repealed on 31 December 1998, § 421 HGB (amended by the Transportrechtsreformgesetz (Transport Law Reform Act) 1998) has been in force since 1 January 1999. 53 For an overview of the earlier law, see Bayer (supra fn. 4), 173 f.; regarding the new law, see Eckhardt, Die Rechtsstellung des Empfängers im Frachtrecht, Hamburg 1999. 54 German General Commercial Code of 1861. 55 For details see Bayer (supra fn. 4), 175 et seq. 56 Definitively K. Hellwig, Die Verträge auf Leistung an Dritte. Nach Deutschem Reichsrecht unter besonderer Berücksichtigung des Handelsgesetzbuchs, Leipzig 1899, 477 et seq.; cf. also W. Lange, Die rechtliche Stellung des Empfängers im Frachtgeschäft nach geltendem Handelsrecht, Leipzig 1905; reproduced in Bayer (supra fn. 4), 175 f. (at fn. 257). 57 See RGZ 87, 64, 65; BGHZ 62, 71, 75. 58 BGHZ 93, 271, 275; BGHZ 100, 157, 171. See e.g. H.-J. Seidel, Die Rechtsstellung des Drittbeteiligten im Reisevertragsrecht, Karlsruhe 1986, 10 et seq., 36 et seq.; see also, in brief, Bayer (supra fn. 4), 156. 59 RGZ 152, 175; BGHZ 89, 263, 266.

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credit card company (B) and businesses which accept payment by credit card (A) also amounts to a contract in favour of the credit card holder (C). This grants C his own right to pay for items by credit card60. Employment law and social welfare law also offer many examples of contracts for the benefit of third parties: e.g. a company pension scheme usually takes the form of the employer (B) concluding an insurance policy with the insurance company (A) for the benefit of the employee (C). This grants C his own right against A to claim the payment of insurance benefits. If the employer (A) promises the employee (B) to support his widow, the latter will have her own right to enforce the promise in the event of B’s death.61. Both individual contracts and collective contracts (e.g. shop agreements62 and collective bargaining agreements63) can grant third parties their own rights. For example, by entering into a collective bargaining agreement the union and the employer undertake to keep the peace. If employees breach this obligation by continuing to strike or beginning a new strike, the employer concerned will have his own right to enforce the employees’ undertaking64.

2. The remnants of the Ius Commune tradition Although § 328 expressly states that the third party “directly” acquires a right against the promisor under the contract, jurists continued to labour under old constructions described by v. Kirchmann as “academic fictions”65. Attempts were still made to justify third party claims in terms of assignment or the assumption of debt.

a) Assignment theory The “assignment theory” was developed by Hellwig, in order to justify life insurance contracts for the benefit of a third party. Despite the clear wording of the statute66 Hellwig argued that the third party (C) acquired a right against the insurer Cf. MüKo / Gottwald (supra fn. 22), § 328 n. 49 und § 329 n. 14. BAGE 19, 100; BAG NJW 1973, 963. 62 E.g. BAGE 13, 1, 11. 63 First, RGZ 73, 92; later, BAGE 6, 321; see MüKo / Gottwald (supra fn. 22), § 328 n. 38; Bayer (supra fn. 4), 164 f. 64 Further examples of contracts for the benefit of third parties are listed by Bayer (supra fn. 4), 138 et seq.; MüKo / Gottwald (supra fn. 22), § 328 n. 35 et seq.; H. Heinrichs, in: O. Palandt (founder), Bürgerliches Gesetzbuch, 63rd ed., Munich 2004 (= Palandt / Heinrichs), § 328 n. 8 – 12; R. Jagmann, in: Staudinger (founder), Kommentar zum BGB, Zweites Buch §§ 328 – 361b, Berlin 2001, § 328 n. 122 – 233; Lorenz (supra fn. 31), 74 et seq. 65 Kirchmann (supra fn. 4) 21 f. 66 § 330: “If, in a contract for life insurance or an annuity, payment of the insurance or annuity to a third party is stipulated for, it is to be presumed, in the case of doubt, that the third party acquires the right directly to demand payment.” 60 61

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(A) from the policy holder (B), i.e. that this claim derived from B’s assets. Therefore, after his death, the creditors could claim the payment of the insurance money during the winding-up of the estate or any rights which had been granted to the third party (C) against the insurer (A)67. The creditors of the estate had already advanced this argument before the Reichsgericht on several occasions without success68. However, the following case provided the court with another opportunity to deal with the question in light of the new BGB and its interpretation by Hellwig69: Shortly before he died, a trader (B) insured “his life in the event of death to the benefit of his wife”. Following his death, it turned out that the estate was bankrupt. The creditors regarded the payment of the insurance money to C (at least DM 10,000) as a gift to C at the estate’s expense. They challenged this disposition according to the provisions of the existing Bankruptcy Act70 (which corresponded to the actio Pauliana of the ius commune) and claimed payment of the insurance money.

The Reichsgericht rejected the action for rescission. The court admitted that C was only able to claim the insurance money in the event of B’s death. However, the claim itself only arose once B had died. For this reason, the claim had never formed part of B’s assets and had not passed to C from B’s assets either. The court’s forthright judgment did not settle the controversy surrounding the acquisition of the insurance claim. Heck argued that the use of “directly” in § 328 und § 330 BGB only meant that the beneficiary did not have to communicate acceptance expressly. However, it did not mean that the right had never belonged to the policy-holder’s assets. Otherwise, B could have used a life insurance policy in order to create a “creditor-proof savings account” in favour of his relatives71. Due to the fact that one may not perform a prohibited act, the creditors of the estate had to have the right to enforce payment of the life insurance money. Even today, this is still the prevailing opinion in legal writing72 and practice73 – at least in the case of insurance contracts which allow the policy holder to nominate the beneficiary ex post facto. This is most peculiar; after all, it was the life insurance contract which formed the catalyst for recognising a contract for the benefit of third parties74. Let us examine the parties’ relationship more closely: the policy holder (B) pays contribuHellwig (supra fn. 56), 338 f. and 366 et seq. E.g. RGZ 1, 188; RGZ 16, 126; RGZ 29, 325; RG Gruchots Beitr. 36, 456; RG Seuff. Archiv 43 No. 145 (S. 218); RG Seuff.Archiv 48 No. 284 (S. 452); further references in Bayer (supra fn. 4), 106. 69 RGZ 51, 403; later RGZ 61, 217 and RGZ 71, 325 (offering a claim as security for the insurance). 70 § 32 fig. 2 Bankruptcy Act (1877), now § 134 Insolvency Act (1994). 71 Heck, Schuldrecht (supra fn. 20), 149. 72 For an overview see Bayer (supra fn. 4), 303 et seq., esp. 306 f. 73 Most recently, BGH NJW 2004, 214, 215 f. 74 Cf. in brief supra fn. 4; in detail Bayer (supra fn. 4), 103 et seq. 67 68

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tions to the insurer (A), the latter repays the insurance money to the beneficiary (C) upon B’s death. It is true that C’s claim for payment depends on B having paid his contributions regularly but for that reason B has not granted the premiums to C. He does not grant C the insurance money either. B has never had a right to payment himself. The right to payment is only granted to C upon B’s death; that is to say, he does not acquire the claim from B’s assets. C has acquired this claim “directly” as § 328 states. Interpreting the adverb “directly” according to its literal meaning has nothing to do with “conceptual jurisprudence” (Begriffsjurisprudenz)75: it simply reflects the legislator’s intention76. In order to avoid the creditors of the estate going away empty handed, the Reichsgericht applied the wisdom of Solomon and directed C to repay the premiums to the creditors of the estate77. However, Bayer might have hit upon the correct solution when he suggested that the beneficiary (C) was liable to the creditors of the estate up to the surrender value of the life insurance policy78. This was because B’s assets would have covered the surrender value had he terminated the life insurance policy before his death.

b) Affirmation theory Contrary to Heck, who believed that a “direct” acquisition (§ 328) by the third party effectively rejected the acceptance theory, Hadding argued that the legislator had thereby only rejected the assignment theory79. In his opinion, § 333 suggested that the beneficiary only acquired his right against the promisor once he had accepted it (hence “affirm”). In fact, § 333 BGB permits the third party to refuse the claim intended for his benefit. This does not mean that the third party has to “authorise” the claim (e.g. by not refusing it)80. Rather, the “Motive” for the First Draft (§ 415 E I) reinforce the argument that the freedom to refuse the right intended does not make the validity of the right acquired “conditional upon its acceptance” 81. After all, the grant of the right may not correspond to the third party’s “wish and intention”82. Therefore, he should be free to refuse it. As a result, According to the proposal by Heck (supra fn. 20), 149. The Second Commission which adopted the currently applicable § 330, wished to emphasise that it was usual for the claim to manifest itself only in the personal characteristics of the third party (especially in the case of life insurance and annuity life insurance contracts); cf. B. Mugdan, Die gesammten Materialien zum Bürgerlichen Gesetzbuch für das Deutsche Reich, Vol. 2 (Recht der Schuldverhältnisse), Berlin 1899, 703 (towards the end). 77 Expressly e.g. RGZ 61, 217, 219. 78 Bayer (supra fn. 4), 307 et seq.; the same, Karlsruher Forum (supra fn. 22), 73 f. 79 W. Hadding, Zur Theorie des Vertrages zu Rechten Dritter im deutschen Recht, in: Festschrift Imre Zajtay, Tübingen 1982, 185, 201 et seq. 80 In detail Bayer (supra fn. 4), 219 et seq. 81 Motive zu dem Entwurfe eines Bürgerlichen Gesetzbuches für das Deutsche Reich, Vol. II: Recht der Schuldverhältnisse, Berlin 1896, 272 (= Mugdan II, supra fn. 76, 151). 82 Motive II (supra fn. 81), 272 (= Mugdan II, supra fn. 76, 151). 75 76

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Hadding’s suggestion flies in face of the legislator’s express intention and rekindles the affirmation theory of the 19th century. So much for theory. By contrast, the Bundesgerichtshof had no hesitation in making the validity of a claim intended for a third party conditional upon the latter’s “acceptance”. The court had been called upon to decide the following case83: Before he died, B instructed his bank (A) to transfer DM 5,000 to the bank account of his girlfriend (C). Following B’s death, the heir (E) revoked his instruction. Therefore, A did not transfer the money to C. C demanded that E consents to A paying out the DM 5,000 to her.

The claim succeeded at first instance but was dismissed by the appeal court and the BGH. Accordingly, C did not have a right against the bank (A) to enforce payment of DM 5,000. If the decision is surprising, the reasoning is astounding. It is true that C had acquired her own right to enforce payment owing to the agreement concluded between B and A (§ 328) and the event of B’s death (§ 331). However, the existing relationship between B and C (“underlying debt relationship”) also had to be considered. B had intended to give C the DM 5,000 gratuitously which meant that his promise amounted to a gift. However, the contract of donation between B and C had never been created effectively. As B’s messenger, the bank (A) should have notified C of his offer to conclude such a contract immediately after his death. In the event, things turned out differently. E, (B’s heir) revoked this offer. In the absence of an effective contract of donation E could demand that C return the payment made by the bank A at any time. However, no one can claim something which he must then surrender. Accordingly, C could not claim the payment of 5,000 DM. If C had already accepted the bank’s offer to pay out the sum then the contract of donation would have been perfected thereby ruling out E’s claim for recovery.84 In that case, C could have demanded that the bank (A) pay DM 5,000. The BGH’s judgment effectively resurrected the affirmation theory85. True, it did not consider whether C had accepted the right which B and A had agreed in her favour. However, the BGH ruled that the contract for the benefit of a third party concealed an obligation between B and C. Therefore, the court required C to have accepted B’s offer to enter into a contract. If the third party (C) had not accepted the offer, then he would have been bound to return any advantage he had obtained from the right intended for the heir’s benefit. Scholars heavily criticised this solution and paraded a whole host of counterarguments86. Indeed, it is difficult to see why the absence of a valid donation BGH NJW 1975, 382. Cf. BGH NJW 1975, 382, 384. 85 Later also BGH NJW 1975, 1360; BGHZ 91, 288, 291; BGH NJW 1984, 480; BGHZ 128, 125, 132; vgl. auch OLG Hamm NJW-RR 1996, 1328, contra OLG Celle WM 1993, 591. 86 Collected in K. Muscheler, Vertrag zugunsten Dritter auf den Todesfall und Erbenwiderruf, in: WM 1994, 921, 930 et seq.; cf. also Bayer (supra fn. 4) 323 et seq., esp. 326. Most 83 84

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between the creditor (B) and the third party (C) should invalidate the direct right of the third party. A’s promise to perform in favour of C grants the latter the right to enforce performance against A even if he is unaware of the right in his favour and B’s contract of donation. Therefore, the disposition (i.e. the grant of the right) is effective – in our case upon B’s death (§ 331). However, can it really be the case that the executory agreement (the causa for the disposition as between B and C) has not been validly created? A dubious result. That said, no result could be so outlandish as to confound explanation. In our case, the reason for the decision appears to have been the Abstraktionsprinzip. This principle assesses the executory agreement and disposition in inter vivos transactions separately. Although the disposition (i.e. the grant of a right by contract for the benefit of a third party) may be valid it does not contain any causa justifying the grant in proprietary terms. The causa could only be found in an existing obligation between B and C, i.e. an effective contract of donation, for example87. However, even the Reichsgericht88 sometimes presumed that the grant of the claim to the third party contained the causa required by the underlying debt relationship. Heck argued that the grant to a third party in the event of death amounted “to a special type of testamentary disposition”89. Recent doctrine reestablishes this connection. First, Wieacker and Harder90, later Lorenz91 and now Wolf92 have argued that a contract for the benefit of third parties which is to take effect in the event of death (§ 331), “includes the legal basis for the transfer of rights”93. The courts (particularly the BGH) nevertheless insist that a grant made to the third party as part of the underlying debt relationship must be based on a special causa in the absence of any other legal basis (i.e. by a gift made by the deceased to the third party). If the third party (C) is unaware of the offer of a gift when the recently, M. Wolf, Die Entbehrlichkeit des Valutaverhältnisses beim Vertrag zugunsten Dritter auf den Todesfall (§ 331 BGB), in: FamRZ 2002, 147 et seq. 87 Or a different obligation, such as a third party’s maintenance claim against the deceased. This maintenance claim (in the underlying debt relationship B – C) would then justify the award of a claim against A; cf. OLG Oldenburg NJW-RR 1991, 26, 27. 88 RGZ 88, 137,139; RGZ 106, 1, 2. 89 Heck (supra fn. 20), 299. 90 F. Wieacker, Zur lebzeitigen Zuwendung auf den Todesfall, in: Festschrift für Heinrich Lehmann, Tübingen 1956, 271 et seq.; M. Harder, Zuwendungen unter Lebenden auf den Todesfall, Berlin 1968, 146 et seq.; id., Das Valutaverhältnis beim Vertrag zugunsten Dritter auf den Todesfall, in: FamRZ 1976, 418, esp. 426 et seq. 91 E. Lorenz, Zur Kapitallebensversicherung auf den Todesfall. Umfang und Art des Rechtserwerbs durch den bei Vertragsschluß ohne besondere Abreden bezeichneten Bezugsberechtigten, in: Festschrift für Robert Schwebler, Karlsruhe 1986, 349 et seq. 92 Wolf (supra fn. 86), FamRZ 2002, 148 f. 93 According to Lorenz (supra fn. 91), 367 f.; Wolf (supra fn. 86), FamRZ 2002, 148 refers to “embedding the causa in the contract for the benefit of third parties”; critical MüKo / Gottwald (supra fn. 22), § 331 note 10.

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donator (B) dies94, this approach will lead to a “race between the heir and the promisor”: C will only be able to enforce his claim if the promisor (A) notifies him of the offer before the heir has had time to revoke it. This situation is unsatisfactory in both legal and practical terms. However, it is a necessary consequence of adhering to the old “affirmation theory” (even within the confines of the underlying debt relationship).

III. New horizons: the contract with protective effect for third parties 1. Obligation to perform and third party protection Beyond the theoretical formulation of the contract for the benefit of third parties, §§ 328 et seq. took on an important life of their own. Some years after the enactment of the BGB, these provisions were used to bridge a large gap between tortious and contractual liability. In the following case the Reichsgericht passed one of the first judgments pertaining to the “contractual protection of third parties”95: The railway official (B) was granted a new company apartment by his employer (A), which B moved into with his family. The previous tenant had suffered from tuberculosis. A’s employees (M) only disinfected the apartment once B and his family had moved in. Consequently, C (B’s daughter) fell ill with tuberculosis. C and B sued A for damages.

This case and the court’s decision clearly illustrate the reasons for granting contractual protection to third parties. The plaintiff (C) sued A for compensation in tort (§ 823 I). Her claim failed because A had chosen and supervised his employees (M) properly; therefore, he was not liable for their misconduct (§ 831). A separate claim for damages against M in tort presented two problems: on the one hand, the employees (M) were most likely to be men of straw and, on the other hand, C had to prove that M had acted negligently in disinfecting the apartment so late. The Reichsgericht granted C his own contractual claim against A by extending the landlord’s strict duty of compensation96 to C on the basis of § 328. C was not party to the tenancy agreement himself but A’s duty of protection also extended to the tenant’s relatives97. The Reichsgericht gave the following reasons for its finding98: “If the contractual obligations of the landlord were not extended in this way, the relatives would be limited to non-contractual claims in the event of injury. In particular, they would not enjoy the benefits which the provisions of §§ 278, 538 BGB offer the tenant by reason of the fact that the landlord is liable for any defects which existed at the time the contract 94 An implied contract of donation was presumed if the third party was aware of the intended donation: OLG Cologne WM 1995, 1954, 1955; OLG Hamm WM 1998, 2236, 2238. 95 RGZ 91, 21. See recently W. Bayer, Vertraglicher Drittschutz, JuS 1996, 473 et seq. 96 Then § 538, now § 536a BGB. 97 Expressly RGZ 91, 21, 25. 98 RGZ 91, 21, 24.

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was concluded, regardless of fault. It would contravene principles of natural justice to place the tenant’s relatives in a situation completely different to that of the tenant himself. This would not reflect the contractual intention of the tenant who, as the landlord must accept, does not wish his relatives to be worse off than himself in relation to the claims for compensation described.”

This judgment differs considerably from an earlier one99, which was recently described as the “starting point” for the contractual protection of third parties100: During his stay at a hospital (A), C became infected with scarlet fever and sued A for damages. The court took the view that the contract for treatment had not been concluded between A and C but between the health insurance company (B) responsible for C and the hospital (A). The court also considered whether C could make a claim against B. Although the health insurance company (B) was under an obligation to pay the costs of C’s treatment it had employed the hospital (A) and the doctors working there to carry out the treatment in question. This being the case, A would only have been acting as B’s servant (§ 278). As a result, B would have been responsible for A’s negligence101. However, the Reichsgericht decided differently. Owing to the fact that B could not have performed any treatment himself, the court regarded the contract between B and A (to the effect that C would stay at A), as representing a contract for C’s benefit (§ 328). The contract between B and A granted C his own right to be treated by A. Owing to the fact that A had performed his obligation negligently (C had become infected with scarlet fever at the hospital (A)), C also had his own claim for damages. In the “hospital case”, the Reichsgericht presumed that the third party had his own right to enforce performance. In the “tuberculosis case” the court reached a different conclusion but awarded the third party a contractual claim for damages nevertheless. This is the birth of the “contract with protective effect for third parties”, as it later102 became known103. Following the “tuberculosis case”, the Reichsgericht maintained that the injured party could also enforce contractual claims for compensation even if he himself did not have any right to enforce performance under the contract. One well-known decision was the “gas meter case”104, in which the Reichsgericht justified its case law up to that point: RG JW 1915, 916 (Judgment of 4 July 1915). S. Hofer, Drittschutz und Zeitgeist. Ein Beitrag zur privatrechtlichen Zeitgeschichte, in: SZ (German section), 117 (2000) 377 et seq. 101 See e.g. RGZ 74, 165 (= JW 1910, 934); referred to in RG JW 1915, 916. 102 First in K. Larenz, Anmerkung zum Urteil des BGH vom 25. 4. 1956 – VI ZR 34 / 55, NJW 1956, 1193; cf. M. Plötner, Die Rechtsfigur des Vertrags mit Schutzwirkung für Dritte und die sogenannte Expertenhaftung, Berlin 2003, 28. 103 C.f. W. Fikentscher, Schuldrecht, 2nd ed., Berlin 1969, § 37 IV 1 (p. 165): “Since BGH NJW 59,1676 it has become clear that this does not involve any contract for the benefit of third parties with a claim for performance of main duties but instead a contract for the benefit of third parties with compensation claims relating to warranties.” 104 RGZ 127, 218 (judgment of 10 February 1930). 99

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C was employed to work as a house servant at B. When she smelt traces of gas in the apartment C struck a match and looked for the gas pipe. A large amount of gas was pouring out of the gas meter, which M, an employee of A, had incorrectly mounted. C approached the leak with the match which resulted in an explosion. C was badly injured and sued A for compensation.

C could not claim compensation from A in tort owing to § 831 BGB. A claim against M (§ 823 I) held little promise of success. Due to the fact that the contract concluded between A and B for the repair of the gas meter did protect all persons staying at B’s apartment the Reichsgericht granted C her own contractual right to claim compensation from A. In particular, the court defended its practice of basing the compensation claims of third parties on § 328 despite the fact that the third party did not have the right to enforce performance herself.105 The BGH initially followed this reasoning106, which eventually led to a contradictory case-law during the 1950s. § 328 expressly granted the third party the right “to demand performance”. However, if it was true that C could not enforce performance then the protection offered by a contract for the benefit of third parties could not be based on § 328 (according to e.g. Larenz und Gernhuber107). Modern doctrine adopts a more relaxed approach to this theoretical faux pas: those who have a right to enforce performance in their capacity as third parties can always claim damages in the event of non-performance or defective performance. Those who do not have a right to enforce performance cannot claim damages in the event of non-performance. However, they can claim damages for any loss they may have suffered owing to the promisor’s defective performance, provided that the performance injures them to the same degree as the promisee himself. Therefore, third parties injured by defective performance may claim damages.108 The new provisions on defective performance109 favour this line of reasoning: § 280 I sanctions any negligent “breach of duty” by granting the injured party the right to claim damages. This includes the breach not only of conditions but also of warranties (e.g. the duty to respect the creditor’s legal interests). The promisee (B) and the promisor (A) can agree between themselves that such protection will also extend to C’s legal interests (§ 328 mutatis mutandis). In this case, the third party will also have his own right to claim compensation for the breach of contractual warranties110. 105 Cf. RGZ 127, 218, 221 et seq.; cf. also E. Wahl, Vertragsansprüche Dritter im französischen Recht unter Vergleichung mit dem deutschen Recht dargestellt an Hand der Fälle der action directe, Berlin 1935, 192 et seq. 106 E.g. in the “threshing machines case”: BGH NJW 1956, 1193 f. 107 Larenz (supra fn. 102), NJW 1956, 1193; J. Gernhuber, Drittwirkungen im Schuldverhältnis kraft Leistungsnähe, in: Festschrift für Arthur Nikisch, Tübingen 1958, 249 et seq. 108 See e.g. Medicus, Schuldrecht I (supra fn. 19), n. 772. 109 Amended by the Act Modernising the Law of Obligations (“Schuldrechtsmodernisierungsgesetz”), in force since 1 January 2002. 110 For an outlook see K. Larenz, Lehrbuch des Schuldrechts, Vol. 1.: Allgemeiner Teil, 14th ed., Munich 1987, 229.

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2. The rise and fall of the “weal and woe” case law The BGH followed the path taken by the Reichsgericht despite some criticism of the theoretical justification of third party protection. However, the court now looked for arguments by which it could expand contractual protection. The “Capuzol case” offered such an opportunity111: A delivered an anti-rust compound to B. However, attention was not drawn to the fact that the compound was highly flammable either by the defendant himself when concluding the contract or by the instructions provided on the containers. One of B’s workers, C, suffered severe burns owing to an explosion. C sued A for compensation.

The BGH awarded C compensation, explaining in detail why third parties could be included within the scope of protection offered by a contract under certain circumstances. The court argued that the outcome depended on whether the third party had been affected by A’s performance of his obligations to B, whether the promisee (B) had a special interest in protecting the third party and whether both factors were obvious to the promisor (A). These criteria enabled the BGH to impose provisional limits on contractual protection for third parties. According to the BGH, the crucial fact was that the contractual partner and promisee (B) was responsible for the “weal and woe” (Wohl und Wehe) of the third party (C)112. The way the BGH viewed the relationship between B and C recalls the discussion concerning the performances that third parties could enforce in terms of the “legal basis” granting them this right113. However, the argument that the relationship between B and C forms the basis for granting a right to C pre-dates this judgment. The Second Commission had already suggested that a genuine contract for the benefit of third parties could only be valid if the intended performance “had the welfare of the third party as its objective”114. This rule of interpretation was eventually rejected because there could be contracts for the benefit of third parties which did not subject B to any duty of welfare and maintenance in respect of C and vice versa115. Nevertheless, the Reichsgericht later sought to justify third party claims by arguing that the creditor was under a special obligation to ensure the third party’s welfare and maintenance116. BGH NJW 1959, 1676. BGH NJW 1959, 1676, 1677, adopting a formulation by Larenz (supra fn. 102), NJW 1956, 1193, 1194. For details see e.g. Bayer (supra fn. 4) 184 f. and Plötner (supra fn. 102), 28 et seq. 113 Cf. supra II 2 b. 114 Application no. 3 (by Jacubezky); cf. Jakobs / Schubert, Schuldrecht I (supra fn. 6), 517; cf. also Mugdan II (supra fn. 76), 703. 115 Cf. the discussion concerning this application in Mugdan II (supra fn. 76) 703 et seq., here, 705 f. 116 Express reference is made to the consultations of the Second Commission in RG JW 1915, 916. Concerning the “notion of welfare” in conjunction with the protection of third parties see Hofer (supra fn. 100), SZ (Germ. sect.) 117 (2000), 384 et seq. 111 112

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The BGH mainly employed the “weal and woe” formula in order to restrict the class of third parties entitled to claim protection. The debtor (A) was only liable in relation to those persons for whom the promisee (B) had assumed special responsibility. Thereby (as the BGH itself argued), the validity of C’s claims against A depended on the special bond between B and C and not on the contract between A and B. “The protection of a third party results from the internal relationship between the promisee and a third party which is personal in nature rather than the relationship between the promisee and his contractual partner”117. The “weal and woe” judgments of the Bundesgerichtshof could not hold the expansion of contractual protection for third parties in check for long. In the “fowl pest case”118 the floodgates still held. However, this case bears all the hallmarks of a contract with protective effect for third parties. Only one feature was absent: the BGH held that the vet (B) was not responsible for C’s welfare and did not owe him any care or special consideration either on the basis of statute or contract. One could certainly take a different view119. However, by dismissing contractual claims against A, the court effectively laid the foundations for “product liability”, i.e. a purely tortious duty of care owed by the manufacturer (A) to the end-consumer (C). In Austria, the courts adopted a different solution, deeming the contract between the manufacturer (A) and the retailer (B) to be a contract which served to protect the end customer (C)120. German courts could also have adopted this solution. Only nine years after the “fowl pest case”, the BGH dispensed with the “weal and woe” formula with regard to contracts with protective effect for third parties. Its decision was based on the following case121: C regularly delivered gravel to one of his customers (K) booking the purchase price from K’s account by direct debit. When K’s account ran out of funds, his bank (A) refused to debit some deliveries. However, it failed to notify C’s bank (B) of this fact immediately. As a result, C continued to make deliveries to K. A only notified B one month later whereupon C stopped his deliveries. K was declared bankrupt. C demanded that A pay for the deliveries he had made to K owing to its failure to notify his bank.

The BGH awarded C compensation: the agreement between banks A and B pertaining to the direct debit procedure (i.e. the debiting of customer accounts when transfers are made to the other bank) served to protect the banks’ customers. For this reason, bank A had breached its duties of protection in respect of C by failing to notify B that K’s account could not be debited any longer. The “weal and woe” formula was expressly rejected as being “unnecessarily restrictive”. Instead, con117 118 119 120 121

BGHZ 51, 91, 96. BGHZ 51, 91; for details see supra II 1 e. Cf. the arguments supra II 1 e. E.g. OGH SammlZ 49 / 14; OGH EvBl 1993, 14. BGHZ 69, 82.

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tracts relating to retail banking would also produce protective effects for the benefit of third parties if such transactions presented risks for third parties and the contractual parties were unable “to contain such risks”122. Thereby, the BGH (to a chorus of disapproval123) had created a species of contractual “strict liability”: tort law dressed up as a contract for the benefit of third parties.

3. The floodgates burst open . . . In the “direct debit case”, one also notices that the BGH did not hesitate to use contractual protection for third parties to award compensation for pure economic loss. The protection of third parties had initially been limited to awarding compensation for physical injury or the violation of property rights124 (i.e. loss which could have been compensated according to the general law of torts as well, § 823 I). However, in the “direct debit case” the BGH awarded compensation for pure economic loss suffered by a third party (C). Thereby, the contract with protective effect for third parties was no longer used simply to circumvent the embryonic doctrine of vicarious liability (§ 831). Rather, it was used to overcome the crucial barrier to claiming compensation under tort law, i.e. the rule that the tortfeasor could only be liable for infringing certain legal interests (§ 823 I) or certain acts (§ 823 II and § 826). It was relatively straightforward to justify crossing the boundary in this way. However the BGH failed to establish a new rule limiting the tortfeasor’s liability. The scope of conventional third party protection was also extended in another respect. Hitherto, Reichsgericht and BGH had only awarded the third parties compensation if the promisor (A) had breached contractual warranties. However, in the “inheritance case” the BGH also awarded the third party damages on grounds of non-performance. The case concerned compensation for the “loss” suffered by a disappointed heiress125: B notified his lawyer (A) in the presence of his daughter (C), that he wished to change his will in the latter’s favour. A agreed to find a notary for B, who was bed-ridden, and draw BGHZ 69, 82, 86. W. Hadding, Das Lastschriftverfahren in der Rechtsprechung, WM 1978, 1366, 1373 et seq.; id., Drittschadensliquidation und “Schutzwirkung für Dritte” im bargeldlosen Zahlungsverkehr, in: FS Winfried Werner, Berlin 1984, 165, esp. 193 et seq.; Chr. Badde, Vertrag mit Schutzwirkung für Dritte im Lastschriftabkommen der Banken, Münster 1979. 124 E.g. BGHZ 49, 350. 125 BGHZ JZ 1966, 141 = NJW 1965, 1955. The case closely resembles White v. Jones, [1995] 2 A.C. 207 a case decided by the House of Lords. Concerning this case and the preceding judgment of the Court of Appeal ([1993] 3 WLR 730) W. Lorenz, Anwaltshaftung wegen Untätigkeit bei der Errichtung letztwilliger Verfügungen. Eine vergleichende Betrachtung des deutschen und des englischen Rechts, JZ 1995, 317 et seq.; R. Zimmermann, Erbfolge und Schadensersatz bei Anwaltsverschulden, Entscheidung des House of Lords vom 16. Februar 1995 (White and another v. Jones and another), ZEuP 1996, 672 et seq. 122 123

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up a new will. Despite repeated requests A did not fulfil his promise. B died. C then demanded that A compensate her for the portion of the inheritance she had lost owing to his failure to change the will.

The BGH awarded C compensation. C could not have enforced A’s performance herself (i.e. to draw up a new will with the assistance of a notary)126. Nevertheless, she had been directly affected by A’s failure to perform his obligation to B. The court held that, “according to the principles of good faith”127, it was bound to protect the heiress from the breach of conditions as well as warranties128. In comparison with such innovations, extending third party protection to the precontractual stage appears almost insignificant. If a contract concluded between A and B serves to protect C then, under circumstances, such protection will already take effect when A and B are at the pre-contractual stage. Perhaps the most familiar example of this is the “vegetable leaf case“ (Gemüseblatt-Fall)129: B and her daughter C went shopping in supermarket A. C slipped and fell on a vegetable leaf which was lying on the floor and was seriously injured. C demanded that A compensate her injury.

A might have succeeded in escaping liability under § 831. After all, it was A’s employees (and not A himself) who had overlooked the vegetable leaf and failed to remove it.130 C did not have any contractual claims against A because only her mother had intended to conclude a contract with him. The only way of awarding C compensation was to derive protective duties in her favour from the “pre-contractual relationship” between B and A. It was only after a sufficient body of case law dealing with a contract with protective effect for third parties had accumulated that one noticed a theoretical problem in C’s claim against the retailer (A). In the wellknown “linoleum case” (Linoleumrollen-Fall)131 the child of the potential customer was also injured. The Reichsgericht awarded the mother and child equal amounts of compensation on the basis of culpa in contrahendo but failed to give specific reasons for awarding the child compensation.

Cf. § 2232 BGB. BGH JZ 1966, 141, 142. 128 Critical G. Kegel, Die lachenden Doppelerben: Erbfolge beim Versagen von Urkundspersonen, in: FS für Werner Flume, Vol. 1, Cologne 1978, 545 et seq.; R. Zimmermann, Lachende Doppelerben? – Erbfolge und Schadensersatz bei Anwaltsverschulden, FamRZ 1980, 99 et seq. In agreement E. v. Caemmerer, Verträge zugunsten Dritter, in: FS für Franz Wieacker zum 70. Geburtstag, Göttingen 1978, 311, 321 f. 129 BGHZ 66, 51. 130 Today, one would justify making S liable on the basis of § 823 I due to his “organisational responsibility”: during the course of his business he is subject to a duty of care towards third parties and is liable in cases of breach. 131 RGZ 78, 239. 126 127

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4. The expert opinion cases Both the “weal and woe” cases and the restriction of third party protection to compensating injured legal interests have ensured that protection is only afforded to a small class of third parties. The consequences of lifting the restrictions are best illustrated by the judgments in the “expert opinion cases”. The facts are similar in each case132: B instructed A to produce an expert opinion on the value of real estate, which C eventually purchased. The valuation of the purchase price was based on A’s expert opinion. Owing to the fact that the expert had overlooked important facts, C paid a price far in excess of the market price. He demanded that A compensate his loss.

The BGH ordered A to pay compensation. The contract concluded between A and B also protected C, despite the fact that the “third party” in question was unknown to A at the time he performed his obligation. The crucial fact was that the expert (A) had realised that third parties would make their business decisions on the basis of his expert opinion.133 This justified holding A separately liable despite the fact that the principal (B) had withheld important facts from him (as in the “attic case”134) and therefore could not claim compensation from A himself. The court held that if A had known that relevant information was missing then he would have had to have drawn attention to this fact in his expert opinion. Failure to do so would expose him to compensation claims by third parties (C). In these and similar judgments135 the BGH created a completely new species of contract which protected third parties136. Liability in respect of third parties still depended on someone else’s contract. However, the defendant’s liability was justified by the “trust” he had established in the case in question rather than any special relationship between the contractual promisee (B) and the third party (C). In its The facts reproduced here are based on BGH JZ 1984, 246 = NJW 1984, 355. BGHZ 127, 378, 381 (“attic case”): “The confirmation of a duty to protect does not require that the party owing the duty to protect knows the number or identity of the persons he has to protect. Rather, it is sufficient if the defendant was aware that his expert opinion was intended for a (potential) purchaser.” 134 BGHZ 127, 378, 383 f. 135 BGH NJW 1982, 2431 (Consul I); BGH JZ 1985, 951 (Consul II); BGH NJW 1987, 1758 (house bank case); BGH JZ 1998, 1059 (surety bond case); BGHZ 138, 257 (auditor case); BGHZ 145, 187; BGHZ 146, 365. For details on most of these cases, see Plötner (supra fn. 102), 41 et seq. 136 Critical, e.g. H. Honsell, Anm. zu BGH JZ 1985, 951, 952; id., Die Haftung für Gutachten und Auskunft unter besonderer Berücksichtigung von Drittinteressen, in: Festschrift für Dieter Medicus, Munich 1999, 211 et seq.; B. Grunewald, Die Haftung des Experten für seine Expertise gegenüber Dritten, AcP 187 (1987), 285 et seq.; C.-W. Canaris, Die Haftung des Sachverständigen zwischen Schutzwirkung für Dritte und Dritthaftung aus culpa in contrahendo, JZ 1998, 603 et seq., E. Picker, Gutachterhaftung. Außervertragliche Einstandspflicht als innergesetzliche Rechtsfortbildung, in: FS für Dieter Medicus, Munich 1999, 397 et seq. 132 133

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early decisions, the BGH granted C his own right under the contract because B was responsible for C’s “weal and woe”. Nevertheless, the court later based its judgment on B having a special interest in C’s protection137. In the “expert opinion cases” the existing relationship between B and C was no longer important. Nowadays, a contractual right will be conferred on the third party despite the fact that B and C pursue completely different, even opposing interests. The “attic case” (Dachstuhl-Fall) is a good example of this138: The seller of a house (B) instructed A to produce an expert opinion pertaining to the value of the property but withheld facts which were crucially important for valuation. A’s expert opinion on the value formed the basis for the contractual negotiations with purchaser (C) which led to the conclusion of a sale contract. When he learnt of the defects, C repudiated the contract. He demanded that A compensate his loss.

The suggestion that the contract concluded between A and B could protect C is questionable for a number of reasons. Above all, it was not in B’s interest to include C in the protection offered by the contract. To borrow Canaris’s expression, B and C “were not in the same boat”139. In addition, A was not concerned about B claiming any compensation from him on the grounds that his expert opinion was incomplete or incorrect. After all, B had deceived him. However, when a third party makes a claim, § 334 allows the promisor to rely on any defence which would have been available to him had the claim been made by the promisee. As a result, C’s claim for compensation had to fail by reason of the contract concluded between B and A. Nevertheless, the BGH awarded the purchaser (C) a contractual claim for compensation against the expert (A). How was this possible?

5. The theoretical basis of third party protection a) Weaknesses of tort law The courts shifted from tort to contract law in order to protect legal assets or interests of third parties because of the weaknesses of German tort law: liability for servants is confined to tortious liability (§ 831); the basic definition of tort (§ 823 I) only protects certain legal interests but not economic interests per se and, finally, tort law often requires the injured party to prove that the tortfeasor was negligent. However, modern theory should be able to compensate for these failings of tort law without having to jump ship by switching to contract law. After all, the inconvenient § 831 is often circumvented by holding the enterprise concerned separately Cf. infra III 6. BGH JZ 1995, 306. 139 Cf. C.-W. Canaris, Schutzwirkungen zugunsten Dritter bei “Gegenläufigkeit” der Interessen, JZ 1995, 441, 442. 137 138

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liable under § 823 on grounds of “organisational responsibility”140. In any case, the provision is out of date141, and the legislator should amend it. One could justify the compensation of pure economic loss in analogy to § 826 by making the tortfeasor liable to compensate foreseeable loss (similar to liability for negligence in English law)142. As decisions on product liability show, tort law permits the burden of proof to be reversed143. Once the Reichsgericht had turned to contract law in many cases of quasi-tortious liability, academic writing and case law followed suit. Indeed, the boundaries were rolled back ever further as shown by the case law on contracts with protective effect for third parties. Even today, it is obvious that the BGH reached fair and equitable decisions in the various cases classified as “contracts offering protection to third parties”144. The only difficulty is in justifying them145. Whereas the BGH attempted to reach an equitable result on an individual basis, departing from timehonoured tradition where need be146, academic writing vainly attempted to organise the case material and identify common elements147.

b) The expansion of contract law Clearly, the issue of third party protection can be dealt with under contract as well as tort law. In Germany, jurists have focused exclusively on contract law. In this respect, § 328 is available because the third party’s claim for compensation was originally linked to his own right to enforce performance of the contractual obligation148. In the 19th century it was established that a contractual agreement 140 Correctly, Medicus, Schuldrecht I (supra fn. 19), n. 776; in agreement P. Schlechtriem, Schutzpflichten und geschützte Personen, in: FS für Dieter Medicus, Munich 1999, 529, 530. 141 See also Hofer (supra fn. 100), SZ (Germ. sect.) 117 (2000), 380 and 394. 142 A similar extension of § 123 to cases of “negligent misrepresentation” is supported by H. Ch. Grigoleit, Vorvertragliche Informationshaftung. Vorsatzdogma, Rechtsfolgen, Schranken, Munich 1997. 143 Since the plaintiff end-consumer does not have an overview of the manufacturing process (planning defect, manufacturing defect, quality control) the manufacturer must prove that the product defect was not due to his negligence, cf. BGHZ 51, 91, 102 et seq.; reproduced in H. Sprau, in: O. Palandt (founder), Bürgerliches Gesetzbuch, 63rd ed., Munich 2004 (= Palandt / Sprau), § 823 n. 184. 144 See also Bayer (supra fn. 4), 192. 145 See generally, J. Köndgen, Die Einbeziehung Dritter in den Vertrag, in: Karlsruher Forum (supra fn. 22), 3 – 5. English law has similar difficulties in categorising cases of third party loss under negligence liability; cf. Zimmermann (supra fn. 125), ZEuP 1996, 672, 681 et seq. 146 E.g. by dispensing with the “weal and woe” criterion in the “direct debit case”, BGHZ 69, 82 (supra III 2). 147 A noteworthy attempt in Köndgen, Karlsruher Forum (supra fn. 145), 35 et seq. 148 Unequivocal in e.g. the “hospital case”, RG JW 1915, 916 (supra III 1); see also Larenz, Schuldrecht I (supra fn. 110), 225.

