Seaver v. Ransom
120 N.E. 639 (1918)
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Rule of Law:
A third-party donee beneficiary may sue to enforce a contract if the promisee's primary intent was to secure a benefit for them and the promisee had a moral or natural obligation to the beneficiary, an exception which extends beyond immediate family to relationships like aunt and niece.
Facts:
- Mrs. Beman, who was elderly and on her deathbed, owned a small estate primarily consisting of a house.
- Her husband, Judge Beman, drafted a will for her that gave him a life estate in the house, with the remainder going to a charity.
- When the will was read to Mrs. Beman, she objected, stating she wanted to leave the house to her niece, the plaintiff, Seaver.
- Mrs. Beman was afraid her strength would fail before a new will could be drafted and executed.
- To induce her to sign the existing will, Judge Beman solemnly promised that if she signed it, he would leave Seaver enough money in his own will to make up for the value of the house.
- Relying on her husband's promise, Mrs. Beman executed the will as originally drafted.
- After Judge Beman later died, it was discovered that his will made no provision for Seaver.
Procedural Posture:
- Seaver sued the executors of Judge Beman's estate in the New York trial court.
- The trial court entered a judgment in favor of Seaver.
- The executors of Judge Beman's estate, as appellants, appealed to the Appellate Division of the Supreme Court.
- The Appellate Division affirmed the trial court's judgment in favor of Seaver, the appellee.
- The executors of Judge Beman's estate appealed to the Court of Appeals of New York, the state's highest court.
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Issue:
Does a third-party donee beneficiary have an enforceable right to sue on a contract made for her benefit, where the consideration is a promisee's execution of a will and the promisee's motive is a moral obligation based on a close familial relationship, rather than a legal debt?
Opinions:
Majority - Pound, J.
Yes. A third-party donee beneficiary has an enforceable right to sue on a contract where the promisee, motivated by a strong moral obligation, intended to provide a gift to the beneficiary. The court recognized four existing categories in New York where a third party can sue on a contract, including cases involving a 'close relationship' between the promisee and the beneficiary, such as parent-child or husband-wife. The court explicitly expands this category, finding that the 'desire of the childless aunt to make provision for a beloved and favorite niece differs imperceptibly in law or in equity from the moral duty of the parent.' The court reasoned that the doctrine established in Lawrence v. Fox is 'progressive, not retrograde,' and should be enlarged to achieve justice where the equities strongly favor the beneficiary. Since Mrs. Beman executed her will in reliance on Judge Beman's promise, and Seaver is the only one substantially damaged by its breach, she is entitled to enforce the contract.
Dissenting - Hiscock, Ch. J; Collin and Andrews, JJ.
No. The dissenting judges did not issue a written opinion explaining their reasoning.
Analysis:
This case significantly expands the rights of third-party beneficiaries in New York by broadening the 'close relationship' exception. It moves beyond the strict requirement of a pecuniary obligation or an immediate family tie (parent/spouse) and establishes that a strong moral obligation, rooted in affection and a desire to provide for a relative like a niece, is sufficient to grant a donee beneficiary standing to sue. The decision signals a judicial shift away from rigid adherence to privity of contract and toward a more flexible, equity-based analysis focused on the promisee's intent. This precedent allows courts to enforce promises in family settings where fairness demands it, even if traditional legal obligations are absent.
