Page:Harvard Law Review Volume 8.djvu/521

RECENT CASES. 505 consititutional provisions prevail, one may advance the query whether this "domestic policy " is really adopted by the people or by the court. Cooley on Taxation, 2d ed., pp. 623, 634-636, Cooley, Const. Lim., 6th ed-, pp. 612, 623, 624. Contracts — Offer and Acceptance. — Plaintiff wrote to defendant, making an offer definite in its terms, and defendant replied accepting the offer. Held, that the letters made a binding contract, although it was understood that a formal agreement should afterwards be drawn up and signed by the parties. Sanders v. Pottlitzer Bros. Frittt Co., 144 N. Y. 209. See Notes. Contracts — Ousting Courts of Jurisdiction — Benefit Societies. — A rule of a benefit society, to which members subscribe when admitted, provided that the executive committee shall have power to pass on all death claims, and that its decision after a hearing shall be binding on the claimant unless an appeal is taken to the high- est council of the order, that the decision of the appeal shall be final, and that no suit in law or equity shall be commenced by any member or beneficiary against such coun- cil. Held, such a provision is not invjilid as against public policy. Fillmore v. Great Camp of Kiii^^hts of Maccabees et at., 61 N. W. Rep. 7S5 (Mich.). Unless a different principle applies to provisions of this kind by benefit societies, and provisions as to arbitration in general, the case would seem to be wrong according to the strict English rule and that laid down in Massachusetts. Reed v. Fire dr" Marine Ins. Co., 13S Mass. 572. And no such difference does exist, but the same rules seem to govern both. Bacon on Benefit Societies and Life Insurance, § 94, and cases cited. This being the case, such a provision as that above, which provided for decision by a private tribunal, not only as to the amount of damages, but also as to whether any action lies, would seem to be bad, at least in Massachusetts, and in England before the Act of 14 Vict. c. 138 was passed, allowing such societies to settle their disputes by their own rules and regulations. Contracts — Suit bv a Beneficiary. — Defendant promised a corporation to pay within thirty days certain debts owed l)y them to plaintiff and others, in considera- tion of which the corporation promised t3 issue to defendant one share of its stock. Held, that plaintiff, on defendant's failure 'o perform, cannot maintain an action against defendant. Washhum v. Interstate Investment Co., Pac. Rep. 620 (Oregon). This decision seems entirely sound. Plaintiff being a stranger to the contract has no privity, and can only sue successfully by making out a case which will bring hira within some of the exceptions to the rule that strangers to a contract cannot sue on it. He does not show that defendant has assets in his hands which in equity belong to him, nor does he show that he is the sole beneficiary, for the corporation were benefited by the contract they made with defendant, by which their debts were to be paid, and they could have sued and recovered more than nominal damages. Why allow two suits then."* The United States Supreme Court lay down these exceptions to the rule that a stranger to a contract cannot sue thereon, in iVal. Bank v. Grand Lodge, 98 U. S. 123, where at page 124 they say, " One of them and by far the most frequent one ia the case where, under a contract between two persons, assets have come to the promisor's hands or under his control, which in equity belong to a third person. In such a case it is held that the third person may sue in his own name. But then the suit is founded rather on the implied undertaking the law raises from the possession of the assets, than on the express promise. Another exception is where the plaintiff is the beneficiary solely interested in the promise, as where one person contracts with another to pay money or deliver some valuable thing to a third. But where a debt already exists from one person to another, a promise by a third person to pay such debt, being jirimarily for the benefit of the original debtor, and to relieve him from liability to p.ay (there being no novation), he has a right of action against the promisor for his own indem- nity; and if the original creditor can also sue, the promisor would be liable to two sep- arate actions, and therefore the rule is that the original creditor cannot sue." Some courts recognize more exceptions, and some, as Massachusetts, only the first. Corporations — Interest of Stockholders in Property belonging to a CoKPORATio.v. — Provisions in policies of insurance, that the policies shall be void if the interest of the insured is not the sole and unconditional ownership of the property described in the policies, or if that interest is not truly stated to the companies or in the policies, held, a complete defence to actions by the sole stockholders of a corpora- tion, upon policies issued to themselves, as owners, upon property belonging to the corporation. A sole stockholder is not the owner of corporate property, nor is his in- terest like that of an owner. All he is entitled to is a share in the profits while the corporation exists, and od its dissolution a share in any assets which remain after