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could directly benefit a third party149. A century later, third party rights were extended to the right to claim compensation independently of performance provided that the contractual parties had given their consent thereto. The Reichsgericht presumed that the debtor (A) and creditor (B) had agreed (at least impliedly), to afford protection to the third party150. If the promisee was responsible for the third party he had intended him to be protected as well and, provided that the promisor knew this, the protection of the third party was deemed contractually agreed151. Admittedly, the court did not explain why something formed part of the contract which the promisor (A) was aware of but which the promisee (B) had not expressed. This is an old phenomenon152 and appears in Windscheid’s theory of conditions153 as well as Oertmann’s definition of the objective basis of contract154. The BGH also based C’s claim on the contract between A and B, adopting a broad construction where necessary155. In this respect, the “weal and woe” criterion developed by Larenz156 and adopted by the BGH initially provided assistance. Accordingly, the person (B) responsible for the weal and woe of the third party (C) would incorporate a provision granting him protection in the contract concluded with A if he had foreseen injury to C. Even after the BGH had dispensed with the “weal and woe” criterion, the creditor (B) still had to prove that he at least had an interest in protecting the third party (C). Even today, leading opinion requires the following three criteria to be satisfied before imposing contractual liability in respect of third parties157: 1. The third party (C) must be affected by the performance of the promisor (A). 2. The promisee (B) must have an interest in protecting the third party (C). 3. The promisor (A) must be aware of both circumstances i.e. the proximity of the third party (C) to the performance, as well as B’s interest in protecting the third party. 149 Cf. the theoretical justification, which influenced the legislator, in Windscheid, Pandektenrecht II, 8th ed. (supra fn. 3), § 316 a (283 f.): “However, more exact details depend on the intention of the contractual party”. 150 RGZ 91, 21, 24; RGZ 102, 232. 151 Detailed reasoning in the “gas meter case”, RGZ 127, 218, 225. 152 Cf. S. Pufendorf, De jure naturae et gentium, Francofurti / Lipsiae 1759 (reprinted Frankfurrt 1967), Vol. III, Ch. VI, § 7: praesertim ubi prae me tulero . . . 153 B. Windscheid, Die Lehre des römischen Rechts von den Voraussetzungen, Düsseldorf 1850. 154 P. Oertmann, Die Geschäftsgrundlage – einer neuer Rechtsbegriff, Leipzig 1921, 37 f.: “The basis for the transaction lies in expectations which have been stated or expressed. . .”. 155 E.g. BGH NJW 1954, 874; BGH NJW 1986, 1929. 156 Cf. supra III 2 (esp. fn. 112). 157 Cf. e.g. Medicus, Schuldrecht I (supra fn. 19), n. 774 et seq.; H. P. Westermann / P. Bydlinski / R. Weber, BGB – Schuldrecht Allgemeiner Teil, 5th ed., Heidelberg 2003, § 16 / 9.

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The second criterion (i.e. that the creditor (B) must have an interest in protecting the third party (C)) merely establishes the “contractual solution” to third party protection favoured by the courts. This second criterion is of fundamental importance for the BGH which has always attempted to find an implied agreement between the creditor and the debtor to the effect that the third party is to be protected or has at least construed the contract to this effect. The court implies an agreement to protect from the obvious interest which the promisee (B) has in protecting the third party (C)158. However, this argument is only tenable in cases where the promisee actually has an interest in protecting the third party. It does not work in situations where the promisee (B) and third party (C) have “opposing interests” (as in the “expert opinion cases”)159. Therefore, leading opinion160 justifies the contract with protective effect for third parties by stretching the scope of the contract on the basis of objective criteria161. The third party is not protected because the promisee and promisor intended him to be (§ 328), but because the contract they have concluded is incomplete in this regard. Therefore, the contract is construed “on the basis of objective rules developed by the courts” in accordance with good faith (§ 242)162. As a result, the protection of the third party cannot be justified by a broad construction of the contract concluded between A and B but only by the application of special, unwritten law163. c) A “third way” of imposing liability in German law? This admission takes care of efforts to justify third party protection under contract law164. On the other hand, German opinion is hardly prepared to anchor third 158 E.g. BGHZ 126, 297; BGHZ 133, 168, 170; BGHZ 138, 257, 261; References to older case law in Bayer (supra fn. 4) 191 f. and H. Dahm, Die dogmatischen Grundlagen und tatbestandlichen Voraussetzungen des Vertrages mit Schutzwirkung für Dritte, Diss. Münster 1988. 159 Cf. D. Medicus, Commentary on BGH JZ 1995, 306 (= BGHZ 127, 378), 308 et seq.; clearer Canaris (supra fn. 139), JZ 1995, 441 et seq.; H. Honsell, in: FS für Dieter Medicus (supra fn. 136), Munich 1999, 211, esp. 229 et seq. 160 For an overview, see MüKo / Gottwald (supra fn. 22), § 328 n. 102; Bayer (supra fn. 95), JuS 1996, 475 et seq. 161 First, F. Bydlinski, Vertragliche Sorgfaltspflichten zugunsten Dritter, JBl 1960, 364 et seq. 162 See e.g. v. Caemmerer (supra fn. 128), FS Wieacker 1978, 311, 317; A. Ziegltrum, Der Vertrag mit Schutzwirkung für Dritte, 1992, 146 et seq.; Bayer (supra fn. 4), 191 f.; St. Saar, Grenzen des “vertraglichen Drittschutzes”, JuS 2000, 220; reproduced in MüKo / Gottwald (supra fn. 22), § 328 n. 102 (with further references). 163 According to Gernhuber, FS Nikisch (supra fn. 107) 269 this involves “customary law”. 164 Similarly, Bayer (supra fn. 95), JuS 1996, 475 et seq., who therefore suggests discussing “third party protection according to contractual principles” (p. 477). J. Esser / E. Schmidt,

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party protection in an expanded law of torts165. The fact that many cases of third party protection cannot be justified under contract or tort law means that some jurists are looking for a “third way” of imposing liability. According to Canaris, this “third way” is to impose liability for the loss caused by reliance on a promise166. In the expert opinion cases, the claim of the third party (C) did not arise from the contract concluded between B and A but from the third party’s special reliance on A’s expert opinion167. Reliance on the accuracy of the expert opinion led to B and C entering into a contract. Therefore, A’s liability had to be based on culpa in contrahendo. In other words, fault during the formation of contract phase would also make a non-participant (in this case, A) liable to pay compensation if and because he had created the detrimental reliance which induced one of the parties to enter into the contract. This reasoning was codified by the new § 311 para. 3 introduced by the Act Modernising the Law of Obligations 2002. It states that an obligation at the precontractual stage “may also arise in relation to persons who do not intend to become parties to the contract themselves. In particular, such an obligation is likely to arise if the third party relies on a special degree of trust thereby significantly influencing the contractual negotiations or formation of contract.”

Many jurists are sceptical of Canaris’ thesis168. The notion that any element of reliance (Vertrauen) created and acted upon gives rise to an obligation is too broad and abstract to bridge the gaps between tortious and contractual liability169. “Reliance” is a social element which features in all human relationships, contractual or non-contractual. As Picker points out, all elements of liability contain trust as a “general component”. For this reason, trust alone offers insufficient grounds to impose specific and independent liability170. Schuldrecht, Vol. 1: Allgemeiner Teil, part 2, 8th ed., Heidelberg 1999, § 34 IV (p. 269) regard the reference to § 328 as “artificial”. 165 However, a corresponding indication is found in Medicus, Schuldrecht I (supra fn. 19), n. 776 (towards the end). 166 See preferably, C.-W. Canaris, Ansprüche wegen “positiver Vertragsverletzung” und Schutzwirkung für Dritte bei nichtigen Verträgen, in: JZ 1965, 475; idem, Die Vertrauenshaftung im deutschen Privatrecht, Munich 1971, 548 ff. Of fundamental importance for basing liability on “trust granted and relied upon” K. Ballerstedt, Zur Haftung für culpa in contrahendo bei Geschäftsabschluß durch Stellvertreter, in: AcP 151 (1950), 501 et seq. 167 Canaris, (supra fn. 139), JZ 1995, 444 et seq. and the same (supra fn. 136), JZ 1998, 605 et seq. 168 E. Picker, (supra fn. 136), FS Medicus 1999, 397, esp. 413 et seq.; Plötner (supra fn. 102), 137 et seq.; MüKo / Gottwald (supra fn. 22) § 328, n. 104 et seq. and n. 138 et seq. with many further references; also Köndgen, Karlsruher Forum (supra fn. 145) 47. 169 Plötner (supra fn. 102), 138 refers to an “amorphous legal institution”. 170 Picker (supra fn. 136), FS Medicus 1999, 423 f.

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In addition, “liability for the loss arising from detrimental reliance” elaborated by Canaris can only explain some of the cases where the BGH arrived at a solution by a contract granting protection to third parties (i.e. those concerning liability incurred by specialists and expert opinions). However, concentrating on the reliance induced by the specialist or assessor risks overlooking an important aspect: i.e., that the question of liability depends on whether the assessor (A) could foresee that a third party (C) would base his decisions on his expert opinion. In addition, one has to distinguish between expert opinions provided for consideration and those provided gratuitously. Both aspects address the relationship between the assessor (A) and his client (B) rather than the third party’s reliance or the contract concluded between the third party (C) and the promisee (B). This is the only way of creating “third party protection” in C’s favour. There would be no triangular relationship if C’s protection was conditional on him suffering a detriment by relying on A’s advice. As far as Canaris’s thesis is concerned, § 311 para. 2 cannot be used either. As the government stated, the provision is only intended to “show that such cases can also be solved in this way”171. Moreover, A’s liability depends on a contract having been concluded between B and C (§ 311 para. 3)172. However, why should the protection of C’s reliance on the expert opinion depend on A having concluded a contract with B? Therefore, discussion concerning the “third way” of imposing liability under German law is far from over. Many describe the obligation between C and A as a “special relationship based on intensified social contact”173. However, this is merely one way of saying that the distinction between tort and contract law is not always clear. There are some cases which, in legal terms, come somewhere between the chance encounter between the tortfeasor and plaintiff (tort law) and an intended and planned obligation undertaken by the promisor in relation to the promisee (contract law). In addition, “social contact”, whatever its form, cannot lay down rules of conduct automatically whose infringement confers the right to claim compensation174. In this respect, Picker makes a more fruitful attempt to trace tortious and contractual liability back to a common root thereby reducing their differences175: both contractual and tortious liability seek to prevent unlawful injury to 171 Explanatory notes to § 311 para. 3, in: C.-W. Canaris (ed.), Schuldrechtsreform 2002, Munich 2002, 723; contra however D. Medicus, Die “Identität des Schadens” als Argument für den Ersatz von Drittschäden, in: FS für Peter Schlechtriem zum 70. Geburtstag, Tübingen 2003, 613, 623 f. 172 This is why § 311 para. 3 regards the party liable (A) as the “third party” instead of the protected party (C). 173 See Esser / Schmidt, Schuldrecht I (supra fn. 164), § 34 IV 2 b (p. 270 f.), however, Esser / Schmidt relate this “special relationship” to the time before the contract was concluded. 174 Generally sceptical of the “spread of statutory obligations” H. Hattenhauer, Grundbegriffe des Bürgerlichen Rechts, 2nd ed., Munich 2000, 105 et seq. 175 E. Picker, Positive Forderungsverletzung und culpa in contrahendo. Zur Problematik der Haftung “zwischen” Vertrag und Delikt, in: AcP 183 (1983), 369, esp. 460 et seq.; id.,

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another person (neminem laedere). As far as wrongful acts are concerned, positive law can only impose duties to pay compensation under certain circumstances and to a limited extent. Otherwise, the tortfeasor would be faced with a duty to compensate ad infinitum. In the case of breach, the contract already limits the defendant’s liability in damages to a specific person and usually to a limited extent. However, even in “special relationships”, not being contracts, it is possible to limit the number of creditors and the extent of liability from the outset. The rules of contractual liability could be transferred to such relationships without creating any anomalies in contract or tort law. This is becoming more important in view of the growing popularity of “organised non-contractual relationships” in a society increasingly characterised by diversification and the division of labour. This is particularly so in areas formerly typified by contractual relationships between individuals176. Picker’s theories were too fundamental to have generated any excitement amongst scholars of German private law moulded by the wording of statute and decisions of the BGH177. However, the discussion concerning liability “in between” contract and tort law and, thereby, the familiar subject of the “contract with protective effect for third parties” can be productive only if the division of liability between contract and tort law is not regarded as an indomitable fact.

6. Third party protection in the absence of third party rights: the realisation of third party loss The “realisation of third party loss” means that the plaintiff third party (C) does not have his own rights against the tortfeasor (A). Instead, the contractual creditor (B) sues A for compensation owing to the loss suffered by the third party (C) on the basis of the existing relationship between himself and the third party178. He usually has to assign compensation or the claim for compensation to the third party inter partes (§ 285). At the same time, the realisation of third party loss displays great similarities to contracts with protective effect for third parties. This legal device was created in a case which could have been easily decided in accordance with the two existing compensation models179: It was winter. A pupil had fallen seriously ill at the boarding school of a monastery. The headmaster (B) called a doctor (C), and instructed a carrier (A), to bring the doctor to the boarding school in a horse-drawn sleigh. The sleigh was driven by “the servant”, A’s emVertragliche und deliktische Schadenshaftung, JZ 1987, 1041; the same (supra fn. 136), FS Medicus 1999, 428 et seq. 176 Picker (supra fn. 136), FS Medicus 1999, 429 f. 177 At least Picker won the support of his pupil: cf. Plötner (supra fn. 102), 156 et seq. 178 For details on the development of “realisation of third party loss” in the 19th century see I. Reichard, Die Frage des Drittschadensersatzes im klassischen römischen Recht, Cologne / Weimar / Vienna 1993 (esp. 1 et seq.). 179 RGZ 87, 289 (judgment of 18 November 1915).

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ployee (K). At a railway crossing, the horses shied at the approaching train. The sleigh overturned and C was injured. He sued A for compensation.

The Reichsgericht could satisfy the claim in one of two ways: it could either award C his own claim for compensation against the carrier (A) or allow the boarding school (B), to claim compensation for C’s injury. The court opted for the second way: B was to sue A for compensation for the injury suffered by the third party and hand over the amount obtained to C. It did not make any difference to the carrier whether he had concluded the contract with C or B; he was bound to compensate the injury he had caused in any event180. The decision against awarding compensation under § 328 was barely plausible: only a few months earlier, the Reichsgericht had granted third parties a right to claim compensation in relation to a contract for carriage in a very similar case181. The case differed from the later one in only two respects: the accident did not occur in a horse-drawn sleigh but in a “taxicab” (i.e. a car) and the person who had requested the journey (B) was also travelling in the car. However, his fellow passengers (i.e. his wife and daughter (C)) also had a right to “proper and safe carriage”182. A comparison of the reasoning in both decisions reveals the theoretical difference between the respective approaches: in one case, the passenger had his own contractual right to enforce performance. In the “sleigh case” the Reichsgericht rejected such a claim and could only compensate the third party indirectly by the realisation of third party loss. Today, the theoretical distinction between the two legal devices “the realisation of third party loss” and “the contract with protective effect for third parties” hardly appears controversial183. As far as the promisor (A) is concerned, the realisation of third party damage just happens to shift the injurious event from the promisee (B) to a third party (C). However, this is not intended to relieve A of liability which remains unaffected by the loss being shifted in this way. In the case of a contract with protective effect for third parties, the promisor is burdened with an additional risk of loss or at least a new contractual risk. Under circumstances he is confronted by a new promisee (C), in addition to the contractual promisee (B) who can sue him for damages. Owing to this difference, the realisation of third party damage is often characterised by the “identity of loss”184.

RGZ 87, 289, 292. RGZ 87, 64 (judgment of 6 June 1915). 182 RGZ 87, 64, 65. 183 Overview in MüKo / Gottwald (supra fn. 22), § 328 n. 120; recently R. Traugott, Das Verhältnis von Drittschadensliquidation und vertraglichem Drittschutz, Berlin 1997. 184 In detail Medicus (supra fn. 171), FS Schlechtriem, 613 et seq. 180 181

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IV. Individual questions 1. Claims for breach of contract? Any legal system which recognises contracts for the benefit of third parties must allocate legal remedies in the event of breach either to the promisee (B) or the third party for whom the benefit is intended (C). The judgment of the BGH185 in the following case caused quite a stir186: C booked a package holiday in the Caribbean with a travel agent (R). For his part, R purchased some seats from B for the return flight from the Caribbean to Germany in an aeroplane which B had chartered from A for this purpose. B was declared bankrupt. When C attempted to board the return flight to Germany, A refused transportation because B had not paid for the flight. Therefore, C travelled back to Germany with a different airline company and demanded that R compensate his expenses. C’s rights were assigned to R who also demanded compensation from A.

The BGH presumed that the charter contract between A and B represented a contract for the benefit of C. Therefore, C had a right in personam to the return flight to Germany. A could not defend himself against C’s claim by the fact that B had not paid for the flight (§ 334). In the charter contract, A and B could have impliedly excluded this defence because A had to assume that B would sell the individual seats in return for a deposit187. For this reason, A alone had to bear the risk of B’s bankruptcy. Therefore, because A had unjustifiably refused to transport C, the latter could claim compensation on grounds of non-performance. The claim was possible due to a provision of the (old) law on breach of contract (§ 325 BGB 1900), which cancelled performance in satisfaction of obligations between A and C on the one hand and A and B on the other. This is important because C could also cancel the exchange of performances between A and B – i.e. the payment of the charter fee. Leading academic writing had assumed that C could only claim compensation for delayed performance (§ 286 BGB 1900), e.g. because A had performed his obligation too late. However, as far as repudiating the contract or claiming damages for non-performance were concerned such remedies were either available to B188 alone or B and C together189. In our “charter plane case”, the BGH found a new 185 BGHZ 93, 271 = JZ 1985, 574 (with commentary by Gernhuber); here, the facts of the case have been simplified. 186 See, preferably W. Hadding, Schuldverhältnis und Synallgma beim Vertrag zu Rechten Dritter, in: H. Lange (ed.), Festschrift für Joachim Gernhuber, Tübingen 1993, 153 et seq. 187 BGHZ 93, 271, 275 f. 188 Larenz, Schuldrecht I (supra fn. 110), 223; Gernhuber, Schuldverhältnis (supra fn. 14), § 20 IV 5 (499 et seq.): the promissee is the “master of synallagma”. 189 See e.g. Hellwig (supra fn. 56), 294 et seq.; Fikentscher, Schuldrecht (supra fn. 103), § 37 III 2 e (p. 164, with reference to RGZ 101, 275, 276 f.); L. Enneccerus / H. Lehmann, Lehrbuch des Bürgerlichen Rechts. Recht der Schuldverhältnisse, Tübingen 1958, § 35 IV 1 (p. 154 f.); reproduced in Bayer (supra fn. 4), 340 n. 697.

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solution: it was entirely in C’s interest whether and how the obligation was to be performed. Therefore, he had a right to all legal remedies connected with a breach of contract – even those which interfered with the mutual performance of obligations between A and B190. Not long ago, Bayer had rejected all these solutions. The question of who could cancel the performance of obligations (i.e. the promisee (B) or the third party (C) or the two together) could only be answered on an individual basis191. Owing to the “modernisation” of the law of obligations (1 January 2002), this question is no longer important. If A performs his obligation too late or inadequately or not at all, the beneficiary (C) has the right to claim repair or compensation (§§ 280 ff.; §§ 323 I, 439) without repudiating the contract altogether. “Repudiating” the contract is not in C’s interest192 because he did not have to perform any obligations in respect of A. Moreover, in cases such as the “charter flight case” which concerned a right to enforce performance of mutual obligations between B and C, there is a presumption that B assigned his claim against A to C193. There may even be cases where C cannot sue A for damages (§§ 280 I, 281) because he can still sue B for the identical performance and has not (yet) suffered any loss due to non-performance. Of course, this restriction does not apply to the charter flight itself. Time was of the essence when A performed his obligation to C; even if B could have still performed his obligation C had already suffered loss.

2. Rescission of a contract for the benefit of third parties If A has performed in favour of C on the basis of a contract concluded with B, the question arises which of the two parties (B or C) must return the benefit of the performance to A if the contract is rescinded. This is an obvious question but one which is difficult to answer. The answer lies in the first decision which the BGH made concerning the rescission of an invalid contract for the benefit of third parties194: A sold a steam boiler to B who, in turn, sold it to C. The contract of sale between A and B stipulated that C could demand the transfer of ownership of the steam boiler from A. The latter transferred ownership to C. The contract between A and B was then annulled. Accordingly, A demanded that C surrender title to the steam boiler. 190 Hadding (supra fn. 186), FS Gernhuber, 163 et seq.; H. Dörner, Dynamische Relativität. Der Übergang vertraglicher Rechte und Pflichten, Munich 1985, 305 et seq., 312 et seq.; MüKo / Gottwald (supra fn. 22), § 335 n. 10. 191 Bayer (supra fn. 4), 341 et seq. 192 E.g. under § 323 I; §§ 437 no. 2, 440, 323; however, the creditor’s claim for reduction (e.g. §§ 437 no. 3, 441) also belongs here. 193 See also Bayer (supra fn. 4), 341. 194 BGHZ 5, 281.

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The BGH dismissed A’s claim. The legal basis for C’s acquisition of ownership was the underlying debt transaction, i.e. the contract of sale between B and C. The argument tallied with academic writing195. The crucial fact was that the performances under the contract for the benefit of a third party were similar to those in an agency-principal relationship196. When A transferred ownership to C he had intended to satisfy his obligations to B. For this reason, defects in the cover ratio (A – B) could only give rise to an action for restitution between A and B. Leading opinion is correct insofar as the “steam boiler case” (BGHZ 5,182) displays great similarity with a “curtailed performance”: i.e. B instructs A to transfer title to C. Actually, the published facts of the case do not make clear whether A was only instructed to transfer title to C or whether C had his own right to have the title transferred to him. However, it is precisely this question which constitutes the crucial difference: if C was able to sue A for performance, then the latter would have only “performed” his obligation in favour of C, i.e. “intentionally increased his assets”. This does not alter the fact that B could also enforce performance in C’s favour (in accordance with § 335). The crucial fact is that A solvendi causa could only perform his obligation in favour of C197. Even those who reject198 the definition of performance199 according to the law of unjust enrichment, will agree that restitution is only possible in relation to C. After all, C has obtained “something without a legal basis” (i.e. a steam boiler in the absence of a valid contract of sale) and “at the expense” of A, because the latter has performed his obligation using his own assets and cannot retain any of the benefit he has received from B. Even C would have difficulty explaining why he should be exposed to a claim of restitution by B but not A. Owing to the fact that 195 E.g. W. Hadding, Der Bereicherungsausgleich beim Vertrag zu Rechten Dritter, Tübingen 1970; E. Schmidt, Der Bereicherungsausgleich beim Vertrag zu Rechten Dritter, JZ 1971, 601 et seq.; E. Pinger, Was leistet der Leistungsbegriff im Bereicherungsrecht?, AcP 179 (1979), 301, 322 et seq.; H.-G. Koppensteiner / E. Kramer, Ungerechtfertigte Bereicherung, 2nd ed., Berlin / New York 1988, 45 et seq.; K. Larenz / C.-W. Canaris, Lehrbuch des Schuldrechts, Vol. 2.: Besonderer Teil, Pt. 2, 13th ed., Munich 1994, 240 et seq. For good overviews of the leading opinon see Dörner (supra fn. 190), 342 et seq. and Bayer (supra fn. 4), 352 et seq. 196 Expressly, e.g Medicus, Bürgerliches Recht (supra fn. 43), n. 681. 197 Convincing Dörner (supra fn. 190), 343 et seq.; the similar result Bayer (supra fn. 4), 359. 198 E.g. B. Kupisch, Gesetzespositivismus im Bereicherungsrecht, Berlin 1978; id., Leistungskondiktion bei Zweckverfehlung. Zum causa-Problem im Zivilrecht, JZ 1985, 101 et seq. and 163 et seq. (= in: id., Über das römische Recht hinaus, Heidelberg 2002, 185 et seq.); M. Lieb, in: Münchener Kommentar zum BGB, Vol. 3: Schuldrecht Besonderer Teil, 3rd ed., Munich 1995, § 812 n. 23 et seq. 199 According to this, “performance” is the “conscious and intentional increase of another’s assets”; cf. e.g. BGHZ 40, 272, 277; BGHZ 88, 184, 188; BGHZ 111, 382, 386; H.-W. Kötter, Zur Rechtsnatur der Leistungskondiktionen, in: AcP 153 (1954), 193 et seq., H. Weitnauer, Die Leistung, in: FS v. Caemmerer, Tübingen 1978, 255 et seq.

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B has granted C a claim against A on the basis of a contract for the benefit of a third party, he has performed in favour of C in satisfaction of his obligations. If C receives the benefit of performance from A then his claim against B will be extinguished. However, if C does not receive the benefit of performance or if he must return the benefit (e.g. because A claims restitution), he is left with a claim against B. Therefore, the underlying debt relationship (B-C) does not affect the relationship between C and A and vice-versa. If the decision were different (i.e. if B was granted the right to claim restitution from C), A would then have to seek redress from B despite the fact that the latter had accepted C as the (new) promisee under the contract concluded with A. As a result, A would be confronted with a different enrichment debtor than the person he chose originally – which is strikingly at odds to the conditions for rescinding a contract in a tripartite relationship200 elaborated by Canaris201. However, in other cases academic writing disagrees with the result arrived at in the “steam boiler case”, which resembles an instruction to perform in favour of a third party. Academic writing would like to depart from the rule that A must claim restitution from B and not C in cases where the contract for the benefit of a third party operates in C’s favour only (the grant of the right to sue A for performance having been made gratuitously202). In this case, A already has a right to claim restitution from the third party beneficiary (C) under the rules on unjust enrichment (§ 822). However, it is often pointed out that it is impossible to have one rule governing the rescission of contracts for the benefit of third parties owing to the diversity of possible cases and relevant interests203. However, this reserved approach to the elaboration of general principles is inappropriate. If the third party is aware that B has granted him a claim against A then he may either refuse (§ 333) or enforce it. In the latter case, the third party must return the benefit obtained to A if the covering transaction is void. Even if C (or B) has withdrawn from the contract with A204, C is under an obligation to return the benefit of the performance to A. This is the direct result of § 346 I. However, why should the results of rescission depend on whether the contract has been declared void (i.e. the law on unjustified enrichment) or terminated (i.e. recovery according to §§ 346 ff.)? Correctly, Dörner (supra fn. 190), 346. C.-W. Canaris, Bereicherungsausgleich im Dreipersonenverhältnis, in: FS Larenz, München 1973, 799 et seq. und Larenz / Canaris, Schuldrecht II / 2 (supra fn. 195), § 70 VI (246 et seq.). 202 Cf. preferably Larenz / Canaris, Schuldrecht II / 2 (supra fn. 195) 240 f.; Medicus, Bürgerliches Recht (supra fn. 43) n. 682. 203 See, in approach Medicus, Bürgerliches Recht (supra fn. 43) n. 683: the enriched party is always the one who is “in close connection to the aim pursued by the performance”; recently Bayer (supra fn. 4), 359 et seq., esp. 363. 204 It is also disputed whether C or B may repudiate the contract (§ 323) if A breaches his obligations; for an overview cf. Bayer (supra fn. 4), 339 et seq. 200 201

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3. The effect on third parties of limitation clauses If A and B can agree that the third party should be granted his own right to sue A for performance, then they can also agree to exclude the third party from A’s claims under certain circumstances205. The exceptio ex iure tertii206 is the reverse side of the ius quaesitum tertio. The contract for the benefit of third parties can act as a sword for third parties but it can just as well act as a shield207. In practice, two important groups of cases have accumulated on this subject. In the first group, any limitation clauses which the employer (B) has agreed with a business partner (A) also protect the employer (C). As far as the second group is concerned, any limitation clauses which the forwarder (B) has agreed with freighter (A) also protect the sub-carrier or transporter (C)208. The BGH dealt with the following case under the latter category (BGHZ 130, p. 223): A employed B to transport sensitive ultrasound equipment (for medical diagnosis) from Nuremburg to Erlangen. B instructed the haulage contractor C to transport the equipment. During transportation, the equipment was damaged. The repair amounted to approximately DM 150,000. A (more precisely, his insurer who had compensated A) demanded that C compensate this loss. C claimed that the action was statute barred because the short limitation period agreed between A and B had already expired.

At first glance, the case appears atypical: in contrast to similar cases, the limitation clause did not reduce the extent of B’s liability but stipulated that A could only enforce claims against B within a relatively short period209. Could C also rely on the expiry of the limitation period? The answer to this question is not straightforward: B enjoyed a privileged position under the contract but C had caused the injury. For his part, A had entrusted B and not C with the transportation. Therefore, what could prevent him from suing C for compensation? The commercial objective of the contracts concluded between A and B, on the one hand, and B and C, on the other, suggests that there are two parties rather than 205 See M. Katzenstein, Haftungsbeschränkungen zugunsten und zulasten Dritter. Zugleich ein Beitrag zur Systematik des Schadenshaftungsrechts, Berlin 2004 in a comprehensive and general form. 206 See R. Stammler, Die Einrede aus dem Recht eines Dritten, in: Hallische Festgabe für Dernburg, Halle 1900, 89 et seq. 207 For a clear comparison see H. Kötz, Europäisches Vertragsrecht, Tübingen 1996, 390. The theoretical qualification is nonetheless disputed; cf. e.g. MüKo / Gottwald (supra fn. 22), § 328 n. 169. The Dutch BW expressly provides that contracts may benefit a third party not only by a right to performance but also by other rights. 208 An overview of the older case law can be found in U. Blaurock, Haftungsfreizeichnung zugunsten Dritter, in: ZHR 146 (1982), 238, 245 et seq.; R. Geissler, “Vertrags- und Gesetzesprivilegien” mit Wirkung für Erfüllungsgehilfen, Berlin 1983, 40 et seq.; recently M. Katzenstein, Haftungsbeschränkungen zugunsten und zulasten Dritter (supra fn. 205). 209 A and B based their contract on the “General German Forwarders’ Conditions” (Allgemeine Deutsche Speditionsbedingungen). § 64 provides for an 8 month period within which the owner can make claims owing to the damage of the item transported.

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three: one party (A) pays for the transportation of the ultrasound equipment from Nuremburg to Erlangen, the other party (B and C) transports the equipment. This situation resembles the realisation of third party damages: as far as the tortfeasor / promisor (A) is concerned, damage is shifted from one party (B) to the other (C) without his involvement. In our case, the injury has also shifted from B to C, again without A’s involvement210. However, the interests involved are only comparable if A had agreed that a third or fourth person could be involved in addition to or instead of B; i.e. if he was only interested in the result and not the identity of the person performing the obligation. If the terms of transportation between A and B were agreed independently of the person carrying out transportation then any other transporter (i.e. C) could also rely on these conditions. The BGH also considered whether the sender (A) had agreed that the forwarder (B) could employ a third party carrier (C). This provided a bridge to § 328: “It appears fair and equitable in such cases to include the haulage contractor (whose employment as a servant must have been in the contemplation of the sender), within the protection offered by the contract concluded by the forwarder employing him and to grant him the benefit of the limitations on liability agreed under the contract”211. Here we come across the ploy used to justify a contract with protective effect for third parties: the fact that the promisor (A) could see that the third party (C) was included under the contract is tantamount to an express agreement for the benefit of the third party (§ 328 I) 212. When transporting goods by inland waterways and sea, it is normal for the “principal carrier” (B) to employ a “subcarrier” (C)213. Therefore, the BGH was quick to accept a contractual benefit for third parties214. In our case, this was proved an important argument in favour of granting C the benefit to the contract concluded between A and B215. However, a second argument was also important: if C had been B’s employer, A would only have been able to claim his services under the terms agreed with B216. The BGH took the view that the interests involved justified granting the same protection to the economically dependent contractor (C), as B’s employee217. There210 Gernhuber, Schuldverhältnis (supra fn. 14), § 22 II 9 (549 f.) refers to “liable parties” in this respect; the Reichsgericht compared the situation to a case of “spurious joint liability” (RGZ 77, 137, 323). 211 BGHZ 130, 223, 229 f. (emphasis added). 212 In order to justify the exceptio ex iure tertii on the basis of the “contract with protective effect for third parties” on the one hand and § 328 mutatis mutandis on the other see Blaurock (supra fn. 207), ZHR 146 (1982), 252 f. 213 The judgment expressly refers to this (BGHZ 130, 223, 227). 214 BGH VersR 1960, 727, 729; BGH VersR 1971, 412, 413; BGH VersR 1972, 40, 41; BGH WM 1977, 785, 786; BGH VersR 1980, p. 572; BGH NJW 1982, p. 987. 215 BGHZ 130, 223, 229: “This concerns a case in which the involvement of a third party in the performance of the contract is typical and obvious to the contractual partner”. 216 BGHZ 130, 223, 228. 217 BGHZ 130, 223, 229.

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fore, C could claim at least the benefit of the exclusion clause agreed between A and B. Owing to the fact that the claim had expired, A’s action was dismissed. The result of this decision is clearly correct but its reasoning is controversial. Attempts to justify the decision fall short of explaining that such cases only involve the interests of two parties (A on the one hand, B and C on the other) rather than three. The BGH dismissed A’s claim against C because, ultimately, B would have been liable. In other words, in most cases where A has requested the services of the employee (C), the latter may seek redress from his employer (B)218. However, this argument hardly applies in those cases where C is not B’s employee but an independent enterprise. Others use § 242 BGB to justify the effect that an exclusion of liability clause agreed between A and B has on third parties219. The tenor of this argument is too general but adopts the correct approach by applying the argumentum e contrario to § 278220: A can sue B for the damage caused by the latter’s servant (C). The advantage is that A gains a strong opponent and can hold onto his contractual partner within the scope of the obligation. However, the disadvantage is that A will also lose his claims against C if B is not liable221. § 278 BGB clearly expresses the crucial notion that such cases only involve two “liable parties” (Gernhuber) or that B and C are in the same boat (to borrow an analogy by Canaris)222. This term223 is used to justify the effect that exclusion clauses have on third parties in addition to § 328. However, the third party is also assisted by § 328: admittedly, the principle under § 278 means that the third party can claim the benefit of any exclusion clause in B’s favour. However, this only applies if A had to assume that B would employ third parties in order to perform his obligations. The justification is obvious: the employment of servants is in the interest of B and not A. On the contrary, A’s risk of loss increases because he has granted B an exclusion clause, which also operates to benefit third parties on the basis of § 278. A can only provide for this risk in the agreement with B if has recognised it. The employment of independent contractors does not require A and B to make a separate agreement: A will hardly expect B to carry out the work himself. However, even if self-employed persons are used as servants, the “objectives of the contract” (§ 328 II) often indi218 BGH NJW 1962, 388, 389; likewise F. Gamillscheg, Die Haftung des Arbeitnehmers gegenüber Dritten, in: Ius privatum gentium. Festschrift für Max Rheinstein, Tübingen 1969, 1043 et seq.; H.P. Westermann, in: Erman (founder), Kommentar zum BGB, 11th ed., Münster 2004, § 328 n. 18. 219 E.g. J. Gernhuber, Gläubiger, Schuldner und Dritte, JZ 1962, 553, 556 et seq.; MüKo / Gottwald (supra fn. 22), § 328 n. 168. 220 Concerning the law on the carriage of goods, § 428 HGB often applies (§ 407 III HGB) which far exceeds this insofar as it makes B liable in respect of A for all acts and omissions of his people (C). 221 Qui habet commoda debet ferre onera (D. 50,17,10). 222 Canaris (supra fn. 139), JZ 1995, 441, 442. 223 And others like it, e.g. § 428 HGB.

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cate that B can carry out the work by employing subcontractors. If this were not the case the employment of third parties would have to be expressly agreed224.

V. Epilogue The last example, in particular, shows how firmly the provisions regulating the contract for the benefit of a third party (§§ 328 ff.) are anchored within the framework of the BGB. They are the logical consequence of or practical supplement to completely different rules relating to the law on agency and liability in respect of third parties. If the legislator had ignored the contract for the benefit of a third party and not included it under the code, the absent principles would have been garnered from other institutions using similar arguments (as was the case in England). At the same time, the principle under §§ 328 ff. is extended in several directions and, as far as “contracts with protective effect for third parties” are concerned, augments the threadbare law of torts. This provides clear evidence that codification is only at a provisional stage of development.

Provisions on Third Party Rights in the BGB § 328. Contract for the benefit of a third party (1) A contract may stipulate performance for the benefit of a third party, so that the third party acquires the right directly to demand performance. (2) In the absence of express stipulation it is to be deduced from the circumstances, especially from the object of the contract, whether the third party shall acquire the right, whether the right of the third party shall arise forthwith or only under certain conditions, and whether any right shall be reserved to the contracting parties to take away or modify the right of the third party without his consent. 329. Rules of interpretation in the event of assuming performance If in a contract one party binds himself to satisfy a creditor of the other party without assuming the debt, it is not to be presumed, in case of doubt, that the creditor shall acquire a direct right to demand satisfaction from him. § 330. Rules of interpretation in case of life insurance or annuity If, in a contract for life insurance or an annuity, payment of the insurance or annuity to a third party is stipulated for, it is to be presumed, in the case of doubt, that the third party acquires 224 This notion becomes especially apparent in the case New Zealand Shipping Co. Ltd. v. A. M. Satterthwaite & Co. Ltd. (The Eurymedon), [1975] AC 154 (Privy Council); see W. Lorenz, Reform des englischen Vertragsrechts: Verträge zugunsten Dritter und schadensrechtliche Drittbeziehungen, JZ 1997, 105, 108 f. The court presumed that A would have made C the offer to conclude a release agreement in the contract with B. The same construction of an “anticipated release” was also discussed in Germany, cf. Blaurock (supra fn. 207), ZHR 146 1982, 241 f.

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the right directly to demand payment. The same rule applies, if in gratuitous transfer of property the duty to perform an act in favour of a third party is imposed upon the recipient, or if a person, on taking over the whole of another person’s property or goods, promises an act of performance in favour of a third party for the purpose of settling the latter’s debts. § 331. Performance after death (1) If the performance in favour of the third party is to be made after the death of the person to whom it was promised, in case of doubt the third party acquires the right to the performance upon the death of the promisee. (2) If the promisee dies before the birth of the third party, the promise to perform in favour of the third party can be revoked or altered only if the right to do so has been reserved. § 332. Change by disposition mortis causa because of reservation If the promisee has reserved to himself the right of substituting another for the party named in the contract without the consent of the named third party, this may also be done, in case of doubt, by disposition mortis causa. § 333. Rejection of the right by the third party If the third party rejects, by declaration to the promisor, the right acquired under the contract, the right is deemed not to have be acquired. § 334. Defences of the promisor as against the third party Defences arising from the contract are available to the promisor even as against the third party. § 335. Right to claim of promisee The promisee may, unless a contrary intention of the contracting parties is to be presumed, demand performance in favour of the third party, even if it is the latter who has the right to the performance.

WARREN SWAIN

Third Party Beneficiaries in English Law, 1880 – 2004 Tweddle v. Atkinson1 is hardly a model of clarity but it quickly became authority for the proposition that contracts only took effect between those who were parties. In England this is known as the doctrine of privity of contact. It has two consequences. Non-parties cannot be bound by another’s contract. In one leading textbook it was said that any other result would be ‘contrary to the common sense of mankind’.2 A second application of the rule, that a non-party cannot enforce a contract made for his benefit has proved to be more controversial. When the rule is applied, a contract between A and B for the benefit of C leaves C without a contractual remedy if A fails to perform. The rule also prevents C from using a benefit in the form of a defence against A. If C is in a contractual relationship with A, he will be protected. There is nothing to stop C from becoming a joint promisee with B, except perhaps a vague doubt about whether both promisees need to provide consideration and a lack of recent English authority.3 As a joint promisee, C is a party along with B to the contract with A. He may also enter into his own separate collateral contract with A.4 Collateral warranties of this sort have traditionally been very important in the construction industry.5 At the turn of the last century Williston began a discussion of American law by quoting from the German jurist F. B. Busch writing in 1860: In no department of the law has a more obstinate and persistent battle between practice and theory been waged than in regard to the answer to the question: Whether a right of action accrues to a third person from a contract made by others for his benefit?6

(1861) 1 B & S 393, 30 LJQB 265, 4 LT 468, 9 WR 781. Sir W. Anson, Principles of the English Law of Contract (14th edition, by M. Gwyer 1917), 276. 3 The Australian High Court decision in Coulls v. Bagot’s Executor and Trustee Co. Ltd. (1967) 119 CLR 460 accepted the principle but the majority held that the parties were not joint promisees on the facts; B. Coote, ‘Consideration and the Joint Promisee’ [1978] CLJ 301. 4 Shanklin Pier Ltd. v. Detel Products Ltd. [1951] 2 KB 854; K. Wedderburn, ‘Collateral Contracts’ [1959] CLJ 58, 68 – 69. 5 Law Commission, Privity of Contract: Contracts for the Benefit of Third Parties Report No. 242 (HMSO 1996) Cm 3329 para 3.10 – 18. 1 2

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Busch’s remarks are just as appropriate in the context of English law in the twentieth century as German law of the 1860s and American law at the turn of the last century. Formerly a strict rule excluding non-parties remained in place. In practice the rule in relation to benefits was undermined almost from the start. The list of exceptions continued to grow. Although it was still difficult for a third party to sue on a contract made for their benefit, it was relatively easy for carefully drafted contracts to allow a third party to raise a defence included in the main contract for their benefit. Following the Contracts (Rights of Third Parties) Act 1999 the exceptions have almost, but not quite, swallowed the rule.

Dunlop v. Selfridge and the confirmation of the privity rule By the 1880s the rule in Tweddle v. Atkinson was securely established: At law the rule in general is, no doubt, that a contract between two parties that one should do something for the benefit of a stranger, cannot be enforced by the stranger, except in certain exceptional cases. 7

A formula of rule to which there were exceptions held good for the next hundred years. Early in the twentieth century it was twice approved by the House of Lords. In Dunlop Pneumatic Tyre Co Ltd. v. Selfridge & Co Ltd.8 Dunlop sold a quantity of tyres to a wholesaler, Dew & Co. The contract of sale contained a term that Dew & Co. would not resell the tyres below prices specified by Dunlop and it also required Dew & Co. to impose similar terms when they in turn sold the tyres on. Dew & Co. sold the tyres to the defendants. The contract of sale provided that if the tyres were sold below the specified price then the defendants were to pay £5 to Dunlop for each tyre sold. The defendants sold tyres at below the specified price but refused to make the payment to Dunlop. Viscount Haldane L.C. spelled out what he termed three ‘fundamental’ principles of the law of England: only a person who is a party to a contract can sue on it; only those who have furnished consideration can sue on a contract; a principal not named in the contract may sue if the promisee was his agent.9 According to Viscount Haldane, Dunlop could not enforce the contract because they were not one of the parties and because they did not furnish consideration.10 Lords Atkinson, Sumner and Parmoor reached the 6 S. Williston, ‘Contracts for the benefit of a third person’ (1902) 15 Harv LR 767. Williston was quoting from F. B. Busch, Doctrin und Praxis über die Gültigkeit von Verträgen zu Gunsten Dritter (1860). 7 Gandy v. Gandy (1885) 30 Ch D 57, 69 (Bowen L.J.). 8 [1915] AC 847. It had actually been confirmed fourteen years earlier in Keighley, Maxsted & Co. v. Durant [1901] AC 240, 246. 9 [1915] AC 847, 853. 10 [1915] AC 847, 854.

