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"a bill before it is drawn is deemed an actual acceptance in favor "of every person who, upon the faith thereof, receives the bill for "value." 33 This provision follows as a natural consequence of the rule that an acceptance by a separate instrument is binding upon the acceptor in favor of the person who, on the faith thereof, receives the bill for value.3 The former English doctrine was that the promise to accept, given before the bill was made, amounted to an acceptance. But this doctrine was afterward qualified so that a person who was not induced to take the bill by the promise to accept could not avail himself of the promise.36 The rule in England now seems to be that a written or verbal promise to accept a bill which does not exist is not equivalent to an acceptance;37 but the written or verbal promise to pay an existing bill is a valid acceptance and will bind the person who gives Where a general promise to accept is issued by a person or by a bank, intended to be shown to third persons for the purpose of giving credit to bills of exchange, it constitutes a letter of credit and effectually binds the promisor to pay all bills drawn in conformity therewith, even without a formal acceptance.39

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b. General rule.-The leading American case on this subject is that of Coolidge v. Payson,40 where the leading English cases were carefully reviewed by Chief Justice Marshall, and he stated the rule to be, "That a letter written a reasonable time before or after the date of the bill of exchange, describing it in terms not to be mistaken, and promising to accept it, is, if shown to the person who afterward takes the bill on the credit of the letter, a

Garretson, 51 Fed. 167; Fairchild v.
Feltman, 33 Hun (N. Y.), 398.

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36. Milne v. Prest, 4 Campb. (Eng.) 393, in which Gibbs, Ch. J., said: "A In the case of Clarke v. Cock, 4 promise to accept not communicated East (Eng.), 57, 71, Lord Ellen- to the person who takes the bill does borough said: It may be for the not amount to an acceptance; but, if convenience of mercantile affairs that the person be thereby induced to take the bill may be accepted by a collateral a bill, he gains a right equivalent to writing, without the bill itself coming an actual acceptance, against the to the actual touch of the acceptor, party who has given the promise to which would sometimes create great accept." delay."

33. Neg. Inst. L. (N. Y.), § 223. For the same section in statutes of other States see Appendix.

34. Neg. Inst. L. (N. Y.), § 222. See also preceding section.

35. Byles on Bills (16th ed.), 260; Pillans v. Van Microp, 3 Burr. (Eng.) 1663; Pierson v. Dunlop, Cowp. (Eng.) 571; Mason v. Hunt, Doug. (Eng.) 284, 287.

37. Johnson V. Collings, 1 East (Eng.), 98; Bank of Ireland v. Archer, 11 M. & W. (Eng.) 383.

57.

38. Clarke v. Cock, 4 East (Eng.),

39. Byles on Bills (16th ed.), 111; In re Agricultural Bank, L. R., 2 Ch. (Eng.) 391. See also § 18, ante.

40. 2 Wheat. (U. S.) 66, 4 L. Ed. 185.

virtual acceptance binding the person who makes the promise." This rule has been universally adopted by the courts in all the States and may be considered as a generally accepted doctrine in this country.11

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c. Form and requisites of promise. The promise need not be expressed in any particular form. It has, however, been generally held that it should so describe the bill to be drawn as not to permit any mistake in its identification.12

41. Letter of credit promising to accept bills of exchange, see the following cases:

United States.- Townsley v. Sumrall, 2 Pet. 181, 7 L. Ed. 386; Boyce v. Edwards, 4 Pet. 111, 7 L. Ed. 799; Wildes v. Savage, Fed. Cas. No. 17,633; Bayard v. Lathy, Fed. Cas. No. 1,131, 2 McLean, 462; Cassel v. Dows, Fed. Cas. No. 2,502, 1 Blatchf. 335.

Alabama.- Kennedy v. Geddes, 8 Port. 263, 33 Am. Dec. 289.

Illinois. Second Nat. Bank v. Dieffendorf, 90 Ill. 396; Nelson v. Chicago First Nat. Bank, 48 Ill. 36, 95 Am. Dec. 510.

Indiana.- Beech v. State Bank, 2

Ind. 488.

Iowa.- Lindley v. Waterloo First Nat. Bank, 76 Iowa, 629, 41 N. W. 381, 14 Am. St. Rep. 254.

95.

