(Orig. Code 1863, § 3181; Code 1868, § 3192; Code 1873, § 3257; Code 1882, § 3257; Civil Code 1895, § 4939; Civil Code 1910, § 5516; Code 1933, § 3-108; Ga. L. 1949, p. 455, § 1.)
Law reviews.- For article discussing third party beneficiary contracts, see 4 Ga. B.J. 19 (1941). For article, "Multiple Party Accounts: Georgia Law Compared with the Uniform Probate Code," see 8 Ga. L. Rev. 739 (1974). For annual survey on construction law, see 71 Mercer L. Rev. 57 (2019). For note discussing transfer fees in home loan assumptions in reference to the Georgia usury laws, see 9 Ga. L. Rev. 454 (1975). For comment on Veruki v. Burke, 202 Ga. 844, 44 S.E.2d 906 (1947), see 10 Ga. B.J. 369 (1948). For comment on Harris v. Joseph B. English Co., 83 Ga. App. 281, 63 S.E.2d 346 (1951), see 13 Ga. B.J. 462 (1951).
JUDICIAL DECISIONSANALYSIS
Cited in Martin v. Lamb & Co., 77 Ga. 252, 3 S.E. 10 (1886); Hobbs & Tucker v. Chemical Nat'l Bank, 97 Ga. 524, 25 S.E. 348 (1895); Carter v. Southern Ry., 111 Ga. 38, 36 S.E. 308, 50 L.R.A. 354 (1900); Shropshire v. Rainey, 150 Ga. 566, 104 S.E. 414 (1902); Hawkins v. Central of Ga. Ry., 119 Ga. 159, 46 S.E. 82 (1903); Lyons v. Kelley, 6 Ga. App. 367, 65 S.E. 44 (1909); Kennedy v. Gelders, 7 Ga. App. 241, 66 S.E. 620 (1909); Taylor v. Felder, 7 Ga. App. 219, 66 S.E. 628 (1909); North British & Mercantile Ins. Co. v. Speer, 7 Ga. App. 330, 66 S.E. 815 (1910); Dickson v. Matthews, 10 Ga. App. 542, 73 S.E. 705 (1912); Sheppard v. Bridges, 137 Ga. 615, 74 S.E. 245 (1912); May v. McCarty, 11 Ga. App. 454, 75 S.E. 672 (1912); Crawford v. Wilson, 139 Ga. 654, 78 S.E. 30, 44 L.R.A. (n.s.) 773 (1913); Paxson v. Planters' Whse. & Loan Co., 20 Ga. App. 267, 92 S.E. 1023 (1917); Henderson Lumber Co. v. Waycross & W. Ry., 148 Ga. 69, 95 S.E. 263 (1918); Jordan v. Colquitt Nat'l Bank, 22 Ga. App. 23, 95 S.E. 319 (1918); American Sur. Co. v. De Wald, 30 Ga. App. 606, 118 S.E. 703 (1923); Cook v. McArthur, 31 Ga. App. 248, 120 S.E. 551 (1923); Hogansville Banking Co. v. City of Hogansville, 156 Ga. 855, 120 S.E. 604 (1923); Board of Drainage Comm'rs v. Morris Constr. Co., 32 Ga. App. 300, 122 S.E. 723 (1924); Young v. Certainteed Prods. Corp., 35 Ga. App. 419, 133 S.E. 279 (1926); Staten v. General Exch. Ins. Corp., 38 Ga. App. 415, 144 S.E. 53 (1928); Manget v. National City Bank, 168 Ga. 876, 149 S.E. 213 (1929); Trust Co. v. Mobley, 40 Ga. App. 468, 150 S.E. 169 (1929); Bond v. Maxwell, 40 Ga. App. 679, 150 S.E. 860 (1929); Hillhouse v. McWhorter, 41 Ga. App. 384, 153 S.E. 85 (1930); Wright Graham & Co. v. Hammond, 41 Ga. App. 738, 154 S.E. 649 (1930); Beck & Gregg Hdwe. Co. v. Southern Sur. Co., 44 Ga. App. 518, 162 S.E. 405 (1931); Ragan v. National City Bank, 177 Ga. 686, 170 S.E. 889 (1933); Darden v. Federal Reserve Bank, 48 Ga. App. 685, 173 S.E. 227 (1934); Bowman v. Chapman, 179 Ga. 49, 175 S.E. 241 (1934); Wometco Theatres, Inc. v. United Artists Corp., 53 Ga. App. 509, 186 S.E. 572 (1935); McRae v. Sears, 183 Ga. 133, 187 S.E. 664 (1936); Gulf Oil Corp. v. Suburban Realty Co., 183 Ga. 847, 190 S.E. 179 (1937); Eddleman v. Lewis, 58 Ga. App. 177, 198 S.E. 108 (1938); Waxelbaum v. Carroll, 58 Ga. App. 771, 199 S.E. 858 (1938); Peretzman v. Borochoff, 58 Ga. App. 838, 200 S.E. 331 (1938); Robinson v. Herbst Bros., 63 Ga. App. 738, 12 S.E.2d 77 (1940); Mason v. Royal Indem. Co., 1 F.R.D. 176 (N.D. Ga. 1940); Hadaway v. Hadaway, 192 Ga. 265, 14 S.E.2d 874 (1941); Sybilla v. Connally, 66 Ga. App. 678, 18 S.E.2d 783 (1942); Cagle v. Justus, 196 Ga. 826, 28 S.E.2d 255 (1943); Wortham v. Beaver-Lois Mills, 71 Ga. App. 685, 31 S.E.2d 837 (1944); Franklin v. Mobley, 73 Ga. App. 245, 36 S.E.2d 173 (1945); Roberts v. Hill, 78 Ga. App. 264, 50 S.E.2d 706 (1948); Stein Steel & Supply Co. v. Goode Constr. Co., 83 Ga. App. 821, 65 S.E.2d 183 (1951); Lurz v. John J. Thompson & Co., 86 Ga. App. 295, 71 S.E.2d 675 (1952); Harmon v. Givens, 88 Ga. App. 629, 77 S.E.2d 223 (1953); Krasner v. Harper, 90 Ga. App. 128, 82 S.E.2d 267 (1954); Southern Life Ins. Co. v. Citizens Bank, 91 Ga. App. 534, 86 S.E.2d 370 (1955); Reserve Life Ins. Co. v. Peavy, 94 Ga. App. 31, 93 S.E.2d 580 (1956); Pacific Nat'l Fire Ins. Co. v. Cummins Diesel of Ga., Inc., 213 Ga. 4, 96 S.E.2d 881 (1957); Pioneer Neon Supply Co. v. Johnson & Johnson Constr. Co., 95 Ga. App. 565, 98 S.E.2d 156 (1957); Simonton Constr. Co. v. Pope, 213 Ga. 360, 99 S.E.2d 216 (1957); Jack Fred Co. v. Lago, 96 Ga. App. 675, 101 S.E.2d 165 (1957); Russell v. City of Rome, 98 Ga. App. 653, 106 S.E.2d 339 (1958); Dayton Rubber Co. v. Dismuke, 102 Ga. App. 85, 115 S.E.2d 767 (1960); Jett v. Atlanta Fed. Sav. & Loan Ass'n, 104 Ga. App. 688, 123 S.E.2d 27 (1961); Tanner v. Tanner, 106 Ga. App. 270, 126 S.E.2d 838 (1962); Maddox v. Dixie Feeds, Inc., 218 Ga. 378, 127 S.E.2d 918 (1962); Murray v. Life Ins. Co., 107 Ga. App. 545, 130 S.E.2d 767 (1963); Assurance Co. of Am. v. Bell, 108 Ga. App. 766, 134 S.E.2d 540 (1963); J.J. Black & Co. v. City of Atlanta, 114 Ga. App. 457, 151 S.E.2d 824 (1966); Levy v. Empire Ins. Co., 379 F.2d 860 (5th Cir. 1967); Climatrol Indus., Inc. v. Home Indem. Co., 316 F. Supp. 314 (N.D. Ga. 1970); Fireman's Fund Ins. Co. v. Crowder, 123 Ga. App. 469, 181 S.E.2d 530 (1971); Knight v. Lowery, 124 Ga. App. 172, 183 S.E.2d 221 (1971); Q.S. King Co. v. Minter, 124 Ga. App. 517, 184 S.E.2d 594 (1971); Fidelity & Deposit Co. v. Gainesville Iron Works, Inc., 125 Ga. App. 829, 189 S.E.2d 130 (1972); Clarke v. Fanning, 127 Ga. App. 86, 192 S.E.2d 565 (1972); Lincoln Land Co. v. Palfery, 130 Ga. App. 407, 203 S.E.2d 597 (1973); Weaver v. Ralston Motor Hotel, Inc., 135 Ga. App. 536, 218 S.E.2d 260 (1975); Barone v. Adcox, 235 Ga. 588, 221 S.E.2d 6 (1975); Chase Manhattan Mtg. & Realty Trust v. Pendley, 405 F. Supp. 593 (N.D. Ga. 1975); Washington Rd. Properties, Inc. v. Home Ins. Co., 145 Ga. App. 782, 245 S.E.2d 15 (1978); Thorpe v. Collins, 245 Ga. 77, 263 S.E.2d 115 (1980); AAA Plastering Co. v. TPM Constructors, Inc., 247 Ga. 601, 277 S.E.2d 910 (1981); William Iselin & Co. v. Davis, 157 Ga. App. 739, 278 S.E.2d 442 (1981); Sheppard v. Yara Eng'g Corp., 248 Ga. 147, 281 S.E.2d 586 (1981); Plantation Pipe Line Co. v. 3-D Excavators, Inc., 160 Ga. App. 756, 287 S.E.2d 102 (1981); Jordan v. Goff, 160 Ga. App. 636, 287 S.E.2d 640 (1981); McDaniel v. American Druggists Ins. Co. (In re Nat'l Buy-Rite, Inc.), 11 Bankr. 