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THE GREEN BAG
CONSTITUTIONAL LAW. (Unreasonable Searches — Witnesses — Privilege — Anti-Trust Act.) U. S. C. C. for S. D. of N. Y. — Two points of interest and importance in connection with the recent efforts to enforce the national anti-trust legislation are contained in the decision In re Hale, 139 Federal Reporter, 496. The first hold ing is to the effect that an inquisition before a grand jury to determine the existence of supposed violations of the anti-trust act is a "proceeding" within Act of Congress, February 19, 1903, pro viding that no person shall be prosecuted or subjected to any penalty for, or on account of any transaction, matter, or thing concerning which he may testify or produce evidence in any proceed ing under several statutes mentioned, including the anti-trust act. A point of possibly more importance is involved in the statement that a supoena duces tecum commanding the secretary and treasurer of a corporation supposed to have violated the anti trust act to testify and give evidence before the grand jury, and to bring with him and produce numerous agreements, letters, telegrams, reports and other writings described genetically and in effect, including all the correspondence and docu ments of the corporation, originating since the date of its organization, to which nineteen other named corporations or persons were parties; for the purpose of enabling the district attorney to . establish a violation of such act on the part of the witness' principal, constituted an unreasonable search and seizure of papers, prohibited by Federal Constitution, Amendment 4. CONTRACTS. (Consideration — Parties.) N. Y. S. C. — The validity and enforceability of con tracts of a public service corporation is the subject of consideration in Wright v. Glen Telephone Company, 95 N. Y. Supp. 101. Plaintiff in com mon with many others, had signed a petition for the granting of a franchise to a telephone com pany on the condition that the company should furnish service at a certain rate. Pursuant to this petition, a franchise was granted and accepted by the company in writing, by which franchise and acceptance the company was required to furnish service at the rate prescribed. Plain tiff was held to be a party to the contract and its consideration so as to be entitled to sue and to enforce performance of its provisions as to rates of charge for service. The validity of the contract was attacked on the ground that the New York Transportation Law gave to telephone companies the right to use streets so that it received nothing in addition by the franchise, wherefore its contract as to rates was without consideration. The owever, is of the opinion that as the
statutes gave such companies no rights in public parks or other public places outside of the streets, and did not deprive the city of the right to deter mine whether lines shall be run upon poles or in subways, the city's permission to erect poles and string wires in the streets and other public places in return for which the company obligated itself to furnish service at certain rates, was supported by a sufficient consideration. This case is interesting because in its opinion the court casts doubt upon the New York view that a gift or sole beneficiary, one to whom the promisee owed no duty to procure him the bene fit in question, cannot recover. This sort of case is to be discriminated from that of a payment beneficiary, one to whom the promisee does owe such a duty. New York, of course, allows him to recover. Lawrence v. Fox, 20 N. Y. 268. But the gift beneficiary has been denied recovery. Townsend v. Rockham, 143 N.. Y. 516. While in the case of a payment beneficiary there is no reason for making an exception to the rule that only parties to a contract can sue on it (Williston, 15 Harv. Law Rev. 775 et seq.) in the case of a gift beneficiary to make an exception seems proper. This is so, because there is no other method by which the contract can be adequately enforced. If the promisor refuses to perform neither a suit by the promisee in which he could recover nominal damages, nor a rescission for the breach in which he could recover back merely the consideration he gave for the promise, nor a suit for specific performance, since the promise of the promisor might be one which equity would not specifically enforce, as an agreement to labor for the beneficiary, is an adequate remedy. The best solution is to treat the transaction as a gift to the beneficiary. Delivery is required for a gift. But the making of the contract may be considered as equivalent in formality, and, there fore, equally likely to make certain that the inten tion to give was real, the purpose in requiring delivery. The gift beneficiary should, therefore, be allowed to sue on the contract. The New York courts have not kept strictly to their rule. Relatives who were gift beneficiaries have been allowed to sue on the argument that the promisee owed them some vague non-legal duty to aid them. Buchanan v. Tilden, 158 N. Y. 109. And where the State made a contract by which the publisher of the New York reports should sell them to other publishing houses at a fixed price, it was held that such other publishers could recover on it. Little v. Banks, 85 N. Y. 281. That seems the same in principle as the present case. Gift beneficiaries may recover on the contract in most American jurisdictions, 15 Harv. Law. Rev. 780, 804. Clarke B. Whittier.