Kentucky.- Vance v. Ward, 2 Dana,

Louisiana.-Carrollton Bank v. Tayleur, 16 La. 490, 35 Am. Dec. 219.

Maine.- Plummer v. Lyman, 49 Me. 229; Scott v. McLellan, 2 Me. 199. Massachusetts.- Putnam Nat. Bank v. Snow, 172 Mass. 569, 52 N. E. 1070; Central Savings Bank v. Richards, 109 Mass. 413; Murdock v. Mills, 11 Metc. 5; Mayhew v. Prince, 11 Mass. 55; Storer v. Logan, 9 Mass. 55; Banorgee v. Hovey, 5 Mass. 11, 4 Am. Dec. 17.

Minnesota.- Woodard v. Griffiths Marshall Grain Com. Co., 43 Minn. 260, 45 N. W. 433.

Mississippi.- Pollock v. Helm, 54 Miss. 1, 28 Am. Rep. 342.

New York.- Scott v. Pilkington, 15 Abb. Pr. 280; Ulster County Bank v. McFarlan, 5 Hill, 432; Bank of Michigan v. Ely, 17 Wend. 508; Ontario Bank v. Worthington, 12 Wend. 593; Goodrich v. Gordon, 15 Johns. 6; Benecke v. Haebler, 38 App. Div. 344, 58 N. Y. Supp. 16, affd. 166 N. Y. 631, 60 N. E. 1107.

North Carolina.- Nimocks v. Woody, 97 N. C. 1, 2 S. E. 249. South Carolina.-Strohecker v. Cohen, 1 Speers, 349.

42. Description of bill.— In the case of Nelson v. Chicago First Nat. Bank, 48 Ill. 36, the court said, after quoting the rule as laid down by Chief Justice Marshall: "This rule has been constantly followed by the courts of this country, the only point of dispute being as to the degree of accuracy with which the promise to accept must describe the nonexisting bill, and it is objected in the present case, by counsel for the appellee, that the promise to pay by the bank did not sufficiently identify the checks to which the promise was to be applied, and the case of Boyce v. Edwards, 4 Pet. 122, is cited as an authority in point. The authority of that case is certainly to the effect that the promise of the bank cannot be treated as a technical acceptance, for want of identification of the checks. We may be permitted to say, however, that the difference between a promise to accept a particular bill or check to be thereafter drawn, and the promise to accept all checks which a person might draw for a specified purpose, is so extremely technical and refined that we should be inclined, where the plaintiff had received the check or bill upon the faith of the promise and had sued on the promise as an acceptance, to hold that it was a distinction without a difference.

It seems to us, a fair construction of the language of Chief Justice Marshall would require, not that the promise should describe the bill to be drawn and accepted, by its date and amount, and the name of the drawee, as that would be generally impossible; but merely in such a mode that there could be no possible doubt as to the

Under certain

The promise to accept must be unconditional. circumstances, as where a creditor authorizes his debtor to draw on him, for the purpose of procuring such draft to be discounted for his, the drawee's, benefit, an unqualified authority by the drawee, to draw on him for a certain amount, is an unconditional promise to pay the draft.13 The authority need not be phrased in the precise and formal language of a legal document; special promissory words are unnecessary, where the language employed sufficiently imports a legal obligation.** Words of limitation or direction as to the purposes or the amount for which the drafts are made are not necessarily words of condition, and do not affect the unconditional character of the promise." But where a con

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Mich. 450; Burke v. Utah Nat. Bank,
47 Neb. 247, 66 N. W. 295.
"Will