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same conclusion.11 Lord Parker also dismissed the claim but solely on the basis that there was no consideration moving from the plaintiffs.12 Lord Dunedin also rejected the plaintiff ’s claim on the basis of an absence of consideration but with noticeably less enthusiasm, noting rather tersely that the ‘effect of that doctrine (of consideration) is to make it possible for a person to snap his fingers at a bargain deliberately made, a bargain not in itself unfair, and which the person seeking to enforce it has a legitimate interest to enforce.’13 The House of Lords in Dunlop v. Selfridge like the Queen’s Bench in Tweddle v. Atkinson failed to agree on a single reason for rejecting the claim. The rule that only a party to a contract could sue continued to be accompanied by the rule that consideration must move from the promisee. In the first edition of Anson’s Principles of the English Law of Contract to appear after Dunlop v. Selfridge the case features prominently in a chapter on consideration and a later chapter on the parties only rule.14

The parties only rule and the law of contract15 The reasoning in Dunlop v. Selfridge is not wholly unambiguous but the consequences are clear. A third party cannot sue on a contract made for their benefit. The position with regard to third parties using another’s contract as a defence is more complex. Elder, Dempster & Co. v. Paterson Zochonis & Co. Ltd.16, an early example, has been described by Donaldson J. as ‘something of a judicial nightmare’.17 The claimant owned some palm oil. He entered into a contract of carriage with some carriers evidenced by a bill of lading. The oil was damaged. He was unable to recover against the carrier because of an exemption clause in the bill of lading. The ship was chartered and the plaintiff also attempted to recover damages against the ship owners. The bill of lading exempted the ship owners from liability but they were non-parties. The House of Lords held that the ship owners could also rely on the exemption. The decision is not an easy one to understand. Most of the speeches are devoted to the issue of whether or not the vessel was seaworthy. [1915] AC 847, 858 (Lord Atkinson), 861 (Lord Sumner), 864 – 65 (Lord Parmoor). [1915] AC 847, 859. 13 [1915] AC 847, 855. 14 (14th edition, by M. Gwyer, 1917), 98, 103, 276. 15 The most comprehensive and the best summary of the privity doctrine in contract is to be found in Sir G. Treitel, The Law of Contract (11th edn., Sweet & Maxwell London 2003), 580 – 671 or in a more condensed form in Sir G. Treitel, Some Landmarks of Twentieth Century Contract Law (OUP Oxford 2002), 47 – 105. 16 [1924] AC 522. 17 Johnson Matthey & Co. Ltd. v. Constantine Terminals Ltd. and International Express Co. Ltd. [1976] 2 Lloyd’s Rep 215, 219. 11 12

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Scrutton L.J.’s solution was the most severe incursion into the doctrine of privity. In a dissenting judgment in the Court of Appeal he argued: The real answer to the claim is in my view that the shipowner is not in possession as a bailee, but as an agent of a person, the charterer, with whom the owner of the goods made a contract defining his liability, and that the owner as servant or agent of the charterer can claim the same protection as the charterer. Were it otherwise there would be an easy way round the bill of lading in the case of every chartered ship; the owner of the goods would simply sue the owner of the ship and ignore the bill of lading exceptions, though he had contracted with the charterer for carriage on those terms and the owner had only received the goods as agent for the charterer.18

His final remarks are significant. One of the problems with the privity doctrine is that it allows bargained for agreements to be ignored. Lord Dunedin had made the same point in Dunlop v. Selfridge but still followed the rule. The fact that Scrutton L.J. was willing to circumvent privity is important given his standing as a commercial lawyer and expertise in shipping law where he was the author of the standard work on bills of lading.19 His principle is nevertheless a broad one. When A enters into a contract with B and employs C in order to perform that contract, C gains the benefit of an immunity of liability that A might have. Lord Reid has described the ratio of the Elder Dempster as ‘very obscure’.20 Many reading the case will share the frustrations of Langton J.: At one time I hoped that I was going to get a great deal of assistance from that case, but I suffered disappointment as I went through it and found that I could get no assistance from it at all except along a quite general line.21

There are three lines of reasoning. Scrutton L.J.’s principle of ‘vicarious immunity’22 perhaps the most radical of the three attracted the least support.23 Agency reasoning is consistent with the privity doctrine. The cargo-owners and shipowners were parties to the same contract entered into through the carrier as agent.24 Lord Sumner’s preferred solution was a bailment between the owners of the palm oil [1923] 1 KB 420, 441 – 42. He was the author of The Contract of Affreightment as Expressed in Charterparties and Bills of Lading (1886). Scrutton also came from a family of shipowners see F. D. Mackinnon, rev H. Mooney ‘Scrutton, Sir Thomas’ in Oxford Dictionary of National Biography (OUP, Oxford, 2004). 20 Scruttons Ltd. v. Midland Silicones Ltd. [1962] AC 446, 477. 21 The Kite [1933] P 154, 178. 22 The term was not actually used in Elder, Dempster & Co v. Paterson Zochonis & Co Ltd. It was adopted by later judges as a convenient short hand. In Scruttons Ltd. v. Midland Silicones Ltd. [1959] 2 QB 171, 185 – 86 Diplock J. attributed the phrase to an American judge, Holmes J. in A. M. Collins & Co. v. Panama Railway Co. (1952) AMC 2054. 23 [1924] AC 522, 534 (Viscount Cave with whom Lord Carson agreed) 548 (Viscount Finlay). 24 [1924] AC 522, 534 (Viscount Cave). 18 19

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and the shipowner ‘on terms which include the exceptions and limitations of liability stipulated in the known and contemplated form of bill of lading’.25 Undeterred by a lukewarm reception in the House of Lords Scrutton L.J. persevered with ‘vicarious immunity’.26 Other judges were also attracted by the idea.27 Bailment28 and agency29 also had their supporters. In the event of damage to goods, defendants were permitted to rely on an exemption clause in a contract to which they were not party if they fell within agency or bailment. Actions for personal injury were a different matter. In Adler v. Dickson30 Mrs Alder was injured after a gangway of a ship on which she was travelling slipped. Her ticket contained two widely drafted exception clauses: ‘Passengers and their baggage are carried at passengers’ entire risk’ and ‘The company will not be responsible for and shall be exempt from all liability in respect of any damage or injury whatsoever of or to the person of any passenger’. She accepted that the owners of the ship were not liable but contended that their servants were not protected by the exemption clause. In the face of unfavourable Court of Appeal authority31 counsel for the defendants sought to rely on Elder Dempster. Although the judgments in the Court of Appeal differ slightly in tone, the gist of all three was that the rules which applied between commercial parties in relation to carriage of goods were inappropriate in relation to an action for personal injury of a private individual dealing on standard form terms. The ‘vicarious immunity’ principle was probably never a serious threat to the doctrine of privity if only because there were other ratios in Elder Dempster. Hence Owen J. in the Supreme Court of New South Wales stressed the need for the courts to reflect commercial realities but was able to achieve those ends using bailment.32 By the late 1940s Denning L.J. posed a more serious threat to the privity doctrine. On his elevation to the Court of Appeal he wasted little time in firing his first broadside in Smith & Snipes Hall v. River Douglas Catchment Board.33 The 25 [1924] AC 522, 564.Bailment can come into existence without the need for a contract. Like property and tort it shows how another legal category can be used to circumvent contractual privity. The ways in which bailment can be used as a device to undermine privity is beyond the scope of this volume but provides a very important way around privity: The Pioneer Container [1994] 2 AC 342; The Mahkutai [1996] AC 650. 26 Mersey Shipping & Transport Co. Ltd. v. Rea Ltd. (1925) 21 Ll L Rep 375. 27 The Kite [1930] P 154. 28 Vita Food Products v. Unus Shipping Co. Ltd. [1939] AC 277, 301 (Lord Wright); Gilbert Stokes & Kerr Proprietary Ltd. v. Dalgety & Co. Ltd. (1948) 48 SR (NSW) 435; (1948) 81 Ll L Rep 337; Waters Trading Co. v. Dalgety & Co. Ltd. [1951] 2 Lloyd’s Rep 385. 29 Pyrene Co. Ltd. v. Scindia Co. Ltd. [1954] 2 QB 402. 30 [1955] 1 QB 158. 31 Cosgrove v. Horsfall (1945) 175 LT 334. 32 Waters Trading Co v. Dalgety & Co. Ltd. [1951] 2 Lloyd’s Rep 385. 33 [1949] 2 KB 500. Denning L.J. had been in the Court of Appeal less than a year when he delivered his judgment.

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case involved freehold covenants so special rules applied but Denning L.J. used the opportunity to criticise those who treated privity as a fundamental principle. He turned legal historian pointing out that privity was only firmly established in Dunlop v. Selfridge and that the principle that a ‘man who makes a deliberate promise which is intended to be binding’ has roots that go deeper.34 He also referred to s 56 (1) Law of Property Act 1925. It had previously been thought that the section was a word-saving provision. It covered the situation where A purports to make a grant or covenant with B and C. C is a party but not named.35 Denning L.J. attempted to place a wider interpretation on the section: where A covenants with B alone then C can enforce a contract for his benefit even though he is neither named nor a party.36 In the years that followed Denning L.J. lost no opportunity to criticise the privity doctrine.37 He was not alone. Devlin J. seemed to share some of his misgivings.38

Privity of contract reasserted In the mid-1950s the High Court of Australia began to adopt a position that was doctrinally conservative.39 Denning L.J. was criticised and the privity doctrine reasserted. In England, although there was perhaps no serious threat of abolition, calls for reform were beginning to build.40 The immediate future of the doctrine of privity was secured by two House of Lords decisions: Scruttons Ltd. v. Midland Silicones Ltd. and Beswick v. Beswick. Rarely can there have been such an array of judicial talent on display as in Scruttons Ltd. v. Midland Silicones Ltd.41 Before them was a test case. The question posed was whether or not stevedores engaged by a shipowner or carrier could rely on an exclusion or limitation of liability clause in a contract between the cargoowner and shipowner or carrier when they negligently damaged the cargo. Not surprisingly given that it was a decision of the House of Lords, Dunlop v. Selfridge loomed large in the judgments of Diplock J. and the Court of Appeal. It was con[1949] 2 KB 500, 514. White v. Bijou Mansions Ltd. [1938] Ch 351; Re Sinclair’s Life Policy [1938] Ch 799; Re Miller’s Agreement [1947] Ch 615; H. W. R. Wade, ‘Note on Drive Yourself Hire’ [1954] CLJ 66. 36 [1949] 2 KB 500, 517 – 18. 37 White v. John Warwick [1953] 1 WLR 1285, 1294; Drive Yourself Hire (London) Ltd. v. Strutt & Another [1954] 1 QB 250, 272. 38 Pyrene Co. Ltd. v. Scindia Navigation Co. Ltd. [1954] 2 QB 402, 426. 39 Wilson v. Darling Island Stevedoring and Lighterage Company [1956] 1 Lloyd’s Rept 346. 40 In Scruttons Ltd. v. Midland Silicones Ltd. [1959] 2 QB 171, 181 Diplock J. observed ‘This question has been much debated in this country for the past twenty-five years.’. 41 Diplock J. in the Queens Bench and Hodson, Pearce and Upjohn L.JJ. in the Court of Appeal. All four were later elevated to the House of Lords. 34 35

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ceded that there were exceptions to the privity rule but it was held that they did not apply on the facts.42 Any attempt to add vicarious immunity to the list of exceptions was strongly resisted.43 Lord Reid was unwilling to allow the stevedores to enjoy the protection of the exemption clause. He was no great supporter of privty, which shows the extent to which the decision of the House of Lords was as much about the importance of stare decisis as it was about the value of privity of contract.44 The majority felt that because they were bound by their earlier decision in Dunlop v. Selfridge the claim had to fail. The tenor of the majority speeches is captured in some remarks of Viscount Simonds: For to me heterodoxy, or, as some might say, heresy, is not the more attractive because it is dignified by the name of reform. Nor will I easily be led by an undiscerning zeal for some abstract kind of justice to ignore our first duty, which is to administer justice according to the law, the law which is established for us by Acts of Parliament or the binding authority of precedent.45

Lord Denning was a lone dissenting voice. He revisited history in order to show how privity of contract was not as fundamental as some supposed, but there was also a subtle shift in tone.46 Despite confessing that ‘I am not unduly attached to the strict doctrine of precedent’47 he based his conclusion that a third party could sometimes rely on a limitation clause for his benefit, on the grounds that the principle had the support of Viscount Cave, Viscount Finlay and Lord Carson in Elder Dempster. But Lord Denning’s disagreement went beyond a difference of interpretation of a decision of the House of Lords forty years before. His treatment of the facts before him also contained remarks that went right to the heart of the doctrine itself. He conceded that on the facts the stevedores could not rely on the benefit of the clause because they were not named in the bill of lading. He would have departed from the majority if the stevedore had been named. Lord Denning expressed the view that if the stevedores had been named it showed that the shipper had consented to limit the stevedore’s liability. The importance placed on consent provided a link with Lord Denning’s earlier decisions.48 His remarks that ‘I know of no good reason why his consent, if freely given, should not be binding on him’49 [1954] 2 QB 402, 185; [1961] 1 QB 106, 122 (Hodson L.J.), 132 (Upjohn L.J.). [1954] 2 QB 402, 187; [1961] 1 QB 106, 121 (Hodson L.J.), 129 (Pearce L.J.), 134 (Upjohn L.J.). 44 [1962] AC 446, 475. He followed the rule that the House of Lords were bound by their own past decisions: London Street Tramways Co. v. London County Council [1898] AC 375. 45 [1962] AC 446, 467 – 68. 46 [1962] AC 446, 483. 47 [1962] AC 446, 487. 48 For example in Smith & Snipes Hall v. River Douglas Catchment Board [1949] 2 KB 500. 49 [1962] AC 446, 489. 42 43

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echo those of Lord Dunedin and Scrutton L.J. Lord Denning unlike the majority was not thinking in terms of a narrow range of pre-ordained exceptions. Where A contracts with B for the benefit of C (who is named) then C would be able to enforce the contract. Having admitted that ‘I suppose, however, that I must be wrong about all this: because your Lordships, I believe, take a different view’,50 Lord Denning went on to consider whether an exemption clause in the contract between the stevedores and the carriers was capable of binding the cargo owners. The point was not raised by counsel for the stevedores and, save to reject it, the argument attracted little attention from the other members of the House of Lords. The majority may have viewed the rule that the burden of a contract could not be imposed on a non-party as almost too obvious to need stating but the rule caused serious difficulties for carriage of goods by sea. The rights and liabilities of the cargo owners and carriers were normally governed by the Hague Rules. Lord Denning pointed out that cargo owners could easily by-pass these limitations by suing stevedores. Even worse in practice it could leave carriers, protected by the Hague Rules, footing the bill for actions against the Master and crew.51 The difficulties caused by the doctrine of privity were not confined to commercial arrangements. The second big House of Lords case of the 1960s was concerned with a family dispute.52 Peter Beswick was a coal merchant. He possessed a lorry and other utensils necessary to carry out his trade. On his retirement he agreed to transfer these assets along with the goodwill of the business to his nephew John who had worked with him. In return John promised to employ Peter at the rate of £6 10s a week as a consultant for the rest of his life. In the event of Peter’s death John agreed to pay his widow Ruth Beswick an annuity of £5 per week. On Peter’s death John failed to pay the annuity. Ruth brought an action against him in her own capacity and as administratrix of Peter’s estate. Lord Denning had returned to the Court of Appeal and gave the leading judgment. He said that it would be deplorable if Ruth could not recover her annuity. His first solution is the most radical. If applied without restriction it would drive a coach and horses through the doctrine of privity. It is said that a third party simply had to bring an action in the name of the contracting party.53 The promisor could not escape by the ‘shifty means’ of alleging that damages were nominal. Seemingly the only limitation was that the third party had a ‘legitimate interest’ in enforcing the promise.54 His second solution traversed old ground. Section 56 (1) of the Law of Property Act 1925 was once again broadly construed.55 This time Danckwerts L.J. sup[1962] AC 446, 489. [1962] AC 446, 492. 52 Beswick v. Beswick [1968] AC 58. 53 [1966] Ch 538, 551 – 52. 54 Lord Denning used the concept of ‘legitimate interest’ as a means of distinguishing Midland Silicones: [1966] Ch 538, 557. 55 [1966] Ch 538, 556 – 57. 50 51

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ported Lord Denning.56 The final reason for the success of Ruth’s claim was the only one to gain unanimous support. She was able to avoid the privity restriction altogether by suing in her capacity as administratix, enabling her to stand in the shoes of her husband. Because specific performance could be ordered she could secure her annuity. The House of Lords accepted the reasoning of the Court of Appeal on the final point and specific performance was ordered.57 All of the speeches assume the orthodox position that a non-party cannot enforce a contract made for his benefit at Common law is correct.58 A narrow interpretation of s 56 (1) of the Law Property Act 1925 was preferred, ending Lord Denning’s twenty year campaign to use the Act as a means of eroding privity.59 Ruth Beswick was fortunate. It was only because she was administratrix that she could recover her annuity. By the end of the 1960s the privity doctrine was as secure as ever. But the list of exceptions to the rule was not closed. Lord Denning’s attempts to undermine privity were in keeping with his philosophy of contract law which was designed to bridge the gap between strict rules and what he perceived as social necessity or fairness.60 He was not the only judge who began to seek to undermine the rule. Other, more commercially minded, judges began to develop more sophisticated exceptions which enabled third parties to use another’s contract as a defence.

The growing list of exceptions Given that after 1966 the House of Lords were no longer bound by their own past decisions61 Beswick v. Beswick presented the House of Lords with the perfect opportunity to overturn the doctrine of privity. They chose not to take it. Where it not for the fortunate fact that Mrs Beswick was administratrix her claim would have failed. Commercial parties may have experienced fewer difficulties. In Midland Silicones Lord Reid had supported the privity doctrine but at the same time had conceded that agency might provide a way around privity.62 Where A enters into a contract with B for the benefit of C and B is agent for C as principal, then C may acquire rights and liabilities.63 In Pyrene v. Scindia64 goods were shipped [1966] Ch 538, 563. [1968] AC 58, 77 (Lord Reid), 81 – 82 (Lord Hodson), 83 (Lord Guest), 92 (Lord Pearce), 102 (Lord Upjohn). 58 [1968] AC 58, 72 (Lord Reid), 78 (Lord Hodson), 83, 85 (Lord Guest), 92 – 93 (Lord Pearce), 95 (Lord Upjohn). 59 [1968] AC 58, 76 – 77 (Lord Reid), 79 – 81 (Lord Hodson), 86 – 87 (Lord Guest), 94 (Lord Pearce), 105 (Lord Upjohn). 60 Lord Denning, The Discipline of Law (Butterworths London 1979), 197. 61 [1966] 1 WLR 1234. 62 [1962] AC 446, 474. 63 Treitel, The Law of Contract, 727 – 32. 56 57

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under a contract between a buyer and carrier under an F.O.B. contract. At the point when the goods were damaged the risk was still with the seller. The question was whether the seller was also bound by a limitation clause. Devlin J. held that the sellers were bound because the buyer was the seller’s agent in making the contract with the carrier or because there was an implied contract between the seller and the carrier.65 Commercial parties were increasing exploiting the exceptions to privity by using appropriately drawn contracts. The Himalaya clause was designed to allow third parties to rely on a defence or limitation in a contract to which they were not a party. Such a clause was used in The Eurymedon.66 The relevant clauses in The Eurymedon included a number of the exceptions: no servant or agent (including independent contractor) of the carrier was to be liable for any act or default in the course of his employment; every limitation available to the carrier should be available to such persons; the carrier was agent or trustee of such persons; such persons to this extent were parties to the contract. It was held that the third party was protected by an appropriately drafted clause. Speaking for the Privy Council Lord Wilberforce explained that: The bill of exchange brought into existence a bargain initially unilateral but capable of becoming mutual, between the shipper and the [stevedores], made through the carrier as agent. This became a full contract when the [stevedores] performed services by discharging the goods.67

The Himalaya clause works by creating an agency arrangement which when coupled with performance creates a full contract incorporating the exemption or limitation. Himalaya clauses have proved enduringly popular but are not trouble free. In Midland Silicones Lord Reid had stipulated that it was not enough for the clause to declare that the carrier acted as agent; the carrier must have authority from the stevedore to do so.68 This restriction on Himalaya clauses caused no difficulties in The Eurymedon itself because the carrier and stevedores were associated companies. In The New York Star69 the stevedores were part owned by and regularly employed by the carriers but Lord Wilberforce took the opportunity to emphasise that ‘their Lordships would not encourage a search for fine distinctions which would diminish the general applicability, in the light of established commercial practice, of the principle’.70 [1954] 2 QB 402. This was the interpretation of Pyrene v. Scindia adopted by Viscount Simonds in Scruttons Ltd. v. Midland Silicones Ltd. [1962] AC 446, 471 but is not wholly without difficulty see Treitel, The Law of Contract, 639. 66 [1975] AC 154. 67 [1972] AC 154, 167 – 68. 68 [1962] AC 446, 474. 69 [1981] 1 WLR 138. 70 [1981] 1 WLR 138, 144. 64 65

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Himalaya clauses are not always a perfect solution. They are at the mercy of judicial construction of contracts71 and unable to stand in the face of contrary legal provision72 but they provided an attractive solution to commercially minded lawyers and judges. Lord Roskill, who was responsible for drafting the Himalaya clause73 and who was a member of the Privy Council in The New York Star justified this development: The importance of these various decisions is this. They show a fundamental change in the attitude of our courts and a welcome determination to give effect to the intention of the parties where that intention has been clearly expressed in their contract and not to allow technical rules like the doctrine to stand in the way of so doing. This roué is a different route from that which appealed to Lord Denning in his dissenting speech on the Midland Silicones case, and I venture to think is, with all respect, very much more soundly based in legal principle.

Himalaya clauses provide a good example of how carefully drafted contracts can provide a way around the doctrine of privity in the context of carriage of goods by sea. There are other examples of careful drafting. A wishing to protect C gives C an enforceable indemnity, and contracts with B that B will not sue C. If B sues C in breach of his contract with A then A can recover damages against B for the indemnity he has had to pay C. Section 49 (2) of the Supreme Court Act 198174 gives the courts a discretion to halt B’s action against C in order to prevent circularity of actions. Two conditions are required to be satisfied before A can obtain an injunction: there must be a clear promise by B not to sue C and A needs a ‘sufficient interest’.75 The usual method of demonstrating a sufficient interest is to include an indemnity clause.76 Although these agreements may be relatively easy to draft, the flaw in this method of circumventing privity lies in a willingness of A to grant an indemnity knowing that whether or not payment has to be made is at the mercy of judicial discretion. The third major development of the 1970s continues to generate controversy. Lord Denning was its progenitor. When in Beswick v. Beswick it was said that if the administratrix had bought an action for damages she would only be awarded a nominal sum because there had been no loss to the estate77 the House of Lords The Mahkutai [1996] AC 650. The Starsin [2003] 2 WLR 711. S. Girvin, ‘Contracting Carriers, Himalaya Clauses and Tort in the House of Lords’ [2003] LMCLQ 311; E. Peel, ‘Actual Carriers and the Hague Rules’ (2004) 120 LQR 11. 73 Lord Roskill, Half-A-Century of Commercial Law 1930 – 1980 (The Holdsworth Club Birmingham University 1981), 10. 74 This section replaced s 41 Supreme Court of Judicature (Consolidation) Act 1925 s 41. 75 Gore v. Van der Lann [1967] 2 QB 31; P. Davies, ‘Mrs Gore’s legacy to commerce’ [1981] LS 287; The Elbe Maru [1978] 1 Lloyd’s Rep 206; European Asian Bank AG v. Punjab and Sind Bank [1982] 2 Lloyd’s Rep 356; The Chevalier Roze [1983] 2 Lloyd’s Rep 438. 76 Indemnity clauses are not the only way of demonstrating a sufficient interest c.f. Snelling v. John G Snelling Ltd [1973] QB 87. 71 72

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were following the rule that damages are only there to compensate the claimant for his loss. The orthodox rule meant that even if the promisee was willing to sue he could not recover losses suffered by the third party. In Jackson v. Horizon Holidays78 a father brought an action on behalf of himself and his wife and children after the luxurious holiday they were expecting proved to be anything but that. When calculating damages for mental distress Lord Denning held the court need not confine itself to the father’s own distress but could also take into account the distress of his wife and children. In Woodar Investments v. Wimpey79 the House of Lords restated the rule that it was not usually possible to recover damages for losses received by the third party. Lord Salmon described the orthodox rule as ‘most unsatisfactory’.80 There are a number of significant exceptions. Lord Wilberforce suggested that family holidays might be one of them.81 The most important exception, based on an authority decided before the crystallisation of the privity doctrine,82 was revived in The Albazero.83 Lord Diplock explained when the anomaly operated: In a commercial contract concerning goods where it is in the contemplation of the parties that the proprietary interests in the goods may be transferred from one owner to another after the contract has been entered into and before the breach which causes loss or damage to the goods, an original party to the contract, if such be the intention of them both, is to be treated in law as having entered into the contract for the benefit of all persons who have or may acquire an interest in the goods before they are lost or damaged, and is entitled to recover by way of damages for breach of contract the actual loss sustained by those for whose benefit the contract is entered into.84

On the facts a shipper of goods could not recover damages on behalf of a buyer to whom the property in the goods and risk had passed because the buyer had his own contractual claim against the shipowner.85 As expressed by Lord Diplock the anomaly is a narrow one. It would not have helped Ruth Beswick. In his formula 77 [1968] AC 58, 73 (Lord Reid), 78 (Lord Hodson), 102 (Lord Upjohn). Lord Pearce at 88 disagreed on this point. 78 [1975] 1 WLR 1468. 79 [1980] 1 WLR 277. 80 [1980] 1 WLR 277, 291. 81 [1980] 1 WLR 277, 283. Package holidays are governed by the Package Travel, Package Holidays and Package Tour Regulations (SI 1992 / 3288). The regulations give a right of action to a ‘consumer’. As defined in reg 2 (2) a ‘consumer’ includes ‘any person on whose behalf the principal contractor agrees to purchase the package.’ 82 Dunlop v. Lambert (1839) 2 Cl & F 626, 7 ER 824. The case and its aftermath is discussed by H. Unberath, Transferred Loss Claiming Third Party Loss in Contract (Hart Oxford 2003), 105 – 115. 83 [1977] AC 774; Unberath, Transferred Loss, 145 – 50. 84 [1977] AC 774, 847. 85 Under s 1 Bills of Lading Act 1855 (repealed and replaced by the Carriage of Goods by Sea Act 1992).

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the parties must be commercial, the contract must concern goods and the third party must have acquired an interest before the breach and loss. The Albazero exception was applied in Linden Gardens Trust Ltd. v. Lenesta Sludge Disposals Ltd.86 The claimant had a building contract with the defendant builder to develop land that he owned. The land but not the benefit of the contract were then transferred to a third party. After the transfer the defendant was in breach of the building contract. Lord Griffiths allowed the claimant to recover on the grounds that although the property had been transferred the claimant had suffered loss because the defendant had failed to deliver the promised for benefits. The majority agreed with Lord Browne-Wilkinson and applied the rationale of The Albazero to building contracts.87 Later authorities have extended the principle still further. In Darlington Borough Council v. Wiltshier Northern Ltd.88 the Court of Appeal held that damages could be recovered even though there was no transfer of property. Some significant limits remain. They were set out by the House of Lords in Alfred McAlpine Construction Ltd. v. Panatown Ltd.89 The majority accepted that there was a general rule that a promisee was unable to recover damages in respect of losses suffered by a third party.90 The Albazero exception did not apply when the third party had his own claim even if the contract was so arranged that his own claim would be less lucrative.91 The majority also held that the promisee could recover no damages in respect of his own losses because having no pecuniary interest in curing the defect he had suffered no loss.92 But this type of claim was certainly not ruled out altogether.93

The parties only rule and the law of tort In the nineteenth century the law of tort was ill-equipped to deal with an action by a consumer against the ultimate manufacturer in negligence.94 In Donoghue v. [1994] 1 AC 85. Lords Keith, Bridge and Ackner. 88 [1995] 1 WLR 68. 89 [2001] 1 AC 518; Unberath, Transferred Loss, 205 – 219. 90 [2001] 1 AC 518, 522 (Lord Clyde), 563 (Lord Jauncey), 575 (Lord Browne-Wilkinson). Lord Millett who dissented accepted this general point at 580 – 81. Lord Goff was less convinced at 538 – 539. 91 [2001] 1 AC 518, 531 – 32 (Lord Clyde), 545 (Lord Goff), 568 (Lord Jauncey), 576 – 77 (Lord Browne-Wilkinson), 585 (Lord Millett). 92 [2001] 1 AC 518, 536 (Lord Clyde), 574 (Lord Jauncey), 577 – 78 (Lord Browne-Wilkinson). 93 [2001] 1 AC 518, 535 (Lord Clyde), 577 (Lord Browne-Wilkinson). 94 D. Ibbetson, ‘The Tort of Negligence in the Common Law in the Nineteenth and Twentieth Centuries’, in E. Schrage, ed., Negligence The Comparative Legal History of the Law of Torts (Duncker & Humblot Berlin 2001), 229, 254 – 55. 86 87

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Stevenson 95 Lord Atkin famously asked ‘who in law is my neighbour?’ thereby opening up the way for claims in negligence which in contract would run up against the privity rule. Physical injury, like that suffered by the plaintiff in Donoghue v. Stevenson, or damage to property have caused few difficulties. Much greater problems have been experienced with claims for pure economic loss. Pure economic loss includes financial losses caused by negligent advice, the cost of remedying a defect in a property which has reduced its value but not damaged other property and loss of expected commercial profits. Financial losses of this type, those not parasitic on personal injury or property damage,96 are the paradigm form of loss recovered in an action for breach of contract. Once claims for pure economic loss are allowed there are two problems. Should the plaintiff be able to bring an action in negligence when he also has a contract with the defendant? Secondly, and more immediately relevant, should the plaintiff be allowed to bring an action in negligence for pure economic loss when one of the requirements necessary for a contract claim such as consideration or privity is absent?97 The reasons for the Common law’s traditionally hostile attitude towards claims in negligence for pure economic loss are complex.98 The scope of liability has grown over the last fifty years out of as series of exceptions to the no-liability rule. One of the consequences has been that plaintiffs have sought a remedy in tort when unable to satisfy the restrictive requirements of contract.99 In Hedley Byrne & Co. Ltd. v. Heller & Partners Ltd.100 the House of Lords allowed the plaintiff to by-pass the requirement of consideration and bring an action in negligence where the parties were in a relationship ‘equivalent to contract’. 101 With the expansion of negligence in the aftermath of Anns v. Merton London Borough Council102 it was probably inevitable that claimants would seek to use negligence as a route around the doctrine of privity. In Junior Books Ltd. v. Veitchi Ltd.103 the defenders were sub-contractors involved in the construction of the pur[1832] AC 562. There is some reluctance to define precisely what pure economic loss means: Spartan Steel & Alloys Ltd. v. Martin & Co. (Contractors) Ltd. [1974] QB 27. For an attempt see Oliver L.J. in Leigh and Sillivan Ltd. v. Aliakmon Shipping Co. Ltd. [1985] QB 350, 377 – 78. 97 Williams v. Natural Life Health Foods Ltd. [1998] 1 WLR 830, 837 (Lord Steyn). 98 Simpson v. Thomson (1877) 3 App Cas 179; Société Anonyme de Remorquage á Hélice v. Bennetts [1911] 1 KB 243; Weller & Co. v. Foot & Mouth Disease Research Institute [1966] 1 QB 569; J. Stapleton, ‘Duty of Care and Economic Loss – A Wider Agenda’ (1991) 107 LQR 249; J. Stapleton, ‘Duty of Care: Peripheral Parties and Alternative Opportunities for Deterrence’ (1995) 111 LQR 301. 99 B. Markesinis, ‘An Expanding Tort Law – The Price of a Rigid Contract Law’ (1987) 103 LQR 354. 100 [1964] AC 465. 101 [1964] AC 465, 530. 102 [1978] AC 728. 103 [1983] 1 AC 520. 95 96

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suer’s factory. Within two years the flooring that the defenders had laid began to crack. The pursuer alleged that the floor had been laid negligently and sought to recover £ 200,000 by way of damages. The reason why they were suing the subcontractors in tort rather than the main contractor with whom they had a contract was not revealed.104 The majority supported a claim in negligence. Lord Brandon dissented on the grounds that the claim was contrary to authority and were it to be allowed then it would impose contractual type obligations on people who were not in a contractual relationship. The leading speech of the majority was delivered by Lord Roskill. He relied on earlier remarks by Lord Wilberforce105 and Lord Reid106 to the effect that whether or not there was a duty of care depended more on principle than whether the courts had found a duty of care in an analogous situation in the past.107 Lord Roskill conceded that the pursuer needed to demonstrate ‘proximity’ with the defenders.108 In a passage that would later become important Lord Roskill sketched out the relationship between the parties to the dispute: The appellants, though not in direct contractual relationship with the respondents, were as nominated sub-contractors in almost as close a commercial relationship with the respondents as it is possible to envisage short of privity of contract.109

Lord Fraser stressed that he was deciding the appeal strictly on its facts.110 His remarks contain the epitaph of Junior Books. From the beginning the decision drew critical comment from commentators, primarily on the grounds that its boundaries were unclear.111 Judges, unsure of or unsympathetic to its implications, preferred to be cautious. In an early decision Walton J. warned that, ‘if the principle does not have some certain limits, it will come perilously close to abrogating completely the concept of privity of contract.’112 By the mid-1980s negligence on the grounds of pure economic loss was in retreat.113 In order to succeed the claimant was required

104 [1983] 1 AC 520, 538 Lord Roskill remarked rather sarcastically that, ‘This economy of fact is in stark contrast to the wealth of citation of authority of which your Lordships have had the benefit’. 105 Anns v. Merton London Borough Council [1978] AC 728, 751. 106 Home Office v. Dorset Yacht Co. Ltd. [1970] AC 1004, 1026. 107 [1983] 1 AC 520, 541 – 42, 545 – 46. 108 [1983] 1 AC 520, 546. The question of proximity was not raised by counsel for the defenders. Junior counsel for the defenders later admitted that they were naïve see A. Rodger ‘Some Reflections on Junior Books’ in P. Birks (ed), The Frontiers of Liability (OUP Oxford 1994) 2.64, 65. 109 [1983] 1 AC 520, 542, 546. 110 [1983] 1 AC 520, 533. 111 J. Holyoak, ‘Tort and Contract After Junior Books’ (1983) 99 LQR 591; N. E. Palmer / J. R. Murdoch, ‘Expanding Contracts?’ (1983) 46 MLR 213; A. J. E Jaffey, ‘Sub-contractors Privity and Negligence’ [1983] CLJ 37; R. Hodgin, ‘Economic Loss in the House of Lords’ (1983) 34 NILQ 155. The most trenchant critic of the decision was Tony Weir: T. Weir, A Casebook on Tort (5th edn. Sweet & Maxwell London 1983), 33 – 34. 112 Balsamo v. Medici [1984] 1 WLR 951, 959 – 60.

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to demonstrate proximity with the defendant. Proximity came to be narrowly defined and provided a useful device, in several Court of Appeal cases, for distinguishing Junior Books out of existence. Goff L.J.’s remarks in Muirhead v. Industrial Tank Specialities Ltd. were typical: Faced with these difficulties it is, I think, safest for this court to treat Junior Books as a case in which, on its particular facts, there was considered to be such a very close relationship between the parties that the defendants could, if the facts as pleaded were proved, be held liable to the pursuers.114

By the late 1980s, outside the context of negligent misstatement, the courts no longer smiled favourably upon pure economic loss.115 This more conservative attitude was short lived. By the mid-1990s the House of Lords with Lord Goff at the helm had changed course once again. In Hedley Byrne v. Heller the House of Lords had imposed liability for negligent misstatements. The justification for finding a duty of care was an assumption of responsibility. The idea of assumption of responsibility was taken from the old case of Nocton v. Lord Ashburton.116 Thirty years after Hedley Byrne the House of Lords turned to the principle again in Henderson v. Merrett Syndicates Ltd.117 The same idea was used again to support claims in negligence for pure economic loss caused by acts. Assumption of responsibility was not without limits. Where the facts were close to Junior Books Lord Goff explained: It will not ordinarily be open to the building owner to sue the sub-contractor or supplier direct under the Hedley Byrne principle, claiming damages from him on the basis that he has been negligent in relation to the performance of his functions. For there is generally no assumption of responsibility by the sub-contractor or supplier direct to the building owner, the parties having so structured their relationship that it is inconsistent with any such assumption of responsibility.118

Lord Goff ’s remarks serve to underline the continued importance of the ‘contractual matrix’. Parties conduct themselves on the basis of expectations generated by the contractual arrangement. It would be unfair if the claimant was able to turn round and ignore the process of risk allocation by the simple expedient of bringing an action in negligence. 113 Leigh & Sullivin Ltd. v. Aliakmon Shipping Co. Ltd. [1986] AC 785; Yuen Kun Yeu v. A-G of Hong Kong [1988] AC 175; Greater Nottingham Co-operation Society v. Cementation Piling [1989] QB 71. 114 [1986] QB 507, 528; Simaan General Contracting Co. v. Pilkington Glass [1988] QB 758, 784; D & F Estates Ltd. v. Church Commissioners [1989] AC 177,202,215; Greater Nottingham Co-operation Society v. Cementation Piling [1989] QB 71, 96,106. A useful summary of the reaction to Junior Books is contained in the judgment of Judge Toulmin Q.C. in Architype Projects Ltd. v. Dewhurst MacFarlane & Partners [2003] EWHC 3341. 115 Caparo Industries Plc. v. Dickman [1990] 2 AC 605; Murphy v. Brentwood District Council [1991] 1 AC 398. 116 [1914] AC 932. 117 [1995] 2 AC 145. 118 [1995] 2 AC 145, 196.

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This form of anti-circumvention argument does not mean that negligence can never be used to side-step privity. The difficulty facing claimants here is that where there are dealings between A and B, whether contractual or otherwise, it will usually be difficult to say that A also assumes responsibility towards C such as to allow C to bring a claim in negligence for pure economic loss against him. Assumption of responsibility seems to connote some kind of mutuality. The relationship is after all supposed to be ‘equivalent to contract’. An absence of mutuality need not necessarily bar a claim. In White v. Jones119 the claimants were two daughters, the defendant a solicitor employed by their father, the testator. The daughters quarrelled with their father and were disinherited. Following a reconciliation the father instructed his solicitor to draw up a new will. The claimants alleged that they were negligent in failing to draw up a will before their father’s death with the result that the old will still prevailed and the daughters remained disinherited. The only contract was between the solicitor and father. The intended beneficiaries attempted to side-step the privity rule by suing in negligence. In his dissenting speech Lord Keith observed that ‘to admit the plaintiffs’ claim in the present case would in substance . . ..be to give them the benefit of a contract to which they were not parties.’120 The leading speech of the majority was delivered by Lord Goff. Throughout his speech the need to do ‘practical justice’ is stressed.121 The ‘extraordinary fact’ was that: If a duty owed by the testator’s solicitor to the disappointed beneficiary is not recognised, the only person who may have a valid claim has suffered no loss, and the only person who has suffered a loss has no claim.122

The claim was supported on the basis that the solicitor has assumed responsibility to the beneficiaries. Lord Goff said that there were ‘special circumstances’ but preferred to concentrate on the lacuna that would exist if a duty of care were denied rather than attempting to fully explain why there was an assumption of responsibility. Lord Browne-Wilkinson focused on the relationship between the daughters and the solicitors which was described as ‘special’. It was enough that the solicitor assumed responsibility for a task which would lead to suffering on the part of the plaintiff if carried out badly.123 In his dissent Lord Mustill pointed out that assumption of responsibility indicated some form of relationship or mutuality. In the absence of mutuality on the facts there was no liability.124 Lord BrowneWilkinson admitted that he was extending Hedley Byrne.125 His own formula is a 119 120 121 122 123 124 125

[1995] 2 AC 207. [1995] 2 AC 207, 251. [1995] 2 AC 207, 259, 260, 263, 264, 265, 268, 269. [1995] 2 AC 207, 262. [1995] 2 AC 207, 271. [1995] 2 AC 207, 283, 287. [1995] 2 AC 207, 275.

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potentially broad one. Without the need for mutuality, assumption of responsibility is devoid of content. In White v. Jones assumption of responsibility was little more than a convenient label to be attached when a claim is felt to be meritorious, just as earlier House of Lords judges had feared that it would be.126 The implications of White v. Jones are still been explored case by case.127 Opinion is divided. The decision has attracted critical academic commentary.128 Lord Steyn has called it a ‘one-off ’.129 Other judges have emphasised the importance that Lord Goff placed on the ‘impulse to do practical justice’.130 Where no lacuna exists because the beneficiary was able to protect his interests by other means then claims based on White v. Jones have failed. A negligence action is said to be unnecessary when an executor is able to recover more than nominal damages131 or rectification is available.132 These authorities seem to counsel caution but at the same time the reasoning in White v. Jones has been extended by analogy beyond claims by beneficiaries under a will.133 Developments in negligence have run parallel to developments in contract. In the face of continued hostility to actions by third parties on the contract, a line of cases beginning with Junior Books have allowed third parties to sue in negligence. Given the inherent uncertainty engendered in reasoning by analogy, and judicial fondness for plugging remedial ‘black-holes’,134 the potential of negligence claims founded on assumption of responsibility to circumvent the privity rules is difficult to predict.135 Although nothing like the outright contractual prohibition on actions by third parties, the way in which the Junior Books line of authorities has been hemmed in by restrictions means that negligence does not provide a general remedy. 126 Smith v. Bush [1990] 1 AC 831, 862 (Lord Griffiths); Caparo Industries Plc. v. Dickman [1990] 2 AC 605, 628 (Lord Roskill); K Barker, ‘Unreliable assumptions in the modern law of negligence’ (1993) 109 LQR 461. 127 Hughes v. Richards [2004] EWCA Civ 266 para 25. 128 T. Weir has criticised White v. Jones just as earlier he had objected to Junior Books: T. Weir, A Casebook on Tort (9th edn. Sweet & Maxwell London 2000), 68 – 77; T. Weir, ‘A Damnosa Hereditas?’ (1995) 111 LQR 357. 129 Lord Steyn, ‘Does Legal Formalism Hold Sway in England?’ (1996) 49 CLP 43, 53. Lord Steyn has made the same point judicially in Williams v. Natural Life Health Foods Ltd. [1998] 1 WLR 830, 837. Other judges have used the same description: Young and others v. Clifford Chance (1995) LEXIS (Popperwell J.). 130 Farah v. British Airways (2000) TLR 45; Carr-Glynn v. Frearsons [1999] Ch 326, 335; Worby v. Rosser [1999] Lloyd’s Rep 972; Chappell v. Somers & Blake [2004] Ch 19, 24. 131 As was the case in Chappell v. Somers & Blake [2004] Ch 19. 132 Walker v. Geo. H Medlicott [1999] 1 WLR 727. 133 Gorham v. British Telecommunications Plc. [2000] 1 WLR 2129; Dean v. Allin &Watts [2000] Lloyds Rep 469. 134 See below p. 355. 135 For some suggestions about desirable future developments see: S. Whittaker, ‘Privity of Contract and the Tort of Negligence: Future Directions’ (1996) 16 OJLS 191.

