$221. Revocation of authority or promise.-The authority may be considered as revoked by a failure to act upon it within a reasonable time, or by a failure to conform to the terms of the authority. It may be considered revoked by a refusal to act upon it and the proposal of other terms not accepted by the drawee,' as well as by a statement of the person authorized to both drawee and payee that he would not act upon the authority. The authority when once acted upon to the extent of the power granted is exhausted,3 and the authority may be revoked whether the payee knows that fact or not. He takes the risk of the power being no longer in existence, just as he does when an authority is granted by a telegram, but another telegram has been sent revoking the authority, and he takes the draft in ignorance of the revocation. But a continuing authority exists until notice of revocation to the person authorized. The authority may be revoked at any time, as in the case of a permission to overdraw. But where the continuous authority has been addressed to a particular person to grant credit to the drawer, it would seem that in justice the revocation ought to be addressed to that person. § 222. Defenses to promise to accept.-The situation of the accounts between the drawer and drawee, or an abuse of the confidence of the drawee, or a failure on the part of the drawer to carry out his contract with the drawee,3 or a 1 There was never any acceptance of the offer by the offeree. 133 Ill. 234. Death revokes the authority. Michigan State Bank v. 2 Lienow v. Pitcairn, 2 Paine, C. Leavenworth, 28 Vt. 209. C. 517. 3 Ranger v. Sargent, 36 Tex. 26. 4 See the case cited in the next note and Michigan State Bank v. Leavenworth, 28 Vt. 209. But compare Ilsley v. Jones, 12 Gray, 260. 5 First Nat. Bank v. Clark, 61 Md. 400. 6 De Tastell v. Cronsillat, 2 Wash. C. C. 132; Hall v. First Nat. Bank, 7 Ballard v. Fuller, 32 Barb. 68. It may be revoked as a promise to accept, except as to some one who has acted upon it. Robbins v. Lambeth, 2 Rob. (La.) 304. 365. Palmer v. Rice, 36 Neb. 844. 3 Central Sav. Bank v. Richards, 109 Mass. 413. closing of the accounts between the drawer and drawee,' or any other dealings between the drawer and the promisor," will not affect the person who has acted upon the authority in conformity with it, unless the fact is known to the payee and is of such a character that he is able to infer that the authority would no longer continue, or such that his acting upon the authority would be a fraud upon the promisor." Nor will a delay in presenting the draft for acceptance be a defense for the promisor where the holder parted with value," unless his conduct amount to an estoppel; nor can he defend on the ground of delay where the drafts are drawn against the proceeds of shipments which he has received. The defenses of failure to act upon the power or promise within a reasonable time, of revocation of the authority, and of failure to conform to the authority granted, have already been considered in the preceding sections.9 § 223. Revocation of acceptance made. An acceptance once made in writing cannot be revoked after delivery of the acceptance to the holder, unless the holder was in some way a party to an imposition upon the acceptor. It would seem to follow that any other kind of acceptance recognized as valid in the particular jurisdiction could not be revoked; but it has been held that a promise to accept a draft made to the holder of the draft could be revoked where no third person was affected. There is reason in holding that a 4 Miltenberger v. Cooke, 18 Wall. ter, Rice & Co., 152 Mass. 34; An421. Drawee knew draft was drawn. dressen v. First Nat. Bank, 2 Fed. R. 122. It cannot be revoked as to the drawer by an agreement be 5 Carrollton Bank v. Tayleur, 16 La. 490. 6 See Sherwin v. Brigham, 1 Cleve. tween the payee and acceptor to Law R. 22, 39 Ohio St. 137. 7 Starr v. Murchison, 1 City Ct. R. 413. The acceptance becomes a promissory note. revoke it. Trent Tile Co. v. Fort Dearborn Nat. Bank, 54 N. J. Law. 33, 599. 2 Robbins v. Lambeth, 2 Rob. (La.) 8 Miltenberger v. Cooke, 18 Wall. 304. A promise to accept may be considered as an offer. This offer 421. 9 See § 221, ante, and §§ 219 and is made to any one who chooses to 220. ante. act upon it. Until it is acted upon 1 Fort Dearborn Nat. Bank v. Car- it is no more than an offer and may promise to accept, made before the draft is drawn, could be revoked at any time before the promise is acted upon, for such a promise is nothing more than a letter of credit, which gains no efficacy until acted upon. This is as far as the rule should go. A uniform rule ought to be applied to all valid acceptances, whatever their nature, and an acceptance once complete ought to be revocable only for fraud or mistake. A mistake as to the signature of the drawer, or as to the possession of funds, ought to be excepted from the right of revocation, because the drawee is bound to know the signature of the drawer and the state of the accounts. As to a bona fide transferee after acceptance, or as to a bona fide acceptee who has altered his position on the strength of the acceptance, the acceptance as well as the promise to accept before or after the drawing of the bill must be considered irrevocable. This statement presupposes that the bill is a genuine bill, not forged as to an indorser's name or as to the amount. § 224. Necessity of acceptance as to drawee.- Until a bill of exchange is accepted by the drawee, no obligation to pay it as a party to the bill exists upon the drawee's part,' unless the acceptor waives acceptance, which he may do by parol; nor if the bill of exchange is drawn generally, and is not payable out of a particular fund, can it be considered; nor can it operate as an assignment of any funds of the drawer in the hands of the drawee. The rule in regard to checks has be withdrawn. If it be withdrawn, a person acting upon it, as we have seen in the last section, must take the risk of the authority being still in existence. 