and the drawer, unless such arrangements were known to the payee either from actual knowledge or through knowledge imputed to him from customary methods of business." In both the latter instances he will be bound by his knowledge. The construction of the writing determines the promise or authority. A written authority to draw or letter of credit is sufficient. A telegram in answer to one describing a certain check, which says: "T. is good, send on your paper," is sufficient. A telegram promising to pay a certain draft is an acceptance, both at common law 10 and under the statute requiring a writing." But a written statement that "we expect to take care of them and pay drafts as heretofore" is said to be not sufficient," and though the writer says he will accept, the phrase may be controlled by other language in the letter. A letter agreeing to carry the maker of a promissory note is no authority to draw a draft for the amount of the note." A written promise to pay a bill when corrected is good as to the bill when corrected.1 If the authority to draw is countermanded, it cannot afterwards protect any one.16

13

4 Naglee v. Lyman, 14 Cal. 450; Carrollton Bank v. Tayleur, 16 La. 490.

5 See last case and Storer v. Logan, 9 Mass. 55.

6 Compare for the principle, First Nat. Bank v. Fiske, 133 Pa. 241.

7Smith v. Ledyard, 49 Ala. 279; Pollock v. Helm, 54 Miss. 1; Adoue v. Fox, 30 Mo. App. 98 (under statute requiring writing): Rinz v. Renauld, 100 N. Y. 256; Gates v. Parker, 43 Me. 544; Michigan Bank v. Ely, 17 Wend. 508.

8 Monroe v. Pilkinton, 14 How. Pr. 250; Merch. Ex. Nat. Bank v. Cardago, 35 N. Y. Super. Ct. 162; Bussell v. Wiggin, 2 Story, 213. And see cases cited in note 11, supra.

9 North Atchison Bank v. Gar

retson, 51 Fed. R. 168, 4 U. S. App. 557.

10 In re Armstrong, 41 Fed. R. 381. 11 Molson's Bank v. Howard, 40 N. Y. Super. Ct. 15. And see, as to checks, § 150, ante.

12 State Nat. Bank v. Young, 14 Fed. R. 889. This case is wrong. Any ordinary business man would have acted upon the letter. The court's remarks are simply foolish. 18 Musgrove v. Hudson, 2 Stew. (Ala.) 464.

14 Atlanta Nat. Bank v. Fertilizing Co., 83 Ga. 356. This decision is an egregious error. The letter was clearly sufficient.

15 Harrison v. Sternan, 4 Phila. 315. 16 First Nat. Bank v. Clark, 61 Md. 400.

§ 217. Construction of the promise or authority.— A promise to accept drafts drawn against shipments is necessarily conditional upon the shipment or bill of lading accompanying the draft;1 but such a promise is an acceptance of drafts accompanied by bills of lading, even though the bill of lading be not genuine, if that fact is not known to the payee. If the authority requires the bill of lading to be attached, it is sufficient that it be delivered with the draft though not actually attached. A promise to accept a bill cannot be construed to cover a bill for a debt not contemplated by the letter itself. Subsequent letters, however, may be construed in accordance with the terms of former letters. The word "draft" may include more than one draft. A letter authorizing a draft at so many days may be construed to cover a draft so many days after date as well as so many days after sight, but other cases hold that it means only so many days after sight. In such a case, evidence as to the meaning of the term ought to be admitted as controlling the meaning. The letter, when it contemplates a continuous drawing, makes a separate contract with each person that acts upon it.10 It is needless to say that the controlling authority is that any one to claim the benefit of such a letter, whether of authority or credit, or of promise to accept or to pay the draft, must have acted upon the letter," and parted with a valuable consideration. And it should be remembered that, in the case of such promises, whether

1 First Nat. Bank v. Bensley, 2 Fed. R. 609; Craig v. Marx, 65 Tex. 649. It is immaterial that the drawee who authorized actually received the goods, as these cases show. See § 220, note 14.

2 Young v. Lehman, 63 Ala. 519. 3 Craig v. Libbett, 15 Pa. 238. 4 Foreman v. Walker, 4 La. Ann. 409. Compare Murdock v. Mills, 11 Met. 5.

5 Hodges v. Iowa Barb Wire Co., 80 Iowa, 65.

6 Berckhead v. Brown, 5 Hill, 634.

7 Hall v. First Nat. Bank, 35 Ill. App. 116.

8 Burnes v. Rowland, 40 Barb. 368; Barney v. Newcomb, 9 Cush. 46.

9 Ulster Co. Bank v. McFarlan, 5 Hill, 433, holds it means after sight not after date. Allentown Bank v. Kirmes, 4 Wkly. Notes Cas. 401, holds it to mean after date.

10 Union Bank v. Coster, 3 N. Y. 203.

11 See § 215, ante, notes 4 and 5, and note 21 to the same section.

oral or written, emanating from banks, a bank has no power to lend its credit for accommodation, and such promises may be nugatory. A promise of acceptance by more than one person is a joint and several promise as to each promisor.13

12

3

§ 218. Promise as to existing bill.- A promise to accept an existing bill is a collateral promise as to any one who has already taken the bill, and should be founded upon a new consideration. To any one who upon the faith of the promise then takes the bill, the promise is original and not within the statute of frauds,2 and if it intelligibly describes the bill is sufficient, under the limitation that it be acted upon within a reasonable time, as will be pointed out in the next section. A written promise to pay an existing bill is said to be an acceptance under all circumstances, but a promise to accept an existing bill or order for money, whether oral or written, unless founded upon some new consideration, would not seem to have any efficacy. But the rule is stated by the highest authority generally that a promise to accept a bill, whether oral or written, is an acceptance, and no qualification is placed upon the rule whatever." It seems to be good if in writing, and certainly would be good if not in writing, provided the promisor was under any obligation to accept the bill, arising from the possession of funds or of the proceeds of the property represented by the bill, or of

12 See § 146, ante.

Cook v. Miltenberger, 23 La. Ann. 13 Michigan State Bank v. Pecks, 377. Contra thereto, First Nat. Bank 28 Vt. 200. v. Clark, 61 Md. 400.

