Hamill v. Maryland Casualty Co.
United States Court of Appeals for the Tenth Circuit
209 F.2d 338 (10th Cir. 1954)
Gunnell Construction Company (defendant) agreed that Hamill (defendant) would advance 10% of the cost of any construction contracts Gunnell entered in exchange for 10% of net profits. Using this contract to show financial stability, Gunnell obtained a performance bond from Maryland Casualty Co. (plaintiff) for a school construction project. When Gunnell ran into financial trouble, Hamill nonetheless demanded and received repayment before all project bills were paid. Maryland Casualty then had to pay Gunnell's outstanding bills to satisfy its bond obligations, and sued Hamill and Gunnell for reimbursement. The district court found Maryland Casualty was a third-party beneficiary of the Hamill-Gunnell contract and that Hamill breached it by demanding early repayment. Hamill appealed.
Whether a third party may sue and recover upon a valid contract in which it has a beneficial interest, even though it is not explicitly named as a beneficiary in the contract.