LETTERS OF CREDIT 15 therefore have tried not only to find better ways of treating genuine letters of credit, but have shown some tendency to turn guaran- tees into letters of credit in the supposed interest of security of mercantile transactions. As a basis for discussing our third, or contract-for-benefit-of- third-party theory, we may take the case of Carnegie v. Morrison.^ Here one Oliver, the Boston agent of the defendants, a firm of bankers in London, wrote as follows : — "Messrs. Morrison, Cryden & Company, London: Mr. John Bradford, of this City, having requested that a credit may be opened with you for his account, in favor of Messrs. D. Carnegie and Company. of Gottenburg, for three thousand pound sterling, I have assured him that the same will be accorded by you on the usual terms and conditions." This letter was delivered to Bradford, but the bankers were notified that the letter was written and would be forwarded by Bradford to Carnegie and Company with a request for credit. This might have been treated as an offer by the defendant ad- dressee to Carnegie and Company and accepted by them when they gave credit to Bradford. Counsel for defendants argued that it was only a contract between defendants and Bradford that the former would give the latter credit, so that the plaintiffs were not parties to it and could not sue on it. Answering this argument, Shaw, C. J., said: "He (Bradford) had funds either in cash or credit with the defendants and entered into a contract with them to pay a sum of money for him to the plaintiffs. . . . He gave the plaintiffs notice of what he had done and sent them the instrument as authentic evidence of the fact. They assented to and affirmed it as an act done in their behalf and gave the defendants notice thereof and conformable to the terms of the letter of credit drew their bills on the letter of credit. The refusal to accept was a breach of the promise thus made. ... It would be vain to say that this promise was not made for the benefit or (according to the terms of some of the cases) for the interest of the plaintiffs." This looks very much like a theory of a contract between the issuer and holder for benefit of addressee. But such a theory would not ^ 2 Met. (Mass.) 381 (1841). See also on "right of third party to sue," 25 L. R. A. 257, note; Franklin Bank of Baltimore v. Lynch, supra.
