Jacobs, Donges and Bigelow. The opinion of the court was delivered by Bigelow, J.A.D.
[5 NJSuper Page 197] This is an action for compensation for legal services rendered. The first count pleads an express contract; the second count, an implied contract. Judge Knight, in the County Court, directed a verdict for defendant and plaintiff appeals.
The defendant was involved in extensive litigation during the period 1930 to 1936. Her attorneys were the New York firm of Avery & Whiting, of which the senior member was Mr. Brainard Avery, the plaintiff's father. The plaintiff was admitted to the bar of New York at the end of 1930, was immediately employed by his father's firm and put to work on the defendant's business. In February, 1935, he resigned from Avery & Whiting and struck out for himself in a couple of offices that were part of or adjoined the suite of Avery & Whiting, and which they sublet to him. That firm, or Brainard Avery, continued in general charge of defendant's legal matters and plaintiff continued giving a great part of his time to them, just as he had before February.
The defendant has a son, Alex Sielcken, who had general charge of her business as her attorney in fact. He and plaintiff knew each other well and usually saw each other several times a week. About the time that plaintiff left the employ of Avery & Whiting, he told Alex that he was doing so and "that I would have to have some arrangement for compensation in these matters (defendant's litigation) if I was to continue." There were other conversations between them on the same subject, continuing into April, 1935, but what was said does not appear. On April 9th, Alex wrote plaintiff, speaking highly of his work on defendant's affairs and saying, "Your father has asked for an independent arrangement to you, and I am glad to enclose a copy of what has been worked out between him and me." The enclosure was a contract between Brainard Avery and defendant, in the form of a letter addressed to her and, at the foot, her acceptance endorsed by her son. Whether Brainard contracted on behalf of his firm, or for himself alone, is not certain and is immaterial. It is one paragraph of this letter on which plaintiff bases his action, arguing that it is a covenant by defendant of which he was a third party beneficiary. This paragraph reads:
"Albert Avery is overworking himself in your interests. It is important that his enthusiasm and interest in the heavy work he is doing, both in the Sielcken reference and in the Toledo litigation, be recognized by you. We suggest that you authorize us to carry his
time as a disbursement at the rate of $100 per week, beginning March 15th, to continue until the present proceedings have been submitted to the Surrogate for decision."
Plaintiff construes this as a promise by defendant to pay plaintiff at the rate of $100 a week. We do not. It might be construed as a promise by Brainard to pay plaintiff $100 a week, on which perhaps plaintiff could maintain an action against the personal representative of his father who is now deceased. The parties did not intend that plaintiff should be engaged by defendant either as an employee or as an independent contractor, or that defendant should pay plaintiff anything; they intended that defendant should pay Brainard Avery, in addition to the value of his services and the amount of his other out of pocket expenses, $100 a week to reimburse Brainard for the amount he paid or was supposed to pay plaintiff for such work on defendant's matters as his father might direct him to do. That is the meaning of the contract as we understand it.
The elder Avery, if his income dwindled, might default in paying the weekly sums of $100 to the plaintiff, unless the defendant, on her part, paid equal amounts as agreed to Brainard Avery, and in this sense we may say that plaintiff was a beneficiary of the contract. But he was only an "incidental beneficiary" without a right of action on the contract against defendant. A third party cannot maintain action on a contract where performance is due directly to the promisee and not to the third party. Rest. -- Contr. , § 174; Will. -- Contr. , § 402. If defendant breached the contract, Brainard Avery, the promisee, could recover but not his son. Furthermore, there is no evidence of any breach by defendant; she agreed to pay Brainard and is not shown to have defaulted.
The contract was made in New York and contemplated performance in that state. Substantive rights springing from the contract are measured by New York law. Hinkly v. Freick , 86 N.J.L. 281 (E. & A. 1914). The question whether a third party can sue on the contract is one of substantive right -- Has he a cause of action -- and not one of procedure -- How shall he enforce his cause? Our opinion
that the plaintiff has no cause of action on the contract seems to be supported by the New York cases to which counsel refer us. The more important of these are Lawrence v. Fox , 20 N.Y. 268 (1859); Seaver v. Ransom , 120 N.E. 639, 2 A.L.R. 1187 (1918); McClare v. Mass. Bonding, etc., Co., (N.Y.) , 195 N.E. 15 (1935); Filardo v. Foley Bros. (N.Y.) , 78 N.E. 2d 480 (1948); Morgan v. Ebco Mach. Corp. , 267 N.Y.S. 369 (App. Div. 1933).
In his second count, plaintiff alleges that at the special instance and request of defendant, he performed legal services for her of the value of $20,000. These are the same services already referred to. A few additional facts should be noted. Plaintiff was paid by Avery & Whiting on account of his services $500 on September 4 and $100 on December 9, 1935. He was never paid anything by defendant. In January, 1936, he rendered to her a bill for $3,450. Thereafter he continued working on defendant's matters until December, 1936. The following July, he gave Alex Sielcken an informal computation of the total amount due him, $7,350. Defendant leans heavily on the rule that the existence of an express contract excludes an implied contract. Voorhees v. Woodhull , 33 N.J.L. 494 (E. & A. 1869); Pericin v. Denburg's Modern Bakery , 130 N.J.L. 547 (E. & A. 1943). That rule has full effect only when the parties to ...