DETROIT BANK & TRUST CO. V. CHICAGO FLAME HARDENING CO.
541 F.Supp. 1278 (N.D. Ind. 1982)
NATURE OF THE CASE: This was an action for a breach of contract. Detroit (P) sought to
enforce terms of widow's resolution for benefit of its ward with P contending there was
failure to expressly reserve right to rescind, a presumption of acceptance for donee
beneficiary, and ward's mental condition precluded earlier assertion of her rights as means
of acceptance.
FACTS: Scott's husband entered into an agreement with other shareholders of Flame (D)
that their surviving spouses would receive monthly salary payments for 15 years or until the
surviving spouse died. The principals subsequently rescinded that agreement. Scott's husband
died and her guardian, Detroit Bank (P), sued to recover the stipend. P argued that no
modification or rescission could occur without the consent of the wife as a third party
beneficiary. D claimed that Scott had not changed her position in reliance on that contract.
D contended that the contract did not preclude modification, and Scott had not changed her
position in reliance on it.
ISSUE:
RULE OF LAW:
HOLDING AND DECISION:
LEGAL ANALYSIS:
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