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application of the promise to the bill to be drawn. A description of sufficient certainty could thus be made to A telegram in the words: apply to a series of bills, as well as to pay H.'s draft, $2,300, for stock," is one bill." See also Ulster County an absolute undertaking to accept and Bank v. McFarlan, 5 Hill (N. Y.), pay. The words "for stock merely 432; First Nat. Bank v. Clark, 61 indicate the nature of the consideraMd. 400, 48 Am. Rep. 114; Valle v. tion as between the drawer and acCerre, 36 Mo. 575, 88 Am. Dec. 161. ceptor. Coffman v. Campbell, 87 Ill. 43. Authority to draw for specific 98. A promise in these terms, I have purposes. Barney v. Worthington, 37 no objection to accepting for you at N. Y. 112, in which a letter was di- three and four months on the terms rected to a partner by another member you propose," contained in a letter, is of a firm evidently intended to author- an absolute, and not a conditional, ize the firm to draw upon him in the promise, and warrants a single draft manner and for the purposes stated at four months. Parker v. Greele, 5 therein. The court said: The letter Wend. (N. Y.) 414. And in the case is to be read in the light of the sur- of Michigan Bank v. Ely, 17 Wend. rounding circumstances; proof of (N. Y.) 508, it was held that a writwhich was properly admitted to aid ten direction by a principal to his the court in ascertaining the purpose agent to make drafts on him to a cerof the paper, and in applying and in- tain amount, if the agent should need terpreting its language. In more funds, is an unconditional promview of the circumstances under which ise to accept drafts which might be it was given, the defendant's unquali- drawn by the agent in the manner dified authority to draw on him for the rected. amount was equivalent to an unconditional promise to pay the draft. The absence of technical promissory words is of no practical moment, where the language employed is such as to raise an imperative legal obligation." See also Ruiz v. Renauld, 100 N. Y. 256, 3 N. E. 182; Merchants' Bank v. Griswold, 72 N. Y. 472, 479; Smith v. Ledyard, 49 Ala. 279; Whilden v. Merchants & Planters' Bank, 64 Ala. 1, 38 Am. Rep. 1; James v. E. G. Lyons Co., 134 Cal. 189, 66 Pac. 210; Gates v. Parker, 43 Me. 544; First Nat. Bank v. Clark, 61 Md. 400, 48 Am. Rep. 114; Bissell v. Lewis, 4

*

44. Ruiz v. Renauld, 100 N. Y. 256, 3 N. E. 182.

45. Words limiting promise to accept.- Bank of Michigan v. Ely, 17 Wend. (N. Y.) 508; Ulster County Bank v. McFarlan, 5 Hill (N. Y.), 532; Merchants' Bank v. Griswold, 72 N. Y. 472, in which case the defendant executed a power of attorney in the following form: "I hereby authorize Horace Loveland, as my agent, to make drafts on me from time to time, as may be necessary for the purchase of lumber on my account, and to consign the same to the care of P. W. Scribner & Co." In an action

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dition precedent is attached to a promise to accept a bill, which is a substantive part of the promise and is so coupled with it as to show that the promisor did not intend to bind himself, except on compliance with the condition, it is not such an unconditional promise to accept as will support an action against the promisor as an acceptor." In all cases the promise to accept must have induced the person to receive the bill; the promise must have given credit to the bill.47 A written promise to accept a nonexisting bill will not amount to an acceptance thereof in favor of one who had subsequently received the bill without knowledge of the promise, and not on the credit thereof.48 But it is not necessary that the written promise to accept be shown to the person who takes the bill relying on the existence of the promise; if he chooses to act without an inspection of the written promise, he will be deemed to have such information as he would have acquired by reading it.49 A promise to accept given by a telegram will be sufficient, if it otherwise complies with the requirements.50

d. Verbal promise to accept.-At common law a verbal promise to accept a bill, if credit is given the bill, on the faith thereof, is as binding as though the promise was written.51 No distinction

upon a draft, drawn by Loveland in his own name, and discounted by the plaintiff upon the faith and credit of, and upon the delivery of the instrument, it was held that the authority given was absolute within the prescribed limits, and was equivalent to an unconditional promise to pay drafts so drawn; that the words "as may be necessary for the purchase of lumber" did not constitute a condition precedent which the plaintiff was required to show had been performed, but it was for the agent to determine the necessity.

drawee liable to the holder as an acceptor.

An indorsee of a bill who does not take it on the credit of the drawee's promise to accept cannot maintain an action against him on such implied acceptance. Goodrich V. Gordon, 15 Johns. (N. Y.) 6; Howland v. Carson, 15 Pa. St. 453.