3 New York Stock Bank v. Gibson, 5 Duer, 574. This must be the fraud of the holder. 4 As to checks, see § 150, ante. 1 Dickey v. Harmon, 1 Cranch, C. C. 201; Colorado Bank v. Boettcher, 5 Colo. 185; Reilly v. Daly, 159 Pa. 605; Northumberland Bank v. McMichael, 106 Pa. 460; Kimball v. Donald, 20 Mo. 597; Hankin v. Squires, 5 Biss. 186. 2 Wintermute v. Post, 24 N. J. Law, 420, semble. Promises to accept may be considered as waivers also; so may authority to draw. 3 Kimball v. Donald, 20 Mo.'597; Mo. Pac. Ry. Co. v. Wright, 38 Mo. App. 141: Brill v. Tuttle, 81 N. Y 457; Holbrook v. Payne, 151 Mass. 383; Bush v. Foote, 58 Miss. 5; Marysville Bank v. Brewing Co., 50 6 The been heretofore stated and need not be repeated here. same is true of an order drawn generally and not payable out of a particular fund. The exceptions to the above statement are (1) in the case of checks which have been treated by the parties and are understood between them to be assignments of a particular fund or a portion thereof, they will be considered as total from a legal, or partial assignments from an equitable, point of view; and this rule would be applied to drafts; (2) orders or bills of exchange, so called, payable out of a particular fund, or describing the fund out of which they are payable, will be considered assignments of the fund pro tanto, with the proviso that if they take a part of the fund only they are partial assignments, not good at law but in equity; (3) a promise to accept on the part of the drawer, or, as we have scen, previous authority to draw the draft or a letter of credit, may dispense with the necessity for accept 8 Ohio St. 151; Hopkins v. Beebe, 26 Pa. 85; Randolph v. Canby, Fed. Cas. 11,559; Winter v. Drury, 5 N. Y. 525. Even where the draft is for the exact amount of the fund it is not an assignment. Shand v. Du Buisson, L. R. 18 Eq. 283; Bush v. Foote, 58 Miss. 5. Contra, Wheatley v. Strobe, 12 Cal. 97. (See Cushman v. Harrison, 90 Cal. 297.) Nimocks v. Woodey, 97 N. C. 1. The designation of the fund or particular account for reimbursement does not make the bill of exchange an assignment. Whitney v. Eliot Nat. Bank, 137 Mass. 354; Schmittler v. Simon, 101 N. Y. 554. 83 (a draft). The case of North v. Campbell, 72 Ill. 380, has a misleading head-note. The decision really holds, however, that a draft drawn generally was an assignment of the fund prepared to meet it. The case should have been decided on the ground that the draft was drawn by an agent against the principal, who was in fact drawee, and the draft was accepted by the manner in which it was drawn. Such orders are not bills of exchange, they are assignments. See § 207, ante. Implied acceptances might be classed under this head as assignments. See Hall v. First 4 See § 146, ante, notes 15, 16, 17, Nat. Bank, 133 Ill. 234; Milling v. and § 147, ante. 5 Shaver v. West. Union Tel. Co., 57 N. Y. 459; Woodruff v. Hensel, 5 Colo. App. 103. Order out of particular fund. Indiana Mfg. Co. v. Porter, 75 Ind. 428. 6 See § 146, ante, note 17, and Throop Grain Co. v. Smith, 110 N. Y. Sloan, 57 Ga. 392; Cowperthwaite v. Sheffield, 1 Sandf. 416; Lowery v. Steward, 25 N. Y. 239; Miltenberger v. Attwood, 18 How. Pr. 330. But see Exchange Bank v. Rice, 107 Mass. 37. 8 Gurnee v. Hatton, 63 Hun, 197; Hopkins v. Nash Co., 77 N. W. R. 53. 9 ance; (4) there are some peculiar cases where the transaction amounts to the creation of a trust," or it may be an implied acceptance," or what may be termed an estoppel.12 Thus it has been held that where one man induced another to draw a bill in which the second man had no interest, the bill being drawn against funds prepared by the first man to meet the draft, and the latter induced the payee not to present the draft and then appropriated the fund for other purposes, the draft would be considered as having been accepted by the drawee as agent of the person who caused the draft to be drawn, and the latter would be held to have appropriated the money of the payee and as liable for money had and received; 13 (5) though the drawee may be dead, his personal representative may accept the bill or order both before and after maturity; " (6) the acceptance may be waived,15 either because the document is considered as accepted or by express waiver. But if the bill or check or order be not accepted the payee has his recourse upon the drawer or indorsers, and every one responsible to him upon the document, provided he protect his rights as hereinafter stated,16 or if he has seasonably protected his rights may sue the drawer upon his original claim." But if the drawer drew as agent the agent is not personally responsible,18 except for the truth of his implied representation of his authority as agent.19 In a peculiar case the holder was refused a remedy against the drawer or one whom he had the right to consider the drawer.20 9 See SS 215 to 222, ante. 10 See Halsey v. Warden, 25 Kan. 128; Michigan State Bank v. Gardner, 15 Gray, 362. 11 See § 214, ante, and note 7, supra, and Halsey v. Warden, 25 Kan. 128. But see Calhoun v. Manuf. Bank, 36 Ga. 410, and Ware v. Macon City Bank, 59 Ga. 840. 12 See § 214, ante. 13 North v. Campbell, 72 Ill. 380. See for an explanation of this case note 6, supra. 14 This must be in writing under the statute of frauds. See Debesse v. Napier, 1 McCord, 106. 15 See §§ 208 and 209, ante. 16 See Brown v. Jackson, 1 Wash. C. C. 512, for a non-negotiable order, and see § 225, post, note 2. 17 See § 225, post. 18 Hall v. Conk, 17 S. W. R. 1022. 19 This would not be a suit on the paper, but for damages. 20 Parsons v. Armor, 3 Pet. 413. This decision is undoubtedly wrong. |