Lawrence v. Fox

20 N.Y. 268 (1859)

As Stewart Sterk wrote in There Shall Be a Court of Appeals, “the Court of Appeals made its first significant mark on contract law before the Civil War. The facts are as follows: “Holly lent Fox $300, telling Fox that Holly owed $300 to Lawrence, and had agreed to repay Lawrence the next day. As Fox received the money, he promised Holly he would repay Lawrence the next day. Fox never repaid Lawrence and Lawrence brought an action against Fox.”

The case was tried in Buffalo before Justice Masten, and the jury returned a verdict for Mr. Lawrence for the amount of the loan and interest, $344.66. Mr. Fox appealed the judgment to the Superior Court, which affirmed. Fox then appealed to the New York Court of Appeals.

Professor Sterk writes, “When the case reached the Court of Appeals, Fox made three arguments. The Court of Appeals, in an opinion by Judge Hiram Gray, quickly dispatched the first two—that oral testimony by a bystander was insufficient to establish the promise from Fox to Holly, and that the promise from Fox to Holly was not supported by consideration. The court then turned to Fox’s third contention: Lawrence could not recover from Fox because Lawrence was not in privity of contract with Fox.”

Basing the holding in the case on broad principles of common law, Judge Gray wrote that “a promise made to one for the benefit of another, he for whose benefit it is made may bring an action for breach.”

As Professor Sterk notes, the Court of Appeals opinion in Lawrence v. Fox remains the foundation for modern third-party beneficiary law.



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