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When successfully argued, the anti-circumvention argument defeats the claim that A assumed responsibility towards C. The contract between A and B is important in other ways. In a contract between A and B the development of Himalaya clauses and other devices may effect A’s right of action against C. From C’s perspective his duty to A is moulded by the contract between A and B. When C is the one suing A in negligence the rules are inverted. Once again the defendant’s duty is moulded by the contract between A and B. This means that where A sells a motor vehicle to B ‘as seen with all its faults and without warranty’ A was not in breach of a duty of care to C who was injured as a result of a defect in the vehicle.136

The parties only rule and the law of property Contract and negligence are both types of personal obligations. The fact that they overlap is one of the reasons why attempts to circumvent the privity doctrine using negligence have proved so difficult and helps to explain why there are close parallels. Because English law treats property as part of a different legal family there is nothing incongruous when property law circumvents privity. In Dunlop v. Selfridge Lord Haldane conceded that ‘a right may be conferred by way of property, as, for example, under a trust, but it cannot be conferred on a stranger to a contract as a right to enforce the contract in personam’.137 A claim that would fail for want of privity in contract may still be enforced through the law of property. In reality, of course, there are no neat divisions. Contract and property do not operate in isolation. Langbein has argued that trusts are a form of contract, for example.138 Sometimes as with leases this relationship is a complex one. Claimants looking for a solution to the problems generated by privity have traditionally turned to Equity.139 They continued to do so in the period after 1880. Having reviewed some of the earlier authorities140 the Court of Appeal in Lloyd’s v. Harper141 were unequivocal that a trust could be created when A promises B that he would confer a benefit on C. B becomes trustee of the promise. The promise constitutes the trust property. C is the beneficiary. In practice this means that where B sues A for failing to fulfil his promise to C then the damages B recovers represent the loss suffered by C and are held on trust for C as beneficiary.142 C can Hurley v. Dyke [1979] RTR 265. [1915] AC 847, 853; cf Midland Silicones Ltd. v. Scruttons Ltd. [1959] 2 QB 171,184 (Diplock J.). 138 J. Langbein, ‘The Contractarian Basis of the Law of Trusts’ (1995) 105 YLJ 625, 646. 139 For the early history see the paper by Dr Jones in the present volume at 135 – 173. 140 For a discussion of these cases see the paper by Professor Ibbetson and Dr Swain in the present volume at 201 – 205. 141 (1880) 16 Ch D 290. 142 Re Cavendish Browne’s Settlement [1916] WN 341. 136 137

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enforce the promise more directly through an action against A and B as co-defendants.143 Four years after Dunlop v. Selfridge the House of Lords in Les Affréteurs Réunis Société Anonyme v. Leopold Walford (London) Ltd.144 applied Robertson v. Wait 145 and held that where there was a clause in a charterparty for the benefit of a broker it could be enforced by the charterer as trustee of the broker.146 The courts are not always so willing to find a trust of a promise. Re Express Engineering Co.147 was decided in the same year as Lloyds v. Harper but Jessel M.R. was much less keen on a trust.148 Trusts of a promise were imposed after Les Affréteurs Réunis Société Anonyme v. Leopold Walford (London) Ltd but that decision may mark their high point.149 Trusts of a promise have been cut away by a requirement common to all trusts that the settlor, in this instance the promisor, intends to create a trust.150 It has never been necessary for express words to be used in order to create a trust, but the intention requirement is often used by judges as a convenient mask for underlying policy objectives.151 In the absence of very clear evidence the courts became reluctant to infer any intention particularly in a commercial context.152 The Law Commission have suggested that the courts are unlikely to revive the trust of a promise153 but in more recent years there is some evidence to suggest that judges are willing to reach for the trust as an answer to problems generated by privity.154 Freehold and leasehold covenants play important roles in regulating land use.155 The covenantor agrees with the covenantee that he will do or refrain from doing a particular activity in relation to the land. The covenant is a form of contract, albeit a formal one contained in a deed. A covenant which only binds the original parties A. Corbin, ‘Contracts for the Benefit of Third Parties’ (1930) 46 LQR 12. [1919] AC 801. 145 (1853) 8 Exch 299. 146 [1919] AC 801. 147 (1880) 16 Ch D 125. 148 Ibid 128 – 29. 149 Royal Exchange Assurance v. Hope [1928] Ch 179. 150 Knight v. Knight (1840) 3 Beav 148. 151 Lambe v. Eames (1871) LR 6 Ch App 597; Paul v. Constance [1977] 1 WLR 527. 152 Re Engelbach [1924] 2 Ch 348; Vandepitte v. Preferred Accident Insurance Corporation of New York [1933] AC 70; Re Clay’s Policy [1937] 2 All ER 548; Re Foster [1938] 3 All ER 357; Re Sinclair’s Life Policy [1938] Ch 799; Re Schebsman [1944] Ch 83; Swain v. Law Society [1983] 1 AC 598. 153 Law Commission, Report No. 242, para 2.9. 154 Don King Productions Inc v. Warren [2000] Ch 291; A. Tettenborn, ‘Trust and unassignable agreements – again’ [1999] LMCLQ 353. 155 K. Gray / S. Gray, Elements of Land Law (4th edn OUP Oxford 2005), 1349 – 50. 143 144

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would have little practical unity. A series of property rules have grown up which enable the benefit and burden of covenants to pass on conveyance of the land.156 The rules concerning the passing of the benefit and burden of freehold covenants are complex. The benefit of a freehold covenant runs in Law and Equity. For practical purposes if a covenant ‘touches and concerns’ the land157 over which the covenantee and assignee have a legal estate158 then the benefit of the covenant will be annexed to the land.159 The rules concerning the running of the burden of covenants are narrower. The burden never runs in Law.160 Burdens run in Equity under the rule in Tulk v. Moxhay161 but only when the covenant is restrictive.162 The lease has a dual character in English law. As a form of property a lease is one of the two legal estates.163 But leases like covenants are also derived from contracts with the rights and obligations of a landlord and tenant governed by leasehold covenants.164 The privity of contract rules mean that leasehold covenants in the lease cannot be enforceable against successors of the landlord or tenant. A solution to the privity of contract bar was found in property law through the doctrine of privity of estate.165 Privity of estate is now on a statutory footing.166 Unless expressed to be personal to the original parties the benefit and burden of leasehold covenants run with the land.167 Under the old law the original parties remained liable under the contract even though they were no longer in the position of landlord or tenant. Following the Landlord and Tenant (Covenants) Act 1995 a tenant is released from his obligations on assigning the lease.168 If a landlord assigns his property his obligations are only released if he is able to secure the tenant’s consent.169

Gray / Gray, Elements of Land Law, 1351 – 52. P & A Swift Investments v. Combined English Stores Plc [1989] AC 632. 158 They need not have the same legal estate: Smith & Snipes Hall Farm Ltd. v. River Douglas Catchment Board [1949] 2 KB 500. 159 s 78 (1) Law of Property Act 1925; Federated Homes Ltd. v. Mill Lodge Properties Ltd. [1980] 1 WLR 594. If there is evidence of contrary intention then annexation will not take place: Roake v. Chadha [1984] 1 WLR 40; Crest Nicholson Residential (South) Ltd v. McAllister [2004] All ER (D) 37. 160 Rhone v. Stephens [1994] 2 AC 310. 161 (1848) 2 Ph. 774. 162 Haywood v. Brunswick Permanent Benefit Building Society (1881) 8 QBD 403. 163 s1 (1) Law of Property Act 1925. 164 On the dual character of a lease see Gray / Gray, Elements of Land Law, 323 – 328. 165 Spencer’s Case (1583) 5 Co Rep 16 a, 77 ER 72. 166 The Law Commission, Landlord and Tenant Law Privity of Contract and Estate Report No. 174 (HMSO 1988). 167 Landlord and Tenant (Covenants) Act 1995 s 3 (1). 168 Ibid. s5. 169 Ibid. s8. 156 157

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Reform of the privity rule Privity of contract is a subject beloved of academic commentators. Much, but not all, of the literature is critical.170 Academics have also played a more direct role. Privity of contract was one of the issues considered by the Law Revision Committee in 1937.171 Three academic lawyers, Professors A. L. Goodhart, H. C. Gutteridge K. C. and A. D. McNair, were members. The committee proposed that: where a contract by its express terms purports to confer a benefit directly on a third party, the third party shall be entitled to enforce the provision in his own name provided that the promisor shall be entitled to raise as against the third party any defence that would have been valid against the promise. The rights of the third party shall be subject to cancellation of the contract by the mutual consent of the contracting parties at any time before the third party has adopted it either expressly or by conduct.172

The chairman of the committee, Lord Wright, was a well known critic of consideration and privity173 and given the character and known views of the academic members the radical tenor of the proposed reforms is understandable. Goodhart was an American and would have been familiar with the rejection of privity in the United States.174 Gutteridge was a comparative lawyer who would later stress the importance of learning lessons from other jurisdictions, including the United States, in law reform.175 He had also appeared in print criticising privity before the Law Revision Committee Report was published.176 Radical and even sensible the proposals may have been, but they were never enacted.177 The criticisms levelled at privity by the Law Revision Committee con170 A selection includes: A. Corbin, ‘Contracts for the Benefit of Third Persons’ (1930) 46 LQR 12; M. Furmston, ‘Return to Dunlop v. Selfridge?’ (1960) 23 MLR 373; R. Flannigan, ‘Privity – The End of an Era (Error)’ (1987) 103 LQR 564; N. H. Andrews, ‘Does a third party beneficiary have a right in English law?’ (1988) 8 LS 14; J. Adams / R. Brownsword, ‘Privity and the concept of a network contract’ (1990) 10 LS 12; D. Beyleveld / R. Brownsword, ‘Privity, Transitivity and Rationality’ (1991) 54 MLR 48. The privity rule is not totally without supporters: P. Kincaid, ‘Third Parties: rationalising a right to sue’ [1989] CLJ 243; S. A. Smith, ‘Contracts for the Benefit of Third Parties: in Defence of the Third-Party Rule’ (1997) 17 OJLS 643. The role played by Sir G. Treitel’s detailed exposition in highlighting difficulties and anomalies should not be underestimated. 171 Statute of Frauds and the Doctrine of Consideration (Cmd 5449) (1937 HMSO). 172 Ibid. para 48. 173 Lord Wright, ‘Ought the Doctrine of Consideration to be Abolished from the Common Law ?’ (1936) 49 Harv LR 1225, 1246, 1250 – 51. 174 Lawrence v. Fox (1859) 20 NY 268; Restatement of Contracts s 302. 175 H. Gutteridge, Comparative Law: An Introduction to the Comparative Method of Legal Studies and Research (CUP Cambridge 1946), 33. 176 ‘Contract and Commercial Law’ (1935) 51 LQR 91, 98. 177 J. Beatson, ‘Reforming the Law of Contracts for the Benefit of Third Parties’ (1992) CLP 1, 10 – 15.

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tinued to be relevant. The law remained uncertain and confused178 and given the growing list of exceptions in the period post 1945 the problem of uncertainty has been magnified.179 Another more fundamental criticism of privity was not explicitly stated in the 1937 Report. Two years before the report was published Professor Gutteridge, in an article in the Law Quarterly Review, observed that it served to defeat the ‘real intentions of those concerned’.180 The ability of privity to defeat intention was also a favourite of Lord Denning’s.181 More recently Steyn L.J. returned to the theme: The autonomy of the will of the parties should be respected. . ..there is no doctrinal, logical or policy reason why the law should deny effectiveness to a contract for the benefit of a third party where that is the expressed intention of the parties.182

Lord Denning has also questioned the historical pedigree of the privity rule: ‘let me remind your Lordships that this fundamental principle was a discovery of the nineteenth century’.183 In recent times judges in other Commonwealth countries have taken an equally robust anti-privity line.184 Other judges have been more restrained in their criticism but some have advocated statutory reform.185 It is probably no coincidence that two of the leading critics, Lord Dunedin186 and Lord Reid187 were Scots.188 Perhaps the greatest testament to dissatisfaction with the rule is the way in which judges have been willing to expand the list of exceptions. In the early 1970s the Law Commission commissioned a contract code.189 Under the Code third parties were given the right to receive a promised perforStatute of Frauds para 44. An admittedly crude indicator is provided by comparing the 1st edition of Treitel’s The Law of Contract’ published in 1962 which discusses privity in thirty one pages and the latest edition where it has expanded to ninety one. 180 ‘Contract and Commercial Law’ (1935) 51 LQR 91, 98. 181 Smith & Snipes Hall v. River Douglas Catchment Board [1949] 2 KB 500, 514; Scruttons Ltd. v. Midland Silicones Ltd. [1962] AC 446, 489. 182 Darlington Borough Council v. Wiltshire Northern Ltd. [1995] 1 WLR 68, 76. 183 Scruttons Ltd. v. Midland Silicones Ltd. [1962] AC 446, 483; Drive Yourself Hire (London) Ltd. v. Strutt & Another [1954] 1 QB 250, 272 – 73. 184 Trident General Insurance Co. Ltd. v. McNiece Bros. Pty Ltd. (1988) 165 CLR 107; London Drugs Ltd. v. Kueline & Nagel International Ltd. (1992) 97 DLR (4th) 261. 185 Swain v. The Law Society [1983] 1 AC 598, 611 (Lord Diplock); Forster v. Silvermere Golf & Equestrian Centre (1981) SJ 397 (Dillon J.). 186 Dunlop Pneumatic Tyre Co. Ltd. v. Selfridge Co. Ltd. [1915] AC 847, 855. 187 Scruttons Ltd. v. Midland Silicones Ltd. [1962] AC 446, 473; Tomlinson (Hauliers) Ltd. v. Hepburn [1966] AC 451, 470 – 1; Beswick v. Beswick [1968] AC 58, 72. 188 The law in Scotland adopted a different attitude to third parties see the paper by Professor McQueen and Mr Sellar in this volume at page 357 – 384. 189 It was written by Harvey McGregor, Contract Code Drawn up on behalf of the English Law Commission (Giuffré Milan 1993). 178 179

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mance and a right to rely on exclusion or limitation clauses.190 The Code was never implemented.191 There matters rested until the 1990s when the Law Commission came to reconsider the problem of privity.192 Legal academics were once again influential. Professors Treitel and Furmston assisted with the Consultation Paper.193 Professors Beatson and Burrows were the Law Commissioners overseeing the reform of the privity rule. Many other academics took part in the consultation process.194 In England statutory abrogation of privity until this point was important but only piecemeal. 195 By contrast in New Zealand the Contracts (Privity) Act 1982 went much further allowing an intended beneficiary to enforce a contract for his benefit.196 More general statutory reform in England was finally achieved in the Contracts (Rights of Third Parties) Act 1999.197 In English law it is now possible for a third party to enforce a contract made for his benefit in two situations: where the ‘contract expressly provides that he may’198 and secondly ‘if the term purports to confer a benefit on him’199 unless the parties to the contract do not intend the term to be enforceable by him.200 The Act is not limited to the simple situation where A makes a promise to B to pay C but also includes a promise by A not to sue C.201 Ibid. para 642. Law Commission, Eighth Annual Report No. 58 (1972 – 73) paras 3 – 5. 192 Law Commission, Consultation Paper No. 121 Privity of Contract: Contracts for the Benefit of Third Parties (1991 HMSO); Law Commission, Report No. 242 Privity of Contract: Contracts for the Benefit of Third Parties (HMSO 1996) Cm 3329. On the reform proposals see: P. Kincaid, ‘The UK Law Commission’s Privity Proposals and Contract Theory’ (1994) 8 JCL 51; H. Beale, ‘Privity of Contract: Judicial and Legislative Reform’ (1995) 9 JCL 103; A. Burrows, ‘Reforming Privity of Contract: Law Commission Report 242’ [1996] LMCLQ 467; C. Mitchell, ‘Privity reform and the nature of contractual obligations’ (1999) 19 LS 229. 193 Law Commission, Consultation Paper No. 121 para 1.6. 194 Law Commission, Report No. 242 App C. 195 Treitel, The Law of Contract, 666 – 71; R. Merkin, ed., Privity of Contract The Impact of the Contracts (Rights of Third Parties) Act 1999 (LLP London 2000). 196 J. Burrows / J. Finn / S. Todd, The Law of Contract in New Zealand (2nd edn. LexisNexis Wellington 2002) 522 – 538. 197 The extent of academic literature on the Act belies the current scarcity of authorities: Merkin, Privity of Contract; G. Treitel, in F. Rose, ed., Lex Mercatoria. Essays on International Commercial Law in Honour of Francis Reynolds (LLP London 2000) 345; A. Burrows, ‘The Contracts (Rights of Third Parties) Act 1999 and its implications for commercial contracts’ [2000] LMCLQ 540; C. MacMillan, ‘A Birthday Present for Lord Denning: The Contracts (Rights of Third Parties) Act 1999’ (2000) 63 MLR 721; N. Andrews, ‘Strangers to justice no longer: the reversal of the privity rule under The Contracts (Rights of Third Parties) Act 1999’ [2001] CLJ 353; R. Stevens, ‘The Contracts (Rights of Third Parties) Act 1999’ (2004) 120 LQR 292. 198 s 1 (1) (a). 199 s 1 (1) (b). 200 s 1 (2). 201 s 1 (6). 190 191

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Concluding remarks Before May 2000 when the Contracts (Rights of Third Parties) Act came into force various different groups and individuals had chipped away at the privity doctrine. Pressure for reform had come from judges and academics. Judges have shown considerable ingenuity in allowing third parties to take the benefit of exception and limitation clauses and giving a right of action when to refuse a claim would create a ‘legal black hole’ where the claimant had suffered a loss but had no right of action and the party capable of bringing the action had suffered no loss.202 Commercial parties were not uniformly in favour of change. Ironically the main criticism levelled at the Law Commission proposals came from the building industry203 even though a collateral warranty did not always achieve the desired result.204 One of the main sources of academic criticism of the law before the 1999 Act, was in the words of the Law Commission, that the exceptions generated complexity, artificiality and uncertainty.205 The 1999 Act does not abolish the rule that a contract between A and B for the benefit of C cannot be enforced by C but it does create a wide exception.206 There may be less need to resort to the existing routes around privity.207 Whether in itself this means an end of complexity, artificiality and uncertainty may be more doubtful.208 Before 2000 there were some hard cases that could not be accounted for within the existing exceptions. It was difficult for a third party to sue on a contract for his benefit. The 1999 Act may not produce the ‘right’ result every time. The Law Commission explicitly excluded a contract claim in a situation like White v. Jones.209 A flexible law of tort may still be needed in order to rectify a still (relatively) rigid law of contract.210 The Contracts (Rights of Third Parties) Act may 202 This type of reasoning is particular clear in the extended The Albazero line of cases and in White v. Jones: I. N. Duncan Wallace, ‘Third Party Damage: No Legal Black Hole’ (1999) 115 LQR 394; H. Unberath, ‘Third Party Losses and Black Holes: Another View’ (1999) 115 LQR 535. 203 Law Commission, Report No. 242 paras 1.7 n16, 3.10 – 23. 204 The main problem was caused by assignment: J. Cartwright, ‘The Assignment of Collateral Warranties’ (1990) 6 Const LJ 14, I. N. Duncan Wallace, ‘Assignment of Rights to Sue for Breach of Construction Contracts’ (1993) 109 LQR 82. 205 Law Commission, Report No. 242 para 3.6. 206 In Nisshin Shipping Co. Ltd. v. Cleaves & Co. Ltd. [2004] 1 Lloyds Rep 38, 39 – 40 Coleman J. described the reforms as ‘a long overdue body blow’. 207 The exceptions are preserved by s 7 (1). 208 Treitel, The Law of Contract, 581; Stevens, ‘The Contracts (Rights of Third Parties) Act 1999’ 302 – 314. The question of whether the contract ‘purports to confer a benefit’ in s 1 (1) (b) may be particularly problematic in practice see for example Laemthong International Lines Co. Ltd. v. Artis and others [2005] 1 Lloyd’s Rep 688. 209 Law Commission, Report No. 242 para 1.9. 210 In German law the positions between contract and tort are reversed: W. Lorenz, ‘Contracts and Third-Party Rights in German and English Law’ in B. Markesinis, ed.,The Gradual

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even stifle judicial creativity on the grounds that it is not the proper role of judges to extend protection afforded by Parliament.211 Post 2000 solicitors drafting standard form commercial contracts are expressly excluding the Act.212 But the Act is symbolically important. The Will Theory of contract and the privity rule were always uneasy bedfellows. Pothier borrowed privity from Roman Law and put it in his Traité des Obligations.213 He was enormously influential in England.214 His error was translated into the Common law. The Contracts (Rights of Third Parties) Act can be seen as the final victory for the Will Theory.215 Where A and B intend a contract to be for the benefit of C it can be enforced by C.

Convergence (OUP Oxford 1994) 65. The German law in relation to third parties is discussed in the paper by Professor Schermaier at p. 289 ff. 211 Alfred McAlpine Construction Ltd. v. Panatown Ltd. [2001] 1 AC 518,535 (Lord Clyde). These type of arguments have been successful in stifling judicial development in negligence actions for defective realty: Murphy v Brentwood District Council [1991] AC 398, 472 (Lord Keith), 480 – 81 (Lord Bridge), 491 (Lord Oliver); D & F Estates Ltd. v. Church Commissioners for England [1989] 1 AC 177, 208 (Lord Bridge). 212 Information provided by a solicitor working in the City of London. 213 W. Evans, trans., A Treatise on the Law of Obligations or Contracts by M. Pothier (1806) 1.1.5§ 1. The role of Pothier is discussed by in the paper by Professor Ibbetson and Dr Swain at p. 191 ff. in this volume. 214 Hall v. Wright (1858) El, Black &El 746, 760, 120 ER 688 Lord Campbell described him as ‘one of the most celebrated modern jurists’. 215 On the Will Theory and privity more generally see R. Flannigan, ‘Privity – The End of an Era (Error)’ (1987) 103 LQR 564, 582 – 84.

HECTOR L. MACQUEEN* and W. DAVID H. SELLAR**

Scots Law: Ius quaesitum tertio, Promise and Irrevocability*** As elsewhere in the history of the Scots law of obligations, the Institutions of James Dalrymple, Viscount Stair, first published in 1681, hold a crucial place in the development of the Scottish doctrine of third party rights in contract – or, as Stair dubbed it, jus quaesitum tertio. The Institutions linked this doctrine with the concept of binding unilateral promise, the place of which in Scots law was also first analysed by Stair. He was able to cast the doctrine of jus quaesitum tertio in quite general terms, as a more or less inevitable consequence of his view that the law should give effect to the will and intention of parties to be bound in what he called conventional obligations. Not all later writers on Scots law were able to agree with this view of Stair, the result being a fundamental cleavage in the legal analysis of third party rights only partly resolved – and not very satisfactorily at that – by a decision of the House of Lords as late as 1920. The law remains in a state of some uncertainty down to the present day.

Stair and earlier developments Stair’s Institutions Stair chose not to follow the Roman law classification of obligations, preferring to divide obligations into two categories: obediential and conventional. According to Stair, conventional obligations ‘do arise from our will and consent’.1 Stair discusses jus quaesitum tertio in his chapter entitled ‘Obligations Conventional’ immediately following the passage in which he explains that, con* Professor of Private Law, University of Edinburgh. ** Honorary Fellow, School of Law, University of Edinburgh. *** We are grateful for the work of our research assistant Jen Hendry and for the financial support of the Edinburgh Law School which made her assistance possible. This contribution draws heavily upon our respective papers, Hector MacQueen, ‘Third party rights in contract: jus quaesitum tertio’ and W. D. H. Sellar, ‘Promise’ in K. Reid and R. Zimmermann (eds), A History of Private Law in Scotland (2000), vol. 2, pp. 220 – 251 and 252 – 282, to which the reader is referred for more detailed treatment of both subjects. 1 Stair, Institutions, I,10,1.

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trary to the view of Grotius, unilateral promises are obligatory without the promisee’s acceptance. 2 On conventional obligations generally Stair writes: We must distinguish betwixt promise, pollicitation or offer, paction and contract, the difference amongst which is this, that the obligatory act of the will is sometimes absolute and pure, and sometimes conditional, wherein the condition relates either unto the obligation itself, or to the performance; . . . As when any offer or tender is made, there is implied a condition, that before it become obligatory, the party to whom it is offered must accept . . . So then, an offer accepted is a contract, because it is the deed of two, the offerer and accepter.3

Stair’s use of the term ‘pollicitatio’ and the meaning which he attached to it, has been much debated, but is not considered here.4 Stair, incidentally, does not distinguish between ‘paction’, ‘convention’ and ‘contract’: ‘Pactions, contracts, covenants and agreements, are synonymous terms both in themselves and according to the recent customs of this and other nations; so that it will be unnecessary to trace the many subtilties and differences amongst pactions and contracts in Roman law.’5 In the next chapter Stair expounds his view that in Scots law unilateral promise is binding without the promisee’s acceptance, setting out clearly his disagreement with Grotius on this point. Stair derives this position explicitly from Canon law: But a promise is that which is simple and pure, and hath not implied as a condition, the acceptance of another. In this Grotius differeth de jure belli, lib.2.cap. 11.s14 holding, “that acceptance is necessary to every conventional obligation in equity, without consideration of positive law:” and to prevent that obvious objection, that promises are made to absents, infants, idiots, or persons not yet born, who cannot accept, and therefore such obligations should ever be revocable, till their acceptation, which in some of them can never be; he answereth, that the civil law only withholdeth, that such offers cannot be revoked, until these be in such capacity as to accept or refuse. Promises now are commonly held obligatory, the canon law having taken off the exception of the civil law, de nudo pacto. It is true, if he in whose favour they are made, accept not, they become void, not by the negative non-acceptance, but by the contrary rejection. For as the will of the promiser constitutes a right in the other, so the other’s will, by renouncing and rejecting that right, voids it and makes it return.6

In Institutions I,10,7 Stair again emphasises the Canon law background and relates it to Scottish practice: We shall not insist in these [formalities of Roman law], because the common custom of nations hath resiled therefrom, following rather the canon law, by which every paction produceth action, et omne verbum de ore fideli cadit in debitum . . . We have a special statute of session, November 27, 1592, acknowledging all pactions and promises as effectual: and so it has ever been since decided, January 14, 1632, Sharp contra Sharp.7 2 3 4 5 6

Stair, I,10,4. Stair, I,10,3. For recent discussion see Sellar (n. *** above), 267 – 8. Stair, I,10,10. Stair, I,10,4.

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It should be noted, however, that there was an important obstacle in the way of an unfettered doctrine of promise in Scots law: although no particular formalities were required to constitute an obligation, a promise, if challenged, could only be proved by the writing or oath of the party denying. Stair discusses jus quaesitum tertio in Institutions I,10,5. It is clear that he saw the jus quaesitum as an example of promise: It is likewise the opinion of Molina, cap 263, and it quadrates to our Customs, that when Parties Contract, if there be any Article in favours of a third party, at any time, est jus quaesitum tertio, which cannot be recalled by both the Contractors, but he may compel either of them to exhibit the Contract, and thereupon the obliged may be compelled to perform. So a Promise, though gratuitous, made in favours of a third Party, that party, albeit not present, nor accepting, was found to have right thereby, Had. November 25, 1609, Achinmoutie contra Hay.8

In the final part of this passage, Stair emphasises that the third party need not accept, or indeed be present at the formation of the contract, in order to acquire the right. Jus quaesitum tertio is for Stair the product of a joint declaration of will by the contracting parties only, and there is no need for the third party to emit a further declaration, or indeed to be in existence, to create a right in his favour. In Stair’s analysis, each contracting party makes a promise. Although the primary and characteristic performance generally falls upon one of the parties only (‘the obliged may be compelled to perform’), either may be called upon to ‘exhibit’ the contract – that is, to assist the third party in establishing his right so far as may be necessary.9 The effect of the promise in favour of the third party, being constitutive of a right, is to prevent revocation of the contract by the contracting parties. However, the situation is different if the so-called promise in favour of a third party is no more than an offer, binding only on acceptance: If the promise be pendent upon acceptation, and no more than an offer it is imperfect and ambulatory, and in the power of the offerer, till acceptance; . . . and so if a promise be made by one to another in favours of a third, importing the acceptance of that third, it is pendent and revocable by these contractors, till the third accept.10

The significance of Stair’s reference to the work of Luis Molina (1535 – 1600), one of the Spanish scholastic writers of the sixteenth century, whose De Justitia et Jure Tractatus was published in 1599, has been doubted, on the basis that it may well have been a ‘blind citation’, copied from Grotius and not actually used by Stair himself.11 The importance of the Spanish scholastic influence in general in Stair, I,10,7; Sharp v. Sharp (1631) Mor 4289. Stair, I,10,5. 9 For convenience we will henceforth use the terms ‘debtor’ to describe the party obliged to perform to the third party and ‘stipulator’ for the other party to the contract. 10 Stair, I,10,6. 11 T. Richter, ‘Molina, Grotius, Stair and the jus quaesitum tertio’, 2001 JR 219 – 222. 7 8

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relation to third party rights in the jus commune is that these writers did not make the third party’s right dependent upon acceptance, unlike Grotius and others in the later Natural Law school who also favoured recognition of third party rights.12 Even if Stair did not himself read Molina, however, it is significant that on the point at issue he wished to align himself with those whose view was opposed to that of Grotius, an author to whom in other respects Stair was much indebted.13 As Alan Rodger has shown, Molina’s particular contribution in Disputatio 263 was not so much to the argument about third party rights as to the debate about the enforceability of unilateral promises without acceptance. 14 In the key passage, as translated by Rodger, Molina writes: What we assert is nonetheless true, namely, that leaving aside positive law which decides otherwise, a promise itself by its very nature has force before acceptance to bind the promisor for his part in such a way that he is bound to show the promise to the beneficiary so that if he wishes to accept it, he [the promisor] should fulfil it, as he was bound for his part before the acceptance.

So, as Rodger observes, for Molina, ‘unless positive law provides to the contrary, a promise can bind the promisor even though it has not been accepted’.15 In Stair’s view, as we have seen, Scots common law or custom as declared by the Court of Session did recognise both promise and, as a consequence, third party rights as binding without acceptance, and therefore ‘quadrated’, with the requirements of natural law. The whole topic thus exemplified Stair’s basic contention that Scots law was close to the requirements of natural law.16 Stair’s approach to the subject placed him in a tradition which challenged the Roman law principle, alteri stipulari non potest, and stretched back as far as the glossator Martinus Gosia. Similar considerations may have motivated the fourteenth-century compilers of the ley ‘Paresciendo’ in Castile discussed elsewhere in this volume.17 12 R. Zimmermann, The Law of Obligations: Roman Foundations of the Civilian Tradition (1990), 43 – 5; A. F. Rodger, ‘Molina, Stair and the jus quaesitum tertio’, 1969 JR 34, 128 (2 parts), at 135 – 9. 13 See J. J. Gow, The introduction of the theory of justice in Scots law, Aberdeen PhD 1952; P. G. Stein, ‘Stair’s general concepts: the theory of law’ in D. M. Walker (ed) Stair Tercentenary Studies (1981), 181 – 187; W. M. Gordon, ‘Stair, Grotius, and the sources of Stair’s Institutions’, in J. A. Ankum, J. E. Spruit and F. B. J. Wubbe (eds), Satura Roberto Feenstra, (1985), 571 – 583. 14 See also on Molina and promises J. Gordley, The Philosophical Origins of Modern Contract Doctrine (1991), 70 – 81. Gordley does not discuss Disputatio 263. 15 Rodger (n. 12), 138. See also Gordley (n. 14), 73 – 74. 16 See e.g. Stair, Institutions, Dedication to the King; Advertisement to the Second Edition; and I,I; see further W. M. Gordon, ‘Stair’s use of Roman law’, in A. Harding (ed), Law Making and Law Makers in British History (1980), 120 – 126. 17 See further the contributions to this volume of Jan Hallebeek and Harry Dondorp; also their joint article, ‘Grotius’ doctrine on adquisitio obligationis per alterum and its roots in the legal past of Europe’, in O. Condarelli (ed), “Panta rei”: Studi dedicate a Manlio Bellomo (2004), 205 – 244.

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Canon law and Scots law before Stair As already noted, Stair rested his discussion of promise and third party rights on Canon law and ‘the common custom of nations’; more specifically on Canon law and its influence on Scottish practice. The Church had taught that promises seriously intended should be kept, whether standing on their own, or as part of what would now be classified as a contract: pacta quantacunque nuda servanda sunt;18 this being in clear contrast to the Civil law rule: ex nudo pacto non oritur actio. At first the keeping of promises was regarded as primarily a moral obligation, which should not necessarily be given legal effect; but in the later Middle Ages it came to be accepted by Canon lawyers that such promises should also be legally binding, and various devices were used to give legal force to such obligations in the Church courts. Richard Helmholz has noted that, ‘The ethical principle led even to enforcement of unilateral promises’;19 while Helmut Coing has shown how natural obligations based on consent came to include pacta nuda, promises made under oath, and promises in favour of third parties.20 Church courts claimed jurisdiction over obligations supported by an oath, on the basis that an oath sworn in the name of God gave them a locus in the matter. As a result the courts of the Church in Scotland, as in much of western Europe at this time, acquired a significant jurisdiction in the field of obligations.21 Debate, however, continued within the ius commune as to the enforceability of promises and pacta nuda in secular courts. Increasingly exceptions came to be made to the Civilian rule ex nudo pacto; and more and more agreements came to be regarded or classified as pacta vestita, agreements clothed by causa and thus actionable, rather than pacta nuda. By the end of the seventeenth century it was generally accepted, in theory as well as practice, that agreements entered into by mutual consent should be legally enforceable, even if they involved no counter-prestation or quid pro quo.22 X (Decretals),1,35,1. R. H. Helmholz, ‘Contracts and the canon law’ in J. Barton (ed), Towards a General Law of Contract (1990), 49 – 65 at 50. 20 H. Coing, ‘English equity and the denunciatio evangelica of the canon law’ (1955) 71 LQR 223 – 41. 21 For an overview of Canon law in this area, see Helmholz (n.19). On oaths in particular see Helmholz, The Spirit of Classical Canon Law (1996), 145 – 73. 22 This short account of a lengthy and complicated process is necessarily much simplified. It does not, for example, cover differing definitions of causa and ‘consideration’. For further details, see Barton’s Introduction, and R. Feenstra’s ‘Pact and contract in the Low Countries from the 16th to the 18th century’ in Barton (above n. 19), 197 – 213; also K.-P. Nanz. Die Entsehung des allgemeinen Vertragsbegriffs im 16. bis 18. Jahrhundert (1985) – we have found W. M. Gordon’s review of Nanz in (1987) 8 Journal of Legal History 373 – 6 particularly helpful; Gordley (n. 14), especially at 67 – 77; and Zimmermann (n. 12), chs. 16 – 18. See further G. Lubbe, ‘Formation of contract’, in Reid and Zimmermann, History of Private Law in Scotland, 1 – 46. 18 19

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Naked pactions, then, resulting from a bare agreement between the parties, came to be regarded as enforceable by most writers within the ius commune by the end of the seventeenth century. But what about a promise, pure and simple? Although most writers, Fransiscus Connanus (1508 – 51) being a notable exception, took the view that promises were morally binding, few were prepared to argue that they should be legally enforceable. As already noted,23 Grotius was quite explicit that a promise (promissio), although intending to confer a legal right on another, was binding only on acceptance. Stair, however, rested the proposition that a promise seriously intended was binding without acceptance squarely on the Canon law. This leads to a consideration of the influence of Canon law on later Scots law. In fact, the influence of the Canon law, including specifically the law affecting obligations, was particularly strong in Scotland both before and after the Scottish Reformation, which took place in 1559 – 60.24 As elsewhere in Western Europe, the courts of the Church came to exercise a large jurisdiction over contract. Using the surviving record of the Official Principal of St Andrews shortly before the Reformation, Gordon Donaldson calculated that, excluding appeals, about a quarter of the judgements given related to ‘the rendering of money or goods by one party to another or for the fulfilment of contracts.’25 This last category, he noted, arose partly from obligations fortified by an oath, partly as a result of agreement between the parties that the church courts should have jurisdiction, and partly from contracts ‘actit’ or recorded in the books of the Officials.26 In 1542, in the case of Barclay v. Blackhall, the Session confirmed that, ‘a contract or obligation made of any civil and profane matter, such as an assedation of lands, is understood not to be profane or civil, if the same be confirmed by the oath or fide media of the contrahentis, or any of them; and therefore the party, albeit he be a temporal man may be called and pursued for fulfilling the same before the Spiritual Judge.’27 See above, n. 13. For the influence of the Canon law in Scotland, see David Baird Smith, ‘Canon law’ in H. McKechnie (ed.), The Sources and Literature of Scots Law (Stair Society, 1936), 183 – 92; J. J. Robertson, ‘Canon law as a source [in Stair’s Institutions]’ in D. M. Walker (ed.), Stair Tercentenary Studies (Stair Society, 1981) 112 – 27; Simon Ollivant, The Court of the Official in Pre-Reformation Scotland (Stair Society, 1982), especially at 130 – 3; J. J. Robertson, ‘Canon law [as a historical source]’, in The Laws of Scotland: Stair Memorial Encyclopaedia,vol. XXII (1987), 580 – 86; and L. J. Macfarlane, William Elphinstone and the Kingdom of Scotland, 1431 – 1514 (2nd edn, 1995) chs. 2 and 3. 25 G. Donaldson, ‘The Church Courts’, in: G. Campbell H. Paton (ed.), Introduction to Scottish Legal History (Stair Society, 1958), 356 – 73 at 366 (reprinted in a revised form in Donaldson, Scottish Church History (1985), 40 – 52 at 43 – 44). 26 See also Ollivant (n. 24), 85 – 93, 177; also 65 – 6. 27 P. G. B. McNeill (ed), Balfour’s Practicks (Stair Society, 1962, 1963), 29; jurisdiction did not extend, however, to contracts ‘concerning redemptioun of landis or heritage’; and see A. J. Mackenzie Stuart, ‘Contract and quasi-contract’ in Campbell Paton (n. 25), 250. In general from this point on we have extended contractions, inserted punctuation and normalised capitalisation in quotations. 23 24

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In much of Europe the wide jurisdiction of the Church courts in the field of obligations came to be resented, and was ended or restricted before the Reformation. In England, for example, the fourteenth century statute of Praemunire was invoked to cut it down, and by the 1520s the Church’s jurisdiction in contract became, in the words of Helmholz, ‘virtually moribund’.28 In Scotland, unusually, ecclesiastical jurisdiction over obligations continued unaltered until the Reformation. However, although the authority of ‘the bishope of Rome’ was then roundly rejected in Scotland, Canon law continued to be regarded as an important source of law except inasmuch as it conflicted with the Reformation settlement. Stair, for example, wrote that, ‘So deep hath the canon law been rooted, that, even where the Pope’s authority is rejected, yet consideration must be had to these laws . . . as containing many equitable and profitable laws.’29 Much Canon law, in fact, both substantive and procedural, had already been incorporated into the common law of Scotland before the Reformation, and many distinguished Canon lawyers had presided over secular courts. In addition, the President of the Court of Session, Scotland’s supreme civil court, from its establishment as a College of Justice in 1532 until the Reformation, was a churchman, as were half the ordinary judges of the court. From the beginning the procedure of the new court owed much to the Roman-Canonical model. There was a further significant fusion of Canon law and Scottish common law after 1560. New ‘Commissary’ courts were established, under a head Commissary court based in Edinburgh, to exercise much of the jurisdiction formerly possessed by the spiritual courts in matters not strictly ecclesiastical. This included not only jurisdiction over status, testaments and moveable succession, but also in contractual matters. Article XIV of the original instructions given in March 1564 to the ‘Commissaries’ (judges) of the head Commissary Court of Edinburgh concerned jurisdiction in contract: That the Commissaris sall be Judges to all contractis registrat in their bukis, quhairunto thair authoritie is interponit, and the partie submittand him to thair jurisdictioun, et hoc cumulative, sed non privative: And siclike, to all uther contractis not beand registrat in uther judges ordinaris bukis; for the fulfilling quhairof the parties is ellis sworn, or sall happen thairefter to be sworn, et hoc cumulative, et non privative.30

Article XV provided further for jurisdiction in other actions where the sum in dispute did not exceed forty pounds, and in cases involving ‘widowis, pupils, and siclike puir [poor] and miserabill persounis’, not exceeding twenty pounds. Although the new courts soon became quite secularised and looked to the Court of Session (described in 1609 as ‘the King’s Great Consistorie’31), rather than to the Reformed Church, there was at first considerable continuity with the past in Helmholz (n. 19), 59. Stair, I,1,14. 30 Balfour’s Practicks, 655 sqq. These grounds of jurisdiction, it will be observed, compare closely with those instanced by Donaldson (above, n. 25). 31 Acts of the Parliaments of Scotland [APS], iv, 430 c.8. 28 29

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personnel also.32 The Commissary jurisdiction was confirmed in 1592 when the original instructions of 1564 were ratified by Act of the Scottish Parliament, ‘Decerning and declaring the said iurisdictioun to be als ample of the same force and auctoritie with the iurisdictioun of the saidis officiallis to quhome thai succeedit’.33 Gradually, in the course of the seventeenth century, the Commissary courts lost or gave up most of their jurisdiction over voluntary obligations. Crucially in 1639 it was said that interpositio fidei should not confer jurisdiction on the Commissaries in actions not merely consistorial.34 At the end of the century Stair simply describes the Commissaries as ‘proper judges in the confirmation of testaments, and in the matter of divorce’, although they did still retain some jurisdiction into the following century over civil matters not exceeding forty pounds Scots in value.35 As has been noted,36 Stair pointed to ‘a special statute of session’ of 27th November 1592 as a crucial turning point in the recognition by Scots law of all promises and pactions as being legally enforceable. The reference is to ‘Acts of Sederunt’, sometimes resembling legislation, by which the Court of Session regulated its procedure. Later commentators doubted this reference: the surviving Act of Sederunt of the relevant date did not appear to support Stair’s proposition, and they could find no other.37 Recent research, however, has tended to vindicate Stair, pointing out that his testimony is supported by an earlier seventeenth-century source.38 However that may be, the adoption by the Court of Session of the Canon law rule pacta sunt servanda, does not appear to have been quite as sudden or complete as suggested by Stair’s comment, ‘ . . . and so, it hath been ever since decided’.39 Civilian arguments based on the maxim ex nudo pacto non oritur actio continued to be addressed to the Court of Session for some time. In Kintore in 1623, it was argued unsuccessfully that a promise ‘was nudum pactum, having no preceding cause, and that promises of that kind are not obligatory’; of Laird of Clackmannan, a year later, Mackenzie Stuart comments that ‘Spotiswoode’s humanistic mind is outraged by the Lords finding the promise to be a ‘perfect stipulation‘; while in Sharp v. Sharp itself in 1631, arguments based on ‘the treatises of the lawyers and doctors’ were considered not to be relevant.40 The ultimate decision to follow the 32 See for example the remarkable career of Sir James Balfour of Pittendreich, last Offical of Lothian, first Chief Commissary of Edinburgh and finally Lord President of the Court of Sesssion, described in P. G. B. McNeill’s introduction to Balfour’s Practicks (above, n. 27). 33 RATIFICATIOUN of the Commissariot of Edinburgh (APS, iii, 574 c.64). 34 APS, v, 603a. 35 Stair, IV,1,58. More research into the topic of Commissary jurisdiction in the seventeenth century is clearly desirable. 36 See above, p. 359. 37 Erskine, Institutes, III,2,1; Mackenzie Stuart (n. 27), 253 – 4. 38 Sellar (n. ***), 261 – 2. 39 Stair, I,10,7. 40 Kintore v. Sinclair (1623) Mor 9425; Laird of Clackmannan v. Nisbet, 1624, reported in Sir Robert Spottiswoode’s Practicks of the Law of Scotland (1706), 28; and Sharp v. Sharp

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Canon law may have been made the easier by the fact that the medieval treatise Regiam Majestatem, which was still cited in court, however one might view its authority, had borrowed from the distinguished thirteenth-century Canonist Goffredus de Trano in its section on pacts, and this had been repeated in both the sixteenth and seventeenth centuries.41 Recognition of a form of third party rights in contracts occurs in printed Scottish legal sources towards the end of the sixteenth century.42 In 1591, significantly close in time to the Act of Sederunt of 1592 referred to by Stair, the Court of Session in Wood v. Moncur43 held that a provision in favour of a third party in a contract of excambion could be invoked by that third party, ‘albeit [he] was no contractor, yet there was a provision made in the same in his favours’. The printed report reveals no reference to previous authority, whether of the jus commune or of native law, but equally does not give an impression of any radical departure from previous practice. Similarly the report of the next known case, Auchmoutie v. Hay in 1609,44 cited by Stair, itself contains no citation of authority in upholding the possibility of a third party right. There the defender in an action for spuilzie of teinds (spoliation or dispossession of ecclesiastical dues or tithes) . . . . . . alledged that he had ane exceptione noviter veniens ad notitiam, to witt, that the persewar had promised to Robert Hay who in name of the said defendar accepted of the promis that if ever he compeired at the barr in the said caus, he sould be content to discharge the said defendar of his haill teinds. It was argued the said exceptione could not be received, ffirst becaus the cause was concluded; 2do becaus the promise not being made to the pairtie preferred and accepted himselfe, it was not obligator [obligatory]. Notwithstanding thirof, becaus the persewar was present and the defendar’s procurators offered to make faith that the said exceptione was newly come to his knowledge and offered to referr the veritie thirof to the persewar’s oath, the Lords ffound the exceptione relevant to be proved be the pairtie’s oath; who, having sworne, denyed the same.