191 (Bankr. N.D. Ga. 1981); Bartley v. Augusta Country Club, Inc., 166 Ga. App. 1, 303 S.E.2d 129 (1983); Fleming v. Caras, 170 Ga. App. 579, 317 S.E.2d 600 (1984); Merz v. Professional Health Control of Augusta, Inc., 175 Ga. App. 110, 332 S.E.2d 333 (1985); Bryan v. Robert Harold Contractors, 177 Ga. App. 25, 338 S.E.2d 494 (1985); Routh v. St. Marys Airport Auth., 178 Ga. App. 191, 342 S.E.2d 502 (1986); Murawski v. Roland Well Drilling, Inc., 188 Ga. App. 760, 374 S.E.2d 207 (1988); Martin & Jones Produce, Inc. v. Lundy, 197 Ga. App. 38, 397 S.E.2d 461 (1990); Gray v. Higgins, 205 Ga. App. 52, 421 S.E.2d 341 (1992); Anthony v. Grange Mut. Cas. Co., 226 Ga. App. 846, 487 S.E.2d 389 (1997); Edelkind v. Boudreaux, 271 Ga. 314, 519 S.E.2d 442 (1999); Allen v. Dominy, 272 Ga. 399, 529 S.E.2d 363 (2000); Scott v. Mamari Corp., 242 Ga. App. 455, 530 S.E.2d 208 (2000); Raintree Trucking Co. v. First Am. Ins. Co., 245 Ga. App. 305, 534 S.E.2d 459 (2000); Gateway Family Worship Ctrs., Inc. v. H.O.P.E. Found. Ministries, Inc., 244 Ga. App. 286, 535 S.E.2d 286 (2000); Scott v. Cushman & Wakefield of Ga., Inc., 249 Ga. App. 264, 547 S.E.2d 794 (2001); Kenny A. v. Perdue, 218 F.R.D. 277 (N.D. Ga. Aug. 18, 2003); Brenner v. Future Graphics, LLC, 258 F.R.D. 561 (N.D. Ga. 2007).
Parties to Actions, Generally
This section is a procedural statement of rule of substantive law that there must be privity of contract. Jordan Co. v. Adkins, 105 Ga. App. 157, 123 S.E.2d 731 (1961).
This state recognizes the English rule that generally the action on a contract must be brought in the name of the party in whom the legal interest in such contract is vested. O'Leary v. Costello, 169 Ga. 754, 151 S.E. 487 (1930).
Plaintiff having no right of action at all cannot recover either for the plaintiff's own benefit or for the use of anyone else. Tyler v. National Life & Accident Ins. Co., 48 Ga. App. 338, 172 S.E. 747 (1934).
Legal right in person to whom obligation due.- Ordinarily an action must be brought in the name of the person having the legal right to maintain it; and the legal right is in the person to whom, according to the terms of the written contract, its obligation is due. United States Epperson Underwriting Co. v. Jessup, 22 F.R.D. 336 (M.D. Ga. 1958), aff'd, 260 F.2d 355 (5th Cir. 1958).
Proper parties to bring an action on a contract are the parties who, in regard to the subject matter of the contract, have given consideration or exchanged mutual promises of performance. American Fletcher Mtg. Co. v. First Am. Inv. Corp., 463 F. Supp. 186 (N.D. Ga. 1978).
Applying O.C.G.A. § 9-2-20, the action against the parent company could not survive because neither it nor its predecessor was a party to the insurance contract and the parent company's motion for summary judgment was granted. Worsham v. Provident Cos., 249 F. Supp. 2d 1325 (N.D. Ga. 2003).
Defendant cannot be bound to agreement when not a party.
- Grant of partial summary judgment to the defendant in a breach of contract action was affirmed because the facts in the record did not show with reasonable certainty what the parties intended to do in the agreement; thus, the agreement on all material terms was not made and the defendant was not a party to the non-disclosure agreement and could not be bound by the agreement's terms. Souza v. Berberian, 342 Ga. App. 165, 802 S.E.2d 401 (2017).
Nursing home patient not benficiary of arbitration agreement between health care agent and facility.
- Nursing home patient was not a third-party beneficiary of an arbitration agreement between the home and the patient's brother-in-law, who was the patient's agent for health care decisions, because, to the extent the patient obtained the benefits of dispute resolution outside the courts, the patient had repudiated this alleged benefit and did not seek to enforce the arbitration agreement, which was not required as a condition to admission to the home. Coleman v. United Health Servs. of Ga., 344 Ga. App. 682, 812 S.E.2d 24 (2018).
Non-party could not challenge validity of agreement, but could seek a declaration of rights.
- In a dispute between a back-up buyer and the buyer and sellers of real property, the back-up buyer had standing under O.C.G.A. § 9-4-2 to seek a declaration of its rights, if any, to the disputed property, although it was not a party to the contracts between the buyer and the sellers; however, the back-up buyer did not have standing to challenge the signatures on those contracts pursuant to O.C.G.A. § 9-2-20. Del Lago Ventures, Inc. v. QuikTrip Corp., 330 Ga. App. 138, 764 S.E.2d 595 (2014).
Mortgagor lacked standing to assert the breach-of-contract claim because the mortgagor lacked standing to contest the validity of the transfer or assignment of the loan documents based on the pooling and servicing agreement (PSA) because the mortgagor conceded that the mortgagor was not a party to the PSA. Cornelius v. Bank of Am., NA, F.3d (11th Cir. Sept. 25, 2014)(Unpublished).
Assignee as real party in interest.
- In an action on an installment sales contract, when it appears from the contract itself that the original seller of the tobacco combine assigned all its rights, title, and interest in that contract to an assignee, the assignee is the real party in interest. Rigdon v. Walker Sales & Serv., Inc., 161 Ga. App. 459, 288 S.E.2d 711 (1982).
Trial court erred in granting an assignee summary judgment in an action against a debtor to collect the amount owed on a credit card account agreement the debtor allegedly entered into with an assignor because the assignee failed to show that it was entitled to file suit to recover the outstanding debt against the debtor pursuant to O.C.G.A. § 9-11-17(a); the assignee relied on the affidavit of its agent and business records custodian of its credit card accounts to show that the assignor transferred to it all rights and interests to the debtor's account, but the affidavit failed to refer to or attach any written agreements that could complete the chain of assignment from the assignor to the assignee, and although the assignee contended that the debtor did not raise its failure to present a valid assignment in the trial court, the record reflected that that issue was squarely before the trial court because the assignee directly addressed the debtor's defense under § 9-11-17 in its motion for summary judgment, referring to the affidavit to show that it was the assignee. Wirth v. Cach, LLC, 300 Ga. App. 488, 685 S.E.2d 433 (2009).
Construction of section with § 13-3-42. - Former Civil Code 1895, § 4939 (see now O.C.G.A. § 9-2-20) was a codification of the common law, and was frequently construed with former Civil Code 1895, §§ 3657, 3661, and 3664 (see now O.C.G.A. § 13-3-42) which permitted the promisee to maintain an action, although the promisee was a stranger to the consideration. Hawkins v. Central of Ga. Ry., 119 Ga. 159, 46 S.E. 82 (1903).
