a class by themselves, and but little reference is made in them to the general law of contracts. Presumably everywhere a beneficiary to whom the insurer has promised the insured that the insurance money shall be paid is given a right to enforce the policy, and generally by a direct action. This result has been reached in England" and Massachusetts 91 by statute, but in most states without the aid of a Statute.92 Where the policy reserves to the insured a right to change the beneficiary, there is a defeasible vested interest in the latter.93

§ 370. Receipt of property as consideration for a promise to make a payment.

Another common illustration arises on these or similar facts: A parent gives property to a son, who upon receiving it promises to make specified payments to daughters or others either at once or upon the death of the donor. There is properly no trust or even equitable charge, because it is contemplated that the son shall deal as he sees fit with the property transferred to him and pay the beneficiaries from any source he chooses. Courts are rightly almost universally unwilling to deny the

90 45 & 46 Vict., c. 75, § 11; Mass. Stats. 1887, c. 214, § 73; 1894, c. 225. (See Cleaver v. Mut. Reserve Fund Life Assoc., [1892] 1 Q. B. 147.

91 Nims v. Ford, 159 Mass. 575, 35 N. E. 100; Wright v. Vermont Life Ins. Co., 164 Mass. 302, 41 N. E. 303.

92 See, e. g., Mutual Benefit L. Ins. Co. v. Swett, 222 Fed. 200, 137 C. C. A. 640, Ann. Cas. 1917 B. 298; Johnson v. New York L. Ins. Co., 56 Colo. 178, 138 Pac. 414, L. R. A. 1916 A. 868; Neary v. Metropolitan L. Ins. Co. (Conn.), 103 Atl. 661; Perry v. Tweedy, 128 Ga. 402, 57 S. E. 782, 119 Am. St. Rep. 393, 11 Ann. Cas. 46; Mutual Life Ins. Co. v. Devine, 180 Ill. App. 422; Mutual Life Ins. Co. v. Guller (Ind. App.), 119 N. E. 173; Townsend v. Fidelity & Casualty Co., 163 Ia. 713, 144 N. W. 574, L. R. A. 1915 A. 109; Filley v. Illinois Life Ins. Co., 91 Kan. 220, 137 Pac. 793, 93 Kans. 193, 144 Pac. 257, L. R. A. 1915 D. 130, 134;

Breard v. New York Life Ins. Co., 138 La. 774, 70 So. 799; Martin v. Ætna L. Ins. Co., 73 Me. 25; Metropolitan Ins. Co. v. Clanton, 76 N. J. Eq. 4, 73 Atl. 1052; In re Gebert, 95 N. Y. Misc. 477, 160 N. Y. S. 782; Mutual Benefit L. Ins. Co. v. Cummings, 66 Or. 272, 126 Pac. 982, 133 Pac. 1169, 47 L. R. A. (N. S.) 252, Ann. Cas. 1915 B. 535. Marquet v. Etna Life Ins. Co., 128 Tenn. 213, 159 S. W. 733, L. R. A. 1915 B. 749, Ann. Cas. 1915 B. 677. See also infra, § 396, n. 8, and numerous cases, collected in Cooley, Ins. Briefs, p. 3755. Cf. cases of fraternal beneficiary societies, infra, § 396a.

93 Roberts v. Northwestern &c. Co., 143 Ga. 780, 85 S. E. 1043; Indiana &c. Life Ins. Co. v. McGinnis, 180 Ind. 9, 101 N. E. 289, 45 L. R. A. (N. S.) 192; Mutual Life Ins. Co. v. Guller (Ind. App.), 119 N. E. 173, 177; Holder v. Prudential Ins. Co., 77 S. C. 299, 57 S. E. 853.

beneficiaries a remedy in such a case.94 Even in England there are cases that have never been overruled, in which a beneficiary was allowed to recover in an action of debt against a devisee whose devise was left upon the condition that he should make a payment to the beneficiary. If the devisee accepts the gift he is personally liable to perform the duty which he thereby assumes, and his liability is not restricted to the value of the property he has received.95 So far as this question of personal liability is concerned these cases present quite as much difficulty in principle as the cases where the gift is made inter vivos.

§ 371. No distinction if promise based on other valid consideration.