49. Lewis v. Kramer, 3 Md. 265; Woodard v. Griffiths-Marshall Grain Com. Co., 43 Minn. 260, 45 N. W. 433.

50. In the case of North Atchison Bank V. Garretson, 51 Fed. 168, 2 C. C. A. 145, one T., having 46. Germania Nat. Bank v. Taaks, purchased certain cattle, offered

101 N. Y. 442, 5 N. E. 76.

47. Coolidge v. Payson, 2 Wheat. (U. S.) 66, 4 L. Ed. 185; Storer v. Logan, 9 Mass. 55; Exchange Bank v. Hubbard, 62 Fed. 112, 10 C. C. A. 295; Russell v. Wiggin, 2 Story (U. S.), 214; Lagrue v. Woodruff, 29 Ga. 648; Steman v. Harrison, 42 Pa. St. 49, 82 Am. Dec. 491.

48. McEvers v. Mason, 10 Johns. (N. Y.) 207. In the case of Exchange Bank v. Rice, 98 Mass. 288, it was held that a promise to accept a bill of exchange written after the holder took the bill would not make the

his check for $22,000 in payment. The seller refused to accept it or part with his cattle until assured that the check would be paid, and, therefore, telegraphed the drawee, asking if it would pay T.'s check for such amount.

The drawee answered: “T. is good. Send on your paper." It was held that this constituted a contract to pay the check on its presentation. See also In re Armstrong, 41 Fed. 381; Franklin Bank v. Lynch, 52 Md. 270, 36 Am. Rep. 375.

51. Townsley v. Sumrall, 2 Pet. (U. S.) 170, 7 L. Ed. 386; Hall v. Cordell,

is apparently made between a verbal and a written promise to accept an existing bill;52 but it has been held that a mere verbal promise to accept a nonexisting bill is not such an acceptance as will in law bind the acceptor, even if made to the person in whose favor the bill is drawn.53 The rule of the common law is changed by statute in nearly all the States, and, of course, no longer exists in those States which have adopted the Negotiable Instruments Law.

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e. Conformity with terms of promise.—Any person who gives a written promise to accept a bill of exchange may insist that the terms of his agreement be strictly complied with.54 Any departure from the terms of an agreement to accept the bill of another will not bind the party sought to be charged as acceptor." As where one promises to accept a draft for a specified sum, and the draft is afterward drawn for a larger sum, the promisor is not liable on the draft to any amount, nor for a breach of agreement to accept.56 And it has been held that an agreement to accept a draft for a certain amount is not complied with by drawing for such amount with exchange on a certain place;57 but where no place of exchange is specified the words have been declared to be surplusage.

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§ 149. Time allowed to accept.

The Negotiable Instruments Law provides that: "The drawee "is allowed twenty-four hours after presentment in which to "decide whether or not he will accept the bill; but the acceptance "if given dates as of the day of presentation." 59 If the acceptance of the bill is dated, such date is presumed to be the true date of the acceptance." Where the acceptance is not dated the rule at common law seems to have been that the presumption is that

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142 U. S. 116, 12 Sup. Ct. 154, 35 L.
Ed. 956; Williams v. Winans, 14 N. J.
L. 339; Light v. Powers, 13 Kan. 96;
Kelley v. Greenough, 9 Wash. 659, 38
Pac. 158.

52. Kennedy v. Geddes, 8 Port. (Ala.) 263, 33 Am. Dec. 289.

53. Plummer v. Lyman, 49 Me. 229; Rulo First Nat. Bank v. Gordon, 45 Mo. App. 293; Edson v. Fuller, 22 N. II. 183.

54. Dickins v. Beal, 10 Pet. (U. S.) 572, 9 L. Ed. 538; Lienow v. Pitcairn, Fed. Cas. No. 8,341, 2 Paine (U. S.), 517; First Nat. Bank v. Bensley, 2 Fed. 609; Saulsbury v. Blandy, 53 Ga.

665; American Water-Works Co. v. Venner, 63 Hun (N. Y.), 632, 18 N. Y. Supp. 379.

55. State Nat. Bank v. Young, 14 Fed. 889.

56. Brinkman v. Hunter, 73 Mo. 172, 39 Am. Rep. 492.

57. Lindley v. First Nat. Bank, 76 Iowa, 629, 41 N. W. 381.

58. North Atchison Bank v. Garretson, 51 Fed. 168, 2 C. C. A. 145.

59. Neg. Inst. L. (N. Y.), § 224. For same section in statutes of other States see Appendix.

60. Neg. Inst. L. (N. Y.), § 30. See § 44 (b), ante.

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