Promisee may sustain action, even though the promisee is a stranger to the consideration. Holmes v. Western Auto Supply Co., 220 Ga. 528, 140 S.E.2d 204 (1965).
Application to common-law bonds.
- Actions on bonds executed by public officials but not required by law or statute (generally referred to as common-law bonds) at the time of creation are governed by the common-law rule in this section. National Sur. Co. v. Seymour, 177 Ga. 735, 171 S.E. 380 (1933).
Action by general or special owner.- Interest of plaintiff entitled to sue in contract under this section for injury to goods may be either that of general or special owner. Inman & Co. v. Seaboard Air Line Ry., 159 F. 960 (S.D. Ga. 1908).
Two persons who separately owned articles of personalty and sold them jointly for a lump sum jointly owned the debt against the buyer for the purchase money and could bring a joint action against the debtor for its recovery. Mathis v. Shaw, 38 Ga. App. 783, 145 S.E. 465 (1928).
When plaintiffs have joint right of action on contract for reimbursement for services which the plaintiffs jointly promised to perform, the plaintiffs may bring an action listing all their names as plaintiffs. Boroughs, Dale & Griffin v. St. Elias E. Orthodox Church, 120 Ga. App. 434, 170 S.E.2d 865 (1969).
Agreement by wife to be financially responsible for husband's debts to a nursing home provided her with a legal interest in the contract executed between her husband and the home. Fisher v. Toombs County Nursing Home, 223 Ga. App. 842, 479 S.E.2d 180 (1996).
Former husband lacked standing to assert claims arising from violations of security deed.
- Because a former husband was never a party to a security deed and had no legal interest in the property at the time a bank and a law firm sent notices of the default and the acceleration, the former husband lacked standing to assert any claims arising from violations of the security deed; therefore, it was of no consequence even if the bank and law firm had failed to comply with the notice provisions in the security deed. Farris v. First Fin. Bank, 313 Ga. App. 460, 722 S.E.2d 89 (2011).
Action by a corporation must be brought in its own corporate name, and not in the name of its trustees or directors. Kersey v. Grant, 177 Ga. 501, 170 S.E. 501, answer conformed to, 47 Ga. App. 408, 170 S.E. 503 (1933).
Corporation lacked standing to pursue damages.
- Trial court did not err in directing a verdict against a corporation and the corporation's owner as to their breach of contract and wrongful foreclosure claims because two of the owner's other companies suffered damages from the alleged misconduct, and those entities were not parties to the suit; the corporation lacked standing to pursue any damages belonging to the companies, and thus, the trial court properly determined that the corporation and owner were not entitled to recover damages belonging to the companies. The trial court properly determined that the corporation and the owner were not entitled to recover damages belonging to the companies. Canton Plaza, Inc. v. Regions Bank, Inc., 315 Ga. App. 303, 732 S.E.2d 449 (2012).
Action by removed member of LLC.
- Party to an LLC operating agreement had standing to bring an action for the breach of contract even though the party had been removed as a member of the LLC under O.C.G.A. § 9-2-20(a). Kaufman Development Partners, L.P. v. Eichenblatt, 324 Ga. App. 71, 749 S.E.2d 374 (2013).
Breach of lease.
- In action to recover damages for breach of written lease, plaintiff corporation must show that it was a party to the contract sued upon, by written assignment from assignees of original lessee. Sorrento Italian Restaurant, Inc. v. Franco, 107 Ga. App. 301, 129 S.E.2d 822 (1963).
Homeowners' actions against loan servicers.
- While the mortgagors alleged a transfer of the mortgagors' security deed violated a pooling and servicing agreement (PSA), and that the attorney transferring the security deed lacked authority, the mortgagors were not a party to the PSA or the challenged transfer, and thus did not have standing to contest the validity of the transfer under O.C.G.A. § 9-2-20(a). Edward v. BAC Home Loans Servicing, L.P., F.3d (11th Cir. Aug. 16, 2013)(Unpublished).
Borrowers lacked standing to challenge assignment of security deed.- In a wrongful foreclosure action, the district court did not err in concluding that the borrowers lacked standing to challenge the assignment of the security deed because, even though the assignment allegedly contained a patent defect in attestation, they were not parties to the assignment and had demonstrated no other right to challenge it. Haynes v. McCalla Raymer LLC, 793 F.3d 1246 (11th Cir. 2015).
Action by note holder.
- Action cannot be maintained upon promissory note payable to the order of a named person which has not been endorsed or otherwise transferred, except in the name of the person to whom it is payable. Kohn v. Colonial Hill Co., 38 Ga. App. 286, 144 S.E. 33 (1928).
When a note is payable to a given person or order, the holder thereof, other than the payee, cannot sue thereon in the holder's own name, unless the paper has been endorsed or transferred to the holder in writing. Kersey v. Grant, 177 Ga. 501, 170 S.E. 501, answer conformed to, 47 Ga. App. 408, 170 S.E. 503 (1933).
Holder of legal title, as trustee, may sue even though the holder is not entitled to the beneficial interest. Wortsman v. Wade, 77 Ga. 651, 4 Am. St. R. 102 (1886).
Right of agent to bring action.
- Agent has a right of action in the agent's own name on a contract made with the agent in the agent's individual name, even though the agency is known; and in cases of an agency coupled with an interest, which is known to the party contracting with the agent, the agent may maintain an action on a contract in the agent's own name. Whitfield v. Boykin, 48 Ga. App. 141, 172 S.E. 82 (1933).
Agent of known principal, whose agency is not coupled with an interest known to the opposite party in such manner as to form an exception to the general rule, may not, in the agent's own name, bring an action for the recovery of the principal's money. Curry v. Roberson, 87 Ga. App. 785, 75 S.E.2d 282 (1953).
Insurance contract is no exception to the general rule of this section. Equitable Fire Ins. Co. v. Jefferson Std. Life Ins. Co., 26 Ga. App. 241, 105 S.E. 818 (1919) (see O.C.G.A. § 9-2-20).
Action on insurance policy must be brought in name of holder of legal title. Tyler v. National Life & Accident Ins. Co., 48 Ga. App. 338, 172 S.E. 747 (1934).
Duty of insurer is only to its insured and not to one who is not a party to the contract, even if the premiums on the policies were paid by that party. Gaines v. American Title Ins. Co., 136 Ga. App. 162, 220 S.E.2d 469 (1975).
Only insured or assignee can maintain action on policy.
- Generally, one other than the person to whom an insurance policy was issued cannot, in that person's own name, maintain an action thereon, unless the policy has been duly assigned to that person in writing. Insured Lloyds v. Bobo, 116 Ga. App. 89, 156 S.E.2d 518 (1967).
Action on a policy of insurance or on a written binder must be brought in the name of the holder of the legal title thereto. Insured Lloyds v. Bobo, 116 Ga. App. 89, 156 S.E.2d 518 (1967).
Trustee in a holding company's bankruptcy case did not have the right to bring a breach of contract claim against an insurer under a fidelity bond; although both the holding company and the company's subsidiary, a bank, were named as insureds, only the bank had the right to bring the claim under the terms of the bond because the bank's employees caused the alleged loss. Lubin v. Cincinnati Ins. Co., 677 F.3d 1039 (11th Cir. 2012)(Unpublished).
Fact that insurance policy did not specifically exclude benefits of coverage to all the world save the insured does not show intent that anyone could maintain an action under the policy. Insured Lloyds v. Bobo, 116 Ga. App. 89, 156 S.E.2d 518 (1967).
Action against insurer by injured party prohibited.
- In absence of policy provisions to the contrary, one who suffers injury is not in privity of contract with insurer under liability insurance policy and cannot reach proceeds of the policy for payment of a claim by an action directly against insurer. Insured Lloyds v. Bobo, 116 Ga. App. 89, 156 S.E.2d 518 (1967); Lee v. Petty, 133 Ga. App. 201, 210 S.E.2d 383 (1974); Gilbert v. Van Ord, 203 Ga. App. 660, 417 S.E.2d 390, cert. denied, 203 Ga. App. 906, 417 S.E.2d 390 (1992).
Owner of automobile consigned for sale to insured dealer is not a beneficiary within the purview of this section, so as to entitle the owner to maintain an action against the insurer which issued the policy covering theft. First of Ga. Ins. Co. v. Augusta Ski Club, 118 Ga. App. 731, 165 S.E.2d 476 (1968).
Interest in credit insurance policy in creditor, not debtor.
