Thomas Wilson versus Thomas Clements, 2 Tyng 1

* And now, at this term, the opinion of the Court was [ * 9 ] delivered as follows, by Sedgwick, J. If this case is to be considered merely upoq common law principles, it is manifest, for two reasons, that the plaintiff is not entitled to recover. 1st.

For the want of a sufficient consideration ; the promise expressed in the defendant’s letter being an undertaking to pay any balance which should be claimed by JIinkley: upon a re-perusal of the accounts, whether in fact any thing was justly due or not; and it does not appear that any thing was due; and unless there was, the promise must be considered as nudum vactum. 2d. Considered as a promise from the defendant to Hinkley, had it been legally obligatory, being a chose in action by the common law, it could not have been so assigned to the plaintiff as to authorize him to bring an action in his own name.

But I apprehend, it is not so to be considered ; but that the authority given by the defendant to Hinkley to draw upon him, and he having drawn in pursuance of that authority, the bill of exchange in question, the bill and letter are so coupled together, that the case must be deermined on the principles of commercial law, of which the Court will take notice. This presents two questions for consideration:— 1.

Supposing the bill to have been drawn in due season, and taken by the plaintiff, with a knowledge of the defendant’s authority to Hinkley to draw upon him, and in reliance upon it, is the plaintiff entitled to recover in this action ? 2. If the plaintiff could support his action, provided the bill had been seasonably drawn, does the distance of time between the date of the letter and the date of the bill, with the other circumstances in the case, in law vary it ? As to the first question; in the case of Johnson & Al. vs.

Collins, Lord Kenyon says, “ This was a promise to accept a non-existing bill, which varies this case from all those which have been decided upon the same subject; and I know not by what law I can say that such a promise is binding as an acceptance.” And it is added by Grose, J., that “ no authority had been cited to show that, by the law merchant, a mere promise to accept a bill to be drawn in [ * 10 ] * future, amounts to actual acceptance, when drawn.

Then we have no authority to extend the rules which have been hitherto established.” These general declarations of the judges must be taken in relation to the subject matter. In that case, the promise was merely verbal, was not known to the plaintiffs, nor had there been any communication between the plaintiffs and defendant on the subject; and of course the bill was not taken upon the credit, or in reliance upon the promise of the defendant to accept it.

Lord Kenyon and Justice Grose cannot reasonably be understood as intending to affirm, to the extent to which the words seem to import, that in no case a previous promise to accept had been adjudged to be binding on the drawee; for in the argument, cases directly contrary had been cited, and particularly that of Pillans &f Al. vs. Van Mierop & Al., where the promise of the defendant not only preceded t'ne drawing of the bill, but notice not to draw had been previously given.

It was therefore intended to affirm, that such a promise as had been proved in that case—a mere verbal promise—had never been decided to be an acceptance of a non existing bill. And in the case of Johnson Al. vs. Collins, Le Blanc, J., truly expressed and limited the doctrine upon this subject.

He said, “ It has been truly said, as a general rule, that the mere answer of a merchant to the drawer of a bill, saying he will duly honor it, is no. acceptance, unless accompanied with circumstances which may induce a third person to take the bill by endorsement ; but if there are any such circumstances, it may amount to an acceptance, though the answer be contained in a letter to the drawer ” . These words are a quotation from what is said by Lord Mansfield in the case of Pierson vs. Dunlop . And in the case of Mason vs.

Hunt Ah, Lord Mansfield says, “ If one man, to give credit to another, makes an absolute promise to accept his bill, the drawer or any other person may show such a promise upon the exchange, to get credit, and a' third person, who should advance his money upon it, would * have nothing [ * 11 ] to do with the equitable circumstances, which might subsist between the drawer and acceptor.” After these authorities, it would be too much to say that such a promise, inducing such consequences, should not be binding; and more especially as very respectable writers on the subject of bills of exchange, whose works have become popular, and by whose authority merchants regulate their conduct, have fully adopted the principle.

