CONTRACTS - WILLS - THIRD PARTY BENEFICIARY CONTRACT AS TESTAMENTARY DISPOSITION

The defendant executed a bond and mortgage to one Catherine McCarthy Jackman. Subsequently the parties entered into an extension agreement wherein it was provided that in the event of the death of the mortgagee prior to the .maturity of the mortgage, the interest and principal were to be paid one-half to a brother of the mortgagee and one-half to the heirs of a deceased sister. After the death of the mortgagee prior to the maturity of the mortgage, the plaintiffs (the brother and heirs of the deceased sister) claimed a right to the payment of interest as third party beneficiaries. Held, the plaintiffs were not entitled to the payments because the provision in the extension agreement was testamentary in nature and not executed as a will.

McCarthy v. Pieret, 281 N. Y. 407, 24 N. E. (2d) 102 (1939).