- Legal and beneficial interest in credit insurance policy insuring certain debtors of creditor against contingency of death and permanent disability and agreeing to pay creditor balance of indebtedness in event of such contingencies is in creditor and debtor has no cause of action thereunder for insurer's failure to pay on disability claim by debtor. First of Ga. Ins. Co. v. Augusta Ski Club, 118 Ga. App. 731, 165 S.E.2d 476 (1968).
Incidental benefit from insurance.
- Absent statutory provision vesting right to maintain action, fact that one receives an incidental benefit from insurance, i.e., payment of balance of one's indebtedness upon the happening of specified events, does not alter fact that the right of action is not vested in that person. Insured Lloyds v. Bobo, 116 Ga. App. 89, 156 S.E.2d 518 (1967).
When plaintiff was not an insured under homeowner's policy but owned property, the loss of which was insured, the plaintiff had no right to sue insurer under the policy. First of Ga. Ins. Co. v. Augusta Ski Club, 118 Ga. App. 731, 165 S.E.2d 476 (1968).
Action against insurer by injured party with judgment against insured.
- Insurance policy which provides that any person who has secured a judgment against the insured shall thereafter be entitled to recover under the policy makes injured party who obtains a judgment against the insured a third-party beneficiary entitled to bring an action on the policy under this section. Davis v. National Indem. Co., 135 Ga. App. 793, 219 S.E.2d 32 (1975).
In the absence of a provision in an insurance policy that any person who has secured a judgment against the insured shall thereafter be entitled to recover under the policy, there is no privity of contract between the insurer and the insured party under this section. Davis v. National Indem. Co., 135 Ga. App. 793, 219 S.E.2d 32 (1975).
Borrower may not sue title insurer upon mortgage title policy issued to lender on the borrower's real estate loan. Sherrill v. Louisville Title Ins. Co., 134 Ga. App. 322, 214 S.E.2d 410 (1975).
Parties contracting to divert charter granted for public purposes proper defendants.
- Municipal authorities, street railroad company, and manufacturing company charged to have combined in diversion of charter granted for public purposes to private benefit and to have been parties to a contract for that purpose were properly joined as defendants. Mayor of Macon v. Harris, 73 Ga. 428 (1884).
Action against a corporation under joint venture theory.
- In an insured's suit asserting claims for breach of contract under O.C.G.A. § 9-2-20 in connection with an insurer's denial of the insured's claim for proceeds of a long-term disability insurance policy, the parent corporation of the insurer, which administered the insurer's policies, was not liable under a joint venture theory because the insured's claims sounded in contract, not negligence. Adams v. UNUM Life Ins. Co. of Am., 508 F. Supp. 2d 1302 (N.D. Ga. 2007).
Action against a corporation under an alter ego theory.- Insured could not pierce the corporate veil and hold the parent insurance company liable under an alter ego theory for a breach of the policy by the subsidiary because the insured did not show that the subsidiary had insufficient assets to satisfy the insured's claims, and the parent company was not a party to the policy issued by its subsidiary. Perry v. Unum Life Ins. Co. of Am., 353 F. Supp. 2d 1237 (N.D. Ga. 2005).
In an insured's suit asserting claims for breach of contract under O.C.G.A. § 9-2-20 in connection with an insurer's denial of the insured's claim for proceeds of a long-term disability insurance policy, the parent corporation of the insurer was not liable under an alter ego theory; because the insurer was not insolvent and had funds sufficient to satisfy any judgment for the insured, the insurer's corporate veil could not be pierced so as to hold the parent liable, even if the insurer and the parent failed to maintain separate corporate existences. Adams v. UNUM Life Ins. Co. of Am., 508 F. Supp. 2d 1302 (N.D. Ga. 2007).
Plaintiffs could not assert claim based on instruments to which plaintiffs were not parties or third-party beneficiaries.- Plaintiffs' claim that the defendant violated the "one satisfaction rule" by foreclosing on their home failed because the plaintiffs could not assert a claim against the defendant based on a purported insurance policy or settlement agreement as the plaintiffs were not parties to, or third-party beneficiaries of, those instruments. Fenello v. Bank of Am., N.A., F. Supp. 2d (N.D. Ga. Nov. 8, 2013).
In a case in which a pro se borrower argued that an assignment was invalid because it was executed after the creditor assigned the note and did not comply with the pooling and servicing agreement for the trust or state law, the borrower lacked standing since the borrower was not a party to the assignment. Morrison v. Bank of Am., N.A., F. Supp. 2d (N.D. Ga. July 31, 2014).
Siblings who signed separate notes for mutual businesses.
- Sibling who was not a party to or a third-party beneficiary of the other's residential mortgage, equity line of credit, or promissory note lacked standing to raise claims based on those transactions, although both the borrower and the sibling took out personal loans associated with their furniture businesses. Nelson v. Hamilton State Bank, 331 Ga. App. 419, 771 S.E.2d 113 (2015).
Trust that did not exist at time of transaction not a party.
- Trial court did not err in granting summary judgment to the sellers as to the claims made by a trust against them because, when the sale and purchase of the house at issue was conducted, the trust did not even exist at the time the alleged misrepresentations or fraudulent concealments were made, thus, there was no evidence existing that the trust relied on the alleged misstatements. Stephen A. Wheat Trust v. Sparks, 325 Ga. App. 673, 754 S.E.2d 640 (2014).
Third Party BeneficiariesException to the general rule is third-party beneficiary theory, which allows the beneficiary of a contract between other parties to maintain an action against the promisor of a contract. American Fletcher Mtg. Co. v. First Am. Inv. Corp., 463 F. Supp. 186 (N.D. Ga. 1978).
Third-party beneficiary contract is one in which a promisor engages to promisee to render some performance to a third person; it must clearly appear from the contract that it was intended for the benefit of the third party. Stewart v. Gainesville Glass Co., 131 Ga. App. 747, 206 S.E.2d 857 (1974), aff'd, 233 Ga. 578, 212 S.E.2d 377 (1975).
Underlying contract required before one can be third-party beneficiary.
- Contractor was not a third-party beneficiary of the relationship between a county and the Environmental Protection Department because a Land Application System permit issued to the county was not a contract. Forsyth County v. Waterscape Servs., LLC, 303 Ga. App. 623, 694 S.E.2d 102 (2010).
Subsection (b) not to be given retroactive effect.
- While Georgia Laws 1949, p. 455, amending this section, was apparently enacted to permit beneficiary under contract between other parties to recover, it could be given no retroactive effect, as to do so would violate the provisions of the United States and state Constitutions regarding impairing obligations of contracts by creating a right for one to recover under an existing contract when one previously had no such right and by subjecting a party to an existing contract to liability to a third person who previously had no right under the contract. Guest v. Stone, 206 Ga. 239, 56 S.E.2d 247 (1949).
In order for third party to have standing to enforce contract under this section it must clearly appear from the contract that it was intended for the third party's benefit; the mere fact that the third party would benefit from performance of the agreement is not alone sufficient. Backus v. Chilivis, 236 Ga. 500, 224 S.E.2d 370 (1976); Miree v. United States, 242 Ga. 126, 249 S.E.2d 573 (1978); American Fletcher Mtg. Co. v. First Am. Inv. Corp., 463 F. Supp. 186 (N.D. Ga. 1978); Jahannes v. Mitchell, 220 Ga. App. 102, 469 S.E.2d 255 (1996); Rowe Dev. Corp. v. Akin & Flanders, Inc., 240 Ga. App. 766, 525 S.E.2d 123 (1999).
It must appear that both parties to the contract intended that the third person should be the beneficiary of the contract in order for the third party to have standing. Donalson v. Coca-Cola Co., 164 Ga. App. 712, 298 S.E.2d 25 (1982).
Although as a general rule an action on a contract is brought by a party to it, the beneficiary of a contract made between other parties for the beneficiary's benefit may maintain an action against the promisor on the contract. Somers v. Avant, 244 Ga. 460, 261 S.E.2d 334 (1979).
Beneficiary of a contract made between parties for its benefit may maintain an action against the promisor on the contract, the only requirement being that the third party be an intended beneficiary. Therefore, plaintiff's status depends on the intention of the contracting parties to benefit it as a third party. Beckman Cotton Co. v. First Nat'l Bank, 666 F.2d 181 (5th Cir. 1982).
In order for a third party to have standing to enforce a contract under subsection (b) of O.C.G.A. § 9-2-20, it must clearly appear from the contract that it was intended for his or her benefit. The mere fact that the third party would benefit from performance of the agreement is not alone sufficient. Culberson v. Fulton-DeKalb Hosp. Auth., 201 Ga. App. 347, 411 S.E.2d 75, cert. denied, 201 Ga. App. 905, 411 S.E.2d 75 (1991).