Kyd has quoted the very words recited from the report of the case of Mason vs. Hunt & Al., as undoubted law . And Chitty has expressly adopted the same opinion . Indeed, nothing appears more consonant to reason and natural justice than that a man should be obliged to fulfil a promise which he had deliberately made, and which had induced another, from the confidence he reposed in it, to part with his property. But it is not intended to decide, in this case, whether the facts will bring it, in contemplation of law, within the principles which govern the cases of Pillans & Al. vs. Han Mierop & Al., and Mason vs.

Hunt & AL, and that class of cases which have determined that a promise to accept a bill not drawn, shall be obligatory, under certain circumstances, upon the person making the promise; oecause we are all satisfied as to the second question, that if the plaintiff could support his action, provided the bill had been seasonably drawn, and with reliance by the plaintiff upon the credit of it, that the distance of the time between the date of the letter and the date of the bill, with the other circumstances n the case, entitle the defendant tó avail himself, if the facts will support him in it, of the defence which he offered to set up on the trial.

Or. this question there is no adjudged case expressly in point; but considerable aid in deciding it may be derived from the principle, which has been frequently ruled at nisi prius in England ; that wherever it appears that a note has been endorsed over, some time after it is due, which is out of the usual course of [ * 12 ] trade, that circumstance alone * throws such a suspicion on it, that the endorsee must take it on the credit of the endorser, and must stand in the situation of the person to whom it was payable. And this principle is fully established by the cases of Brown vs. Davis , and Boehm vs.

Sterling . The reason is obvious. The time of the negotiation is, in itself, a sufficient caution to the person who takes the assignment, so that he cannot reasonably claim an indemnification in consequence of having suffered from imposition. The case under consideration is at least entitled to as favorable regard on that account. The terms of the letter from the defendant to Hinkley were sufficient to excite caution in the plaintiff.

It was apparent that the accounts, which were the foundation of Hinkley’s demand, had been adjusted, and the defendant discharged therefrom ; that the authority to draw was a trust of the most confidential nature; that it could not, of course, be supposed to be extended, for an indefinite length of time; that it must have been intended, if at all, to be exercised freely, and not under circumstances of pressure and embarrassment; that more than two years had intervened since that authority was given ;. and the plaintiff could not have been certain that a present relief was not, at least, as influential with Hinkley to draw the bill, as a belief that the amount was justly due.

It is probable, too, that Hinkley’s circumstances had, in the mean time, between the date of the defendant’s letter and the date of the bill, suffered considerable deterioration. At the latter period, the arrest by the plaintiff is evidence that Hinkley’s credit was then, in his opinion, unsound; and it is highly improbable that the defendant would have made the promise at all, had he foreseen the use which was, and under these circumstances most probably would be, attempted to be made of it.

It would, in my opinion, be unreasonable to hold the defendant at all responsible for any bill, which Hinkley might be induced, within two years, tc [ * IB ] draw upon him, to obtain a * release from imprisonment. And, indeed, the length of time alone is a sufficient reason why the defendant’s promise should not be considered as concia sively binding upon him. We are all, therefore, of opinion that there should be A new trial granted . 1 East. R. 105. Cowp. 573. Kyd on Exchange, 74. Chitty on .mils, 77 Kyi, 283. 3 Term R. 80. 7 Term R. 423.

See also Cbitty, 113. [The very term acceptance imports an existing bill; and the better opinion is, that a promise to accept a non-existing bill cannot be available as an acceptance in the hands of the drawer.—Johnson vs. Collins, 1 East. 105.—Milne vs. Prest, 4 Camp. 393.—1 Holt, C. N. P. 181.—Smith vs. Brown, 2 Marshall, 41.—Sed vide Cooledge vs.

Payson, 2 Wheat. 66.—And, upon the established principles of law, it would seem that such a promise can only be binding between the parties, and cannot be available as an acceptance, even to a third person (2 Pardessus, No. 362, 363); although Bailey, Chitty. and Thortison, and other writers on bills, express a doubt upon the matter.—Ed.]