In most jurisdictions no distinction is made and recovery is equally allowed when the promise is based on valid consideration other than a transfer of property; for instance, services or forbearance of a claim.96

§ 372. Bonds to secure performance of building contracts or other duty.

It is a common stipulation in a building contract that the contractor will pay all bills for labor and materials. In most cases the fulfilment of this promise by the contractor operates to discharge a liability of the owner of the building, whose building would be liable to satisfy the liens given by the law to workmen and materialmen. It cannot, therefore, be inferred that the promisee requires the promise in order to benefit such creditors of the contractor. The natural inference is that his object is to protect himself or his building. When, however, the owner of the building is a municipality, or county, or State such an inference cannot so readily be justified, for the laws give no liens against the buildings of such owners. In such cases if the stipulation can be regarded as the result of more than the accidental insertion of a provision common in building contracts without reflection as to its necessity, it must be supposed that the object was to benefit creditors of the con

96 Allen v. Davison, 16 Ind. 416; Marlett v. Wilson, 30 Ind. 240; Strong v. Marcy, 33 Kan. 109, 5 Pac. 366; Clarke v. McFarland's Exec., 5 Dana, 45; Benge v. Hiatt's Adm., 82 Ky. 666, 56 Am. Rep. 912; Felton v. Dickinson, 10 Mass. 287 (overruled by Marston v. Bigelow, 150 Mass. 45, 22 N. E. 71, 5 L. R. A. 43); Todd v. Weber, 95 N. Y. 181, 47 Am. Rep. 20; Buchanan v. Tilden, 158 N. Y. 109, 52 N. E. 724, 70 Am. St. Rep. 454; Whitcomb v. Whitcomb, 92 Hun. 443, 36 N. Y. S. 607; Babcock v. Chase, 92 Hun, 264, 36 N. Y. S. 879.

See also Lawrence v. Oglesby, 178

Ill. 122, 52 N. E. 945; and see cases cited supra, § 368.

But in Pennsylvania, though the promise is perhaps enforceable by the beneficiary when the consideration is the transfer of property, it is not if the consideration is anything else. Edmundson v. Penny, 1 Barr, 334, 44 Am. Dec. 137. And such is the law of Oregon. Weinhard v. R. R. Thompson Est. Co., 242 Fed. 315; Washburn v. Interstate Investment Co., 26 Oreg. 436, 36 Pac. 533, 38 Pac. 620; Brower Lumber Co. v. Miller, 28 Oreg. 565, 43 Pac. 659, 52 Am. St. 807.

tractor. This supposition becomes a certainty when the legislature in view of litigation in the courts in regard to the matter enacts that all building contracts made by towns or counties shall contain such a stipulation. Creditors have in some States been allowed not only to take advantage of the promise but to sue the contractor and his sureties upon a bond given by him to secure the performance of his contract.97 Similarly a bond given by a liquor dealer to a municipality to ensure performance by him of the requirements of law has been held enforceable by individuals injured by his failure to observe those requirements.98 This result can hardly be supported on any other theory than that the bonds are statutory obligations and that the statute though not so providing expressly is to be construed as giving not simply the municipality but also individuals the

" King v. Downey, 24 Ind. App. 262, 56 N. E. 680; Baker v. Bryan, 64 Ia. 561, 21 N. W. 83; Des Moines Bridge Works v. Marxen, 87 Neb. 684, 128 N. W. 31 (but see Hunt v. King, 97 Ia. 88, 66 N. W. 71); St. Louis v. Von Phul, 133 Mo. 561, 34 S. W. 843, 54 Am. St. Rep. 695 (overruling Kansas City Sewer Pipe Co. v. Thompson, 120 Mo. 218), 25 S. W. 522; Devers v. Howard, 144 Mo. 671, 46 S. W. 625; Glencoe Lime Co. v. Wind, 86 Mo. App. 163; Sample v. Hale, 34 Neb. 220, 51 N. W. 837; Lyman v. City of Lincoln, 38 Neb. 794, 57 N. W. 531; Doll v. Crume, 41 Neb. 655, 59 N. W. 806; Korsmeyer Co. v. McClay, 43 Neb. 649, 62 N. W. 50; Kaufmann v. Cooper, 46 Neb. 644, 65 N. W. 796; Hickman v. Layne, 47 Neb. 177, 66 N. W. 298; King v. Murphy, 49 Neb. 670, 68 N. W. 1029; Rohman v. Gaiser, 53 Neb. 474, 73 N. W. 923; Pickle Marble Co. v. McClay, 54 Neb. 661, 74 N. W. 1062; Gastonia v. McEntee-Peterson Co., 131 N. C. 363, 42 S. E. 858; Baker City Mercantile Co. v. Idaho Pipe Co., 67 Or. 372, 136 Pac. 23. Contra, Jefferson v. Asch, 53 Minn. 446, 55 N. W. 604, 25 L. R. A. 257, 39 Am.