That is, the defence in this case did not fail on the ground that the promise had not been made to ‘the partie preferred and accepted himselfe’, but because the pursuer denied under oath that the promise had been made at all. (1631) Mor 4289 (for which see also above, n. 7). For these cases, see further Mackenzie Stuart (n. 27), 252. 41 Regiam Majestatem, I,28 – 31, especially ch. 28, De Pacto et Pollicitatione; and see P. Stein, ‘The source of the Romano-canonical part of the Regiam Majestatem’, (1969) 48 SHR 107 – 23. Balfour’s Practicks, 188 – 189, repeats the passage in Regiam in the vernacular; see also Hope’s Major Practicks, i,98, and ii,89. Goffredus himself, Canonist though he was, based his account partly on Azo and the Digest. 42 We have found no trace of a doctrine of jus quaesitum tertio in Regiam Majestatem, Quoniam Attachiamenta or Balfour’s Practicks. But the unpublished records of the Lords of Session and the MS Practicks from before 1600 have not been examined, nor the surviving materials for the pre-Reformation church courts, and much may remain to be discovered there. 43 Wood v. Moncur (1591) Mor 7,719. 44 (1609) Mor 12,126, cited by Stair as Auchinmoutie contra Hay. For the original report, quoted in the text below, see Rodger (n. 12) at 145 – 6.

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In his Major Practicks Hope cites two cases, neither of which he names, which apparently dealt with third party rights, one from 1612 and the other from 1616. He reports the former case, which deals first with obligations sine causa, only in general terms: ‘Ane obligatione may be registratt, the pairtie being dead in whose favors it was made, if ther be ane third person alyve who hes ane claus or provisione conceaved in his favours’.45 More factual details are given for the other case: Jhone Gildie contra Andraw Ochiltrie, for registrating of ane contract quhilk wes conceaved in favours of the persewar, the lords fand proces albeit the principall partie contracter wes not summoned, viz Thomas Gildie of Legastrune; and sic lyke in the same caus they fand that the partie in whois favours the contract wes conceaved neided not to show quhen he had right to the soumes as assigney, albeit the contract beir to make payment to him as assigney.46

In a case in 1634, Renton v. Ayton,47 dealing like Auchmoutie v. Hay with spuilzie of teinds, the Lords upheld the claim of the defender, Lady Ayton, to immunity from liability on the basis of an agreement between the pursuer and other parties, and rejected the pursuer’s contention that ‘the said clause being conceived in favours of a third party, who was neither present the time of the parties contracting thereon, she not being a party, nor knowing anything of the bargain, and doing nothing upon it, nor being accepted by her, nor by none in her name, and so behoved to be unprofitable to her, being stipulation alteri facta, which is not profitable in law’.48 The Lords found that, the contract having been registered and so made public, its discharge required the consent of the third party beneficiary as well as that of the contractual creditor.49 Some years before the case of Renton, in Supplicants v. Nimmo50 in 1627, the Court of Session dealt with a contract in which one party, having purchased land from another, was under an obligation to pay the price to third parties. The third parties sought to enforce this obligation by way of an inhibition against the debtor: and it being doubted if they might crave the said inhibition, seeing the said contract was not subscribed by them, neither were the parties contractors therein, nor in the inhibition craved by any of the contractors; the Lords found that the said persons, notwithstanding they were not contractors, might seek inhibition upon the clause foresaid, conceived in their favour, against the party obliged by the contract, to perform the same to them.51

These cases, all clearly upholding third party rights in contracts, form an important background to Stair’s general statement on the Scots law of jus quaesitum tertio, even although the analysis they reveal is not wholly the same as his. They 45 46 47 48 49 50 51

Hope, Major Practicks, II,iii,37. Ibid, II,1,30. (1634) Mor 7,721. At 7,721 – 2. At 7,222. (1627) Mor 7,740. At 7,740.

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demonstrate that the Lords of Session had recognised the possibility that a contract might create rights for third persons who had not been party to it if there were clauses ‘conceived in their favour’. The printed reports make no reference to jus commune authority, although there may well have been influence.52 Theoretical explanations of the nature of the right were apparently not a concern for the court, but no acceptance of the right was required of the third party, while the language of promise was used in Auchmoutie v. Hay in 1609. Public registration of the contract appeared to be significant in Renton v. Ayton, while the fact that the contracts had been put into effect by performance at least reinforced the third party’s right in Supplicants v Nimmo. Where third party rights existed, they could not be affected by later unilateral acts of the original contracting parties, nor did enforcement against the debtor in the obligation require the concurrence or involvement of the other contractor. Case law on third party rights in Stair’s own time seems not inconsistent with the view he took of the law in the Institutions. In 1664, in Ogilvie and Grant v. Ker,53 Ogilvie had sold lands to Ker, who was obliged by the contract to pay Grant. When Grant claimed payment from Ker, the latter declared that he had paid Ogilvie and argued that the clause in Grant’s favour conferred no right upon him, because he ‘was no contractor’;54 because the contract had never been delivered to Grant; and because the contract was merely a mandate to pay which Ogilvie could recall at his pleasure. The Lords found, that seeing the bargain took effect, the clause in Grant’s favour was not a simple mandate but a delegation, whereby Ogilvie constituted Ker his debtor, to be debtor to Grant his creditor, which needed no intimation, being contracted by, and so known to Ker himself; and therefore found Ogilvie’s discharge ineffectual.55

In Irving v. Forbes56 in 1676 the Lords rejected an argument that a third party could not enforce a bond in his favour unless it had been delivered to or accepted by him, albeit that it was also observed ‘that the not delivery or acceptance . . . was only probable by his [i.e., the third party’s] oath’.57 There are at least two cases in and just after Stair’s time, however, which present some difficulties for his view of jus quaesitum tertio and which would become of some significance in the later development of the law. In Trotters v. Lundy,58 which 52 See Coing (n.20) for recognition of third party rights in the jus commune; also J. C. de Wet, Opuscula Miscellanea (1979), 217 – 239; Hallebeek and Dondorp, in Studi Bellomo (above, n. 17). 53 (1664) Mor 7,740. 54 At 7,740. 55 At 7,741. The interlocutor survives in the National Archives of Scotland, Edinburgh: call number CS 18 / 12. 56 (1676) Mor 7,722. 57 At 7,722. 58 (1667) Mor 11,498.

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was decided in 1667 and reported by Stair, a father had taken a bond from his debtor and had it made payable to his children. The Lords held that he might at any time discharge the bond until it was made public by delivery (that is to say, by infeftment if it was a heritable right, or by intimated assignation or confirmed testament if moveable). The case is cited in Stair’s Institutions, but there confined to the special case of ‘bonds of provision by fathers to children’.59 In Stonehewer v. Inglis60 in 1697, a merchant with several creditors had sent a sum of money to a neutral party with an instruction to pay it to one of the creditors. Before payment could be made, another creditor arrested the money. It was held that the second creditor’s claim was to be preferred, since the money remained the property of the merchant and traditionibus non conventionibus seu nudis pactis transferuntur rerum dominia. Neither case was consistent with a model of irrevocable third party rights arising from a contract term alone. On the other hand, in another case in 1714 involving a seller instructing a buyer to pay the purchase price to the former’s creditors, an argument that the creditors had no jus quaesitum was apparently rejected in favour of the view that ‘by our law, obligations conceived in favours of third parties, although not directly granted to them, cannot be discharged without their consent’.61 Another point of some importance for subsequent developments62 is that Stair did not cite these or any other seventeenth-century case apart from Auchmoutie v. Hay, in the two editions of the Institutions published in his lifetime (in 1681 and 1693). It was the editors of the third edition in 1758 who replaced Stair’s reference to Auchmoutie with Supplicants v. Nimmo, Renton v, Ayton, Ogilvy v. Ker and Irving v. Forbes, in which intervention they were followed by the editors of the fourth (1826) and fifth (1832) editions.63 The evidence overall suggests that in Scotland the influence of the Canon law on the law of obligations was positive and direct. All the matters particularly mentioned in the context of possible Canon law influence by Coing as deriving from obligatio naturalis - naked pactions, simple promise and jus quaesitum tertio – are to be found in Stair’s Institutions.64 This can surely be no accident. Stair declared his exposition of the law to be based on Scottish practice, and believed this practice, in turn, to owe much to Canon law. There is evidently a paradox here. A very conservative approach towards legal change led to the pre-Reformation jurisdiction of the Church courts in Scotland over promise and contract continuing little altered under the new Commissary courts and thus to a further and very significant Stair, I,5,6. (1697) Mor 7,724. 61 Blair v. Graham (1714) Mor 7,744. 62 See further below the discussions of Blumer v. Scott (373) and Carmichael v. Carmichael’s Exx (376 – 380). 63 See Rodger (n. 12), 39 – 41, and further below, p. 375. 64 See Coing (n. 20). 59 60

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fusion of Canon law and Scots common law. A century later Stair’s expository genius gave this area of law a distinctly modern appearance. Stair’s analysis of jus quaesitum tertio was not always fully understood or followed to the letter by later Scots lawyers, as will appear. However, the structure of Stair’s Institutions, based upon the consideration and exposition of rights, rather than on the traditional Civilian classification according to persons, things and actions, avoided much potential confusion between jus quaesitum tertio and areas of law such as assignation and mandate. The ‘master-plan’ of Stair’s Institutions focuses on rights, discussing first, in books one and two, the constitution and nature of rights, including jus quaesitum tertio, with mandate appearing as a separate title;65 followed by the conveyance and translation of rights in book three, commencing with assignations; before moving on finally to the cognition and enforcement of rights.66 But complications remained about the delivery and registration of deeds, and there was also, at the end of the nineteenth century, a brief flirtation with the English law of trusts.67 One circumstance which was to give rise to problems in Scots law, as in other jurisdictions, was the granting by fathers of rights in favour of their children. Such difficulties arose in Stair’s own time in Trotters v. Lundy, noted above, in the eighteenth century in Hill v. Hill, and in the twentieth century, first in Cameron’s Trustees v. Cameron, then in the great case of Carmichael v. Carmichael’s Executrix. All of these are discussed more fully in the following sections.

After Stair Kames The topic of third party rights attracted increasing, if still somewhat scant, attention from writers in the eighteenth century.68 Of these the most significant, especially because he took a different view from Stair, was Lord Kames in his Principles of Equity.69 His point of departure was once again the problem of constituting rights in favour of those not present: in the words of the relevant chapter’s title, ‘How far a covenant or promise in favour of an absent person, is effectual’. The chapter appears in a larger section dealing with ‘Powers of a Court of Equity to Stair, I,1,12, ‘Mandat, or Commission, where of Trust, etc’. Stair, I,1,22 and III,1,1. On Stair’s ‘master-plan’ see A. H. Campbell, The Structure of Stair’s Institutions (1954), 10 – 14. For the history of assignation, see K. Luig, ‘Assignation’, in Reid and Zimmermann (eds) (above n. ***), vol 1, 399 – 419. 67 See further below, p. 374. 68 For the later history of unilateral promise in Scots law see Sellar (n. *** above). 69 We have used the last edition published in Kames’ lifetime, the 3rd of 1778. The 5th and final edition appeared in 1825. On Kames’ speculative and philosophical approach to law see, e.g. I. S. Ross, Lord Kames and the Scotland of his Day (Oxford, 1972); D. Lieberman, The Province of Legislation Determined (Oxford, 1989), 144 – 175. 65 66

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Remedy the Imperfection of Common Law With Respect to Matters of Justice that are not Pecuniary’.70 Kames begins with an assertion of what he took the position to be in the law of nature: And to make our engagements the more extensively useful in the social state, we find ourselves bound in conscience, not only to those with whom we contract, but also to those for whose benefit the contract is made, however ignorant of the favour intended them.71

But how far was this supported by municipal law? Roman law had confined actions upon a contract to the parties to it, leaving unenforced many moral rights and obligations. Further, a party to a contract had to have a pecuniary interest in it before he could seek enforcement. But, Kames argues, if I obtain a promise in favour of my benefactor or my child, perhaps my heir, do I not have an interest to enforce which a court of equity would recognise? Should this not extend to the case where the promise is in favour of my friend? But this does not mean that my friend has an action in his own right, at least during my lifetime. The obligation is mine, not his, and I am free to discharge it without reference to him. However, Kames continues, there were some decisions of the Court of Session which taught ‘a very different doctrine’,72 in particular Ogilvie v. Ker and Supplicants v. Nimmo.73 But the court ‘afterward determined more justly in the following cases’;74 and Kames goes on to describe and analyse Dundas v. Dundas,75 Rose v. Baine of Tulloch,76 (both decided in the early years of the eighteenth century), and Hill v. Hill,77 decided in 1755, three years after Kames had ascended to the Court of Session bench, and first reported by him in his Select Decisions (1780). Having thus apparently rejected Stair’s doctrine of jus quaesitum tertio, Kames then goes on to describe exceptions, under which the third party may acquire a right to enforce a contract made by others in his favour. The death of the creditor who had exacted the provision gave title to the third party, since the debtor remained bound in conscience, especially (but not exclusively) if the deceased creditor had provided some quid pro quo for the promise. Again, the creditor might renounce his power of discharging the obligation; which renunciation delivered, will instantly intitle that person to demand performance. Such renunciation may also be inferred rebus et factis. As, for example, where a man dispones his estate to his eldest son, and takes from him a bond of provision to his younger 70 Kames, it should be noted, does not juxtapose Common Law and Equity in the strict English sense, but more generally. In Scots law there is no formal division between law and equity. 71 Kames, Equity, 59. 72 Ibid, 64 – 65. 73 Cited and discussed above, nn. 50 and 53. 74 Kames, Equity, 65. 75 Kames cites Fountainhall, January 2, 1706: see (1706) Mor 4089. 76 Kames gives only the date July 6, 1717: see (1717) Mor 11,505. 77 (1755) Mor 11,580. See further below, p. 372.

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children by name: while the bond is in the father’s custody, it continues under his power; but if he deliver the bond to his children, he is understood to renounce his power, which will intitle them to demand payment.78

Kames then embarks upon a discussion of the exceptions to privity of contract recognised in Roman law, leading him to comment at some length upon fideicommissary settlements, which he compares with trusts: A trust . . . comes not under the cogniscience of the common law; because the person in whose favour the trust is established, not being a party to the agreement, has not at common law an action to oblige the trustee to fulfil his engagement: but he hath an action in equity as above mentioned. And hence it is, that in England such trusts are made effectual in the court of chancery.79

Kames’ discussion has been summarised in extenso because he is the first jurist to give detailed argument which, if accepted, would place significant restrictions upon Stair’s doctrine of jus quaesitum tertio, emphasising a need for delivery and a link with trust law. It may first be noted that there was at least one case during Kames’ time which was inconsistent with his general approach of allowing free revocation of third party rights so long as the contracting party was living. In Warnoch v. Murdoch,80 a marriage contract provided for the payment of an annuity to the husband’s step-mother should she and the wife both survive him, the sum to be payable from another larger annuity for the wife. Just before his death, the husband purported to revoke the provision in favour of his step-mother, who after his death brought an action of payment against the widow. The step-mother relied on Stair I,10,5 and cases such as Supplicants v. Nimmo and Renton v. Aiton. The widow argued that the transaction had been gratuitous; that the step-mother was no party to the marriage contract, and there was no good reason why the husband should not be able to revoke or should be held without the power to revoke; and, finally, that ‘no deed can be effectual without delivery; and, in this case, there was no delivery to [the step-mother], nor was the deed even put into the register, which is held to be a general delivery to all parties interested’.81 The Lord Ordinary (Lord Bankton) held for the stepmother, rejecting the arguments against a third party right, and the Inner House adhered to his opinion. Unfortunately the report does not give the reasoning supporting these decisions. Of the cases which Kames cites, however, probably the most important in terms of the impact which it was to have upon the subsequent development of the law of 78 Equity, 66, citing Trotters v. Lundy, Dirleton 20 Nov 1667 (see (1667) Mor 11,498), cited above, n. 58. 79 Kames, Equity, 70. After further excursions in the Roman law of legacies and the Scots law of entails and the discharge thereof, Kames concludes his treatment with an analysis of the problem of payment of another’s debt, with which we need not concern ourselves here. 80 (1759) Mor 7,730. The case was doubted by Lord Dunedin in Carmichael v. Carmichael’s Exx 1920 SC (HL) 197. 81 (1759) Mor at 7,731.

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jus quaesitum tertio is Hill v. Hill,82 decided in 1755. In this case a father lent money and took in return a bond in his son’s name. Following the son’s death, the father’s claim to the sum in the bond was upheld in a competition with the son’s executor (his brother). The latter had argued that the son had acquired a right by delivery of the bond to the father, who was acting for the son’s behoof; but the father’s reply was that the money lent was his, he retained control of the bond, and so it was revocable for his lifetime unless delivered to the son himself. In some sense, the father was seen as the owner of the bond. More importantly, perhaps, the decision reinforced the control of parents over their children, enabling them, in the language of the report, ‘to appoint certain subjects to go to certain of their children, reserving still their own power of alteration’. A more or less complete process for this case, from its beginnings in the sheriff court of Perth to its conclusion in the Court of Session, survives in the National Archives of Scotland. This confirms that the legal arguments were confined mainly to issues about paternal rights and touched only glancingly, if at all, on Stair’s doctrine of jus quaesitum tertio.83 There was thus apparent by the middle of the eighteenth century a division, between Stair’s view that a provision in a contract in favour of a third party created a right in favour of that party which even the contracting parties could not revoke, and a line of cases holding that such a provision did not necessarily create a right which would be good against the competing claims of one of the contracting parties or of its creditors. The second view, strongly supported by Kames, had some support from Bankton also;84 Stair’s view, however, could also draw support from cases decided both before and after his time as well as, to some extent, from Bankton again as well as Erskine.85

The nineteenth century No attempt was made to reconcile these two strands of authority for a considerable period of time. Hill v. Hill was applied in a number of cases in the nineteenth century.86 The line of authority was finally approved by a Full Court of seven judges, headed by Lord President Dunedin, in Cameron’s Trustees v. Cameron87 in 1907: it was affirmed that if a man took bonds in favour of himself as trustee for his children, and kept custody of the documents, there was no delivery to, and no right in, the children, even although the bonds had been publicly registered. But (1755) Mor 11,580. National Archives of Scotland, call number CS 234, Innes Durie, H2 / 16. There is reference to the son having a jus quisitum (sic), but Stair is not cited in the pleadings of either party. 84 Bankton, I,11,6 (see MacQueen, n. ***, 227). 85 Bankton, I,11,7; Erskine, III,2,43 – 44 (see MacQueen, above, n. ***, 227 – 228). 86 See further MacQueen (above, n. ***), 231. 87 1907 SC 407. 82 83

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throughout the same period the courts also continued to uphold third party rights which appeared to rest on little more than provisions in a contract or some other legally effective document.88 The later years of the nineteenth century, and the early years of the twentieth, saw several more cases in which the scope of the jus quaesitum tertio doctrine was refined, drawing essentially on Stair I,10,5.89 In Blumer v. Scott,90 an 1874 case about a sub-contract under which engineers supplied shipbuilders with engines for a ship being constructed by the latter under another contract with a purchaser, the purchaser sued the engineers for damages in respect of defects in the engines, claiming to be a tertius under the sub-contract and citing Stair I,10,5, as well as the related cases, for the following proposition: When there was in a contract a stipulation intended to benefit or affect a third party neither of the contracting parties could resile so as to disappoint the third party of his benefit, and to this it was not necessary that he should have been even apprised of the existence of the contract. All such contracts were not for the benefit of the contracting parties alone, but were also for that of the party who was the cause of the contract being made.91

The argument, which with its supplementation of the established test of ‘intention to benefit’ by ‘intention to affect’ the third party, went some way beyond the authorities by which it was supported, was rejected by a majority of the First Division. Lord President Inglis looked to the terms of the two contracts, pointing out that the express obligation of the engineers was to satisfy the shipbuilders, who in turn, but under another contract, had an obligation to satisfy the purchasers. The other main opinion was rendered by Lord Ardmillan, who accepted the authority of Stair, followed the Lord President’s analysis of the contracts in the case, and observed that the contract between the shipbuilders and the engineers was annullable by mutual consent. In a dictum which was later to attain considerable significance, he added that before a jus quaesitum tertio could arise, ‘it must be clear that both the contracting parties intended so to secure [the third party] and that they could not, separately or together, revoke the stipulation’.92 This dictum seemed to go further than the authorities upon which Lord Ardmillan was purporting to rely, in that irrevocability of the contract was made one of the pre-conditions for the existence of a jus quaesitum tertio, whereas for Stair irrevocability had followed from the existence of the term in favour of the third party. But it seems implausible to dismiss the dictum as a mere slip of expression, since, as noted above, the purchasers had explicitly argued that the mere existence of the term was enough to prevent revocation of the contract and there was by this time a substantial body of authority (albeit not referred to directly by Lord Ardmillan) holding that third party rights needed something more than simple contractual provision. 88 89 90 91 92

MacQueen (above, n. ***), 232 – 234. Ibid, 234. (1874) 1 R 379. Ibid, at 382. Ibid, at 387.

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The Sandeman analysis: irrevocability a condition of a third party right? In 1880 an anonymous author in the Journal of Jurisprudence surveyed the authorities and opined: ‘As regards jus quaesitum tertio, it is impossible to state the doctrine with any approach to definite accuracy’.93 An influential attempt to perform the impossible task was made, however, in 1898, when James Condie Stewart Sandeman (1866 – 1933), an advocate who would go on to become Dean of Faculty from 1922 – 1932,94 set out an account of the law in the first edition of Green’s Encyclopaedia of Scots Law.95 This would appear again virtually unchanged, not only in a second edition of Green’s Encyclopaedia in 1912,96 but also, in 1929, in the Encyclopaedia of the Laws of Scotland produced under the consultative editorship of Lord Dunedin and Lord Wark.97 Sandeman’s account is striking on several grounds. He presents jus quaesitum tertio as ‘a deviation from the rule of contract law, that no third party can sue upon a contract’.98 He thus departs from the position of Stair in which jus quaesitum tertio was a natural outcome of the concept of voluntary obligation, including the binding nature of promise; presumably under the influence of notions of privity. Sandeman also makes an extensive comparison of the jus quaesitum tertio with the trust: ‘It resembles, indeed, more closely in its main features the conception of a trust, where the relation of trust arises out of a contract between the truster and trustee, the beneficiary being the tertius on whose behalf jus quaesitum.’ English law is drawn upon, for the first time in the history of the development of the doctrine of jus quaesitum tertio. A comparison of Scottish and English decisions leads to the altogether unhistorical conclusion: ‘Our tertius with his jus quaesitum and the English cestui que trust show strong affinity. . . . These cases establish the relationship of our doctrine of jus quaesitum to the English idea, called equitable, and classified under the head of trusts.’99 However, ‘the law of Scotland . . . is well settled, and goes much further than English common law has ventured’.100 Unhampered by the doctrine of consideration, ‘the general rule of the law of Scotland is that every stipulation in a mutual agreement is binding upon the person obliged, whether it is conceded in favour of the other contractor or of a third party’.101 Anon, ‘Jus quaesitum tertio’ (1880) 24 Journal of Jurisprudence, 565 at 573. See the obituary (with portrait) in 1933 SLT (News) 205 – 207. 95 Vol 7 (1898), 251 – 257. All quotations below are from this version. 96 Vol 7 (1912), 205 – 213. 97 Vol 8 (1929), 572 – 580. 98 Above, n.95, at 251. 99 Ibid, at 252. 100 Ibid, at 252. 101 Ibid, at 253. This passage is in fact Sandeman’s quotation from Lord Watson in Macdonald v. Hall (1893) 20 R (HL) 88 at 95. 93 94

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The most critical part of Sandeman’s analysis, however, now followed. He stated that the principle just quoted applied ‘in questions between the parties to the agreement’;102 but with respect to the third party, the agreement between the contractors had to have become irrevocable. He summarised the general position thus: When a contract containing a stipulation in favour of a third party, who is named or clearly indicated, becomes irrevocable, the right so stated in the third party vests in him, and on it he can found and sue. Such a contract may amount to a direct creation of a trust in favour of the third party; or it may become irrevocable (1) by intimation, or delivery, or registration; (2) by the death of one of the parties to it; (3) by third parties, on the faith of the contract and for value, acquiring rights under it.103

When Sandeman came to deal in detail with his requirement of irrevocability, he noted that ‘some confusion on this point is to be observed among the authorities’.104 He dealt with the apparently contrary authority of Stair I,10,5 by saying that if the words ‘which cannot be recalled by either or both of the contractors’ were transposed to a place before ‘est jus quaesitum tertio’, then there would be no problem of reconciling Stair with later authorities; and this, he argued, was what Lord Ardmillan had done in Blumer. Further, the four cases cited by Stair supported, not his proposition, but rather the construction offered by Lord Ardmillan. ‘On principle,’ argued Sandeman, ‘it is plain enough that if A and B make a contract in C’s favour behind his back, and nothing follows, they may immediately agree to rescind that agreement.’ He then gave in further support of this principle an extensive quotation from the speech of Lord Cranworth in the English case of Synnot v. Simpson,105 decided by the House of Lords in 1854, in which it had been held that vesting property in the hands of trustees or agents in order to pay one’s creditors did not make the trustees or agents trustees or agents for the creditors unless they were also made party to the arrangements, by notice express or implied. However, although Sandeman recognised that a right could be created in favour of a third party not in existence at the time the contract was made, he failed to link this with the issue of irrevocability, even although for Stair this had been the key underpinning of the irrevocability of the contract in favour of the third party by virtue of the term alone.106 The view of Gloag in 1914 But Sandeman’s views on irrevocability did not command universal acceptance. In 1914 there appeared the first edition of William Murray Gloag’s massive Law of Contract: A Treatise on the Principles of Contract in the Law of Scotland. Gloag 102 103 104 105 106

Above, n. 95, at 253. Ibid, at 251. Ibid, at 255. (1854) 5 HLC 121. See above, p. 359.

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(1865 – 1934) was the son of a judge of the Court of Session and a KC, and had held the Chair of Law at Glasgow since 1905.107 He began his treatment of jus quaesitum tertio by quoting Stair I,10,5, and criticised Lord Ardmillan’s dictum in Blumer (and, by implication those such as Sandeman who founded upon it): ‘this is an argument in a circle, because the only reason against the revocation of a contract by mutual consent is that a third party has acquired a right under it.’108 Gloag rested the doctrine on the intention of the contracting parties. ‘The most unequivocable indication of an intention that a third party should have a jus quaesitum under a contract is an express provision that he should have a title to enforce it, and it is conceived that there is no principle of the law of Scotland which should prevent a stipulation of this kind having the effect intended.’109 He discussed revocation as a question arising when the tertius was unaware of the contractual terms in its favour. In Gloag’s view, it was unclear whether the contracting parties could revoke in such circumstances; but ‘there would seem in general to be no legal ground for holding that they may not do so’,110 although there were contrary early cases. But the contract certainly became irrevocable once the tertius had notice of the contract and had acted upon it. If the contract contained an express power to revoke, the recently decided case of Love v. Amalgamated Society of Lithographic Printers111 showed that nonetheless a jus quaesitum tertio might arise if the power had not been used at the time the right actually arose.

Carmichael v. Carmichael’s Executrix112 This was the case in which the difference of view between Stair and Kames about jus quaesitum tertio finally emerged and required judicial decision. But Lord Dunedin’s bold attempt to reconcile the authorities has since won over very few supporters. a) The facts On 20 or 25 July 1916,113 Ian Neil Carmichael, who had joined the Royal Naval Air Service (precursor of the RAF) the previous October, was killed in an air accident. There was in force a policy of assurance upon Ian’s life, worth £1,000. It had On Gloag see D. M. Walker, The Scottish Jurists (1985), 410 – 414. W. M. Gloag, The Law of Contract: A Treatise on the Principles of Contract in the Law of Scotland (1st edn, 1914), at 343. 109 Ibid, 344. 110 Ibid, 351. 111 1912 SC 1078. Further on this case see MacQueen (above, n. ***), 237 – 238. 112 1919 SC 636 (Five Judges); rev’d 1920 SC (HL) 195. 113 20 July is the date given in 1919 SC at 638; but Lord Dunedin says 25 July at 1921 SC (HL) at 197. 107 108

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been taken out with the English and Scottish Law Life Assurance Association in 1903 by Ian’s father, a consulting engineer in Hong Kong called Hugh Fletcher Carmichael. The policy provided that Hugh should pay the annual premiums each 22 October during Ian’s minority and be entitled to repayment thereof should the assured die before attaining majority. But once Ian attained majority, and if he took over payment of the premiums, then the sum assured was to be paid on his death to his executors. The object of this ‘deferred assurance on the life of a child’ was ‘to encourage thrift in the young by giving the child on attaining majority an inducement to continue the assurance at a low rate of premium, and on the footing that there would be no liability to extra premium on account of family history or personal delicacy or on the ground of his being engaged in some hazardous occupation or residing in some unhealthy climate’.114 Hugh Carmichael paid all the premiums due up to Ian’s twenty-first birthday on 29 October 1915, and retained custody of the relevant documentation throughout this period and up to Ian’s death. Immediately after his birthday in 1915, Ian inquired of the insurance company whether his entry upon active service would affect the policy; having been told that it would not, and having declared his willingness to take over payment of the premiums, he executed a holograph will on 11 November 1915 in which he bequeathed to his aunt, Miss Catherine M’Coll, his whole estate, and appointed her as his executrix. Ian never paid a premium before his death, since the next one would have fallen due to be paid on 22 October 1916. On 7 October 1916, the insurance company, confronted with the competing claims of Hugh Carmichael and Catherine M’Coll to the £1,000 payable under the policy, raised an action for the resolution of the dispute in the Court of Session. The claim was disposed of in favour of Hugh Carmichael by Lord Hunter in the Outer House; and this was subsequently affirmed by a Court of Seven Judges, holding that the case was governed by the precedents of Hill v. Hill and Cameron’s Trustees rather than Stair I,10,5 (which was, in the light of the authorities the passage itself appeared to cite, to be interpreted as by Lord Ardmillan in the Blumer case).

b) The House of Lords: Dunedin v Stair Catherine M’Coll appealed to the House of Lords where in July 1920 her claim finally succeeded. The leading speech of a unanimous court was given by Lord Dunedin. In the course of a long judicial career,115 Lord Dunedin had already several times addressed the problems of jus quaesitum tertio and of Hill v. Hill. He had led the Full Court in Cameron’s Trustees in approving Hill; but he had also 1919 SC at 648 per Lord Salvesen. After a political career, Dunedin (1849 – 1942) became Lord President of the Court of Session in 1905 and a Lord of Appeal in Ordinary in 1913, retiring in 1932. For his life, see R. Stevens, Law and Politics: The House of Lords as a Judicial Body, 1800 – 1976 (1979), 269 – 274; and the relevant entry in the Oxford Dictionary of National Biography (2004). 114 115

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applied jus quaesitum tertio in cases about co-feuars and deposit receipts.116 In 1915 he had been one of the House of Lords panel which in Dunlop Pneumatic Tyre Co Ltd v. Selfridge & Co Ltd117 affirmed the strict doctrine of privity in English contract law. But in that case Lord Dunedin had opened his speech with the following comments: My Lords, I confess that this case is to my mind apt to nip any budding affection which one might have had for the doctrine of consideration. For the effect of that doctrine in the present case is to make it possible for a person to snap his fingers at a bargain deliberately made, a bargain not in itself unfair, and which the person seeking to enforce it has a legitimate interest to enforce.118

There is, in other words, no reason to suppose that in approaching jus quaesitum tertio Dunedin was moved by any anglicising preference for contractual privity.119 True, he echoed Sandeman’s parallel of jus quaesitum tertio with the trust in England.120 But the outcome of the case, upholding the third party right, together with the reasoning leading to that result, makes clear his recognition of the distinctness of the Scottish position. But, given in particular his participation in Cameron’s Trustees, bolstering still further the authority of Hill v. Hill, the result Lord Dunedin sought in Carmichael could only be brought about by a reconciliation of the two strands of authority which had divided the Court of Session, rather than by an over-ruling of one in favour of the other. Lord Dunedin achieved this goal by combining Sandeman’s analysis of jus quaesitum tertio with a reclassification of the cases. The two categories which Dunedin proposed were (1) cases in which the debtor in the contractual performance denied the title of the tertius to sue; and (2) cases in which the debtor was willing to perform and the dispute was between the stipulator and the tertius as to which was the true creditor. The present case was in category (2). The terms of the insurance policy were not enough by themselves to confer a right upon Ian Carmichael and his estate. While this might be the outcome if the words of Stair I,10,5 were ‘taken literally, and according to what I may call the natural grammar’,121 this would lead to ‘a holocaust of accepted authorities in the law of Scot116 Braid Hills Hotel Co v. Manuel 1909 SC 120; Nicholson v. Glasgow Blind Asylum 1911 SC 391 (co-feuars); Dickson v. National Bank of Scotland 1917 SC (HL) 50 (deposit receipt). See also Welsh v. Forbes & Johnstone (1906) 13 SLT 805. 117 [1915] AC 847. 118 Ibid at 855. 119 Observe the comment of Stevens (n. 115), at 270: ‘He actively despised what he considered the English law’s obsession with form and remedy at the expense of substance and right.’ See further his speeches in e.g. Sinclair v. Brougham [1914] AC 398, Cantiere San Rocco SA v. Clyde Shipbuilding and Engineering Co 1923 SC (HL) 105, and A. & G. Paterson Ltd v. Highland Railway Co 1927 SC (HL) 32; also his David Murray Lecture (delivered in his mid-80s), The Divergencies and Convergences of English and Scottish Law (1935). 120 1920 SC (HL) at 198. 121 Ibid, at 199.

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land’122 from Hill v. Hill onwards. But Stair’s meaning should be reinterpreted, following the Ardmillan dictum in Blumer and observing that the literal meaning was unsupported by the four cases cited for the proposition. What it comes to is this, that irrevocability is the test; but the mere execution of the document will not constitute irrevocability. It is obvious that if A and B contract and nothing else follows, and no one is informed of the contract, A and B can agree to cancel the contract.123

The second sentence of this quotation echoes both Sandeman and Gloag; and Dunedin’s use of the former is further apparent in that his speech goes on to quote the passage of Lord Cranworth in Synnot v. Simpson which Sandeman had also used in this context. The speech then turns to consider what over and above the terms of the document will constitute irrevocability, and again follows Sandeman in listing delivery to the tertius, registration for publication, intimation to the tertius (here the passage from Synnot is quoted again), and ‘the class of cases where the tertius comes under onerous engagements on the faith of his having a jus quaesitum, although the actual contract has not been intimated to him’.124 At this point in the speech, the clear impression is that the judgments of the Court of Session are going to be affirmed. But Lord Dunedin now comments that ‘while, as I have already said, the terms of the document are not conclusive, that does not mean that they are not to be considered. On the contrary, they form a very important piece of evidence.’125 In addition the overall circumstances of the case could be taken into account. The contract distinguished significantly between the period up to the son’s majority and the period afterwards. On reaching the age of 21, Ian had options with regard to the policy, and this was ‘strangely inconsistent with the idea of there being no vested right in the life assured’.126 The father had taken no action when he had had the right to do so. The son knew of the policy, and the evidence showed that the father had contemplated action on his son’s part. Taking all the material together, an irrevocable jus quaesitum had been constituted in favour of Ian Carmichael, and the proceeds of the policy fell to be paid to his executrix. Perhaps it may also be inferred that Lord Dunedin thought the policy considerations favouring the father’s retention of control as the person best placed to judge the overall family interest, which had influenced the judges below, were weakened by the son’s attainment of majority and the apparent breakdown of his relationship with his father. Lord Dunedin’s synthesis is a remarkable endeavour to reconcile two seemingly conflicting branches of the law, neither of which could really be over-ruled given their long standing and considerable support. To achieve this reconciliation, he had 122 123 124 125 126

Ibid. Ibid, at 201. Ibid, at 203. Sandeman is not referred to directly in Lord Dunedin’s speech. Ibid. Ibid, at 204.

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to inflict considerable damage upon what had been written by Stair;127 but, with the unacknowledged assistance of Sandeman in particular, a figleaf of authority and respectability was unwittingly provided by the work of Stair’s later editors, and also by what may have been no more than faulty expression by Lord Ardmillan in the Blumer case. For this Dunedin has since been much criticised. But the limitations which he placed upon the simple doctrine that a third party acquires a right under a contract if the contracting parties so intended, by requiring that in addition the contract be made irrevocable by some further act of the contracting parties, do not appear so restrictive when the final result of the case is considered. Having laid down a narrow and seemingly technical rule, Lord Dunedin then took a very wide and liberal approach to what was required to make a contract irrevocable, going well beyond the formalism of intimation, delivery and registration to embrace reliance by the third party and even knowledge informally acquired.

The neo-civilian counter-attack The story may now be brought swiftly down to the present day. Professor Gloag attempted an uncomfortable reconciliation of his 1914 views with Carmichael in a second edition of his text published in 1929. Sandeman’s arguments were reproduced in the same year in a new edition of the Enclyclopaedia of the Laws of Scotland, with the addition of supporting references to Carmichael. Along with Lord Dunedin’s judgment, each fell victim to the neo-Civilian revival in Scotland after 1945, which included a return to the issue of third party rights in contract. As is not uncommonly the case, this rediscovery of the Civilian characteristics and virtues of Scots law owed something to contemporaneous English dis-satisfaction with the parallel doctrine of privity. In 1937 the sixth interim report of the English Law Revision Committee recommended statutory abolition of the doctrine,128 while from 1949 on Lord Denning launched a series of judicial attacks on it, leading to a lively debate in the legal journals129 which was not stilled when the House of Lords reaffirmed the strictness of privity in 1962.130 In Scotland the debate focused critically on the limitations which Lord Dunedin had drawn upon Stair’s version of the jus quaesitum tertio. Led by T. B. Smith, the periodical literature over the period 1956 to 1970 clearly demonstrated that the Dunedin gloss on Stair 127 See the comment of Sir John Spencer Muirhead, Professor of Civil Law at Glasgow 1920 – 1954: ‘[The judgment] by laying down that Stair meant what he is careful not to say would have warmed the hearts of the pontifical lawyers’ (An Outline of Roman Law (1937), 79 note). 128 Report on the Statute of Frauds and the Doctrine of Consideration (Cmd 5449: 1937). 129 For this see R. Flannigan, ‘Privity – the end of an era (error)’ (1987), 103 LQR 564 at 573 – 4; D. J. Ibbetson, A Historical Introduction to the Law of Obligations (1999), 241 – 244. 130 Midland Silicones Ltd v. Scruttons Ltd [1962] AC 446. See also The Eurymedon [1975] AC 154.