In order for a non-party to have standing to enforce a contract as a third party beneficiary, it must clearly appear that one party to the contract promised another party to the contract to render some performance to the non-party to the contract; further, it must appear that both parties to the contract intended that the contract benefit the non-party. Vaughn, Coltrane & Assocs. v. Van Horn Constr., Inc., 254 Ga. App. 693, 563 S.E.2d 548 (2002).
Trial court properly granted summary judgment to an employer in an action by an injured employee, asserting that the employer breached its contract with a treating physician to provide professional liability insurance, as the employee, who was treated as a patient by the physician, was not a third-party beneficiary who was intended to have standing to bring such a claim under O.C.G.A. § 9-2-20(b). Crisp Reg'l Hosp., Inc. v. Oliver, 275 Ga. App. 578, 621 S.E.2d 554 (2005).
In a class action filed by a group of uninsured patients arising out of a breach of a lease agreement, the patients failed to show a third-party beneficiary status, and thus, failed to prove standing to sue for a breach, despite the fact that the agreement was intended to promote the public health needs of the community and to continue the high quality and level of health care services, as the patients had no more standing than any other member of the public; moreover, the patients' reliance upon provisions of the agreement requiring the hospital to provide indigent and charity care was misplaced. Davis v. Phoebe Putney Health Sys., 280 Ga. App. 505, 634 S.E.2d 452 (2006).
Third party must be party to consideration.
- Third party beneficiary may maintain action in the beneficiary's own name on contract between two other parties when such contract was made for the beneficiary's benefit, when the beneficiary was a party to the contract or in privity, where a trust was created for the beneficiary under the contract, or when the beneficiary's relation or status has been changed thereby. Waxelbaum v. Waxelbaum, 54 Ga. App. 823, 189 S.E. 283 (1936); First Nat'l Bank & Trust Co. v. Roberts, 187 Ga. 472, 1 S.E.2d 12 (1939); Sybilla v. Connally, 66 Ga. App. 678, 18 S.E.2d 783 (1942); Harris v. Joseph B. English Co., 83 Ga. App. 281, 63 S.E.2d 346 (1951), for comment, see 13 Ga. B.J. 462 (1951).
To maintain an action on a contract, third person must be a party to the consideration, or the contract must have been entered into for the third party's benefit, and the third party must have some legal or equitable interest in its performance. Whitley v. Bryant, 198 Ga. 328, 31 S.E.2d 701 (1944).
Enforcement by beneficiary supplying consideration.
- Contract made by the mother, not only for the benefit of the child, but on behalf of the child meant that the child had a substantial interest in the result of the litigation. Savannah Bank & Trust Co. v. Wolff, 191 Ga. 111, 11 S.E.2d 766 (1940).
Action by third person with incidental benefit barred.
- Requirement that action be brought "in the name of the party in whom the legal interest in such contract is vested" bars action by a third person who has merely an incidental benefit in its performance, but it does not preclude an action in the name of a third person who has a direct legal or equitable interest in the performance of the contract, and for whose benefit it was expressly undertaken. Whitley v. Bryant, 198 Ga. 328, 31 S.E.2d 701 (1944).
Subsection (b) of this section is limited in application to intended beneficiaries, as distinguished from incidental beneficiaries. Miree v. United States, 526 F.2d 679 (5th Cir.), different result reached on rehearing, 538 F.2d 643 (5th Cir. 1976), judgment en banc vacated, 433 U.S. 25, 97 S. Ct. 2490, 53 L. Ed. 2d 557 (1977).
County residents who received water and sewer services under a franchise agreement between a city and the county lacked standing to bring suit against the city for damages for excess rates allegedly charged by the city to county customers under the franchise agreement and a settlement agreement between the city and county. Page v. City of Conyers, 231 Ga. App. 264, 499 S.E.2d 126 (1998).
Injured motorist and the motorist's spouse did not have standing to sue the contractors who widened a highway pursuant to a contract with the state highway department following the motorist's accident on the on-ramp to the highway because the motorist and the motorist's spouse were not third-party beneficiaries to the construction contract and the mere fact that they would benefit incidentally from the performance of the contract was not alone sufficient to give them standing to sue on the contract. Hubbard v. DOT, 256 Ga. App. 342, 568 S.E.2d 559 (2002).
Under O.C.G.A. § 9-2-20(b), a successor to a competing sponsor was not a third party beneficiary of an agreement between a race car owner and a promoter, but was merely an incidental beneficiary; thus, the successor lacked standing to challenge the promoter's interpretation of the agreement, and a preliminary injunction against the promoter was improper. AT&T Mobility, LLC v. NASCAR, Inc., 494 F.3d 1356 (11th Cir. 2007).
Insured not intended third-party beneficiary.
- In an insured's suit asserting claims for breach of contract under O.C.G.A. § 9-2-20 in connection with an insurer's denial of the insured's claim for proceeds of a long-term disability insurance policy, the insured's claim against the parent corporation of the insurer failed because the insured was not an intended third-party beneficiary of a contract whereby the parent provided administrative services for the insurer's policies. That the insured benefitted from the performance of that contract was inconsequential, as the contract required the parent to provide a wide variety of other services to the insurer, including auditing, cash management, and marketing services. Adams v. UNUM Life Ins. Co. of Am., 508 F. Supp. 2d 1302 (N.D. Ga. 2007).
In construing supposed third-party beneficiary relationship, it is obligatory to determine intent of the parties to the contract. Continental Cas. Co. v. Continental Rent-A-Car of Ga., Inc., 349 F. Supp. 666 (N.D. Ga.), aff'd, 468 F.2d 950 (5th Cir. 1972).
Under Georgia law, a third-party beneficiary can bring an action on a contract between other parties only if the promisor engages to the promisee to render some performance to a third person and both parties to the contract intend that the third person should be the beneficiary. American Fletcher Mtg. Co. v. First Am. Inv. Corp., 463 F. Supp. 186 (N.D. Ga. 1978).
Inmate's contention that the terms of a contract between Stone Mountain Memorial Association and the Georgia Department of Corrections (DOC) requiring the Association to provide a safe workplace, safety gear and necessary protective clothing, were intended to benefit the inmates by providing for their safety while working pursuant to the contract, was rejected because, viewed as a whole, the contract showed that the inmates' safety remained the primary responsibility of the DOC, and the Association's promise was not an undertaking on behalf of the inmates; thus, the inmate was not an intended beneficiary of the contract pursuant to O.C.G.A. § 9-2-20. Gay v. Ga. Dep't of Corr., 270 Ga. App. 17, 606 S.E.2d 53 (2004).
Third party status determined by construction of contract.
- Rights of a third person to sue on a contract made for the third person's benefit depend on the terms of the agreement and are no greater than those granted by the contract, as intended by the parties thereto; to recover, a beneficiary must be brought within its terms. Deal v. Chemical Constr. Co., 99 Ga. App. 413, 108 S.E.2d 746 (1959).
Since recovery on third person beneficiary contract is a recovery on the contract itself, right of the beneficiary is no greater than if the contract were enforced between the nominal parties, the beneficiary being in no better position than the promisee. Deal v. Chemical Constr. Co., 99 Ga. App. 413, 108 S.E.2d 746 (1959).
Party's status as a third-party beneficiary depends upon the intention of the contracting parties to benefit the third party, which is determined by a construction of the contract as a whole. American Fletcher Mtg. Co. v. First Am. Inv. Corp., 463 F. Supp. 186 (N.D. Ga. 1978).
Promisee did not have standing to sue the maker and assignee of the note for breach of those two parties' asset purchase agreement (APA) because the APA clearly stated that no other person had any right under the APA as a third party beneficiary or otherwise. Kaesemeyer v. Angiogenix, Inc., 278 Ga. App. 434, 629 S.E.2d 22 (2006).
In a breach of contract action, the appellate court erred in concluding that a worker killed at a city airport construction site was an intended beneficiary of all of the contracts between the city and the contractors as the court did not properly consider the definition of the term "all participants" and did not consider the parties' contractual obligations separately. Archer W. Contrs., Ltd. v. Estate of Estate of Pitts, 292 Ga. 219, 735 S.E.2d 772 (2012).
In a premises liability action, the trial court properly granted summary judgment to the hotel franchisee where there was no genuine issue of material fact that no apparent agency existed between the hotel owner and the franchisee and the franchise contract between the hotel and the franchisee showed no intent to benefit third persons such as hotel guests. Bright v. Sandstone Hospitality, LLC, 327 Ga. App. 157, 755 S.E.2d 899 (2014).