St. Rep. 618; Union Ry. Storage Co. v. McDermott, 53 Minn. 407, 55 N. W. 606; Buffalo Cement Co. v. McNaughton, 90 Hun, 74, 35 N. Y. S. 453, 156 N. Y. 702, 51 N. E. 1089; 157 N. Y. 703, 52 N. E. 1123; Parker v. Jeffery, 26 Oreg. 186, 37 Pac. 712; Brower Lumber Co. v. Miller, 28 Oreg. 565, 43 Pac. 659, 52 Am. St. Rep. 807; Lancaster v. Frescoln, 203 Pa. 640. See also Montgomery v. Rief, 15 Utah, 495, 50 Pac. 623, and 71 Cent. L. Journal, 429.

An action on the bond presents the difficulty that the creditors who recover not only are not the promisees, but are not the persons who are to receive payment. The promise is to pay the penalty of the bond, not to the creditors, but to the town or county. This difficulty is not much alluded to in the cases. See, however, Jefferson v. Asch, and Buffalo Cement Co. v. McNaughton, supra. In some of the decisions where recovery was allowed, the result was due to statutes.

98 Koski v. Pakkala, 121 Minn. 450, 141 N. W. 793, 47 L. R. A. (N. S.) 183; Lynch v. Brennan, 131 Minn. 136, 154 N. W. 795, L. R. A. 1916 E. 269.

right to enforce it. In some jurisdictions statutes do expressly so provide.99

§ 372a. Contracts of public service corporations.

A public service corporation frequently enters into a contract with a municipality for the performance of acts in which individual members of the municipality are interested and when a breach of the contract inflicts injury on such an individual the question arises whether he may maintain an action or whether the right is solely in the municipality. Three situations may be distinguished here: (1) The public service corporation undertakes contractually to perform duties which would, in any event, attach to it by virtue of its public profession, though perhaps the extent of the duty would not be exactly defined except for the contract; (2) The performance undertaken is not a duty imposed by law upon the corporation or upon the municipality, but finds its only reason for existence in the contract with the municipality. (3) The municipality is under a legal duty to the public to perform the acts which the corporation undertakes on its behalf. In the first case the corporation is liable to a member of the public for violation of the duty.1 A common carrier is bound on payment of a reasonable charge to perform its functions to every member of the public who may make application. What is a reasonable charge may depend upon the terms upon which a franchise was granted and accepted or upon the provisions of a contract with a municipality. If a water company owes a public duty to maintain its service or to maintain a certain pressure of water, a violation of that duty entitles an individual injured thereby to recover appropriate damages.2 So a water company 3 or a gas company or a

99 See Guaranty Co. v. Pressed Brick Co., 191 U. S. 416, 427, 48 L. Ed. 242, 24 Sup. Ct. 142; Hill v. American Surety Co., 200 U. S. 197, 50 L. Ed. 437, 26 S. Ct. 168; Mankin v. LudowiciCeladon Co., 215 U. S. 533, 54 L. Ed.

Pond v. New Rochelle Water Co., 183 N. Y. 330, 76 N. E. 211, 1 L. R. A. (N. S.) 958.

3

315, 30 S. Ct. 174; United States Fidelity Co. v. Bartlett, 231 U. S. 237, 58 L. Ed. 200, 34 S. Ct. 88.

1 See Wyman Pub. Serv. Corp., §§ 330 et seq.

2 Guardian Trust &c. Co. v. Fisher,

4 Farnsworth v. Boro Oil & Gas Co., 216 N. Y. 40, 109 N. E. 860.