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was unjustified and wrong;131 but apart from an article by J. T. Cameron,132 no real attempt was made to address the problem of the two strands of authority which had confronted the House of Lords in Carmichael. Two developments in the 1960s seemed to offer a chance to reconsider the position established in Carmichael. One was the House of Lords’ assertion in 1966 of its power to over-rule its own previous decisions.133 But when in 1970 a case involving arguments about jus quaesitum tertio came before their Lordships,134 the new power remained uninvoked and the authority of Carmichael was left intact, although Lord Reid left one escape hatch slightly ajar when he said: ‘I do not think that Lord Dunedin meant to say that this intention to make the provision in favour of the third party irrevocable can never be established by the terms of the contract itself. Generally it cannot and then other evidence is required.’135 The other avenue by which Carmichael could have been challenged was through the Scottish Law Commission, which was set up in 1965 along with an equivalent Commission for England and Wales, to advise the Government on reform of the law.136 T. B. Smith, who had worked extensively on the subject of jus quaesitum tertio and strongly favoured Stair’s approach against that of Dunedin, was one of the first Scottish Commissioners. In the late 1960s, the two Commissions worked together on a project for a common codification of contract law,137 and by 1969 131 T. B. Smith, ‘Jus quaesitum tertio: remedies of the tertius in Scots law’, 1956 JR 121, reproduced in revised form in idem, Studies Critical and Comparative (1962); D. I. C. Ashton Cross, ‘Bare promise in Scots law’, 1957 JR 138; Lord Keith of Avonholm, The Spirit of the Law of Scotland (Holdsworth Club Presidential Address, 1957); J. T. Cameron, ‘Jus quaesitum tertio: the true meaning of Stair I.x.5’, 1961 JR 103; Rodger (n. 12); D. N. MacCormick, ‘Jus quaesitum tertio: Stair v. Dunedin’, 1970 JR 228. 132 Who later became the Court of Session judge, Lord Coulsfield. 133 Practice Statement [1966] 1 WLR 1234. 134 Allan’s Trustees v. Lord Advocate 1971 SC (HL) 45. The case is, however, really a trust case, and was so decided. As Lord Reid noted (at 54): ‘To have a jus quaesitum tertio the third party must have been given by the contract of the contracting parties a right to get something from one or both of them. But here the proceeds of the policy were to be paid to Miss Allan. The beneficiaries were given no right against the company: on the contrary, the company having paid the money to Miss Allan were freed from all liability to see that she paid the money to the beneficiaries. Any benefit to the beneficiaries flowed from the declaration of trust, not from the terms of the contract.’ 135 Ibid, at 54 (emphasis supplied). Note that in 1967 Lord Reid had criticised the Parliamentary failure to deal with privity of contract in England as recommended by the Law Revision Committee in 1937 (above, at n. 128), and stated that the House of Lords might find it necessary to deal with matter unless legislation was forthcoming: Beswick v. Beswick [1968] AC 58, 72. 136 Law Commissions Act 1965. 137 For the history which follows see A. E. Anton, ‘Obstacles to codification’, 1982 JR 15 at 20 – 22; Lord Davidson, ‘Law reform–the case for caution in an age of revolution’, (1990) 35 Journal of the Law Society, 219 at 220 – 221; H. L. MacQueen, ‘Glory with Gloag or the stake with Stair? T. B. Smith and the Scots law of contract’, in E. Reid and D. L. Carey Miller

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they had provisionally agreed upon a scheme which provided for third party rights arising from the contract alone, without any need for communication to or acceptance by the third party. Variation or cancellation rights required contractual provision, express or implied.138 The grand project fell apart, however, and was abandoned by the Scottish Law Commission in 1971.139 The Law Commission continued to work on contract law, however, and in 1977 published a Memorandum entitled Stipulations in Favour of Third Parties.140 In effect this recommended a return to the position originally stated by Stair, without qualification even for cases of the kind typified by Hill v. Hill. But the Memorandum never proceeded to the stage of a Report containing the final recommendations of the Commission, because consultation indicated no appetite for reform in the legal profession,141 and perhaps also because Smith retired as a Commissioner in 1981. The story does not end there, however. Since 1980, there has been a notable increase in the number of reported cases in which issues about jus quaesitum tertio have arisen, with the courts showing a greater willingness to apply the concept.142 The evidently increased readiness of counsel to deploy the doctrine in the pursuit of clients’ interests, by comparison with the sixty years after the decision in Carmichael, has no doubt been stimulated by the academic interest visible, not only in the legal journals and textbooks,143 but also in university teaching and the Law (eds), False Gods and New Friends: T. B. Smith and the Progress of Scots Law, Edinburgh 2005, p. 157 – 161. 138 The code as first drafted by Harvey McGregor QC has been published as Contract Code drawn up on behalf of the English Law Commission (1993). The relevant provisions are arts. 641 – 649. 139 Seventh Annual Report 1971 – 2 (Scot Law Com No 28, 1973), para 16. 140 Scot Law Com Memorandum No 38 (March 1977). 141 This can perhaps be inferred from the comments on the progress of work on this and other memoranda in the series on Voluntary Obligations in the Fourteenth to the Eighteenth Annual Reports of the Commission (1979 – 1983). 142 See e.g. Kaur v. Lord Advocate 1980 SC 319; Cumming v. Quartzag Ltd 1980 SC 276; Scott Lithgow v. GEC Projects Ltd 1989 SC 412; Aberdeen Harbour Board v. Heating Enterprises Ltd 1990 SLT 416; Beta Computers (Europe) Ltd v. Adobe Systems (Europe) Ltd 1996 SLT 604; Mercedes-Benz Finance Ltd v. Clydesdale Bank plc 1997 SLT 905; Strathford East Kilbride v. HLM Design 1997 SCLR 877; OBC Caspian v. Thorp 1998 SLT 653; Robbie the Pict v. Miller Civil Engineering Ltd 1999 GWD 12 – 566; Sears Properties Netherlands BV v. Coal Pensions Provisions Ltd 2001 SLT 761; McLaren Murdoch & Hamilton Ltd v. Abercromby Motor Group Ltd 2003 SCLR 323; Clark Contracts Ltd v. The Burrell Co (Construction Management) Ltd (No 2) 2003 SLT (Sh Ct) 73. See also the speech of Lord Clyde in Alfred McAlpine Construction Ltd v. Panatown Ltd [2001] 1 AC 518. 143 See in particular W. W. McBryde, ‘Jus quaesitum tertio’, 1983 JR 137 – 151; idem, The Law of Contract in Scotland (2nd edn, 2001), ch 10; also H. L. MacQueen, ‘Title to sue’, in The Laws of Scotland: Stair Memorial Encyclopaedia, vol 15 (1996), paras 824 – 852; and H. L. MacQueen and J. M. Thomson, Contract Law in Scotland (2000), paras 2.65 – 2.83; M. Hogg, Obligations (2003), 129 – 135; P. J. Sutherland and D. Johnston, ‘Contracts for the benefit of third parties’, in R. Zimmermann, D. Visser and K. Reid (eds), Mixed Legal Systems in Comparative Perspective: Property and Obligations in Scotland and South Africa

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Commission Memorandum. Further development may well be stimulated by the English abandonment of strict privity rules in the Contracts (Rights of Third Parties) Act 1999, and the growing realisation that in Continental Europe and elsewhere the recognition of third party rights is the norm rather than the exception. Amongst other issues, the courts have addressed the question of the potential overlap between jus quaesitum tertio and delictual liability, first highlighted by T. B. Smith in 1956.144 The matter is not yet firmly resolved, but the idea that the third party could not claim damages for breach of his right has been firmly scotched.145 This may mean that some of the difficulties which have arisen elsewhere about delictual recovery for pure economic loss can be dealt with more satisfactorily by way of the doctrines of jus quaesitum tertio.146 Never the less, the courts have recently held that the claim of a disappointed testamentary beneficiary against the solicitor whose negligence caused the failure of the intended bequest to take effect lies in delict rather than in contract.147

Conclusion The history of jus quaesitum tertio just outlined seems best characterised as one in which influences from the jus commune and in particular the canon law were important at an early stage, but are not apparent in the subsequent development, which was almost entirely inward-looking or indigenous. The influence of English law is really very slight: in the late nineteenth century, some Scots lawyers were reassured of the validity of their doctrine of jus quaesitum tertio when they observed that despite the apparently contrary doctrine of privity the same results were reached in English cases by way of the law of trusts. The Scottish law of trusts was itself subject to English influence in the second half of the nineteenth century, and the parallel with jus quaesitum tertio may have helped to strengthen the role which concepts such as delivery and irrevocability played in the latter body of doctrine. The result is an unsatisfactory and unclear body of law, for which Scots lawyers have no-one to blame but themselves; but nevertheless there is still enough material from which judges, pleaders and writers, possibly aided by the legislators, can construct a law of third party rights appropriate to the requirements of the new millennium.

(2004); J. A. K Huntley and A. D. Dedouli, ‘Third party rights, promises and the classification of obligations’, 2004 JR 303 – 352. 144 ‘Jus quaesitum tertio: the remedies of the tertius in Scottish law’, 1956 JR 1 at 11 – 14 (Studies Critical and Comparative, 189 – 191). 145 Scott Lithgow v. GEC Projects Ltd 1989 SC 412. See, for the view thus rejected, Gloag, Contract, 240 (relying on Robertson v. Fleming (1861) 4 Macq 167). 146 See Hogg, Obligations, 129 – 131. 147 Robertson v. Watt, unreported, 4 July 1995; Holmes v. Bank of Scotland 2002 SLT 544.

EDGAR DU PERRON

Third Party Stipulations in Modern Dutch Law Introduction The Dutch Civil Code of 1838 diverged from the more general recognition of the stipulation in favour of a third party in Dutch legal history,1 and in Art. 1353 BW2 (old) took over a translation of Art. 1121 of the French Code Civil. According to the first subsection of this article, a stipulation in favour of a third party was only valid as a condition to a stipulation made in favour of oneself or as a condition attached to a gift. According to the second subsection, the stipulator could revoke the stipulation up to the moment of acceptance by the third party. The article did not regulate at what time the third party acquired his or her right (as a result of the contract or only after acceptance 3); this question was hotly debated in Dutch legal literature.4 Although the courts, in interpreting Art. 1353 BW (old) tried to avoid the practical problems caused by the limitations of this article, a real solution could only come from a change in the law, especially since in 1914 the Dutch Supreme Court denied the validity of a contract which only contained a stipulation in favour of a third party.5 The need for a change in the law was recognized after the Second World War in the first draft of a New Dutch Civil Code, based on the work of E. M. Meijers.6 After a long process (from 1948 onwards) the new Dutch Civil Code finally came into force on the first of January 1992. 1 See J. A. Ankum, De voorouders van een tweehoofdig twistziek monster. Beschouwingen over de historische ontwikkeling van het beding ten behoeve van een derde (inaugural address Amsterdam 1967). The relevant articles in the drafts of a Dutch Civil Code of 1816 (Art. 2635 – 2637) and 1820 (Art. 2313 – 2315) gave the stipulation a much wider scope and are in that sense the precursors of the new Dutch Civil Code. 2 Burgerlijk Wetboek = Civil Code. 3 For the latter solution, see HR (Hoge Raad, Dutch Supreme Court) 13 februari 1924, NJ 1924, p. 711 and HR 19 maart 1976, NJ 1976, 407 note PZ. 4 For an overview, see Asser-Rutten and Ankum, supra note 1. 5 HR 26 juni 1914, NJ 1914, p. 1028. This decision went against the modern solution defended by J. P. Moltzer, De overeenkomst ten behoeve van derden (Thesis Leiden 1876). On the position of Moltzer see H. Dondorp en J. Hallebeek, Het derdenbeding bij Voorda en Moltzer, Pro Memorie 2002, p. 49 – 67. Also see HR 17 december 1926, NJ 1927, 257, note EMM. 6 Parl.Gesch. (Parliamentary History) Book 6, p. 947 ff.

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The Dutch Civil Code of 1992 generally recognizes the validity of third party stipulations in a contract. The relevant Articles 6:2537 – 6:256 read:8 Artikel 6:253 1. Een overeenkomst schept voor een derde het recht een prestatie van een der partijen te vorderen of op andere wijze jegens een van hen een beroep op de overeenkomst te doen, indien de overeenkomst een beding van die strekking inhoudt en de derde dit beding aanvaardt. 2. Tot de aanvaarding kan het beding door degene die het heeft gemaakt, worden herroepen. 3. Een aanvaarding of herroeping van het beding geschiedt door een verklaring, gericht tot een van de beide andere betrokkenen. 4. Is het beding onherroepelijk en jegens de derde om niet gemaakt, dan geldt het als aanvaard, indien het ter kennis van de derde is gekomen en door deze niet onverwijld is afgewezen. Artikel 6:254 1. Nadat de derde het beding heeft aanvaard, geldt hij als partij bij de overeenkomst. 2. Hij kan, indien dit met de strekking van het beding in overeenstemming is, daaraan ook rechten ontlenen over de periode vóór de aanvaarding. Artikel 6:255 1. Heeft een beding ten behoeve van een derde ten opzichte van die derde geen gevolg, dan kan degene die het beding heeft gemaakt, hetzij zichzelf, hetzij een andere derde als rechthebbende aanwijzen. 2. Hij wordt geacht zichzelf als rechthebbende te hebben aangewezen, wanneer hem door degene van wie de prestatie is bedongen, een redelijke termijn voor de aanwijzing is gesteld en hij binnen deze termijn geen aanwijzing heeft uitgebracht. Artikel 6:256 De partij die een beding ten behoeve van een derde heeft gemaakt, kan nakoming jegens de derde vorderen, tenzij deze zich daartegen verzet. Article 6:253 BW 1. A contract creates the right for a third person to claim a prestation from one of the parties or to invoke the contract in another manner against one of them, if the contract contains a stipulation to that effect and if the third person accepts it. 2. Until its acceptance, the stipulation can be revoked by the stipulator. 3. Acceptance or revocation of the stipulation takes place by a declaration addressed to one of the two other persons involved.

This is shorthand for Art. 253 Book 6 Dutch Civil Code. English translation from P. P. C. Haanappel / E. Mackaay (transl.), Nieuw Nederlands Burgerlijk Wetboek. Het Vermogensrecht / New Netherlands Civil Code. Patrimonial Law, Deventer-Boston [1990]. For a general commentary see: Verbintenissenrecht (loose leaf), notes to Art. 6:253 ff. (J. C. van der Steur). 7 8

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4. An irrevocable stipulation which, with respect to the third person, has been made by gratuitous title, is deemed accepted if it has come to the attention of the third person and he has not rejected it without delay. Article 6:254 BW 1. Once the third person has accepted the stipulation, he is deemed to be a party to the contract. 2. The third person can also derive rights from the stipulation during the period prior to acceptance if this is in conformity with the necessary implication of the stipulation. Article 6:255 BW 1. Where a stipulation for the benefit of a third person is without effect with respect to that third person, the stipulator can designate either himself or another third person as beneficiary. 2. The stipulator is deemed to have designated himself as beneficiary when the person from whom the prestation has been stipulated has given him a reasonable period for the designation and he has not done so within such period. Article 6:256 BW The party who has made a stipulation in favour of a third person may claim performance toward that person, unless the latter objects.

These Articles allow the parties to any contract to confer upon a third party (‘the beneficiary’) a right to require performance of a contractual obligation or to invoke the contract against one of the parties (e.g. in the case of a clause limiting the third party’s liability). The contract may even consist of nothing more than the stipulation in favour of the third party.9 For certain contracts, Dutch law has special rules regarding stipulations in favour of a third party. The main examples are insurance contracts have come into force on January 1st, 2006; Art. 7:925 – 992 BW.10 Contracts of carriage are treated in book 8 of the Civil Code. Another example of a special rule is Art. 46 book 2, which makes it possible for associations to conclude contracts in favour of their members. Stipulations in favour of a third party which are important in practice but are not regulated by special provisions in the Civil Code are promises regarding pensions to third parties (e.g. next of kin of former employees)11 and ‘chain stipulations’ regarding obligations relating to real property. With regard to stipulations concerning clauses limiting liability in favour of a third party, Art. 6:257 BW deserves mention. This article, which is mandatory law, allows an employee to invoke in its favour exemption clauses in contracts between his employer and 9 Parl.Gesch. Boek 6, p. 956. On the law on this point before the introduction of the new Dutch Civil Code, see above. 10 Also see Art. 22a Insolvency Act, on the power of the receiver in bankruptcy to terminate a life insurance contract or to change the beneficiary. 11 These can however be subject to the Pension and Savings Act.

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others, provided the employee has not acted willfully or with recklessness bordering on intent.

Burden on the third party Although this is not expressly stated in art. 6:253, the stipulation in favour of a third party can also impose a burden (obligation) on the third party as a condition for his or her right.12 In the relationship between the stipulator and the third party, the burden can be the consideration for the right, but this is not required for the validity of either the right or the burden. The third party is bound as soon as he accepts the right to which the obligation is attached, provided the third party at the time of the acceptance is or ought to be aware of the pending obligation.

Legal basis Like other legal systems, Dutch law historically has had conceptual difficulties with the stipulation in favour of a third party. Since contractual obligations are based on the agreement between the parties, and since the third party is not a party to this agreement, it was considered to be impossible for the third party to obtain legal rights on the basis of the contract. The maxim res inter alios acta tertio neque nocet neque prodest expresses this principle of the relative effect of a contract. Various technical solutions to overcome difficulty have been brought forward in the past. Modern Dutch lawyers recognize, however, that the principle of the relative effect of a contract is not a technical rule (as the English law concept of privity is), but a principle, based on the consensual nature of contractual obligations.13 From the perspective of the consensual principle, the principle of the relative effect of a contract is not an objection against a stipulation in favour of a third party, provided it is based on the agreement of the parties and provided that the third party (the beneficiary) either has to accept or may renounce the right.

Parl.Gesch. Boek 6, p. 956. On this discussion see C. E. du Perron, Overeenkomst en derden (Thesis Amsterdam 1999). 12 13

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Agreement between the parties The legal basis for the beneficiary’s right is the agreement between the parties (the stipulation). This agreement can be express or implied.14 In a recent case,15 the Hoge Raad (Dutch Supreme Court) went even further. A receiver in bankruptcy (curator) of a taxi company sold this company to another taxi company. He stipulated that the buyer would take over the employees of the bankrupt company. The buyer agreed to this, but subsequently refused to offer some of the employees their old jobs (administrative work). He only wanted to hire them to do other work (driving a taxi). The employees concerned sued the buyer on the contract. The buyer argued that the contract was between him and the receiver and that the employees could not sue. This argument was rejected by the judges on the facts and the Supreme Court refused to annul the decision of the lower court. It ruled that a contract may be interpreted to contain a stipulation in favour of a third party even if the contracting parties did not consciously intended their contract to contain such a clause. In other words: a stipulation in favour of a third party may be implied not just on the basis of the (reconstructed) intention of the parties (the normal method of interpreting contracts in The Netherlands), but also on the basis of other grounds, in this case the efficacy of the contract.

Unknown and non-existent beneficiary The beneficiary need not be known at the time when the agreement is concluded and does not have to exist at that time.16

Acceptance At least in theory, the right flowing from a stipulation in favour of a third party is not only supported by the agreement between the parties, but also by acceptance. The reason for this requirement is that the parties should not be able to grant rights to the third party against his or her will. According to Art. 6:253 subsections 1 and 3, the third party needs to accept the stipulation by a declaration addressed to the promisor or to the stipulator. The contract or good faith can require the third party to address the acceptance both to the promisor and to the stipulator.17 Asser-Hartkamp 4-II, no. 420. HR 1 oktober 2004, NJ 2005, 499 note C. E. du Perron (Taxicentrale Middelburg / Gesink). 16 Asser-Hartkamp 4-II, no. 421. 17 Asser-Hartkamp 4-II, no. 423 and Parl.Gesch. Book 6, p. 950. 14 15

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Art. 6:253 sets no time within which acceptance has to take place. The contract may provide such a term. Otherwise, the provision on offer and acceptance (Art. 6:221) can be applied analogously: an oral offer has to be accepted immediately, a written offer within a reasonable time. The promisor who wants to be certain of his position, can set a reasonable period within which the third party can accept. If the third party does not accept within this term, he is deemed to have rejected the stipulation.18 The third party can only accept the stipulation if he knows of its existence. However, it is irrelevant how he learned of the stipulation. In particular it is not a prerequisite for acceptance that the stipulator or the promisor has communicated an offer to the third party.19 The declaration of acceptance need not be express: a third party beneficiary who claims performance of the stipulation has implicitly accepted it.20 The same applies if a third party invokes a stipulation in his favour limiting his liability.21 The requirement of acceptance in subsection 1 is mandatory law (Art. 6:250); the parties cannot exclude it. However, the parties can put restrictions on the terms of acceptance (for instance, limiting it to a certain period of time, or requiring certain conditions to be met before acceptance is possible). In these cases, the third party can only acquire the right within the limitations set by the parties. If the stipulation is irrevocable and, with respect to the third party beneficiary, has been made gratuitously, the stipulation is deemed to have been accepted if it has come to the attention of the beneficiary and the beneficiary has not rejected it without delay. Up to the acceptance, and provided no revocation has taken place, the third party has the ‘wilsrecht’ (right depending upon the will) to accept the stipulation. This ‘wilsrecht’ can be exercised by the third party and his receiver in bankruptcy and is – in principle – inheritable.22 If the promisor is declared bankrupt, acceptance is still possible. Cahen has pointed out, however, that the right acquired by the third party in such a case dates from after the declaration of bankruptcy, and so cannot be invoked against the estate managed by the receiver.23

18 Parl.Gesch. Book 6 p. 955 and p. 959 ff.; G. R. B. van Peursen, Enige juridische aspecten van de overeenkomst met derdenbeding naar huidig en nieuw BW, 1990, p. 36. 19 Asser-Hartkamp 4-II, no. 422. 20 HR 19 maart 1976, NJ 1976, 407 (Kip / Motorvoertuigenbedrijf). 21 Hof Amsterdam 3 december 1959, NJ 1960, 500. 22 Parl.Gesch. Book 3, p. 314. 23 J. L. P. Cahen, Overeenkomst en derden, Mon. NBW B57, no. 18.

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Revocation Up to the moment of acceptance, the stipulator can revoke the stipulation by a declaration addressed to the promisor or to the third party. The contract can provide that the stipulation is irrevocable, for instance if the stipulation has its economic basis in an obligation of the stipulator towards the third party. If the stipulation sets a term within which the third party has to accept, it is deemed to be irrevocable during this term according to the general rules on the formation of contract. As a rule, revocation is impossible after the third party has accepted the stipulation. However, the contract can provide that revocation is still possible immediately after the third party has given notice of its acceptance. If the stipulator has revoked the stipulation by giving notice to the third party but not to the promisor, and the promisor receives a declaration of acceptance before he learns of the revocation, it is questioned whether the revocation is valid.24 In my opinion, since notice to the third party is recognized by Art. 6:253 as a way to revoke the stipulation, in this case the stipulation has already been revoked before the promisor obtained notice of the acceptance and the notice of acceptance has no effect. The right to revoke is part of the stipulator’s patrimony, and can be invoked by its heirs and its receiver in bankruptcy.25 A contract or good faith can require the stipulator to address the revocation both to the promisor and the third party beneficiary.26 The parties can agree to different arrangements on revocability in their contract. If the promisor does not know of the revocation and in good faith performs towards the third party, his performance will dissolve his obligation towards the stipulator (Art. 6:34 BW). Depending on the circumstances, the stipulator may have a claim (e.g. in restitution) against the third party.27 Since the rules on revocation are not mandatory, the stipulator and the promisor may agree that the promisor can revoke the stipulation. They can also terminate the stipulation by mutual agreement, if the third party has not yet accepted it (after acceptance, the third party has to agree to any modification or termination of its right).28 Obligations in separate legal relations between the third party and either stipulator or promisor (e.g. a separate contract between third party and promisor) may limit the power of the stipulator and the promisor with regard to the stipulation. 24 See Verbintenissenrecht, note 16 on Art. 6:253, referring to HR 27 maart 1953, NJ 1953, 575 (PhANH) (Bakker / Olveh), which is however based on the old Civil Code. 25 Asser-Hartkamp 4-II, no. 432, referring to Hof (Court of Appeals) ‘s-Gravenhage 20 februari 1958, NJ 1958, 632. 26 Asser-Hartkamp 4-II, no. 423. 27 Asser-Hartkamp 4-II, no. 423. 28 Parl.Gesch. Boek 6, p. 957.

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Effects As long as the third party has not accepted its right, the normal rules on nonperformance and annulment apply to the contract. Once the third person has accepted, he is deemed to be a party to the contract, and Article 6:279 BW on multi-party contracts becomes applicable, unless the contract provides otherwise. However, since the rules governing multi-party contracts are hardly any clearer than the rules governing the relationship between the parties and a beneficiary of a third party right (e.g. in case of non-performance by the promisor), this ‘deeming a party’ has not much practical relevance. As a general rule, and provided the contract does not contain diverging provisions, if the promisor does not perform towards the third party, the stipulator and the third party can dissolve the contract together (Art. 6:279 subsection 3). It the stipulation has placed an obligation (burden) on the (ex) third party, the third party can dissolve the contract in as far as it pertains to his obligation.29 It depends on the contract and the circumstances whether either the stipulator or the (former) third party can dissolve the contract without the consent of the other. If either the third party or the stipulator is in breach against the promisor, the promisor can dissolve the contract (Art. 6:279 subsection 2). Claims for damages can be brought by the party which suffers the loss from the party who caused it. Art. 6:256 provides that the stipulator can claim performance to the third party.30 The main purpose of this rule is to avoid difficulties if the promisor argues against the third party that the stipulation was not a real stipulation if favour of a third party (in which the third party obtains its own right to performance) and claims that the third party was only an incidental beneficiary or the person to whom the obligation towards the stipulator had to be performed.31 In those cases, Art. 6:256 makes clear that the stipulator can claim performance, irrespective of whether the third party acquired a right to performance or not. However, if the third party objects to a claim to performance by the stipulator, the question whether or not the contract gave him a right to performance of his own still remains relevant. In the first case (where the contract contains a real stipulation in favour of the third party) the will of the third party prevails. In the second case, the stipulator can ignore the third party. It can take some time before the third party learns of the stipulation and accepts it. Therefore, the third party can derive rights from the stipulation during the period prior to acceptance if this is in conformity with the necessary implication of the stipulation. An example is the stipulation which gives the third party the right to Asser / Hartkamp 4-II, no. 427 – 428. See, under the old Civil Code, Rb. (District Court) Arnhem 8 maart 1985, NJ 1985, 678 and HR 11 maart 1983, NJ 1983, 585. 31 For an example see HR 1 oktober 2004, NJ 2005, 499 note C. E. du Perron (Taxicentrale Middelburg / Gesink). 29 30

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invoke a clause limiting its liability. This clause can be invoked to avoid a claim for damages which has arisen before the acceptance of the stipulation by the third party – which as a rule will only accept when a claim for damages is brought against it. If the stipulation has no effect on the third party, e.g. because the third party rejects the right, or because the stipulation is revoked, the stipulator can name another beneficiary or can name himself as beneficiary, according to Art. 6:255. This rule, which is non-mandatory, prevents enrichment of the promisor. It is not applicable to stipulations which enable the third party to invoke a contractual limitation clause for its benefit.32 If, however, the third party has accepted the stipulation, and afterwards abandons its right, the stipulator does not acquire the right, unless the contract provides otherwise.

32

Parl.Gesch. Book 6 (invoering), p. 1824.

DANIEL VISSER and SAMANTHA COOK

Contracts for the Benefit of Third Parties in South Africa – Investigating an Alternative Approach Introduction A fair amount has been written in South Africa on ‘contracts for the benefit of third parties’,1 but, as in many other jurisdictions, there remains, nevertheless, a large measure of uncertainty. The South African position mirrors that of many other countries in one sense, namely that these agreements have always been understood as closely connected to prevailing notions regarding privity of contract and the basis of obligations generally. The position in this country differs, however, from the dominant trend in the rest of the world by virtue of the fact that our courts have taken a very conservative view in this area – to the point of creating a situation where – on at least one reading – it can be said that South Africa eschews the notion of true contracts for the benefit of third parties as understood elsewhere. 1 The central study in South African law on contracts for the benefit of third parties is the Leiden thesis of J. C. de Wet, Die Ontwikkeling van die Ooreenkoms ten Behoewe van ‘n Derde (Leiden 1940) – a study which has not, however, managed to convince the courts of its central proposition, as will be explained below. For general statements of the law relating to contracts for the benefit of third parties, see J. C. De Wet & A. H. Van Wyk, Die Suid-Afrikaanse Kontraktereg en Handelsreg, 5th ed., (Durban 1992), pp. 94 ff.; R. H. Christie, The Law of Contract, 5th ed., (Durban 2006), pp. 300 ff.; Schalk van der Merwe et al., Contract: General Principles, 2nd ed., (Landsdowne 2003), pp. 261 ff.; J. C. de Wet, “Agency and representation” in LAWSA vol. 1 (first reissue, 1993), § 102 ff.; G. F. Lubbe & C. M. Murray, Farlam & Hathaway Contract – Cases, Materials & Commentary (Kenwyn 1988), pp. 407 ff.; and see also now the clear comparative analysis by Philip Sutherland & David Johnston, “Contracts for the benefit of third parties” in Reinhard Zimmermann, Daniel Visser & Kenneth Reid, Mixed Legal Systems in Comparative Perspective: Property and Obligations in Scotland and South Africa (Oxford 2004) 208 ff. See also D. B. Hutchison, Unravelling the Stipulatio Alteri [1974] 3 Responsa Meridiana 1, pp. 4 – 5; Roger Brownsword & Dale Hutchison, “Beyond Promissory Principles and Protective Pragmatism” in P. Kincaid (ed.), Privity: Private Justice or Public Regulation (Hants 2001), ch. 7. For an imaginative analysis of the relationship between contracts for the benefit of third parties and fideicommissa, trusts inter vivos and foundations, see H. L. Swanepoel, “Oor stigting, Trust, Fideicommissum, Modus en Beding ten Behoewe van ‘n Derde” (1957) 20 T.H.R.H.R. 183. See generally R G. McKerron, “The Juristic Nature of Contracts for the Benefit of Third Persons” (1929) 46 S.A.L.J. 387; J. Kerr Wylie, “Contracts in Favour of Third Parties” (1943) 7 T.H.R.H.R. 94; L. Getz, “Contracts for the Benefit of Third Parties” (1962) Acta Juridica 38.

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In this contribution we first set out the principles relating to contracts for the benefit of third parties as they apply in South Africa. We then argue that the uncertainty inherent in the South African case law with regard to this legal construct is not at all surprising, given that it is employed in a variety of situations without the courts having given sufficient thought to formulating the principles in such a way that they are able to be broadly applicable. Thereafter we investigate whether it may be useful to approach contracts for the benefit of third parties in an alternative manner. Brownsword and Hutchison2 have argued that the principle of meeting reasonable expectations should play an important role, not only in understanding the essential nature of these contracts, but also as the basis of the specific rules that are developed in this context.3 A strong case has recently been made for the notion of legitimate expectations to play a more prominent role in the South African law of contract generally4 and the issues that present themselves in the arena of contracts for the benefit of third parties may strengthen the case. We take Brownsword and Hutchison’s ‘reasonable-expectations approach’ and examine various typical cases in four key areas in which contracts for the benefit of third parties are commonly encountered – that is, the areas of insurance, preincorporation contracts, inter vivos trusts and so-called ‘Himalaya clauses’. In so doing, we hope to uncover, in each of these areas, what may constitute a ‘reasonable expectation’; what approach the courts in fact took; what the result in the cases might have been had the ‘reasonable-expectation’ approach informed the decisions; and whether or not any general principles or concrete guidelines to ‘reasonable expectations’ can be discerned. Our investigation of this approach does not advocate the abandonment of rules, nor does it entail simplistically stating that courts must decide matters on the basis of reasonable expectations. Rather, we suggest that the notion of reasonable expectations may inform the identification of relevant policy considerations and thus the formulation of context-sensitive rules that, as far as this is possible, allow predictable solutions in each of the different situations.

I. The Nature of Contracts for the Benefit of Third Parties During the second half of the twentieth century the South African debate regarding the nature of contracts for the benefit of third parties was dominated by the clash between the view of J. C. de Wet – the father of modern South African contract law – and the approach of the country’s highest court in civil matters. Brownsword & Hutchison note 1 above. Ibid., at pp. 128, 144. 4 See Daniel Malan Pretorius, “Letting the Unruly Horse Gallop in the Field of Private Law: The Doctrine of Legitimate Expectations in ‘Purely Contractual’ Relations” (2001) 118 S.A.L.J. 503. 2 3

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De Wet’s definition of a contract in favour of third parties is as follows: An agreement in favour of a third [party] is an agreement between two persons . . . in terms of which the one [the promisor] seeks to bind himself to the other [the stipulator] and a third party . . . to afford a right to the third party.5

A very important aspect of this definition is that it draws a clear line between agency and contracts in favour of third parties. It emphasises that the promisor seeks to bind himself to both the stipulator and the third party, and not only to the third party (as he would have done if the stipulator were acting merely as an agent of the third party, with a mandate from the latter to acquire the right on his behalf).6 Other than clarifying the difference between agency and contracts in favour of third parties, this definition does not reveal much about the nature of a contract in favour of a third party: It tells us nothing of when the right or rights arising from this contract come into being, nor about when, how, and by whom they may be enforced, whether and when corresponding obligations arise; and it also does not deal with when or under what circumstances the rights may be varied, withdrawn or otherwise brought to an end. It is, however, on these issues that the answer to the question ‘what constitutes a contract in favour of a third party’ turns. Of course, as with any contract, the relationship between the parties and the answers to these questions will, to a large extent, depend on the terms of their agreement. It is, however, still important to discern what limits the law will impose on the parties’ agreement; and also to determine what rights and obligations the law will impose where the relevant issues are not dealt with by the parties. The South African approach to the question of when the third party’s right comes into being to a large extent determines the answers to the other questions. We will first focus on this aspect with some brief comments on the issues of enforcement, variation, revocation and corresponding obligations. We will then turn to the possible alternative approach and the use of the principle of ‘reasonable expectations’ in the context of typical cases in the key areas identified. 5 De Wet note 1 above at p. 1 (our translation from the original Afrikaans). In the latest edition of his textbook on the law of contract, De Wet & Van Wyk note 1 above at p. 103, the definition of a contract in favour of a third party is given as being one ‘where the stipulans . . ., does not act as an agent of another, but enters into an agreement in his own name with . . . the promittens . . . , in terms of which he seeks to bind himself to the third party to make a performance to a third party’. (Once again our translation from the original Afrikaans.) 6 De Wet & Van Wyk, note 1 above at p. 104 indicate that many consider the distinctions drawn by Grotius in De Iure Belli ac Pacis 2, 11, 18 ‘as the first conscious formulation of the agreement in favour of a third party’, but, echoing the view expressed by De Wet note 1 above at pp. 115 ff., the authors are not convinced. Whether the honour of first having distinguished between agency and contracts in favour of third parties should be accorded to Grotius does not change the fact that the difference between these two phenomena in South African law lies in the fact that in the case of a contract in favour of a third party the stipulator does not act as the representative of the third party, but enters into the agreement with the promisor in his own name, by which action he seeks to obligate the latter to make a performance to a third party. (See De Wet & Van Wyk note 1 above at p. 103).

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1. When Does the Right of the Third Party Arise? This question has two separate parts, namely (a) what must the promisor and the stipulator do in order to create a right for the third party? and (b) what must the third party do to secure the right for himself? The answer to the first part is that the promisor and the stipulator must both intend to create an enforceable right for the third party by their agreement. In other words, South African law insists that it must be clear that the contract is truly one for the benefit of the third party.7 Not every contract that may contain some benefit for a third party is a ‘contract for the benefit of a third party’ properly understood. So, for example, in the situation where a person instructs her solicitor to draft a will in which she leaves all of her assets to two of her three daughters, the testatrix does not intend that her daughters have a right to compel the drafting of the will by a claim for specific performance if the solicitor turns out to be dilatory. While the contract between the testatrix and the solicitor is one which will benefit the testatrix’s daughters (and is intended to do so), it is not a contract for the benefit of a third party properly understood. The daughters may have a claim in tort against the solicitor, as disappointed beneficiaries, if the will ultimately benefits the third daughter or someone else, but they do not have a contractual remedy beforehand. This can be contrasted with another typical scenario in which a promoter of a company to be formed enters into a pre-incorporation contract with a future supplier. Here the agreement between the promoter and the supplier clearly does envisage that the third party (the company to be formed) should have an enforceable claim against the supplier once it comes into existence. It is interesting to note, by way of comparison, that the English Law Commission had originally proposed that the statute enabling contracts of this kind should require that the promisor and stipulator should intend to create an enforceable legal obligation: [A] third party should be able to enforce a contract in which the parties intend that he should receive the benefit of the promised performance and also intend to create a legal obligation enforceable by him.8

The English Law Commission ultimately modified this position to require explicitly only that the parties intend to confer a benefit on the third party, leaving the requirement that the parties also intend to create an enforceable right for the third 7 Brownsword & Hutchison note 1 above at p. 138: “The courts have consistently ruled that in order to constitute a stipulatio alteri it is not sufficient that the contract confers some incidental benefit or advantage upon the third party; nor even that the contract is intended to benefit the third party. What is required, according to these cases, is a mutual intention to create an enforceable obligation in favour of the third party: a vinculum juris compelling the promisor to make a performance to the third party, and giving the latter an enforceable right to demand the performance.” 8 Law Commission, “Privity of Contract: Contracts for the Benefit of Third Parties” (Law Com. Consultation Paper No. 121, 1991), para. 5.10. (Our emphasis.)

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party to a presumption. On this approach, the third party may enforce a term of a contract that purports to confer a benefit on him unless, “on a proper construction of the contract it appears that the parties did not intend the term to be enforceable by the third party”.9 The South African position in respect of the first part of the question approximates that of the original draft of the Law Commission. As regards the second part of the question, namely what the third party must do to secure the benefit for himself, there are a number of possible answers. These are set out as follows by Brownsword and Hutchison: (a) [He does not have to do anything, for the right vests] as soon as A makes the promise to B – or, perhaps more plausibly, as soon as A makes the promise to B, and C is aware of it; (b) [he has to indicate “acceptance”, for the right vests] as soon as C “accepts” the promise that A has made to B (by C communicating his assent to A); or (c) [he must have relied on the promise, for the right vests] as soon as C relies on the promise that A has made to B.10

The approach in English law, as in a number of other systems, is that nothing need be done by the third party – the right is automatically conferred once it is clear that the promisor and the promisee intended to confer a benefit on the third party. This is not the case in South African law where, once it has been established that the parties intended to confer a benefit on the third party and had intended to create an enforceable obligation, further action is required on the part of the third party.11 The South African courts have opted for possibility (b): the third party must accept the benefit offered to him.12 It is often emphasised that what is required is not simply that the third party accept the benefit but also that he communicates this acceptance. This does, however, leave the door open for a court to waive the communication requirement without necessarily waiving the acceptance requirement. Since in most cases unless acceptance is communicated it cannot be shown to have occurred, this approach can be seen as a device to ameliorate the harsh effects that a strict application of the rule would produce. Furthermore, it should be noted here that imprecise use of language by the courts has resulted in there 9 Law Commission “Privity of Contract: Contracts for the Benefit of Third Parties” (Law Com. Report No. 242, 1996), paras. 7.4, 7.17 and Contracts (Rights of Third Parties) Act 1999, s. 1(2). 10 Brownsword & Hutchison note 1 above at p. 131. 11 Brownsword & Hutchison note 1 above at p. 133 indicate that the clear distinction between these two parts of the enquiry into the moment at which the right of the third party arises, distinguishes South African law from English law, where these two aspects are elided in section 1 of the Contracts (Rights of Third Parties) Act 1999. 12 Louisa and Protector of Slaves v. Van den Berg (1830) 1 Menz 471; Tradesmen’s Benefit Society v. Du Preez (1887) 5 SC 269; Van der Plank v. Otto 1912 AD 353, 362, 363; Brown’s Exrx v. McAdams 1914 AD 231, 235; McCullogh v. Fernwood Estate Ltd 1920 AD 204, 206.