In an insurance dispute, the grant of summary judgment to the homeowner and house insurer was affirmed against the secondary insurer because the homeowner was specifically named on an endorsement as an additional insured on the secondary insurer's policy and that policy was a contract that clearly intended, on the contract's face, to benefit the homeowner as a third-party beneficiary. Southern Trust Insurance Company v. Cravey, 345 Ga. App. 697, 814 S.E.2d 802 (2018), cert. denied, No. S18C1319, 2018 Ga. LEXIS 820 (Ga. 2018).
Intended third party beneficiary of a contract.
- Intended third party beneficiary of a contract between the beneficiary's parents and the corporate operator of a treatment program was entitled to recover the reasonable value of services it failed to provide. Reaugh v. Inner Harbour Hosp., 214 Ga. App. 259, 447 S.E.2d 617 (1994).
County employee had standing to bring an action against the administrator of the county's health plan based on the administrator's alleged failure to exercise its implied duty of good faith and fair dealing in performing its obligations under the agreement with the county. Gardner & White Consulting Servs., Inc. v. Ray, 222 Ga. App. 464, 474 S.E.2d 663 (1996).
Licensee was properly granted partial summary judgment in the licensor's third-party beneficiary claim against the licensee because, after the licensee sold some of its assets to the subsidiary of the purchaser after entering into the license agreement with the licensor, and the purchaser refused to abide by the agreement, the licensor was not a third-party beneficiary under O.C.G.A. § 9-2-20(b) to the agreements. Marvel Enters. v. World Wrestling Fed'n Entm't, Inc., 271 Ga. App. 607, 610 S.E.2d 583 (2005).
Although the franchisees were transferees of a builder's warranty, they were not third beneficiaries under O.C.G.A. § 9-2-20(b); nevertheless, because there were material issues of fact as to whether all repairs were properly made and the franchisees brought suit within the six-year statute of limitation in O.C.G.A. § 9-3-24, the trial court erred in granting summary judgment to the contractor. Danjor, Inc. v. Corporate Constr., Inc., 272 Ga. App. 695, 613 S.E.2d 218 (2005).
Pursuant to O.C.G.A. § 9-2-20(b), an annuity company had standing to pursue a breach of contract action against two former employees of a financial company; although the former employees and the financial company entered into various nondisclosure and nonsolicitation agreements, the agreements specifically afforded protection to the annuity company. Variable Annuity Life Ins. Co. v. Joiner, 454 F. Supp. 2d 1297 (S.D. Ga. 2006).
Employee's action to enjoin the enforcement of a non-compete clause in a contract between the employee's employer and the employee's desired physician, which was treated as a judgment on the pleadings on appeal, was properly dismissed on standing grounds as the employee was neither a party to the contract nor an intended beneficiary of the contract. Haldi v. Piedmont Nephrology Assocs., P.C., 283 Ga. App. 321, 641 S.E.2d 298 (2007).
Insurer was not a third-party beneficiary entitled to enforce an arbitration clause of a loan agreement because the loan agreement did not show any intent to allow anyone other than the buyer, seller, and assignee of the seller and the lender to compel arbitration of disputes under the loan agreement. Lawson v. Life of the South Ins. Co., 648 F.3d 1166 (11th Cir. 2011).
Trial court did not err in concluding that a landowner had standing to assert a breach of contract claim because on its face a site plan's location of a dock was intended to benefit the landowner's by protecting the landowner's ability to place a dock between one dock and another dock. Dillon v. Reid, 312 Ga. App. 34, 717 S.E.2d 542 (2011).
Contracts between public entity and others were for benefit of public.
- City's water customers were not third party beneficiaries of the contracts between the city and the city's contractors who provided meter services under O.C.G.A. § 9-2-20(b) because those contracts were intended to benefit the public generally, not the customers specifically. City of Atlanta v. Benator, 310 Ga. App. 597, 714 S.E.2d 109 (2011), overruled on other grounds, FDIC v. Loudermilk, 2019 Ga. LEXIS 186 (Ga. 2019).
Members of distribution EMCs lacked privity to sue wholesale EMCs.
- Suits by classes of former and current members of distribution electric membership corporations (EMCs) seeking to recover millions of dollars in patronage capital from two wholesale EMCs were dismissed because the members lacked privity with the wholesale EMCs, and there was no legal duty under O.C.G.A. § 46-3-340(c) or the EMCs' bylaws requiring distribution of the patronage capital to the members. Walker v. Oglethorpe Power Corp., 341 Ga. App. 647, 802 S.E.2d 643 (2017), overruled on other grounds, Hanham v. Access Mgmt. Group L.P., 305 Ga. 414, 825 S.E.2d 217 (2019).
Minors as third-party beneficiaries have standing to sue upon contract made for their benefit. Norris v. Cady, 231 Ga. 19, 200 S.E.2d 102 (1973).
Action may be maintained by child to enforce contract to adopt and devise, in person or by next friend. Savannah Bank & Trust Co. v. Wolff, 191 Ga. 111, 11 S.E.2d 766 (1940).
Court-ordered obligation to support one's child is not a third-party beneficiary contract. Baird v. Herrmann, 181 Ga. App. 579, 353 S.E.2d 75 (1987).
Contract to make will.
- When contract to make a will was made by father with grandmother for benefit of plaintiff child, full performance of all the obligations undertaken by father resulted in perfect equitable title in the property in the plaintiff; therefore, whoever held the legal title to the property after the death of the grandmother necessarily held it in trust for the plaintiff who, although not a party to the original contract, was entitled to maintain an action for specific performance. Veruki v. Burke, 202 Ga. 844, 44 S.E.2d 906 (1947), for comment, see 10 Ga. B.J. 369 (1948).
Seller as beneficiary of letter of credit.- When a defendant bank sent a copy of the credit letter to plaintiff seller of cotton and in its own letter of credit procedures equated "beneficiary" with seller/exporter, this shows that the parties contemplated plaintiff as an intended beneficiary of the contract. The district court therefore correctly held that plaintiff had standing to sue as a third-party beneficiary. Beckman Cotton Co. v. First Nat'l Bank, 666 F.2d 181 (5th Cir. 1982).
Materialmen have beneficial interest in contractor's bond and may bring an action on the bond in their own name rather than in the name of the nominal obligee. Sims' Crane Serv., Inc. v. Reliance Ins. Co., 514 F. Supp. 1033 (S.D. Ga. 1981), aff'd, 667 F.2d 30 (11th Cir. 1982).
If the general contractor's payment bond defines a claimant under the bond as one supplying material to a subcontractor, then a materialman of a subcontractor may sue on the bond for the subcontractor's nonpayment; if the bond expressly limits a right of action on the bond to the named obligees or is conditioned on the general contractor's payment of only materialmen having a direct relationship with the general contractor, then a materialman of a subcontractor may not sue on the payment bond; and if the bond is conditioned on the general contractor's payment of all persons furnishing labor and material under or for the contract, then, at a minimum, materialmen of the general contractor may maintain an action on the bond. Sims' Crane Serv., Inc. v. Reliance Ins. Co., 514 F. Supp. 1033 (S.D. Ga. 1981), aff'd, 667 F.2d 30 (11th Cir. 1982).
Action by materialman against obligors in bond for materials furnished is not subject to dismissal upon ground that it is not brought in name of obligee named in bond. Robinson Explosives, Inc. v. Dalon Contracting Co., 132 Ga. App. 849, 209 S.E.2d 264 (1974).
Real estate broker bringing action for commission against closing agent is not prevented from recovery because the broker did not expressly approve or ratify contract providing for distribution of commission by defendant to broker. Guaranty Title Ins. Co. v. Wilson, 123 Ga. App. 3, 179 S.E.2d 280 (1970).
Restrictive covenant.
- When a grantor sells property with a restriction benefiting the grantor's neighbors, the neighbor is a beneficiary who may enforce the restriction. Muldawer v. Stribling, 243 Ga. 673, 256 S.E.2d 357 (1979).
Grantees under a deed containing restrictive covenants had standing to complain that a successor in title to a separate tract of land deeded by the same grantor had breached identical covenants. Jones v. Gaddy, 259 Ga. 356, 380 S.E.2d 706 (1989).
Debtors as beneficiaries under Home Affordable Modification Program.- Debtors lacked standing to sue a bank as third party beneficiaries since the debtors were merely incidental beneficiaries of, and did not have enforceable rights under the Home Affordable Modification Program and a service participation agreement. Salvador v. Bank of Am., N.A. (In re Salvador), 456 Bankr. 610 (Bankr. M.D. Ga. 2011).