1 Barnett v. Boone Lumber Co., 43 W. Va. 441, so holds as to a verbal promise to accept. Strohecker v. Cohen, 1 Spears, 349, holds all verbal promises to accept binding as to bills of exchange.

2 Kelley v. Greenough, 9 Wash. 659; Townsley v. Sumrall, 2 Pet. 170. 3 See note 15 to $ 215, ante.

4 Jones v. Iowa Bank, 34 Ill. 313. See notes 5 and 6 to § 215, ante, and

5 Scudder v. Union Nat. Bank, 91 U. S. 406, citing a number of cases, some of which are in point, to wit: the Illinois cases, and Spaulding v. Andrews, 48 Pa. 411.

6 It would not be within the statute of frauds, but the objection would still remain that it had no consideration. See the cases in note 4, supra.

something obtained by the proceeds. Sometimes a statute requires the promise to be made before the drawing of the bill.8

§ 219. Reasonable time for acting upon promise or authority. As has been already stated, the promise or the authority must be acted upon within a reasonable time.1 The failure to act upon the authority for two years has been held to be an unreasonable delay; but a delay of fifteen days has been considered reasonable where no injury to the promisor was shown. What is a reasonable time must depend wholly upon circumstances, and the customs of the particular business must be taken into account. But a delay in getting a corrected draft was not unreasonable where the promisor was notified of the fact and made no reply."

§ 220. Conformity of bill to promise or authority.Promises to accept drafts or orders are considered somewhat in the light of contracts of guaranty, and the promise or the authority must be strictly followed.' Any material departure from the terms of the authority or promise cannot be enforced against the promisor. A draft larger than the one authorized or promised to be accepted will be a material departure. A draft authorized to be drawn in a particular partnership name is not fulfilled by a draft in another

7 See § 214, ante, and Barnett v. Boone Lumber Co., 43 W. Va. 441.

8 La. Nat. Bank v. Schuchhardt, 15 Hun, 405. The bill if altered in any way is newly issued from that time, if alteration was suggested by the drawee.

1 Wilson v. Clements, 3 Mass. 1; Lanusse v. Barker, 10 Johns. 312; Posey v. Denver Nat. Bank, 7 Colo. App. 108.

2 Wilson v. Clements, 3 Mass. 1; Lanusse v. Barker, 10 Johns. 312; reversed, 3 Wheat. 101. See the

next note for case stating the general principle.

Nimocks v. Woodey, 97 N. C. 1. 4 First Nat. Bank v. Fiske, 133 Pa. 241.

5 Johnson v. Clark, 39 N. Y. 216. 1 Sherwin v. Brigham, 39 Ohio St. 137; Saulsbury v. Blandy, 53 Ga. 665; Lienow v. Pitcairn, Fed. Cas. No. 8341. Compare Coffman v. Clarinda Bank, 33 Ill. App. 641. 2 See the cases in the preceding note.

3 Brinkman v. Hunter, 73 Mo. 172. The promise is not good as a partial acceptance.

name, though the same partnership used that other name interchangeably with the one authorized. A draft drawn upon one of three drawees will not conform to an authority authorizing a draft upon the three. With such strictness is the rule held as to names. A general authority to draw, or a general promise to pay, drafts will be confined to drafts drawn upon the promisor at his place of business. Exchange added to a draft will destroy the efficacy of the draft where exchange was not authorized; but the addition of exchange to a draft which could not draw exchange will be an immaterial departure. If consignments are required to accompany the drafts and do not, the draft will not conform to the authority, although the drawee received the consignments; but this ruling seems exceedingly strained, and the court seems to have had its sense of justice poorly developed. But the better rule is that a reasonable compliance is all that is required, as instances cited in the note below 10 show. If no place is named where the draft should be drawn, the drawer is confined to no particular place." A stipulation that bills of lading be attached is satisfied by delivering the bill of lading with the draft," or, if the attached bill of lading is forged, but that fact is unknown to the payee, the payee may enforce the promise.13 If the drawee retains the proceeds of the shipment, with notice of the violation of the authority, he will be bound.14

4 First Nat. Bank v. Bensley, 2 Geddes, 3 Ala. 581; Lathrop v. HarFed. R. 609. low, 23 Mo. 209.

5 Glover v. Tuck, 1 Hill, 66.

6 Michigan State Bank v. Leaven

worth, 28 Vt. 209.

11 Posey v. Denver Nat. Bank, 7 Colo. App. 108.

12 Foreman v. Walker, 4 La. Ann.

7 Lindley v. First Nat. Bank, 76 409. Iowa, 629.

8 North Atchison Bank v. Garretson, 51 Fed. R. 168.

9 First Nat. Bank v. Bensley, 2 Fed. R. 609. See note 14, infra. 10 North Atchison Bank v. Garret son, 51 Fed. R. 168; Kennedy v.

13 Craig v. Sibbett, 15 Pa. 238.

14 Lewis v. Kramer, 3 Md. 265. If the drawee got the proceeds of the draft, no acceptance at all was necessary. Barney v. Worthington, 37 N. Y. 112; Merchants' Bank v. Griswold, 9 Hun, 561. See § 222, note 8.