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being some uncertainty as to what exactly the third party is expected to accept13 but the consensus seems to be that the best interpretation of the courts’ intention is that they require, as stated in McCullogh v. Fernwood Estate Ltd,14 that the third party accepts an offer of a benefit by the promisor.15 It is at this point that South African law, in the terminology of the English Law Commission, regards the third party’s right as having ‘crystallised’, that is vested, so that (provided there is no further conditionality) it becomes enforceable by him. By taking this course, South African law chose one of the approaches discernible in the Roman-Dutch law of the seventeenth century. The court in McCullogh v. Fernwood Estate16 relied heavily on Grotius when it came to the conclusion that “[w]e may take our law as settled that where two persons have entered into a contract for the benefit of a third, the latter may, before the promise has been revoked, accept it and thus acquire a right of action”.17 The court invoked passages in both Grotius’s Inleydinge tot de Hollandsche Rechts-geleerdheid and his De Iure Belli ac Pacis in support of its approach.18 The theory behind the Grotian approach, as adopted in South Africa, is explained as follows by Brownsword and Hutchison: [T]he intention of the parties, in . . . all . . . contracts for the benefit of a third party, is that the promisor A, and not B [the stipulator], should be obliged to make a performance to C [the third party]; and, conversely, that C’s right to the performance should lie against A. The envisaged vinculum juris is thus between A and C, not between B and C; and the easiest way of ensuring that result within traditional contract theory is to construe the agreement between A and B as constituting an offer by A to C of the intended benefit. C’s acceptance should then in logic be directed to A.19 13 For instance, in Mutual Life Insurance Co of New York v. Hotz 1911 AD 356 it was said that the ‘contract’ must be accepted by the third party, whereas in Crookes NO v. Watson 1956 (2) SA 277 (A), 285 the court spoke of the third party having to accept the ‘benefit’, while in cases such as McCullogh v. Fernwood Estate Ltd 1920 AD 204 it was held that the third party must accept the ‘offer’. 14 1920 AD 204, 208. 15 See Brownsword & Hutchison note 1 above at pp. 136 – 137. 16 McCullogh v. Fernwood Estate Ltd 1920 AD 204. 17 McCullogh v. Fernwood Estate Ltd 1920 AD 204 at p. 215. 18 See Inleydinge 3,3,38, where Grotius, after having stated the basic Roman law rule of privity of contract (‘alteri stipulari nemo potest’) and having outlined the exception, went on to say that over and above the exceptions, “as equity is more regarded with us than legal subtleties, a third person may accept the promise and thus acquire a right, unless the promissory revokes the promise before such acceptance by the third person”. (Per De Villiers, J. at p. 214). The court at p. 214 also relied on De Iure Belli ac Pacis 2,11,18 and pointed out that various authors followed Grotius: “Even Huber in his Hed[endaegse]Rechtsg[eleertheid] (III. C.21. sect40), who wrote for Friesland where Roman law was much more closely followed than in the Province of Holland, bears witness to the fact that ‘custom is that wherever I have stipulated anything for another which he afterwards approved, a claim may be made by him for it.’” 19 Brownsword & Hutchison note 1 above at p. 135.

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De Wet, however, held the view that Grotius’s construction does not amount to a contract in favour of a third party because the third party does not acquire a right from the agreement between the promisor and the stipulator.20 (The Grotian scheme in effect insists on two bilateral contracts, one between A and B and then, after acceptance by C, one between A and C.) De Wet preferred the view of Johannes Voet as expressed in the latter’s exposition of the fideicommissum inter vivos.21 According to Voet, the third party obtains a right from the agreement in his favour immediately upon conclusion of the contract between the promisor and the stipulator, but the right is dependent on the condition that the stipulator does not release the promisor from his obligation towards the third party. This right could, however, according to Voet, be ‘stabilised’ by the third party accepting it. At the heart of De Wet’s approach is the acceptance of Voet’s view that the third party acquires his right directly and without him having to create a separate obligation between himself and the promisor by his own act.22 This view, said De Wet, could be subjected to two criticisms, both of which he rejected: (a) It could be said that the right was forced upon the third party, but this was not a valid criticism because the third party could reject the benefit; and (b) it could be said that this right can be taken away in that the stipulator may release the promisor, but this, too, does not hold water because the right is in any case a conditional one: the right is dependent upon a potestative resolutive condition and, in any event, can be ‘stabilised’ by the third party accepting from the stipulator the benefit which the latter has afforded him.23 Voet’s position is echoed, as we have noted above, in the modern trend which says that a third party directly acquires the rights flowing from a contract between two others in his favour. It must be said, however, that although the South African courts take a different line in this regard, their position fits in neatly with the general principles of South African contract law. First, it reflects the South African rule that unilateral promises do not create obligations. (It is true that there are two parties involved when agreeing to confer the benefit on the third party, but vis-àvis the third party, in Voet’s construction, they together confer a unilateral benefit on him.) Secondly, it accords with the basic South African premise that contracts are created only by consensus, expressed in the acceptance of an offer. Thirdly, it gels with the general approach of South African law to privity of contract. When the South African courts have been confronted with the possibility of pushing the See De Wet & Van Wyk note 1 above at p. 104. De Wet opined that the contract for the benefit of a third party had been carried throughout the development of the civil law by C. 8.54.3. and the fideicommissum inter vivos that emerged from it. (Ibid.) 22 Brownsword & Hutchison note 1 above at p. 134. 23 De Wet & Van Wyk note 1 above at p. 105. See below for more on the notion of ‘acceptance’ of the benefit by the third party from either the promisor or the stipulator. 20 21

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envelope of privity in the context of the law of tort, they have consistently taken a narrow view. For example, relational economic loss – that is to say economic loss that is suffered, for example, purely because the claimant is in a contractual relationship with the person harmed by the wrongdoer – is not actionable in South Africa.24 The South African approach tends to preserve privity without, however, being entirely inflexible. Nevertheless, it is clear that South African law has adopted a strong position in relation to the ‘acceptance requirement’. This approach raises certain theoretical and practical complications but is said to ensure a significant measure of certainty, which in turn is, so it is argued, commercially convenient. An analysis of the cases, however, reveals that requiring acceptance from the third party may sometimes be both difficult and counter-intuitive from a commercial perspective. Furthermore, in certain circumstances, strict application of the court’s approach seems not to be possible. These aspects will be dealt with further below. Jettisoning the requirement of acceptance by the third party would, however, bring with it other interpretive difficulties; and any commercial convenience of adopting such an approach must carefully be weighed against the doctrinal harmony that the current approach is said to achieve.

2. How, When and by Whom can the Third Party’s Right be Enforced; and When and under What Circumstances can the Right be Revoked or Varied? Enforceability and the related questions of revocation and variation are crucial issues in the context of contracts in favour of third parties. We have seen that, in terms of the doctrine adopted by the South African courts, the right of the third party in terms of a contract for their benefit comes into being only after their acceptance of that benefit. Even though, as we will see below, this doctrine has, to some extent, been ignored in the area of insurance, it remains firmly entrenched in other areas. Thus, the contract cannot be enforced by the third party prior to his having accepted the benefit from the promisor. Once this has occurred, the third party has a clear right to enforce the contract against the promisor.25 The question of revocability and variation of the contract, too, go hand-in-hand with the notion of acceptance. De Wet, as mentioned above, holds that the third party can stabilise the right and prevent revocation or variation by accepting the benefit from the stipulator, thereby ensuring that the latter will be in breach of con24 Aucamp v. University of Stellenbosch 2002 (4) SA 544 (C), at paras [63]-[67] where reference is made to the following instructive articles: Dale Hutchison, “Relational Economic Loss (or Interference with Contractual Relations): The Last Hurdle” (2000) Acta Juridica 133 and Dale Hutchison, “When Rigs do Roam: Relational Economic Loss in Table Bay Harbour” (2001) 118 S.A.L.J. 651. 25 Crookes NO v. Watson 1956 (1) SA 277 (A), 291E – H.

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tract if he then acts to revoke or vary the contract. The courts’ view, on the other hand, is that the third party accepts the offer of the benefit from the promisor. Until the offer of a benefit is accepted by the third party and this is communicated to the promissor, the offer can freely be revoked or varied by the promisor and the stipulator acting together. The promisor may not revoke or vary the offer unilaterally as there is still an agreement between the promisor and the stipulator, irrespective of the third party’s acceptance. The next issue to be considered is the extent to which the stipulator can enforce the contract. Of course, the particular contract may set out the rights and duties of the promisor and stipulator inter se. The challenge is, however, to determine what the answer to this question must be when this is not the case. At present, South African law gives a qualified answer. Ordinarily the stipulator will not be entitled to enforce performance to himself.26 The stipulator is, however, generally able to act indirectly to enforce the promisor’s obligation to the third party. He may, it is sometimes said, “insist that [the promisor] should do nothing in conflict with his promise”,27 but it is not clear exactly what this entails. De Wet argued that the stipulator should have the right to enforce performance of the obligation by the promisor to the third party, as it is no less an obligation to the stipulator, who is entitled to make use of the remedy of specific performance.28 Brownsword and Hutchison point out, however, that there are statements in the case law which contradict this approach. Here they refer to Nine Hundred Umgeni Road v. Bali29 in which it was held that the promisee “is not personally entitled to exact or obliged to render the performance which is stipulated for the third party unless the contract so provides”.30 Essentially, the answer to the question of whether the stipulator can enforce performance to the third party depends on how the law views his position after acceptance of the offer of the benefit by the third party. The case law is not clear. In Crookes NO v. Watson31 this uncertainty is noted but it is suggested that, once the 26 Although it may be that the contract provides that in the case of a third party not accepting the offer of the benefit, the stipulator will be liable on that contract or the contract may contain specific obligations of the promisor to the stipulator. In such cases the stipulator will, of course, have the right to enforce performance to himself. In McCullogh v. Fernwood Estate Ltd 1920 AD 204, the stipulator, acting for a company that was in the process of being incorporated, obtained the right to purchase a piece of land for the company but undertook to purchase the land himself if the company were not ultimately incorporated or, if it were incorporated but decided not to accept the offer. 27 Brownsword & Hutchison note 1 above at p. 139, citing African Universal Stores v. Dean 1926 CPD 390 and Semer v. Retief 1948 (1) SA 182 (C), 194. 28 De Wet note 1 above at p. 3. 29 1986 (1) SA 1 (A). 30 Ibid., at p. 6 per Brownsword & Hutchison note 1 above at p. 139 fn 43, where they also note other cases taking a similar approach such as Byworth v. Stevenson (1902) 19 SC 18 and Baikie v. Pretoria Municipality 1921 TPD 376, 380. 31 1956 (1) SA 277 (A), 291.

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third party has accepted the offer of the benefit, the stipulator drops out of the picture.32 This is often stated as being the general position33 but there are contradictory views evident in the case law. Thus in Joel Melamed and Hurwitz v. Cleveland Estates; Joel Melamed and Hurwitz v. Vorner Investments (Pty) Ltd34 the Appellate Division approved of the statement of this position in the Crookes case, saying that, even though it “was a minority judgment [of Schreiner JA] (concurred in by Fagan JA), there is nothing inconsistent therewith in the majority judgments and it has generally been regarded as an authoritative statement of the law”.35 At the same time, however, the court recalled, without disapproval, that in George Ruggier and Co v. Brook36 it had been stated that “[i]t is entirely a question whether there is an intention that the third party can, by adoption of the promise, become a party to the contract in which it is embodied.” This then suggests a trilateral relationship and that the stipulator remains a party to the contract. Perhaps some of the apparent contradictions can be explained by noting how important it is to determine exactly what the benefit is in any particular contract. The nature of the benefit may influence the stipulator’s right to enforce performance. So, for example, the stipulator and the promisor may agree that the promisor is to make an offer to sell his car to the third party. Once the promisor has made this offer, his obligations to the stipulator are fulfilled. Where, on the other hand, the benefit agreed upon is that the stipulator will offer his car to the third party and, in addition, perform fully in terms of the resulting contract of sale, merely making an offer to the third party is not sufficient to discharge the promisor’s obligations to the stipulator. Here, in contrast to the former case, the stipulator may, for example, be entitled to enforce the promisor’s obligation to deliver the car to the third party. The courts probably reached one or other decision informed by the content of the contract before them, but they mostly neglected to state this explicitely. Their decisions as to whether the stipulator can enforce the contract are often formulated as if this formulation applies to all possible situations. 32 The court notes (at p. 291E – F) that ‘the typical contract for the benefit of a third person is one where A and B make a contract in order that C may be enabled, by notifying A, to become a party to a contract between himself and A. What contractual rights exist between A and B pending such acceptance by C and how far after such acceptance it is still possible for contractual relations between A and B to persist are matters on which differences of opinion are possible; but broadly speaking the idea of such transactions is that B drops out when C accepts and thenceforward it is A and C that are bound to each another.’ 33 Brownsword & Hutchison note 1 above at p. 139 fn 47 note the support for this contention in other cases such as Nine Hundred Umgeni Road (Pty) Ltd v. Bali 1986 (1) SA 1 (A) and The London Chemists and Opticians Ltd v. Shapiro 1926 TPD 690, 695. 34 1984 (3) SA 148 (A), 172. 35 The court referred here to George Ruggier and Co v. Brook 1966 (1) SA 17 (N), 23 and the cases cited there as well as to Commercial & Industrial Holdings (Pty) Ltd v. Braamfontein Industrial Sites (Pty) Ltd 1969 (1) SA 479 (T), 493E – H and Protea Holdings (Pty) Ltd v. Herzberg 1982 (4) SA 773 (C), 779G – H. 36 George Ruggier and Co v. Brook 1966 (1) SA 17 (N), 23H.

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3. Do Corresponding Obligations Arise from the Contract for the Benefit of a Third Party and, if so, When do these Arise? The question of when a third party will be obliged to perform vis-à-vis the promisor is one that needs to be settled in any system which recognises contracts for the benefit of third parties. Innes CJ made the following observation in the Fernwood Estate case: It may happen that the benefit carries with it a corresponding obligation. And in such a case it follows that the two would go together. The third person could not take advantage of one term of the contract and reject the other. The acceptance of the benefit would also involve the undertaking of the consequent obligation.37

This statement remains correct but it may, as Brownsword and Hutchison correctly point out, require some qualification in light of the contract at hand. They note that in the case of, for instance, a life insurance policy the stipulator takes on an obligation to pay the premiums, but acceptance of the benefit by the third party would not entail that he now has to pay the premiums. On the other hand, they observe, if the benefit in question takes the form of an option to buy land one would distinguish two stages: (a) the acceptance of the offer of an option by the third party (at which stage he would not yet have any obligation) and (b) the subsequent exercise of the option itself (at which stage the third party would have the obligation to pay the purchase price).38

McCullogh v. Fernwood Estate Ltd 1920 AD 204, 206. Brownsword & Hutchison note 1 above at p. 140. Van der Merwe et al. note 1 above at p. 248 fn 160 suggest that there is a general belief that a contract to the detriment of a third party cannot exist, but that this is contradicted in the case law. In this regard Van der Merwe et al. cite the case of McCullogh v. Fernwood Estate Ltd 1920 AD 204 and state that according to the court in that case, ‘acceptance of a benefit that carries with it a corresponding duty would involve undertaking that duty, with the result that the beneficiary “would be liable to be sued, as well as entitled to sue”. This postulates a positive duty for the beneficiary.’ This statement perhaps highlights the concerns that have been raised in regard to referring to a contract for the benefit of a third party. Perhaps we should, as Christie (note 1 above at p. 267) suggests, adjust our terminology. As he puts it, “[n]o harm is done by continuing to talk about intention to benefit provided we are clear that the benefit is no more and no less than the power to adopt and become a party to the contract, but perhaps the time has come to put our house in order by talking about intention to empower (for short) or intention to empower the third party to adopt. And then perhaps the time has come to take up Schreiner JA’s hint and stop talking about contracts for the benefit of a third party. Stipulatio alteri...is equally misleading. Ius quaesitum tertio is an accurate title, but has the disadvantage of being in Latin. “Contract obtained for a third party” would be a reasonably accurate translation.” This discussion of terminology is interesting, particularly when we see how it can create confusion when dealing with obligations arising. Christie’s assumption, however, seems to be that such contracts take the form of two bilateral contracts. 37 38

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II. Evaluating the Current State of the Law In light of what is revealed by the above analysis, the following statement in the latest book on the law of contract in South Africa comes as no surprise: “How exactly a contract in favour of a third party should be defined is not quite clear”.39 The question is why this should be so, since this legal phenomenon has, through the medium of Roman-Dutch law, been a part of South African law since its inception and one might have expected greater clarity. This is especially so since it is a construct that is used in a variety of business transactions on a regular basis, and, therefore, one cannot say that it languishes in uncertainty through disuse: Thus Sutherland and Johnston40 list the following instances, amongst others, in which the contract for the benefit of a third party is used in South Africa: life insurance,41 short-term insurance,42 pre-incorporation contracts43 and restrictive conditions.44 (They also mention “that the trust inter vivos in South Africa has often been equated to a stipulatio alteri,45 [although] the South African courts have been conscious . . . that too much should not be read into this analogy.”)46 The fact is that contracts for the benefit of third parties are ubiquitous in South African law and the large measure of uncertainty is not easy to explain. In our view one of the major causes for the uncertainty is that both the courts and the authors who have commented on the decisions of the courts have consisVan der Merwe et al. note 1 above at p. 244. Sutherland & Johnston op cit note 1 above (see part XII: Applications of third-party contracts). 41 The authors mention in this regard cases such as Morkel v. London & Scottish Assurance Corp Ltd 1927 CPD 202; Curtis v. Gronningsaeter 1942 CPD 531; Ex parte MacInstosh: In re Estate Barton 1963 (3) SA 51 (N) and Hees v. Southern Life Association Ltd 2000 (1) SA 943 (W). 42 Here they mention cases such as Croce v. Croce 1940 TPD 251, Refrigerated Trucking (Pty) Ltd v. Zive 1996 (2) SA 361 (T), Manderson t / a Hillcrest Electrical v. Standard General Insurance Co Ltd 1996 (3) SA 434 (D). 43 In this connection they state that there are a great many cases in this area and mention the following as the most important: McCullogh v. Fernwood Estate Ltd 1920 AD 204; Nine Hundred Umgeni Road (Pty) Ltd v. Bali 1986 (1) SA 1 (A); and Build-a- Brick BK v. Eskom 1996 (1) SA 115 (O). 44 They refer to C. G. van der Merwe, Sakereg 2nd ed. (Durban 1992), at p. 503 and state that in South Africa it is trite law that a restrictive condition may be registered as a servitude against a title deed, if it is based on a stipulatio alteri. 45 Crookes NO v. Watson 1956 (2) SA 277 (A); Hofer v. Kevitt 1996 (2) SA 402 (C), 406 – 408; 1998 (1) SA 382 (SCA), 386); A. J. Kerr, “The Juristic Nature of Trusts inter vivos”, (1958) S.A.L.J 92; Getz, (1962) Acta Juridica 38, 51. 46 Crookes NO v. Watson 1956 (1) SA 277 (A), 290 – 291; Doyle v. Board of Executors 1999 (2) SA 805 (C), 813. See also the academic criticism: Alexander McCall-Smith, “Comparative Aspects of the Rights of Beneficiaries in the South African Trust” (1972) 5 The Comparative and International Law Journal of South Africa 189, 213 – 215; Edwin Cameron et al., Honorés South African Law of Trusts, 5th ed. (Landsdowne 2002), pp. 34 – 35. 39 40

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tently sought to create rules that would fit every contract that could qualify as a contract for the benefit of a third party. Sutherland and Johnston make a most perceptive comment when they state that in the case of pre-incorporation contracts “the tail has sometimes wagged the dog and some of the rules regarding stipulatio alteri have been tailored to suit pre-incorporation contracts to the detriment of the general body of law”.47 It is immediately obvious that there are important differences between contracts for the benefit of third parties concluded on behalf of a company that is in the process of being incorporated and, say, life-insurance contracts. In a pre-incorporation contract, for instance, the promisor has a very strong interest in whether the third party accepts the benefit that is being offered to him, while in a life-insurance contract the promisor, arguably, has no specific interest in whether or not the third party accepts the benefit, because it will not make any difference to it how much it will have to pay out.48 It is clear, then, that the law should take account of this fact and not necessarily equate these situations for the purposes of, for instance, revocation and variation. Furthermore, the tendency of courts to be influenced by the context of the specific kind of third-party contract with which they are concerned is more widespread than merely pre-incorporation contracts: If a court is faced with a life-insurance matter it is likely to fashion general rules with that context in mind without cautioning that the rule might not be apt in different circumstances. Academic authors too (with the notable exception of Hutchison)49 – from McKerron in his 1929 South African Law Journal article, through J. C. de Wet’s various interventions to the latest textbook by Schalk Van der Merwe et al. – have consistently sought to find a single structure and to formulate ‘one size fits all’ rules. The question is: ‘What is to be done?’

III. An Alternative Approach – Reasonable Expectations In spite of the fact that the South African tendency to over-generalise lies at the heart of the uncertainties that plague the law in this area, the first task for the future may be a general one. It may be that South African law should move away from its current understanding of privity of contract and its corollary, namely the notion that a contract for the benefit of a third party cannot come into existence unless there has been an acceptance of the offer of a benefit by the third party. This seems to be the direction that other jurisdictions are taking. English law, for instance, has embarked upon a massive legislative effort in order to make this shift. Such an 47 Sutherland & Johnston note 1 above (See part XII: Applications of third-party contracts, point (iv)). 48 Of course they do have some interest in not paying the incorrect person, a matter dealt with further below. 49 See Brownsword & Hutchison note 1 above at pp. 139 – 140, especially fn 41 and cases there cited.

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approach may bring with it certain difficulties – such as, for example, interpretive difficulties relating to whether or not the parties intended to create a right for the third party and determining when, how and under what conditions the third party’s right may be enforced, varied or revoked. The fact is, however, that our current approach is also problematic. As will be seen in the cases discussed below, requiring acceptance of the offer of the benefit by the third party may be practically difficult in certain contexts. Furthermore, as we have already seen, the position of the stipulator with regard to enforcement after such acceptance is unclear, as is the answer to the question of whether we are dealing with a trilateral contact or whether a new contract comes into being between the promisor and the third party, thus leaving the stipulator out of the equation. Given these difficulties, and considering the shift in English law, it is not inconceivable that the South African courts will come to accept De Wet’s view and move away from the requirement of acceptance thus bringing us into line with the current position in English and German law.50 The English law position, contained in the Contracts (Rights of Third Parties) Act, 1999, on the enforceability of contracts for the benefits of third parties, as is neatly summarised by Brownsword and Hutchison, is that a third party (expressly so identified) may enforce a term in a contract if (a) the contract expressly provides that he may do so, or (b) the term purports to confer a benefit on him. In the latter case, however, the third party will not have such a right if, as section 1(2) puts it, “on a proper construction of the contract it appears that the parties did not intend the term to be enforceable by the third party.51

Here, as on De Wet’s view, the intention of the promisor and stipulator is paramount. On this approach, the third party is not required to accept the offer of the benefit in order to secure this benefit and to render the right to the benefit enforceable. Not requiring the acceptance of the third party to constitute a contract in favour of such third party will, however, not render acceptance irrelevant. The fact of acceptance, where it does take place, could create the same kind of legal relations as it does at the moment (notwithstanding there being some confusion as to what these are). The question here is rather whether it should also be possible to have contracts for the benefit of third parties outside of the confines of a regime which regards acceptance as a necessary step in the creation of such contracts. This move towards a more relaxed privity regime will, it is true, increase the range of instances in which contracts for the benefit of third parties are enforceable. Moreover, questions regarding how to deal with the issues of revocation and variation will inevitably be more complex. Where, as in current South African law, acceptance of the offer of the benefit by the third party is required before the third party acquires a right, these questions are, in principle, fairly easy to deal with. 50 51

This point is noted by Brownsword & Hutchison note 1 above at p. 141. Brownsword & Hutchison note 1 above at p. 142.

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They become more complex where the requirement of acceptance by the third party is abandoned. The approach in the English legislation is to provide for these concerns separately. The Contracts (Rights of Third Parties) Act, 1999, in s 2, limits the rights of the original contracting parties (to vary or rescind the contract) if: (a) the third party has communicated his assent to the term to the promisor, (b) the promisor is aware that the third party has relied on the term, or (c) the promisor can reasonably be expected to have foreseen that the third party would rely on the term and the third party has in fact relied on it.52

Brownsword and Hutchison suggest that this restriction in English law does not fit with an approach that prioritises the intention of the original contractors – in fact, it allows the common intention of the parties to be over-ridden.53 The difficulty lies then in establishing the doctrinal basis of these contracts. In South Africa too, if we move away from the notion of acceptance, the courts will have to find a new basis for the obligations that arise from this kind of contract. The easy justification of consensus will no longer be available to serve as a basis and the courts might now have to accept that a unilateral promise (created by the contract of the promisor and the stipulator) can create an enforceable obligation. Finding doctrinal harmony is important as it serves the higher goal of coherence in a legal system. It is, however, also important that specific rules are formulated in a manner which will not impede commercial practice or justice between litigants in different situations. Brownsword and Hutchison suggest that perhaps we should be looking at the basis of obligations in the modern law of contract as being “not intention, promise or even reliance as such”, but rather the idea of protecting “reasonable expectation”. 54 They state that, if one were to adopt a relativistic approach to contract law, the notion of reasonable expectations could be structured along three axes: (i) at its widest, expectations are relative to the community’s recognised standards of fair dealing (and it is these ideas that support inter alia the idea that a promise represents a binding commitment); (ii) less broadly, where business sectors have their own local standards of fair dealing, their own customs and practices, expectations are judged reasonable or not relative to those sectoral norms; and (iii) most proximately, where the parties themselves act in ways which create certain expectations in their fellow contractors, then the signals sent between the parties (in the light of their inter-subjective understanding) serve as a reference point for the reasonableness of particular expectations.55

The authors then set out how we can view contracts for the benefit of third parties when the law is framed by this principle of protecting reasonable expectations (understood along these three axes). Essentially, the third party “forms an expecta52 Section 2 Contracts (Rights of Third Parties) Act, 1999; Brownsword & Hutchison note 1 above at p. 126. 53 Brownsword & Hutchison note 1 above at p. 143. 54 Brownsword & Hutchison note 1 above at p. 143. 55 Brownsword & Hutchison note 1 above at p. 144.

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tion that a benefit is to be conferred”56 and may also form an expectation that “he has a right to veto variation or rescission”57 on the part of the stipulator and the promisor. In drawing conclusions as to the existence of these rights, it is necessary to determine whether these expectations are justified or reasonable. This has to be judged against some standard or, as Brownsword and Hutchison put it, “in the light of the material reference points”.58 On a general level, the starting point here could be the first of the three axes set out above: the community’s standards of fair dealing. If the community’s standards place a high value on the obligatory nature of promises, then contracts for the benefit of third parties could be structured such that the relationship between the promisor and the third party is direct (a separate contract). Alternatively, the community’s standards of fair dealings may be more pluralistic and may well see the contract for the benefit of a third party as conferring rights on the third party without there being a separate contract between him and the promisor. Of course the ‘reasonable expectations’ approach brings with it its own difficulties, not the least of which is the difficulty of deciding what viewpoint one should take in determining whether the third party’s expectation of a benefit, in the context of specific contracts, is in fact reasonable or unreasonable. We will return to this problem in our consideration of whether using the notion of ‘reasonable expectations’ is useful in approaching specific cases. Below we look at four typical instances and attempt to formulate what the approach of meeting ‘reasonable expectations’ would entail in each of them and what this means in relation to the approach taken by the court.

IV. Typical Cases 1. Insurance In one of the earliest cases dealing with beneficiary clauses, Mutual Life Insurance Co of New York v. Hotz59 – a case which is seen as one of the milestones on the road to entrenching acceptance of the benefit by the third party as a prerequisite for a contract in favour of that third party to come into existence – the concept of acceptance of the benefit was dealt with in a less-than-satisfactory manner. Lazarus Pelunsky had taken out an insurance policy on his life in terms of which, upon his death, the proceeds would be paid to his father, Jacob Pelunsky, who was resident Brownsword & Hutchison note 1 above at p. 144. Ibid. 58 Ibid. 59 1911 AD 556. See generally on contracts for the benefit of third parties in the context of insurance, H. J. May, “Third Party Stipulations in Life Insurance Policies” (1954) 71 S.A.L.J. 380 and Ellison Kahn, ”Extension Clauses in Insurance Contracts” (1952) 69 S.A.L.J. 53. 56 57

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in Russia. Jacob predeceased Lazarus and Lazarus wanted to acquire the surrender value for himself. The insurance company insisted that it could do so only if they received consent from the legal representatives of the father’s estate. In the court a quo it was held that since there was no evidence that Jacob Pelunsky had accepted the benefit, the insurance company was not entitled to insist on a release. (The court uses the word ‘ratified’, but it is clear from all the surrounding circumstances that the court was not dealing with agency in this instance.) On appeal Lord de Villiers CJ disagreed and held as follows: It is not denied that, if the father had notified to the Company his acceptance of the benefits under the policy, the surrender value would have been payable to the father and not to the son. There has been no notification of such acceptance to the Company, but on the other hand there has been no repudiation of the gift by the father or his legal representatives, and the Company was justified in asking to be secured against the risk of the personal representatives still ratifying the gift and claiming the amount of the surrender value.60 (Our emphasis.)

If the contract for the benefit of a third party really came into existence only on acceptance by the third party, the fact that there had been no acceptance means that the insurance company and Lazarus should have been free to revoke the contract at any time before the company was notified of acceptance, which would render any subsequent acceptance by the legal representatives of the estate of Jacob meaningless. Yet the court treats the right of the third party as existing until it is positively rejected. Innes JA, in his separate judgment, takes the position that acceptance is vital before the third party may enforce a stipulation made in his favour but sees the central question in the case as being whether it is still open to the representatives of Jacob’s estate to accept the benefit. Innes JA thinks it is.61 So here, despite Jacob having died, the offer of a benefit is still seen as being open to his estate. This, as Van der Merwe et al point out, “would of course not be possible if the beneficiary were to be regarded as an offeree to whom a simple offer of the benefit is made”.62 The judgments of both Lord De Villiers CJ and Innes J seem to find difficulty with applying a straightforward construction of offer and acceptance and they are clearly uncomfortable with requiring acceptance in such circumstances. If we were to take the approach that acceptance is not required, Jacob’s right would have vested immediately. The court’s finding is consistent with this approach. The further question that must then be asked is why the court required repudiation of the benefit by Jacob’s estate. One way of viewing it is that the court was of the opinion that Jacob (and, on his death, his estate) had a reasonable expectation of having a right to enforce the contract and a right to veto its revocation or variation. On the evidence before the court, however, it seems that Jacob was not even aware of the policy and therefore the expectation in this context could not 60 61 62

Mutual Life Insurance Co of New York v. Hotz 1911 AD 556, 564. Ibid., at p. 567 – 8. Van der Merwe et al. note 1 above at p. 246 fn 150.

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have been based on the third party’s awareness of the right in his favour. This raises the question whether ‘reasonable expectations’ should be viewed in an objective sense. Could the court be seen to be asking whether, if he had known, Jacob would have had a reasonable expectation of having the right to enforce the contract? In these circumstances perhaps the better question to ask would be whether the estate’s expectation of a benefit would be reasonable. Here Lazarus made Jacob the beneficiary of the policy “to make further provision for him”63 and, as the court finds, “the father was named as sole beneficiary with a view to his support in case the son died, not for the benefit of the son in any way”.64 In our view, this would suggest that the estate’s objective expectation, of having the right to prevent revocation, would not be reasonable, given that the reason for conferring the benefit was no longer valid. Perhaps a clue as to what the court would have viewed as being a reasonable expectation is to be gleaned from its discussion of the position of the insurance company, in regard to which Lord De Villiers CJ had this to say: Supposing they had paid the amount to the insured, they might have been sued the next day for payment of the amount to the executors or heirs of the deceased. . . . [T]he Company was justified in asking to be secured against the risk.65

If the underlying policy consideration here is that insurance companies must be protected against the possibility of competing claims then that is best stated as a context-specific rule. Viewed in this way, the reasonable expectations of the beneficiary would not be particularly useful in formulating a rule for this situation, although the reasonable expectations of the promisor could be useful in doing so. A further possibility that could underlie the court’s reasoning is a broader view that beneficiaries of life-insurance policies should be protected and generally have a reasonable expectation of the benefit and the expectation of the right to veto rescission of that benefit. Even though, as we shall see below, this is not supported by all the cases, a number of decisions can be explained on this basis. All of this tends to show that if one is to use the notion of reasonable expectations sensibly, it is bound to involve deciding whether the expectations in a particular fact-situation are (a) relevant and (b) reasonable; and then weighing them up against one another. In Hees NO v. Southern Life Association Ltd66 a man had nominated his brother as beneficiary of two policies before his death. Subsequent to that he was married in community of property and he and his wife executed a joint will in which they nominated each other as sole heir of the joint estate. When the man committed suicide his widow, in her capacity as executrix of the estate, requested the insurance company not to pay the proceeds of the policies to the deceased’s brother, since 63 64 65 66

Mutual Life Insurance Co of New York v. Hotz 1911 AD 556, 566. Ibid. Ibid., at pp. 563 – 564. 2000 (1) SA 943 (W).

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she was not prepared to consent to or ratify the deceased’s brother as being the beneficiary of the two policies. The insurance company held itself contractually bound to pay the proceeds to the brother and the court agreed. The court designated the contract between the deceased and the insurance company as a contract for the benefit of a third party and accepted the brother’s right to claim the proceeds without there having been any investigation as to whether he had at any stage ‘accepted’ the benefit. The facts are slightly different to those presented in the previous case in that here the beneficiary of the policy was still alive and had, in fact, been paid the proceeds of the policy. This could, of course, be seen as acceptance of the benefit but the court did not even consider the issue of acceptance and certain statements made by it indicate that it was not viewed as a requirement. Its decision rests on the fact that the formalities in the policy which allowed for a change of beneficiary had not been complied with. In fact, Claassen J seems to indicate that the beneficiary’s interests are protected even without his having knowledge of the fact of his nomination as a beneficiary. In discussing whether the nomination of a beneficiary could constitute a donation and thus be revocable by later conflicting juristic acts on the part of the policy holder, Claassen J states the position to be that “[w]here the beneficiary is unaware of the stipulatio alteri in his or her favour, the question of donation does not arise and the stipulatio alteri must be given its due weight when confronted with other juristic acts performed by the policy holder which may seem to conflict with the nomination”.67 To continue the approach that we outlined in the discussion of the Hotz case above, an examination of the various expectations that are present in the situation – to determine their relative relevance and reasonableness – is appropriate. As in that case, it may be that here too looking at whether the expectations of the beneficiary are reasonable from the beneficiary’s perspective may not, in fact, be particularly useful (as a consideration standing alone). Again it may be useful also to take into account the expectations of the broader community. The outcome of this might be a conclusion that, objectively speaking, the expectations of the community are that beneficiaries of life-insurance policies should be protected in their (reasonable) expectation that contracts for their benefit should not be revoked other than in the manner stipulated therein. Taking into account the expectations of insurance companies (as dictated by their commercial interests) might strengthen this conclusion to a point where it is unassailable. In supporting the strict application of revocation clauses in policies (in other words, not, where written notice is required, to allow tacit revocation of the nomination), the court raises the concerns of what would happen if this were not the case: The speedy payment to a beneficiary will be delayed by an indeterminate period of time pending the insurance company’s investigations to ensure that it is entitled to pay the proceeds to the beneficiary. Alternatively, insurance companies will have to put in place ad67

Ibid., at p. 954D.

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ministrative processes to ensure regular contact with policyholders to ascertain whether they may have taken actions which could influence rights flowing from stipulatio alterii contained in insurance policies. This would undoubtedly increase premiums and be prejudicial to all concerned with the insurance industry.68

In considering the matter from the perspective of insurance companies it is possible that the rights of beneficiaries could be protected – but this is incidental (and certainly the court in this case did not seem to make the interests or expectations of the beneficiary the reason for its decision. In the case of Curtis Estate v. Gronningsaeter,69 the court dealt with a beneficiary’s position under an insurance policy in the language of the law pertaining to donation and not explicitly as a contract for the benefit of a third party. In this case, the late Morton Curtis had taken out a ‘heritage insurance policy’ under which his wife was nominated as beneficiary. Any change of nomination had to be given to the company in writing. Morton’s wife accepted the policy and remained in possession thereof. Morton and his wife divorced. Some time later Morton executed a will and mentioned the policy as one of his assets but stated that he was not sure of its whereabouts. He later died without having expressly revoked the appointment of his ex-wife as beneficiary. The deceased’s estate and his ex-wife claimed the proceeds of the policy. The court did not consider the policy to be a contract for the benefit of a third party (the ex-wife). It expressly (and repeatedly) stated that “[t]he beneficiary was no party to the contract, which was and remained one between the company and the assured alone; any condition [such as that requiring written notice of a change of beneficiary] could be waived by the company at its option”.70 This approach seems to be based on a clause in the policy which stated that Morton could, “at any time while [the] policy is in force in the absence of any law to the contrary change the beneficiary or beneficiaries and reapportion the benefits hereunder or declare that the policy shall be for the benefit of himself or his estate by [giving written notice to this effect]”.71 The court in Hees above distinguished this case on the basis that insurance contracts had not yet been recognised as being contracts for the benefit of third parties. However, if we accept that they can be classified as such, the case does introduce another possible ‘rule’ that could be based on reasonable expectations. Perhaps one could, in such a situation, ask whether the fact of the divorce would render the ex-wife’s expectation of a benefit unreasonable. This would, on the facts in the Curtis case, then render the ex-wife’s acceptance of the benefit nugatory. Given the important role played by acceptance in the current approach of the South African courts, this may be difficult – it is one thing for the courts to go against their own doctrine and not require acceptance but quite another to ignore the fact that 68 69 70 71

Ibid., at p. 958B – D. 1942 CPD 531. Ibid., at p. 537. Ibid., at pp. 533 – 534.

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there has been acceptance by the third party. The next case, on similar facts, comes to an entirely different conclusion to that in Curtis. In Ex Parte Macintosh, NO: In re Estate Barton,72 Barton had taken out a policy in which his then wife was named as the beneficiary. They were subsequently divorced and shortly thereafter he revoked his will and appointed his intended new wife, Macintosh, as his executrix testamentary and beneficiary of the major part of his estate. The insurance policy contained a revocation clause that stated that the insured could “by a declaration in writing under his hand appoint a beneficiary or beneficiaries and [could] alter or revoke any prior designation”.73 After the death of Barton, Macintosh, as executrix, applied for an order declaring that the deceased had tacitly revoked the nomination of his former wife as beneficiary and that the proceeds of the policy were payable to the estate. It appeared on the evidence that Mrs Barton was aware of the policy and its general provisions (presumably this would include the provision giving Barton the right to revoke her nomination as beneficiary). The court does not really deal with the issue of Mrs Barton accepting the benefit other than to say that the policy “remained open to acceptance by Mrs. Barton”74 and later, that “nothing has happened to deprive Mrs. Barton of the right which she has exercised to claim the benefits of the policy”.75 Here the court, as in the subsequent case of Hees, was strict in its application of the policy’s revocation clause. Caney J’s decision deals primarily with the issue of gifts to spouses being revoked by divorce. Caney J decided on the facts that the gift was not one “made out of sheer liberality or inspired solely by disinterested benevolence” which could thus tacitly be revoked by divorce.76 The policy was a contract between Barton and the insurance company “creating benefits intended to provide for his family after his death and the nomination of Mrs. Barton was clearly associated with the family income provision [in the policy] . . .. motivated . . . out of an appreciation of a duty to provide for his family’s maintenance”. 77 Looking at reasonable expectations in the context of this case, it is possible to see that the court, to some extent, considered the third party’s expectations, albeit in an objective sense. The court considered Barton’s duty of support to his family and seemed to imply that they would have some expectation of having the policy serve as a satisfaction of this duty upon his death. This may, once again, be more of an expression of what would be considered right in the community than what Mrs Barton may have in fact expected. Outside of the manner in which the court decided the issue, it is possible to construct a ‘reasonable expectations’ argument. Mrs Barton knew of the policy and thus had a personal expectation of the benefit 72 73 74 75 76 77

1963 (3) 51 (N). Ibid., at p. 53C – D. Ibid., at p. 57F. Ibid., at p. 58C. Ibid., at p. 57A – C. Ibid.

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contained therein and that it would not be revoked other than in terms of the policy. Her expectation could be considered to be reasonable, based on the community’s standards of fair dealing, in that the benefit of the policy was, it seems, intended to provide for the family in the event of Barton’s death.

2. Himalaya Clauses Our next example is ‘Himalaya clauses’.78 This is the name given to provisions designed to combat the exposure of servants, agents and subcontractors of a party to a shipping contract.79 They typically extend an exemption from liability contained in a bill of lading to the stevedores or terminal operators (who are of course not parties to the bill of lading). Given that English law, at the time when Himalaya clauses were developed, did not recognise contracts for the benefit of third parties, the basis for the validity of such a clause had to be found elsewhere. In Midlands Silicones Ltd 80 Lord Reid accepted that the basis could be found in the notion of agency; and since New Zealand Shipping Co Ltd v. A. M. Satterthwaite & Co (The Eurymedon)81 this basis has been generally accepted in English law. The importance of this for South African law lies in the fact that, due to the vicissitudes of legal transplants during the colonial period, English law (and indeed English law 78 These clauses derive their name from the English case of Adler v. Dickson (The Himalaya) [1954] Lloyd’s Rep 267, [1954] 3 All ER 397, [1955] 1 QB 158 (CA). In that case, the plaintiff was a passenger on the Himalaya and while she was stepping onto a gangway onto the ship it moved and she was thrown sixteen feet down onto the wharf and was seriously injured. Her ticket, containing the terms of the contract between her and the shipping company, contained a clause to the effect that ‘the company was not responsible for any injury whatsoever to the person of any passenger arising from or occasioned by the negligence of the company’s servants’ (quoted by Farlam J in Bouygues Offshore and Another v. Owner of the MT TIGR and Another 1995 (4) SA 49, 68I). The plaintiff brought an action against the Himalaya’s master and boatswain, the liability of the company having been effectively excluded by the exemption clause.) Although the Court of Appeal found that, in this case, the contract of carriage could not be said to have been intended to benefit the master or boatswain, it held that a carrier could in principle ‘stipulate not only for himself, but also for those whom he engaged to carry out to carry out the contract’ (William Tetley, “The Himalaya clause – revisited” (2003) 9 J.I.M.L. 40. This decision led to clauses which expressly benefited stevedores and the like being inserted into bills of lading (ibid.). 79 An example of a typical Himalaya clause is to be found in Bouygues Offshore and Another v. Owner of the MT TIGR and Another 1995 (4) SA 49: ‘All exceptions, exemptions, defences, immunities, limitations of liability, indemnities, privileges and conditions granted or provided by this agreement, or by any applicable statute, rule or regulation, for the benefit of the tugowner or hirer, shall also apply to and be for the benefit of . . . charterers, subcontractors, operators, master, officers and crew of the tug or tow . . . The tugowner or hirer shall be deemed as acting as agent or trustee of and for the benefit of all such persons, entities and vessels set forth above but only for the limited purpose of contracting for the extension of such benefits to such persons, bodies and vessels’ (at p. 68F-H). 80 Scruttons Ltd. v. Midlands Ltd. [1962] AC 446, 474; [1962] 1 All E.R. (HL). 81 [1975] AC 154.