Denial of bank's motion to dismiss was reversed because homeowners were mere incidental beneficiaries who lacked standing to enforce the Home Affordable Modification Program (HAMP) Agreements. As such, the borrower did not have a private right of action to enforce HAMP against the bank. U.S. Bank, N.A. v. Phillips, 318 Ga. App. 819, 734 S.E.2d 799 (2012).
Contract between state highway department and construction company by which company undertakes to provide for safety of the public during construction of project inures to the benefit of the public, and a member of the public injured as a result of company's negligence in failing to do so may sue the company directly. Lee v. Petty, 133 Ga. App. 201, 210 S.E.2d 383 (1974).
Enforcement of purchaser's assumption agreement by holder of security deed.
- Assignee of a mortgage may enforce it against the purchaser of the property who assumes payment. Reid v. Whisenant, 161 Ga. 503, 131 S.E. 904, 44 A.L.R. 599 (1926).
Under well-recognized exception to the general rule, where owner conveys tract of land as security for indebtedness and thereafter sells and conveys such land to purchaser by deed stipulating that purchaser agrees to assume and pay the indebtedness, the grantee in the security deed or the grantee's transferee may enforce the assumption agreement of the purchaser by a suit in equity. National Mtg. Corp. v. Bullard, 178 Ga. 451, 173 S.E. 401 (1934).
Creditor of vendor may enforce agreement.
- When the purchaser of the assets of a firm agrees to pay their debts, a creditor of the firm can enforce this agreement for the creditor's benefit by a bill in equity to which the partners and purchasers are parties. Bell v. McGrady, 32 Ga. 257 (1861).
After married woman conveyed her separate estate absolutely to others in consideration of their agreement to pay her an annuity for life and all debts against her separate property, the agreement may in equity be enforced by her creditors. Reid v. Whisenant, 161 Ga. 503, 131 S.E. 904, 44 A.L.R. 599 (1926).
Whe vendor conveys property to purchaser in transaction whereby purchaser agrees to assume and pay debts of vendor, a creditor of the vendor may enforce assumption agreement in equity. O'Leary v. Costello, 169 Ga. 754, 151 S.E. 487 (1930); First Nat'l Bank v. Rountree, 173 Ga. 117, 159 S.E. 658 (1931); National Mtg. Corp. v. Bullard, 178 Ga. 451, 173 S.E. 401 (1934); Alexander v. Dinwiddie, 214 Ga. 441, 105 S.E.2d 451 (1958).
When vendor conveys property to vendee, who agrees, as partial or entire consideration, to pay debts of vendor, creditor of vendor may enforce assumption agreement against vendee by suit in equity with proper pleadings and parties. Gerson v. Haley, 114 Ga. App. 606, 152 S.E.2d 654 (1966).
Action against party assuming debt no longer in equity.
- Suit upon a note against party assuming the indebtedness is not dismissible because it was brought in a court without equity jurisdiction. Jones v. Frances Wood Wilson Found., Inc., 119 Ga. App. 28, 165 S.E.2d 882 (1969).
Before the enactment of the 1949 amendment to this section, a suit in equity was required to assert a debt against the party assuming it, but now the action is not considered equitable. Rader v. H. Boyer Marx & Assocs., 142 Ga. App. 97, 235 S.E.2d 690 (1977) (see now O.C.O.G. § 9-2-20).
Contractual provisions were insufficient to create an intended third-party beneficiary status in primary lender.- See American Fletcher Mtg. Co. v. First Am. Inv. Corp., 463 F. Supp. 186 (N.D. Ga. 1978).
Fact that plaintiff may benefit by performance of subcontract does not make it a beneficiary of the subcontract as contemplated under this section, when the benefits provided did not originate on that contract but originated on the primary contract to which the plaintiff was a party. McWhirter Material Handling Co. v. Georgia Paper Stock Co., 118 Ga. App. 582, 164 S.E.2d 852 (1968).
Mere fact that an owner might benefit from a subcontractor's performance of a contract provision is insufficient to entitle the owner to claim a right to secure the enforcement of that provision when the subcontract indicates that it is solely for the benefit of the contractor and subcontractor. Walls, Inc. v. Atlantic Realty Co., 186 Ga. App. 389, 367 S.E.2d 278 (1988).
Stock purchase agreement to protect purchasers from double liability.- Contractual provisions in a stock purchase agreement whereby purchasers of corporation's stock guaranteed their pro rata shares of the outstanding debts of the corporation did not create an enforceable promise to pay outstanding insurance premiums to an insurance company as a third-party beneficiary since the intention of the parties was to protect the purchasers from incurring double liability on the corporation's outstanding debts, as well as the purchase price. Continental Cas. Co. v. Continental Rent-A-Car of Ga., Inc., 349 F. Supp. 666 (N.D. Ga.), aff'd, 468 F.2d 950 (5th Cir. 1972).
Contract between county and another party.
- No plaintiff may maintain action as third-party beneficiary based upon alleged breach of contract between county and another party. Miree v. United States, 242 Ga. 126, 249 S.E.2d 573 (1978).
No third-party beneficiaries to agreement.
- Trial court did not err by finding that an inmate was not a third-party beneficiary to the contract between the county sheriff's office and a medical provider because under the express terms of the contract, there were no third-party beneficiaries to the agreement. Graham v. Cobb County, 316 Ga. App. 738, 730 S.E.2d 439 (2012).
State employee receiving benefits under state health plan.
- State employee could not bring a breach of contract action against a managed healthcare company (MHC) that maintained a national PPO network of providers and the Georgia Department of Community Health (DCH) regarding a contract between DCH and the MHC under which the MHC managed a network of PPO network providers for DCH; the employee was not a third-party beneficiary of that contract. Mitchell v. Ga. Dept. of Cmty. Health, 281 Ga. App. 174, 635 S.E.2d 798 (2006).
"Potential minority subcontractor" not third-party beneficiary.
- Provision in contract between city and general contractor calling for minimum level of minority participation in the contract did not render company listed as a "potential minority subcontractor" in the bid a third-party beneficiary of the prime contract. Southeast Grading, Inc. v. City of Atlanta, 172 Ga. App. 798, 324 S.E.2d 776 (1984).
Action against club by spouse of member.
- Since it was clear that the spouse of a club member had no property rights in the club and could not be a third party beneficiary since the contract was not for the spouse's benefit, the spouse could not maintain an action against the club as the spouse lacked standing to do so. Bartley v. Augusta Country Club, Inc., 172 Ga. App. 289, 322 S.E.2d 749 (1984).
In personal injury cases, an injured party may not recover as a third-party beneficiary for failure to perform a duty imposed by a contract unless it is apparent from the language of the agreement that the contracting parties intended to confer a direct benefit upon the plaintiff to protect the plaintiff from physical injury. Armor Elevator Co. v. Hinton, 213 Ga. App. 27, 443 S.E.2d 670 (1994).
On-call doctor not liable.
- Patient could not rely on a contract between a doctor and a hospital to create a consensual relationship between the patient and the doctor since there was no evidence that the patient was an intended third party beneficiary of the contract with enforceable rights thereunder. Anderson v. Houser, 240 Ga. App. 613, 523 S.E.2d 342 (1999).
Municipal liability insurance contract.
- Members of the public were not third party beneficiaries of municipal liability insurance contracts voluntarily acquired by a city without legislative mandate and did not have the right to bring an action to reform the contract. Googe v. Florida Int'l Indem. Co., 262 Ga. 546, 422 S.E.2d 552 (1992).
Attorney in title certification case has duty to third-party beneficiary which may be enforced under O.C.G.A. § 9-2-20. Kirby v. Chester, 174 Ga. App. 881, 331 S.E.2d 915 (1985).
Attorney as third party beneficiary.
- When an attorney sued a former client's ex-spouse to enforce a lien on the former client's former marital residence, which was titled in the ex-spouse's name, the attorney was an unnamed third-party beneficiary of the separation agreement between the ex-spouse and the former client as the agreement provided for the satisfaction of liens against the parties to the agreement, and the attorney was a member of a relatively small group of those with liens against those parties. Northen v. Tobin, 262 Ga. App. 339, 585 S.E.2d 681 (2003).
Dissolved corporations.
- Insurance agency's motion for summary judgment was properly denied in declaratory judgment action since the agency did not assert that the agency had standing to sue as a third-party beneficiary of the insured's insurance policy under O.C.G.A. § 9-2-20(b). Ins. Agency of Glynn County, Inc. v. Atlanta Cas. Co., 255 Ga. App. 323, 565 S.E.2d 547 (2002).
