5 Wend. 414 | Court for the Trial of Impeachments and Correction of Errors | 1830
The following opinions were pronounced :
It is a well settled rule of the commercial law of this country, and of most of the nations of Europe, except England, where it has recently been abolished by statute, that an unconditional promise in writing to accept a bill of exchange, if made within a reasonable lime before ór after the date of the bill, and describing the same in terms not to be mistaken, is a virtual acceptance thereof, in favor of any person to whom such promise has been shown, and who has received the bill for a valuable consideration on the faith of such promise. The question in this case is whether Greele’s letter of the 9th of February, 1827, was an unconditional promise to accept such a bill as was drawn by Stone, and endorsed by Parker, on the 11th of the same month.
If the letter was an absolute and unconditional promise to accept the bill, the drawee could not, as against a third party who had received or endorsed the bill.on the faith of that promise, show by any extrinsic evidence that he did not intend to accept the bill until certain conditions were complied with. The circuit judge, by deciding that the letter contained an absolute promise to accept, necessarily precluded the defendant from giving any evidence to alter the legal effect of that promise. But as the letter was only a conditional acceptance, referring to some other letter or paper for the terms on which the drawee consented to become the accept- or of the bills to be drawn, it was incumbent on Parker to show what those terms were, and that they had been complied with.
Suppose in this case the terms were as stated in the second count of the plaintiff’s declaration, which probably was the fact; the case would stand thus: Greele has al
Again ; if the plaintiff had shown what the proposed terms were, and that they had been complied with, I do not think the drawee was by his promise bound to accept such a bill as was drawn in this case. The legal effect of an agreement to accept for $2500 at 3 and 4 months, is to accept for the one half at 3, and for the residue at 4 months. I should also think that among merchants an agreement to accept at 3 and 4 months would be understood that length of time, after the presentment of the bill, and not from its date. The supreme court say the longest time is most beneficial to the acceptor; and therefore a draft for the whole amount at four months was a compliance with the terms of the authority to draw. If that principle is correct, it would seem to follow that the bill should have been so drawn as to give the drawee 3 and 4 months from the time of presentment before it became payable. But in cases of this kind I do not think we are at liberty to speculate upon what would probably be most beneficial to the acceptor. If an acceptance was always founded upon funds in the hands of the drawee it might be no disadvantage to him to have the day of payment postponed ; ‘but it is well known that a large proportion of our inland bills of exchange are accommodation paper, accepted on the
I think the decision of the court below was wrong, and should be reversed,
The question appears to have been settled by numerous decisions, that a letter promising to accept a bill of exchange, describing it in terms sufficiently plain to be understood, shewn to a person as the authority upon which a bill is drawn and accepted by him on the credit of such letter, is a virtual acceptance and binding upon the waiter. Coolidge v. Payson, 2 Wheat. 66. Goodrich v. Gordon, 15 Johns. R. 6. Johnson v. Collings, 1 East, 98. Milne v. Priest, Chitty on Bills, 5. An authority to draw bills is virtually an acceptance of any bills drawn in conformity to it. Banorgee v. Hovey, 5 Mass. R. 11.
The reason of the rule, as I apprehend, is, that without it much embarrassment would be thrown in the way of commercial transactions, as a knowledge that a draft will be accepted is often of the utmost importance to the drawer in assisting the negotiation of his bills of exchange ; and if the promissor was not bound by what he had written, extensive frauds might and no doubt would be practised, under the guise of these written engagements; in fact the rule prevents frauds, and accommodates the mercantile transactions of the country.
The only question which can possibly arise in the case under consideration is, whether the letter written by Greele amounted to an acceptance, within the rule as established by the courts. The words of the engagement are, “ I have no objection to accept for you, at 3 and 4 months, for twenty five hundred dollars, on the terms you propose.” When a person is requested to perform an act, and in answer stales that he has no objection to perform it, the only inference that can be drawn from the answer is that he will perform ; and in my view, therefore, the words of the letter were sufficiently explicit to induce the defendant in error to consider them as a promise to accept for the specified amount.
It was objected also that the authority to draw was at 3 and 4 months in two bills, while the bill in question was drawn at 4 months and for the whole amount. The authority was to draw for $2500, and the difference is not perceived between a draft of two bills amounting together to $2500, and one bill of that amount. If the authority to draw and the promise to accept was binding for two, it must be so for one; especially as the one draft was on more favorable terms for the acceptor than that mentioned in the letter, which authorized drafts at three and four months, equal to three and a half months, while the draft drawn was four months.
I am of opinion, therefore, that the judgment of the court below was correct and ought to be affirmed.
Parker, the plaintiff below, was a voluntary endorser of the bill in question, without benefit to himself, to enable Daniel H. Stone, the drawer, to obtain the cash at the bank. The letter of Greele was shewn to Parker at the time the bill was drawn and endorsed, and no doubt was endorsed as well as discounted on the credit of Greele.
Although doubts were expressed by Chief Justice Kent, in McEvers v. Mason, 10 Johns. R. 214 to 216, whether an agreement to accept a bill thereafter to be drawn would amount to an acceptance, or could be enforced by the en
The letter of Greele is a virtual agreement to accept to the amount of $2500 at 3 and 4 months, and the moment the bill was drawn and endorsed became binding upon him. It amounts to an absolute agreement unexplained ; and if he wished to shew it a conditional one, it was his business to have produced the letter of Stone, or to have proved what the condition was.
The theory in regard to bills of exchange is, that the acceptor or drawee has funds in his hands belongingto the drawer, and it is on the credit of these funds that the bill is drawn. Chitty on Bills, 2, 3. 1 T. R. 406, &c. 3 id. 182. Unexplained, we must presume in the present case that it was drawn upon funds.
The bill being drawn at 4 months, the longest period, instead of 3 and 4 months, was for the benefit of Greele, who held the funds, or gave' credit to the drawer; and is not to be objected to on that account, especially as he did not object or offer to prove that he was without funds. The judgment must be affirmed.
On the question, Shall this judgment be reversed 1 the members voted as follows :
For affirmance—Senators Allen, Armstrong, Beardsley, Benton, Boughton, Bronson, Conklin, Deitz, Gere, McMartin, Rexford, Throop, Todd, and Warren—14.
For reversal—The Chancellor, and Senators Mather, Maynard, McCarty, McLean, Oliver, Sherman, and Wheeler—8.
Whereupon the judgment was affirmed.