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of varying vintages) may be applicable in terms of the Admirality Jurisdiction Regulation Act;82 if this is the case, a South African court might, depending on the version of English law that is applicable, be bound by this construction. Where a claim falls within South African admiralty jurisdiction,83 ss 6(1)(a) and (b), read with ss 6(4) and (5) decree that the applicable law in such a situation will be (in the following order): (i) the appropriate South African legislation; (ii) the law indicated by a choice of law clause (which in a shipping law context is usually English law); (iii) in the absence of either legislation or a choice of law clause, where a matter invokes so-called ‘Old Jurisdiction’,84 English law as it was in November 198385; and (iv) where the jurisdiction is new (that is, created by the Act itself) the Roman-Dutch law as currently interpreted in South Africa.86 The South African case of Bouygues Offshore and Another v. Owner of the MT TIGR and Another (The Tigr)87 may be used to illustrate the circumstances under which a particular law will be applicable – and how the notion of contracts for the benefit of third parties (as well as that of reasonable expectations) could be relevant in each instance. In The Tigr, the owner of a barge which had been grounded near Cape Town while being towed from the Congo, brought an application against the owner of Act 105 of 1983. Where there is, for example, a claim for loss of, or damage to, goods or a claim relating to any charterparty or the use, hire, employment or operation of a ship (areas in which a defence based on exclusion from liability would commonly arise). For a full consideration of this issue, see John Hare, Shipping Law & Admiralty Jurisdiction in South Africa (Kenwyn 1999) at pp. 473 ff. 84 That is to say, ‘any matter in respect of which a court of admiralty of the Republic referred to in the Colonial Courts of Admiratly Act, 1890, of the United Kingdom, had jurisdiction immediately before the commencement of this act. . .’. (See section 6(1)(a).) It is in the task of defining Old Jurisdiction that this section produces difficulties. The admiralty jurisdiction of the South African Supreme Court in 1983 essentially remained that prescribed by the 1890 Act. Determining this jurisdiction requires an enquiry into the jurisdiction of the English High Court in 1891. At this point one needs to refer to the admiralty jurisdiction Acts of 1840 and 1861 and also to the pre-existing and inherent jurisdiction of the High Court in Admiralty and that of its predecessor, the Admiralty Court. This task involves reference to numerous pieces of legislation – some going back as far as 1400. See Hare note 83 above at pp. 18 – 19 for this and a further exposition on the subject. 85 As Hare note 83 above at p. 22 points out, this ‘would include all of the then English law applicable in Admiralty: case law and statute. . .also relevant principles of English private international law. . . [and] [i]t is a mammoth task to identify all English legislation that could have been applied to admiralty matters by the High Court in 1983.’ Aside from specific admiralty statutes, other pieces of legislation possibly having a bearing on a shipping dispute, include the ‘Consumer Credit Act, 1974; the Contracts of Employment Act, 1972; The Docks & Harbours Act, 1968; various Employment Acts. . .; the Fatal Accidents Act 1976. . .’. Determining how to apply appropriate English cases here is, it seems, an equally difficult task. See Hare note 83 above at pp. 22 – 3 and at fn. 104 for further examples. 86 Hare note 83 above at p. 19. 87 Bouygues Offshore and Another v. Owner of the MT TIGR and Another 1995 (4) SA 49. 82 83

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the tug. There had been a towage contract between the owner of the barge and the charterer of the tug, but when the barge grounded, the owner of the barge rescinded the contract. It then brought the current application to have the tug and bunkers aboard attached to confirm jurisdiction in its action for damages suffered as a result of the grounding, and for the repayment of the towage price against the charterer. The towage contract contained a clause exempting the charterer from liability for any loss or damage sustained by the tow; it also contained a Himalaya clause whereby the exemption from liability conferred on the charterer was extended to, inter alia, the owner of the tug.88 The question was whether the owner of the tug might not still escape liability by virtue of the exemption clause, read with the Himalaya clause, despite the contract having been rescinded.89 In this case English law as it existed on 1 November 1983 was applicable90 and thus the Himalaya clause had to be dealt with in terms of the agency construction. On this construction, it had to be shown that the owner of the tug had authorised the charterer to contract on its behalf for the relevant exemptions. Although the first respondent had not initially authorised the second respondent to do this, it was held that by making its tug available it ratified the exemption contract made on its behalf by the charterer.91 However, the exemption contained in this Himalaya clause could not benefit the owner of the tug. The reasons for this are as follows: On ratification, the Himalaya clause gave rise to a separate contract between the barge-owner and the tug-owner.92 Either the barge-owner was entitled to rescind this contract itself (on the basis that the charterer was also acting as the agent of the tug-owner when it made the misrepresentation, which gave the barge-owner the right to rescind the towage contract);93 or when the barge owner rescinded the towage contract, the exemptions contained in the Himalaya clause became meaningless (because they referred back to exemptions in the towage contract that no longer existed). Suppose, however, that English law is identified as the applicable law in terms of the choiceof-law clause in a towage contract identical to that in The Tigr. This would mean that not English law as it existed in November 1983, but rather current English law, would have been applicable. This opens up intriguing possibilities. First, the Himalaya clause now has to be interpreted in the light of the Contracts (Rights of Third Parties) Act 1999, which allows a third party to enforce the terms of a contract if the term purports to confer a benefit on him. It is true that s 6(5) of the 1999 Act contains an exception to this general rule, namely that third parties may not obtain rights under s 1 where a contract for the carriage of goods by sea94 is concerned, but Ibid., at p. 50H – I. Ibid., at p. 68E. 90 Ibid., at p. 57B – C. 91 Ibid., at p. 71H – I. 92 Ibid., at e.g. p. 72G. 93 Ibid., at p. 72F. 94 That is to say, ‘contracts contained in bills of lading, seaway bills, or for which there is given an undertaking which is contained in the ship’s delivery order (or in each case a cor88 89

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this same section contains an ‘exception to this exception’95 which states that “a third party may in reliance on [s 1] avail himself of an exclusion or limitation of liability of such a contract”. Tetley states that this “in effect, places the Himalaya clause on a statutory footing in the U.K.”.96 The outcome of The Tigr would then have been the same because s 3(6) of the 1999 Act provides as follows: Where in any proceedings brought against him a third party seeks in reliance on section 1 to enforce a term of contract (including, in particular, a term purporting to exclude or limit liability), he may not do so if he could not have done so (whether by reason of any particular circumstances relating to him or otherwise) had he been a party to the contract.

Assume lastly that South African law were the law identified in a choice of law clause in a Tigr situation, then any Himalaya clause in that contract, depending on the wording thereof, could be treated as either agency or a contract for the benefit of a third party (as understood in South Africa).97 It is now appropriate to consider generally how a contract for the benefit of a third party would be interpreted in this situation. On the current general approach of the South African courts, upon acceptance of the offer of the benefit, the third party would, generally speaking, have a right to prevent rescission or variation of the contract. In The Tigr, the tug-owner ratified the contract and can thus be taken to have accepted the offer of the benefit. If we abandoned the need for acceptance then the tug owner would have acquired the right to the benefit of the exemption clause immediately upon the conclusion of the contract between the owner of the barge and the charterer of the tug. In this context, the current English approach of not requiring acceptance by the third party to give rise to certain rights may be commercially more convenient. The discussion by Farlam J in The Tigr regarding responding electronic transaction)’. Andrew Jamieson, “Shipping Contracts” in Robert Merkin (ed.) Privity of Contract: The Impact of the Contracts (Rights of Third Parties) Act 1999 (2000) ch. 6, p. 158. 95 Tetley (2003) 9 J.I.M.L. 40 at [15]. 96 Ibid. However, it should be kept in mind that the classic Himalaya clause is predicated on the agency construction, which makes the third party a party to the contract (albeit only for the limited purpose of enforcing the indemnity); the 1999 Act merely allows a third party to enforce a term of the contract without making him a party to that contract. Jamieson note 94 above at p. 160 states that if a Himalaya clause were to be drafted in the traditional way (namely that the carrier enters into the clause as an agent for his own servants, agents or subcontractors, who are expressly deemed to be parties to the agreement) it would be questionable whether ‘it would exclude the 1999 Act by making them parties to the contract as opposed to third parties as required by s 1 of the 1999 Act’. He adds that ‘[e]ach clause will be interpreted on its individual wording’. 97 Although not relevant to the Tigr situation, it should generally be kept in mind that a choice of law clause would not be applicable in circumstances where South African legislation is mandatorily applicable. For example, where goods are shipped outwards from a South African port ‘the Hague-Visby Rules, as enacted by the South African Carriage of Goods by Sea Act . . . are mandatorily applicable.’ (Hare note 83 above at p. 475). These rules contain a statutory Himalaya clause which would be applicable. This statutory clause is also based on the agency construction. (For the wording of this see Hare note 83 above at p. 402.)

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the development of the agency construction of Himalaya clauses is instructive. He notes that the result of the earlier cases, denying the efficacy of these clauses, “was regarded as commercially inconvenient by parties such as stevedores and other agents of carriers who themselves had not contractual privity with persons shipping goods and who could, accordingly, not avail themselves of the exemption clauses contained in contracts of carriage”.98 Taking this a step further, it seems that recognising the possibility of using a contract for the benefit of a third party here but then requiring acceptance by the third party may not entirely alleviate the commercial inconvenience. Take, for example, the case of an owner of a tug and the separate party who operates the tug, as in The Tigr. Assume that the contract between these parties does not contain an express authorisation to conclude contracts for the benefit of the tug owner – such as a Himalaya clause. If it is required that the owner of the tug should accept the benefit of a Himalaya clause contained in any towage contract concluded between the operator and its clients, then that owner would have to know about and, to some extent, be involved with, the conclusion of each and every towage contract concluded. Commercially there may be not time for the tug owner to accept the benefit and the commercial advantage of such clauses could be lost. It is likely that the tug owner would only know about such a clause once there was a need to rely on it – that is when something has already gone wrong. On the current approach of South African law, in the absence of acceptance, the benefit of exemption from liability would be lost. It would seem more efficient to take the approach that the tug owner should be able to acquire the benefit of the Himalaya clause concluded on his behalf at the time the contract between the operator and its client is concluded. As we will see below, however, perhaps an expectation of this protection will, for public policy reasons, not be seen as reasonable in all circumstances. Returning to The Tigr, an interesting question that arises is how we treat the issue of the misrepresentation by the second respondent (the stipulator) in this case. We have to consider whether the misrepresentation inducing the towage contract ‘taints’ the Himalaya clause. The answer to this question varies depending on whether one views contracts for the benefit of third parties as two bilateral contracts or as trilateral relationships. This issue is encountered in South African law when considering the issue of whether the stipulator can enforce performance to the third party. In that context, the answer to the question depends on how the law views the position of the stipulator after acceptance of the offer of the benefit by the third party; and, as we have seen, the case law does not provide a clear answer. If acceptance is required, the one possibility is that this then gives rise to a second contract between the third party (the owner of the tug) and the promisor (the owner of the barge) (the charterer of the tug having dropped out). Alternatively, there is a trilateral relationship and the stipulator remains a party to the contract. If we 98 Bouygues Offshore and Another v. Owner of the MT TIGR and Another 1995 (4) SA 49, 69F – G.

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abandon the acceptance requirement then we move towards a trilateral construction. Here acceptance by the third party would not create a new contract but would, on De Wet’s view, ‘stabilise’ the third party’s right. On the trilateral construction, the effect of the misrepresentation by the stipulator (the charterer of the tug in this case) would seem to be that the misrepresentation would have tainted the entire agreement and the third party (the owner of the tug) could not then rely on the benefit of the exemption clause. The position is more complicated if acceptance of the benefit is required, which then creates a new contract. Van der Merwe et al are of the view that on this construction “any misrepresentation made during the conclusion of the original contract, cannot be laid at the door of the third party”.99 In the context of Himalaya clauses, does the misrepresentation, in this case inducing the towage contract, ‘taint’ the separate exemption contract between the owner of the barge and the owner of the tug (contained in the Himalaya clause)? Perhaps a way forward would be to ask how reasonable expectations could inform the answer to this question. Would it be reasonable, either from a broad community perspective, or within the shipping community, or from the perspective of the first respondent, to expect the benefit of the Himalaya clause. As we have seen above, Farlam J in The Tigr notes that denying the efficacy of Himalaya clauses was regarded as commercially inconvenient in the shipping community and this led to the development of the agency construction. In general then, the expectation of third parties to the benefit of exemption from liability (by means of Himalaya clauses) would be judged to be reasonable from the perspective of the shipping community. What then of the situation, seen in The Tigr, where the exemption from liability is not available to the party who was a contract participant (by reason of the contract having been rescinded)? Farlam J’s comments are again instructive. He comments that [t]he whole history of the Himalaya clause makes it clear that the mischief the clause was designed to combat was the exposure of the servant, agent or subcontractor of a carrier or other such party to liability from which the carrier himself was exempted. It was not intended (nor could the other contracting party (such as the shipper) reasonably have anticipated that there was an intention) to create an exemption which would enure for the benefit of the servant, agent or subcontractor even where the carrier’s exemption was lost, for example, through rescission.100

On this view, it would not be reasonable, from the perspective of the parties, or that of the shipping community at large, to expect the benefit of the exemption in circumstances where the contract containing the benefit has been rescinded; or indeed where the availability of a similar benefit is lost to the stipulator. (This approach fits in with that of section 3(6) of the English Act.) What is perhaps unique about Van der Merwe et al. note 1 above at p. 248, fn. 159. Bouygues Offshore and Another v. Owner of the MT TIGR and Another 1995 (4) SA 49, 72H – I. 99

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these kinds of contracts is that the benefit to the third party is intended to be linked to the benefit acquired by the stipulator. Any expectation by the third party, whether it be an expectation of the benefit itself or expectations relating to rescission or variation, would thus not be reasonable where the expectation, if satisfied, would see the third party’s position deviating from that of the stipulator. Furthermore, the benefit in the context of Himalaya clauses is itself quite unique. It is not simply the giving of some defined thing or right by the promisor to the third party. Rather, the promisor is denying to himself a remedy that he would otherwise have in relation to events that have not and may not occur. The extent of the promisor’s risk is not defined or known at the time of contracting and it may thus, from a broad community perspective, not seem reasonable to expect the promisor to carry this risk in too broad a set of circumstances. This needs to be taken into account when judging the reasonableness of expectations in this context. In other words, the notion of reasonable expectations can operate as a means of apportioning risk in a manner thought appropriate by the community. The appropriateness of measuring the reasonableness of expectations against community standards in this context is supported by the fact that, when one considers that when dealing with general instances of exemption clauses in contracts, our law determines what is and is not permissible based on public policy.101

3. Pre-Incorporation Contracts A further application of the contract for the benefit of a third party is where a party contracts for the benefit of a company to be formed – the so-called ‘pre-incorporation contract’. In this area there is some overlap with agency. The rules of agency under common law precluded an agent from acting on behalf of a company still to be formed as the company was essentially a non-existent principal. This is, however, now possible by virtue of section 35 of the Companies Act 61 of 1973, which allows a company to adopt or ratify a contract concluded by a person acting on its behalf prior to its incorporation. Where this is the case, and the requirements of the section are met, there is no need to look to the principles of contracts for the benefit of third parties. Notwithstanding the provisions of the Act, the parties may still rely on the common-law position; and an analysis of a case in this area is useful in our exploration of reasonable expectations.102 For a discussion of this see Christie note 1 above at p. 184. In the case of Build-A-Brick v. Eskom 1996 (1) SA 115 (O), the court dealt with the Close Corporations Act’s (69 of 1984) equivalent of s 35 of the Companies Act 61 of 1973 and found that (citing the headnote at p. 117B): ‘Section 53 of the Close Corporations Act 69 of 1984 is permissive and not peremptory and, like s 35 of the Companies Act 61 of 1973, it was introduced to enable promoters to conclude agreements as agents or trustees although the corporation was not yet in existence. It was not placed on the statute book to codify the law relating to pre-incorporation contracts and promoters of close corporations can still make use 101 102

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The main issues which arise in this context are highlighted in the case of Nine Hundred Umgeni Road (Pty) Ltd v. Bali.103 Here the Appellate Division examined the question of when the stipulator will be bound by a contract concluded for the benefit of a third party. The appellant had sued the respondent, Bali, in the magistrate’s court for payment of an amount allegedly due in respect of arrear rental in terms of a written agreement of lease between the parties.104 The lease in question was concluded by the appellant (the lessor) and Bali “in his capacity as trustee for a company to be formed (‘the lessee’)”; Bali signed the lease “for and on behalf of the lessee”.105 The lessee company was duly incorporated, but prior to this the lease commenced and the premises were made available. The court states that the contract sued upon is a contract for the benefit of a third party. It is assumed for the purposes of argument that the company did not accept the benefit of the stipulation in its favour and the court goes on to consider whether Bali could be held personally liable on the contract. The court comments that “if the company had accepted, the respondent fell out of the contract completely”.106 As discussed above, this is an issue upon which there are a number of contradictory statements in the case law.107 We will return to how we might use reasonable expectations in relation to this question after considering the court’s approach to the liability of the stipulator in the absence of acceptance by the third party. The appellant argued that Bali was personally liable for the obligations of the lessee under the contract as he had contracted as principal. In the view of the court, the cases relied upon by the appellant merely suggested that the stipulator could be personally liable if this was provided for in the contract; that the stipulator may have rights and obligations in terms of the contract, separate from those of the third party; and that he may sue on the contract if that contract so allows (although on this latter point, Viljoen J cites two potentially conflicting dicta).108 Viljoen J concludes that “the trustee is not personally entitled to exact or obliged to render the of the common-law agreement for the benefit of a third party, in which case the requirements of s 53 need not be complied with. Compliance with the requirements laid down in s 53 is obligatory only if the person contracted as an agent and described himself as an agent or trustee.’ See also H. S. Cilliers et al., Cilliers & Benade Corporate Law, 3rd ed. (Durban 2001) at § 5.15 and the cases cited there. See generally on contracts for the benefit of third parties in the context of pre-incorporation contracts also J. C. Sonnekus, “Enkele Opmerkings om die Beding ten Behoewe van ‘n Derde” (1999) Tydskrif vir Suid Afrikaanse Reg 594, 598; M. J. Oosthuizen, “Die Aanspreeklikheid van die Maatskappypromotor by Voorinlywingskontrakte” (1986) Tydskrif vir Suid Afrikaanse Reg 360; and Richard Jooste, “When do Pre-Incorporation Contracts have Retrospective Effect?” (1989) 106 S.A.L.J. 507. 103 1986 (1) SA 1 (A). 104 Ibid., at p. 4F. 105 Ibid., at p. 4H-I. 106 Ibid., at p. 5B. 107 See notes 34 – 36 and accompanying text. 108 Nine Hundred Umgeni Road (Pty) Ltd v. Bali 1986 (1) SA 1 (A), 5D – 6E.

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performance which is stipulated for the third party unless the contract so provides”.109 The first issue to consider is whether it is correct to say that the stipulator cannot exact performance unless the contract so provides. On De Wet’s construction, the stipulator should have the right to enforce specific performance of the obligation by the promisor to the third party, it being no less an obligation to the stipulator.110 This seems to us correct if the contract is viewed as being trilateral and not, as is suggested in many of the cases, two bilateral contracts. Even on the current construction of the South African courts it could be argued that the stipulator should be entitled to enforce the contract, at least before acceptance by the third party. One could, for instance, argue that the promisor did, after all, also make a promise to the stipulator; and community standards seem to support that an expectation to be able to enforce a promise made to you is reasonable. The general body of South African case law in contract can also be seen to support this. What is the position of the stipulator in relation to the enforcement of the contract once the third party has accepted the offer of the benefit? This must depend on the context: In pre-incorporation contracts, it is intended for the most part that the benefit accruing to the third party be a continuing contractual relationship with the promissor. So, for example, in the Bali case it was intended that, following incorporation, the company would be party to a lease agreement as lessee. In such circumstances it does not seem to make sense that the stipulator should continue to be part of some trilateral contractual relationship. This feature of contracts for the benefit of a third party in the context of pre-incorporation contracts differentiates them from, for example, such contracts in life-insurance or exemptions from liability. In those situations, the benefit acquired is not a continuing relationship but is usually a once-off payment or benefit. In pre-incorporation contracts, it may be appropriate to see the stipulator as having ‘dropped out of the picture’ and thus not capable of enforcing the contract against the promisor after acceptance by the third party. It would not be far-fetched to say that this accords with the reasonable expectations of the business community. The next question is whether it is correct to say that the stipulator cannot be held liable for the obligations of the third party unless the contract so provides. Clearly, if, as in the Fernwood Estate111 case, the contract does provide for the stipulator to be personally liable on the contract if the third party does not accept the benefit, liability must follow. The appellants in Bali argued that the contract, if not expressly then at least by implication, provided for Bali to be personally liable pending the 109 Ibid., at p. 6F. The position of the stipulator on acceptance of the contract is an area in which there are conflicting dicta in the South African cases. See notes 27 – 30 and accompanying text above. 110 De Wet note 1 above at p. 3. 111 McCollogh v. Fernwood Estate Ltd 1920 AD 204.

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acceptance by the company of the benefit.112 It also seems clear that after acceptance only the company would be obliged to perform in terms of the contract. But what is the position if the contract does not provide for the promisor to be personally liable and the third party has not yet accepted the benefit?113 In the Bali case the court assumed, as we have seen, that the company did not accept the benefit. The appellants argued that certain clauses in the lease agreement were indicative of the fact that “prior to the acceptance of the benefit by the company, the parties could only have contemplated the respondent in his personal capacity to be the lessee”.114 It was, for example, argued that the property was let for a specific purpose and that the lease was conditional upon the lessee obtaining the necessary trading licence in order to conduct its business. The lessee was obliged to undertake to apply for this licence immediately upon signature of the lease by the lessor. This, it was argued, indicated that it could only have been Bali who was contemplated as being the lessee until such time as the trading licence was obtained; the company being unlikely to accept the benefit unless it had obtained the licence to conduct the business for which it was formed. This argument, like those constructed around other clauses of the lease, was rejected by Viljoen J, who stated the following: The description of the lessee as the trustee for a company to be formed is, per se, no indication, in my view, that prior to the acceptance by the company of the benefit stipulated in its favour, the trustee would be personally liable on the contract. It cannot be said, in my view, that the parties necessarily contemplated the acceptance by the company of the benefit after the date of commencement of the lease and that they inserted these clauses to take care of such contingency.115

If we look at the notion of reasonable expectations here, would it be reasonable for the promisor to expect that the trustee of the company to be formed should be personally liable on the contract pending incorporation of the company? The business community in which such events arise could well find such an obligation to be onerous and unreasonable. It could dissuade people from participating in the necessary function of assisting in the formation of companies if the law imposed obligations thus creating a risk that they could, through no fault on their part, find themselves personally liable. Viljoen J notes that problems may well arise if, pending the formation of the company, performance is due in terms of the contract. Here the ‘trustee’ may perform under the contract in order to prevent the other party from cancelling but this does not necessarily mean that the trustee is incurring liability under the contract. Nine Hundred Umgeni Road (Pty) Ltd v. Bali 1986 (1) SA 1 (A), 6G. In this context requiring acceptance by the third party (the company) is not necessarily problematic in that we are contemplating the point at which the third party takes on obligations. Prior to accepting the benefit, it does not seem reasonable to expect the third party to take on any associated obligations. Furthermore, when dealing with pre-incorporation contracts, the issue of who fulfils the obligations prior to acceptance is vital as it would, in fact, at least until the incorporation of the company, be impossible for the third party to perform. 114 Ibid., at p. 6H – 7C. 115 Ibid., at p. 7D – E. 112 113

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If the trustee does not perform, the other party could resile from the contract.116 A number of issues then arise. First, if we accept that the third party (in this context a company yet to be formed) acquires certain rights immediately on the conclusion of a contract for its benefit, does this mean that the company has a right to expect that the stipulator would act so as to preserve this benefit where it is not possible for the company itself to do so? Would it be reasonable to expect this? Obviously the company does not yet exist and could not, at the time, itself have such an expectation. We could, however, assume this expectation and then focus on whether or not it would be reasonable. It seems that whether an expectation that the stipulator will act to preserve the benefit for the company would be reasonable would depend on what was actually required of the stipulator in the circumstances. If it were, for example, simply to perform some administrative task or to refrain from positively frustrating the contract then this expectation may be reasonable. If, however, to preserve the benefit the stipulator were required to perform some onerous task or to pay significant sums of money it may, according to the norms of the business community, not be a reasonable expectation. Perhaps this particular issue is more appropriately dealt with by looking at fiduciary duties of promoters (or ‘trustees’) of companies yet to be formed rather than trying to examine expectations within this area of contracts for the benefit of third parties. The second issue which arises if the trustee does not perform, and the promisor is forced to resile from the contract, concerns the apportionment of risk. In entering into a contract with a company yet to be formed, the promisor is taking the risk that the company will not ultimately be formed or that, pending incorporation, the company’s obligations will not be performed. In the Bali case, Viljoen J comments that the promisor, while being entitled to resile from the contract on account of nonperformance, “would not even be able successfully to claim damages from anybody” unless he had taken appropriate precautions.117 In the Bali case this was in fact done and the company’s directors had personally guaranteed all the obligations of the lessee in terms of the lease. In a sophisticated environment such as that of the business community, it would seem reasonable for promoters of companies to consider this risk and to negotiate and provide in the contract in question for the appropriate apportionment of such risk. The parties could, as in the Bali case, provide for personal guarantees from the proposed directors of the company or provide for compensation for the stipulator in return for taking on the risk of performance. In this light, the business community would probably regard an expectation of protection from such risk, by making the stipulator liable on the contract or liable to pay damages, as unreasonable. This is particularly so given the fact that, generally speaking, the promisor will benefit from the contract if it is accepted by the company. It is unreasonable to expect a party to take on a risk for which there is, in the performance of the contract itself, no benefit or to allow the avoidance of risk where there is a benefit that could be obtained. 116 117

Viljoen J. discusses this at p. 7F – I. Ibid., at p. 7H – I.

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4. Trusts inter vivos Although there is some uncertainty in the cases and literature as to whether the contract for the benefit of a third party provides an appropriate explanation of trusts inter vivos, this construction is encountered in this area; and it provides a further useful vehicle for exploring the role of reasonable expectations. The case of Crookes NO v. Watson118 illustrates the difficulties that arise when acceptance by the third party is required. In this case, Crookes had, as settlor, donated certain shares to two trustees who were to hold the shares in trust and deal with the trust property in accordance with the trust deed. That deed restricted the settlor’s power to revoke, cancel, annul or amend the provisions of the trust deed. The trust deed directed the trustees, of which Crookes was one, to pay certain benefits to the beneficiary of the trust, Crookes’ daughter Elaine and, on her death, to distribute the trust fund among her lawful issue, failing which it was to be divided amongst her surviving siblings or, if they were deceased, their issue or other next of kin. A number of years later, Crookes wished to amend the trust deed so as to increase the payments from the fund to Elaine and to pay her the whole nett income from the fund (Crookes did not want Elaine’s children to receive a large sum from the trust fund and so sought to reduce it in this manner). Elaine’s husband and her siblings gave their consent for this in their personal capacities and as fathers and natural guardians of their minor children and as curators for unborn issue and other possible beneficiaries under the trust deed whose consent it was not possible to obtain. Crookes and the other trustee applied for an order declaring that this amendment could be made by consent of the settlor and the trustees. The court a quo dismissed the application and the parties appealed. The court a quo saw the transaction as being a “contract for the benefit of third parties having the effect of a fideicommissum and noted that there was an exception to the general rule that beneficiaries could acquire no rights under a trust until they had accepted. Christie describes this exception as follows: The only circumstances in which acceptance by the third party is not necessary in order to bring him into the contract appears to be what has come to be known as the Perezian exception, which is a peculiarity of our trust law . . . that when a donation inter vivos is made to a member of a family subject to a fideicommissum in favour of the family his acceptance confers rights on the other members of the family without any further acceptance by them.119

On this basis, the court a quo in Crookes dismissed the application, finding that Elaine, as the first donee, had accepted the benefits under the trust and this enured for the benefit of all beneficiaries.120 Crookes NO v. Watson 1956 (1) SA 277 (A). Christie note 1 above at p. 308. Our analysis of the approach of the South African courts in insurance cases may mean that this exception no longer stands alone. 120 Crookes NO v. Watson 1956 (1) SA 277 (A), 283G-H. 118 119

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On appeal, Centlivres CJ considered the question of whether a settlor is entitled to amend a trust deed by agreement (with his co-trustee and the only beneficiary who has accepted any benefit under the deed), if this will prejudice the rights of other beneficiaries who have not notified their acceptance and have not consented to the amendment. The court referred to these latter beneficiaries as the ‘ultimate beneficiaries’.121 Centlivres CJ made his decision on the basis that the beneficiaries had not accepted any of the benefits conferred and that there was thus no contract between these beneficiaries and the settlor or trustees. The general rule then was that until such time as there had been acceptance, the contract was capable of amendment by the settlor and trustees.122 Centlivres CJ was of the view that the Perezian exception, the application of which would essentially confer rights on the ultimate beneficiaries, was not intended to apply to circumstances such as those found in Crookes. For the Perezian exception to apply, Centlivres CJ thought it necessary that there be a perpetual fideicommissum within a family where the subject of the donation is inalienable and must remain intact. This was not the case here. It is interesting to note that if acceptance were not required then it would also not be necessary to rely on the exception in order to confer rights on the ultimate beneficiaries. On De Wet’s construction of contracts for the benefit of a third party, this would still leave the trust deed subject to revocation by the settlor in so far as the ultimate beneficiaries are concerned as their right had not been ‘stabilised’ by acceptance. Using the reasonable expectations approach may allow the rights of the ultimate beneficiaries to be protected in some way, if that is thought desirable. Schreiner JA in his separate and dissenting judgments does protect the rights of the ultimate beneficiaries and he does this, not by rejecting the requirement of acceptance in contracts for the benefit of third parties, but by placing an alternative construction on trusts inter vivos. The judgment of Schreiner JA is concerned in particular with the question of “whether trusts arising out of an inter vivos transaction between a settlor and a trustee or trustees are to be treated as a kind of contract for the benefit of third persons.”123 Schreiner JA notes that there appear to be serious objections to this construction and sets out to distinguish such trusts from what is understood, in South African law, to be a true contract for the benefit of a third party. In particular, he emphasises the “radical difference in the contemplated end situations in the two cases”.124 In a trust inter vivos, the settlor divests himself of property in favour of the trustee in order that the beneficiary may receive the benefit of that property from the trustee. A contract for the benefit of a third party, Schreiner JA points out, is “not simply a contract designed to benefit a third person; it is a contract between two persons that is designed to enable a third person to come in as a party to a 121 While some of the ultimate beneficiaries had consented, the appeal was decided on the basis that the consent of all possible ultimate beneficiaries had not been obtained. 122 Crookes NO v. Watson 1956 (I) SA 277 (A), 288A. 123 Ibid., at p. 290G. 124 Ibid., at p. 291.

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contract with one of the other two”.125 On this construction, acceptance is seen as crucial as the third party is, after acceptance, required to perform obligations under the contract in addition to being entitled to rights against the promisor.126 In an inter vivos trust, on the other hand, “acceptance by the beneficiary is really of no practical importance, since he can only be a gainer . . . there seems to be no good reason to require his acceptance, in advance, of the benefit to which he will or may eventually become entitled”.127 On the South African law’s approach that acceptance is required, Schreiner JA is no doubt correct in stating that inter vivos trusts are distinguishable from contracts for the benefit of third parties. If we were to take the German or English law approach, however, and abandon the requirement of acceptance, then an inter vivos trust does look closer to being a contract for the benefit of a third party. Schreiner JA, in distinguishing inter vivos trusts, may in fact, and quite ironically, be accepting the possibility of the existence of a true contract for the benefit of a third party. Although Schreiner JA does not treat inter vivos trusts as being contracts for the benefit of a third party, if we were to treat them as such then his comments may be a further indication of how the context in which such contracts arise is crucial. As we saw in pre-incorporation contracts, where there is the intention that there be a continuing contractual relationship in which the third party is not only a bearer of rights but is also obliged to perform, requiring the acceptance of the third party may be more explicable. Schreiner JA goes on to distinguish the cases cited in support of the view that inter vivos trusts are contracts for the benefit of third parties. In so doing he highlights some of the factors which he feels militate against inter vivos trusts being construed in this way. He refers, inter alia, to the case of Commissioner for Inland Revenue v. Estate Crewe,128 which had been interpreted to suggest that, pending acceptance by the beneficiary, the settlor and the trustee could revoke the agreement. Schreiner JA sees this interpretation of the case as incorrect but states that if this is indeed the correct interpretation then “the effect of treating unaccepted inter vivos trusts as revocable by the settlor and the trustee is so unfortunate as amply to justify reconsideration of this part of Crewe’s case’.”129 Schreiner JA seems to suggest that taking such a line would in some way result in an injustice being perpetrated against the beneficiaries. Related to this question of amendment, Schreiner JA, earlier in his judgment, discusses the appellants’ view that, before acceptance by the beneficiary, the settlor could not unilaterally cancel the trust and claim redelivery of the trust property from the trustee but that 125 126 127 128 129

Ibid., at p. 291B-C. Ibid., at p. 291H. Ibid., at pp. 291H-292A. 1943 AD 656. Crookes v. Watson 1956 (1) SA 277 (A), 294G – H.

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there must be agreement on the part of the trustee.130 Schreiner JA finds it difficult to reconcile this position with the fact that, in a trust, the trustee is not beneficially interested in the property and, taking into account his duties as trustee, he should not be able to take part in deciding whether or not to amend the trust deed. The idea is conveyed that it would be entirely inimical to the purpose of a trust–which is for one person to divest himself of control of property in order that another may administer it for the benefit of the beneficiaries--for those two parties, when the trust deed states the disposition to be irrevocable, then to amend the deed if the trustee can be persuaded to agree. This, he suggests, could lead to “outrageous situations . . . in which the trustee might drive a bargain with the settlor for his consent to cancellation or amendment . . .[S]uch situations would be entirely inconsistent with good faith and could not be tolerated in any civilised system of law.”131 A public policy type argument is thus raised against construing a trust as a contract for the benefit of a third party. Using the notion of reasonable expectations may allow us to see the inter vivos trust as a contract for the benefit of a third party without necessarily allowing the undesirable result suggested by Schreiner JA. It may be that the community’s standards of ‘good faith’ and its notion of a ‘civilised system of law’ would render reasonable an expectation on the part of a beneficiary that the settlor and the trustee not be allowed to amend a trust deed (otherwise stated to be irrevocable and not subject to amendment). This would require looking at the expectations of beneficiaries in a broad sense (as was done in our discussion of expectations in relation to life-insurance policies). In the Crookes case it is not possible to determine the personal expectations of all of the beneficiaries. Once again the enquiry would have to be whether, if they had known of and expected the benefit, that would have been reasonable. This raises a further difficulty in that, in this case, the expectations of what are termed the ultimate beneficiaries and those of the immediate beneficiary may not be the same. Here Elaine, the immediate beneficiary, had consented to the amendment and so could not be said to have an expectation that the trust deed would not be amended. In fact, she could be said to have an expectation that the deed could be amended if she had consented to this. The amendment would, however, have favoured her as the immediate beneficiary and would have prejudiced the ultimate beneficiaries. In an abstract sense, the ultimate beneficiaries would have an expectation that the trust deed would not be amended to their prejudice. Here we have a potential conflict of expectations and we would have to look at what would be reasonable in the circumstances. In this regard we could, for example, consider what expectations arise generally in the context of the related area of succession. Ordinarily, it is considered reasonable that a person’s children will inherit and that the grandchildren will ultimately benefit from whatever is left over when their parents die. In Crookes we are not dealing with a fideicommissum 130 131

Ibid., at p. 292D. Ibid., at p. 292D – F.

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where the immediate beneficiary is required to preserve the property in some way. The context of this case suggests that all that was intended was that the ultimate beneficiaries would get whatever happened to be left over by the time they were entitled to inherit. Furthermore, there is a sense that an existing identified beneficiary should have preference over one which is not even ascertainable at the time. These considerations give some reason then to prefer the expectations of the immediate beneficiary in the Crookes case. The later case of Hofer v. Kevitt132 follows the majority in Crookes in allowing the amendment of a trust deed despite the fact that it prejudiced the ultimate beneficiaries. One of the arguments put forward in the Hofer case against allowing the amendment is that the trustee owed the beneficiaries a fiduciary duty and should thus not be permitted to agree to amendments which would prejudice such beneficiaries. The court, in rejecting this contention, makes some interesting comments that could be used in constructing a reasonable expectations argument in this context. The applicants, in attempting to convince the court not to take the line in Crookes, point the court to the views of Honoré and Cameron in Honoré’s South African Law of Trusts. There the authors express the view that “a trustee is not always free to agree with the founder that the trust should be cancelled or varied, even if it is not expressed to be irrevocable”.133 In support of this they discuss a number of instances in which allowing such revocation or variation would not seem right. They argue, for example, that if the trustee has complete freedom to agree to revoke or vary a trust where the beneficiaries have not accepted, this would result in them being free to do so in respect of charitable trusts “since the identity of the beneficiaries of such a trust is necessarily contingent on a process of selection by the trustee”.134 They suggest that the trustee is not simply free to agree to a revocation or amendment but that he must take certain interests (or expectations perhaps) into account. In this regard they state that [i]n making up his mind whether to consent to a revocation or variation of the trust the trustee should therefore consider both the long-term interests of the beneficiaries and the possible hardship to the founder of refusing his consent. He may well find that the consideration of hardship to the founder a weighty one to the extent that the founder’s circumstances have changed for the worse after the trust has been set up.135

This would fit in with the approach of judging the reasonableness of the parties’ expectations. Conradie J, however, disputes that this is the correct approach and himself suggests a number of policy considerations which would militate against limiting the ability of the trustee and founder to agree to an amendment. In his view, the effect of implementing the approach suggested by Honoré and Cameron would be to make every trust inter vivos irrevocable before acceptance unless the 132 133 134 135

1996 (2) SA 402 (C). Per Conradie J. in Hofer v. Kevitt 1996 (2) SA 402 (C), 406E – F. Ibid., at 406H. Ibid., at p. 406H – I.

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settlor were able to persuade the trustee that the proposed change would be in the interests of the beneficiaries.136 Cameron J sees the problem here as being that the concept of ‘interests’ is a wide one and protecting such broad interests of beneficiaries might lead to difficulties for the trustee in deciding whether or not too allow an amendment: What is in the interests of a particular person is a question which may raise difficult moral issues. It would certainly be to the financial advantage of a potential beneficiary to acquire a large estate which he did not work for; whether it would be in his interests if he is immature, irresponsible or indolent is altogether another matter. What is the interventionist trustee to do if a settlor and a minor potential beneficiary’s guardian agree that a trust in his favour should be revoked? Does his fiduciary duty extend to taking up the cudgels on his behalf? What factors would a trustee consider in making his decision? If a donor decided to revoke an intended trust allowance to a profligate nephew who has behaved abominably towards him but who needs the allowance while the donor is wealthy, does the trustee come down on the side of the impoverished nephew or that of the aggrieved donor?137

Cameron J takes these difficulties as a reason to limit the trustee’s discretion to that flowing from the trust deed. In his view it is up to the parties to impose duties on the trustee but it is not considered desirable to import into South African law to the office of trustees “the exercise of a wide equitable discretion to protect the interests of non-parties”. Cameron J’s concerns are particularly interesting in considering the reasonable expectations approach. First, they highlight what issues it may be necessary to consider in the particular context of inter vivos trusts. Secondly, the situations listed above highlight the difficulty one might encounter in attempting to weigh up expectations. What may be of assistance in addressing Cameron J’s concerns is to consider whether the interest or expectation in question is one that is reasonable. The difficulty inherent in this determination is what standard of reasonableness should be considered. This again raises difficult moral issues, but it does at least introduce some controlling measure into the determination.

Conclusion The fact that the South African law of contract is more firmly rooted in consensus – rather than reliance – as compared to, say, English law, probably goes a long way towards explaining why the South African courts have steadfastly defended the position that acceptance of the benefit by the third party is a necessary element in creating an enforceable right in his favour. Many would argue that this approach, even though it is out of step with comparable legal systems, must be preserved because it produces results that are both certain and appropriate. As we have seen, however, this is not always the case. In life-insurance situations, for instance, a general sense that beneficiaries should be protected in certain circumstances makes 136 137

Ibid., at p. 408 E. Ibid., at p. 408E – H.

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acceptance by the third party not seem as vital. Furthermore, in situations involving Himalaya clauses, modern English law pertaining to contracts for the benefit of third parties may conceivably be applicable due to the historical development of South African maritime law – and in such situations acceptance will not be required. In any event, the courts’ insistence on acceptance has not produced a regime noted for its clarity, and various aspects of contracts for the benefit of third parties have been decided in differing ways. This is so partly because certain of the problems associated with these kinds of contracts arise independently of whether or not acceptance is a requirement; and partly because courts tend to pose, or offer solutions to, problems in a way which implies that the problem or its solution is universal, whereas in fact both are often influenced by the nature of the particular kind of contract involved. This state of affairs suggests that South African law would be well served by developing organising principles to deal with (a) contracts for the benefit of third parties where acceptance is not, or should not be, an element, as well as, and quite apart from the question whether or not acceptance is a requirement, to deal with (b) the uncertainties surrounding questions of enforcement, revocation and variation. As we have seen, the notion of reasonable expectations – if applied sufficiently flexibly – could function as such an organising principle. Asking whether expectations (adjudged to be reasonable) have been met enables one better to identify the interests and policy considerations at play in different contexts; and to balance these interests and considerations appropriately. Of course courts do in fact examine context-specific concerns. (In life-insurance cases, for example, the risks that have to be borne by the insurance industry have been taken into account, while in cases involving Himalaya clauses, the purpose for which these clauses were designed has been considered.) What the reasonable expectations approach does is to provide a tool for working through the various policy considerations and value judgements. As we have seen, taking account of the expectations of the parties themselves, of the expectations of the business community in which they operate, and of the expectations of the community at large indeed provides a useful device in the determination of the answer to problems that typically arise in regard to contracts for the benefit of third parties. It must be emphasised, however, that the notion of reasonable expectations can never produce direct, ‘bright-line’ answers. The various perspectives from which expectations may be approached and the different possible ways in which the reasonableness of expectations can be judged make this not only undesirable, but impossible. Any suggestion that it could fulfil such a role can only be met with the valid objections that it is (a) just too vague to be useful, and (b) that it would introduce intolerable uncertainty into contractual relations of this kind because parties will not be able to work out the consequences of their agreement with sufficient predictability. On the other hand, if it is used as a framework for thinking about and formulating rules it can provide the basis for a common approach to problems in this area and so enhance certainty.