Trial court erred in denying the seller's motion to dismiss the dissolved corporation's renewal action as that action was filed more than two years after the dissolved corporation was dissolved and applicable statutory law only gave the dissolved corporation two years from the time of dissolution to file suit, regardless of whether that suit was an original action or was a renewal action filed after the original action had been voluntarily dismissed. Deere & Co. v. JPS Dev., Inc., 264 Ga. App. 672, 592 S.E.2d 175 (2003).
Bank did not have standing as third party beneficiary of agreement between borrower and borrower's debtor.
- Under O.C.G.A. § 9-2-20(b), a bank was not a third party beneficiary of a guaranty agreement between the bank's borrower and a supplier, although the supplier agreed to deposit all funds owed to the borrower into the borrower's account at the bank. The agreement and letter between the borrower and the supplier did not show any intention that the bank be benefited. U.S. Foodservice, Inc. v. Bartow County Bank, 300 Ga. App. 519, 685 S.E.2d 777 (2009).
Car owner not third party beneficiary in contract between mechanic and garage.
- Car owner was not a third party beneficiary under O.C.G.A. § 9-2-20(b) of a repair contract between the owner's mechanic and a garage to which the mechanic took the car for additional advice and repairs regarding an overheating problem. Dominic v. Eurocar Classics, 310 Ga. App. 825, 714 S.E.2d 388 (2011).
Debtor has no standing to challenge assignment.
- Lower court correctly determined that the debtors lacked standing to challenge the assignment of the security deed to a bank because the security deed afforded the debtors no right to dispute the assignment as they were not third-party beneficiaries of the assignment as a whole and were not intended to directly benefit from the transfer of the power of sale. Ames v. JP Morgan Chase Bank, N.A., 298 Ga. 732, 783 S.E.2d 614 (2016).
Debtor lacked standing to challenge the assignment of the debtor's security deed by the bank to the new loan servicer because the debtor was neither a party to the assignment nor a beneficiary. Cooley v. Ocwen Loan Servicing, LLC, 729 Fed. Appx. 677 (11th Cir. 2018)(Unpublished).
Failure to show third party beneficiary status.
- Trial court did not err in granting a clinic's motion under O.C.G.A. § 9-11-12(b)(6) to dismiss for failure to state a claim as the patients' action failed to state a claim that the patients were entitled as third-party beneficiaries to sue for breach of the contract between the clinic and another medical provider to provide free dialysis treatment for one year after the clinic closed; the contract did not clearly show on the contract's face that the contract was intended for the benefit of the patients as required under O.C.G.A. § 9-2-20(b), and the contract plainly showed that there was no intent to confer third-party beneficiary status on existing clinic outpatients. Andrade v. Grady Mem'l Hosp. Corp., 308 Ga. App. 171, 707 S.E.2d 118 (2011).
Complaint Allegations Sufficient
Allegations in complaint sufficiently set out third party beneficiary right.
- Trial court erred in granting the defendant's motion to dismiss the plaintiff's claim for breach of contract because the allegations that the defendant demanded and received from the plaintiff an additional $3,850 for license and trophy fees in connection with the purchase of the safari arguably showed the flow of consideration directly from the plaintiff to the defendant for goods and services that the defendant allegedly failed to provide thus creating a third party beneficiary right for the plaintiff. Wright v. Waterberg Big Game Hunting Lodge Otjahewita (Pty), Ltd., 330 Ga. App. 508, 767 S.E.2d 513 (2014).
RESEARCH REFERENCES
Am. Jur. 2d.
- 59 Am. Jur. 2d, Parties, §§ 32, 140, 141, 148.
19 Am. Jur. Pleading and Practice Forms, Parties, § 3.
C.J.S.- 67A C.J.S., Parties, §§ 9 et seq., 50, 51, 57, 70, 71.
ALR.
- Action on implied contract arising out of fraud as within statutes of limitation applicable to fraud, 3 A.L.R. 1603.
Enforceability by the purchaser of a business, of a covenant of a third person with his vendor not to engage in a similar business, 22 A.L.R. 754.
Loss of profits as elements of damages for fraud of seller, as to quality of goods purchased for resale, 28 A.L.R. 354.
Right of beneficiary to enforce contract between third persons to provide for him by will, 33 A.L.R. 739; 73 A.L.R. 1395.
Right of third person to maintain action at law on sealed instrument, 47 A.L.R. 5; 170 A.L.R. 1299.
Actions at law between partners and partnerships, 58 A.L.R. 621; 168 A.L.R. 1088.
Liability of water company to private owner or insurer for breach of its contract with municipality to supply pressure for fire purposes, 62 A.L.R. 1205.
Right of third person to enforce contract between others for his benefit, 81 A.L.R. 1271; 148 A.L.R. 359.
Right of beneficiary to bring action under death statute where executor or administrator, who by the statute is the proper party to bring it, fails to do so, 101 A.L.R. 840.
Right of third person entitled to maintain an action at law on a contract between other parties, or to garnish indebtedness thereunder, to maintain a suit for its reformation, 112 A.L.R. 909.
Right of one who buys goods from or sells goods to department under a lease or license from proprietor of department store to hold the latter upon the contract, 123 A.L.R. 594.
Contract to induce promisee to enter into contractual or other relations with third person as enforceable by latter, his creditors or representatives, 129 A.L.R. 172.
Reconveyance to grantor of land previously conveyed by him in consideration of support of grantor and other persons by grantee, as affecting such other persons, 150 A.L.R. 412.
Suits and remedies against alien enemies, 152 A.L.R. 1451; 153 A.L.R. 1419; 155 A.L.R. 1451; 156 A.L.R. 1448; 157 A.L.R. 1449.
Rights and remedies of beneficiary after death of insured who had pledged policy to secure debt, 160 A.L.R. 1389.
Breach of assumed duty to inspect property as ground of liability for damage or injury to third person, 6 A.L.R.2d 284.
Trust beneficiaries as necessary parties to action relating to trust or its property, 9 A.L.R.2d 10.
Right of third person not named in bond or other contract conditioned for support of, or services to, another, to recover thereon, 11 A.L.R.2d 1010.
Suspension or expulsion from social club or similar society and the remedies therefor, 20 A.L.R.2d 344.
Suspension or expulsion from professional association and the remedies therefor, 20 A.L.R.2d 531.
Right of owner's employee, injured by subcontractor, to recover against general contractor for breach of contract between latter and owner requiring contractor and subcontractors to carry insurance, 22 A.L.R.2d 647.
Assignee's right to enforce lessor's covenant to renew or extend lease, 29 A.L.R.2d 837.
Tenant's capacity to sue independent contractor, as third-party beneficiary, for breach of contract between landlord and such contractor for repair or remodeling work, 46 A.L.R.2d 1210.
Power and standing of personal representative of deceased promisee to enforce a contract made for benefit of a third party, 76 A.L.R.2d 231.
Right of insurance agent to sue in his own name for unpaid premium, 90 A.L.R.2d 1291.
Mutual rescission of release of contract as affecting rights of third-party beneficiary, 97 A.L.R.2d 1262.
Right of child to enforce provisions for his benefit in parents' separation or property settlement agreement, 34 A.L.R.3d 1357.
Surveyor's liability for mistake in, or misrepresentation as to accuracy of, survey of real property, 35 A.L.R.3d 504.
Judgment in action on express contract for labor or services as precluding, as a matter of res judicata, subsequent action on implied contract (quantum meruit) or vice versa, 35 A.L.R.3d 874.
Attorney's liability, to one other than his immediate client, for consequences of negligence in carrying out legal duties, 45 A.L.R.3d 1181; 61 A.L.R.4th 464; 61 A.L.R.4th 615.
Discharge of debtor who makes payment by delivering checks payable to creditor to latter's agent, where agent forges creditor's signature and absconds with proceeds, 49 A.L.R.3d 843.
Similarity of ownership or control as basis for charging corporation acquiring assets of another with liability for former owner's debts, 49 A.L.R.3d 881.
Bailor's right of direct action against bailee's theft insurer for loss of bailed property, 64 A.L.R.3d 1207.
Right in absence of express statutory authorization, of one convicted of crime and imprisoned or paroled, to prosecute civil action, 74 A.L.R.3d 680.
Liability of security services company to injured employee as beneficiary of security services contract between company and employer, 75 A.L.R.4th 836.
Breach of assumed duty to inspect property as ground for liability to third party, 13 A.L.R.5th 289.
Enforceability of trial period plans (TPP) under the home affordable modification program (HAMP), 88 A.L.R. Fed. 2d 331.