First National Bank v. Clark

Robinson, J.,

delivered the opinion of the Court.

D. N. Ulm & Co. were engaged in the business of buying and shipping grain at Flora, Illinois; and the appellee was their correspondent in Baltimore.

On the 22nd of September, 1882, Ulm & Co. wrote to the appellee for permission to draw on him for $1500, to which he replied by telegram as follows:

(No. 1.) “ Baltimore, Sept. 26, ’82.

“ On account of decline, you can draw on us for $750 ; will sell spot; hold steamer; is our action satisfactory ?

“Thos. S. Clark & Sons.”

To this Ulm & Co. at once replied:

(No. 2.) “ Flora, Sept. 26, ’82.

“No. Allow draft as required, or turn over bills. Answer quick. D. N. Ulm & Co.”

*405 The appellee then telegraphed:

(No. 3.) “ Baltimore, Sept. 26, ’82.

“ Cannot allow draft; market cent higher than close; cannot turn over shipment; will sell to best advantage.

“Thos. S. Clark & Sons.”

To this Ulm & Co. replied:

(No. 4.) “Will draw on you for $150; it is not satisfactory.”

And the appellee answered:

(No. 5.) “Market higher; do not draw for $150. Account will not stand it.”

After sending telegram No. 2, and receiving telegram No. 3, in the above series, Ulm & Co. exhibited to the cashier of the appellant the telegram marked No. 1, and drew a sight draft for $150 on the appellee, which was discounted by the appellant.

This draft the appellee refused to pay.

Upon these facts two questions arise, and first, is the appellee liable as acceptor ¶ That one may be liable as acceptor of a bill, drawn in pursuance of a written promise to accept, and upon the faith of which the holder has advanced money, is well settled in this State. Lewis vs. Kramer & Ralm, 3 Md., 265 ; Franklin Bank of Baltimore vs. Lynch, 52 Md., 210 . In such cases, however, it is necessary that the bill should be drawn within a reasonable time after the promise is made, for otherwise the drawer will be presumed to have declined to act on the authority thus given, and the drawees will not be construed to have intended an indefinite liability. And second, the promise must so describe the bill, that there can be no doubt of its application to it. This was so expressly held in Coolidge vs. Payson, 2 Wheaton, 66 , and held too, upon the authority of Pillans & Rose vs. Van Mierop & Hopkins, 3 Burr., 1663; Pierson vs. Dunlop, *406 et al., Cowp., 571, and Mason vs. Hunt, Doug., 296. These cases were, it is true, somewhat questioned in Johnson vs. Collings, 1 East, 98, and Clarke, et al. vs. Cock, 4 East, 57, Lord Kenyon saying, that the Court had in these cases carried “the doctrine of implied acceptances to the utmost verge of the law; and he doubted whether it did not even go beyond the proper boundary.”

. And when the question arose in Bank of Ireland vs. Archer, 11 Mees. & Wels., 382, decided in 1843, on a parol promise to accept, Baron Park held, such promise did not amount to an acceptance, although the bill was discounted for the drawer on the faith of the promise. The question was set at rest-fin England by Statute 19 & 20 Vict., ch. 97, sec. 6, which provided that no one should be bound as acceptor unless the acceptance be written on the bill and signed by the acceptor, or by some one authorized by him.

In this country, however, the Courts have generally held to the doctrine of implied acceptance, as laid down by the Supreme Court in Coolidge vs. Payson, being careful at the same time not to enlarge it, for the reason that such acceptances must necessarily affect the credit of bills and impair their commercial value. And accordingly in Franklin Bank of Baltimore vs. Lynch, 52 Md., 280 , where the drawer was authorized by a telegram received late on Saturday to draw for $750, and in pursuance of which, a sight draft for $750, was drawn by him on the Monday following, this draft was discounted by the plaintiff on the faith of the telegram thus received by the drawer; and it was held, the defendant was not liable as-acceptor, because the telegram' did “ not limit or specify the terms of the draft, nor designate the time for which it was to be drawn.” Now if the American doctrine of implied acceptances is to be" adhered to at all, it does seem to me, with great deference, that Lynch’s Case falls directly within it. The authority to draw was unqualified; the telegram was received late on Saturday, and the draft *407 was drawn on Monday following for the precise amount named in the telegram. Upon these facts, and in the ■absence of all proof to the contrary, there was, it seems to me, such a connection between the authority given and the draft drawn, as to leave no doubt of its being the ■identical draft drawn in pursuance of the telegram. But, be this as it may, the decision in Lynch’s Case is binding, upon us, and being so, it is clear the appellee in this case cannot be held liable as acceptor.

We come now to the second question: Is he liable for a breach of promise ? And here the Courts in this country have drawn a distinction between the liability of one as acceptor, and his liability on a promise to,, accept. And they have held that if the promise to accept or authority to draw does not designate and specify with sufficient certainty the bill to be drawn, and the party sued be not therefore liable as acceptor, he may be held liable on his promise to accept. Whether this is a distinction without a difference, as has been intimated by some Judges, it is supported by Boyce & Henry vs. Edwards, 4 Peters, 111 ; Russell, et al. vs. Wiggin, et al., 2 Story, 213 ; Carnegie vs. Morrison, 2 Met., 381 , and approved by this Court in Lynch’s Case, 52 Md., 270 . These cases rest upon the principle that the authority to draw implies a promise to accept and pay the draft, and this promise inures to the benefit of any bona fide holder who takes it on the faith of the promise. -It is a liability therefore founded on agreement constituting a valid contract between the promisor and promisee, inuring to the benefit of a third party who has been induced to advance money on the faith of the agreement.

The liability in such cases being founded on the promise to accept and pay the draft, this suit cannot be maintained unless; there was a promise on the part of the appellee to accept it at the time the draft in controversy was drawn. And this the proof shows was not the case. Ulm & Co. *408 had written for authority to draw for $1500, and this the appellee refused, but did authorize them to draw for $750, provided “it was satisfactory.” If Ulm & Co. had accepted this offer, and the draft had been drawn and discounted on the faith of it, an action would lie against the appellee for a breach of promise. But instead of accepting, Ulm & Co. rejected it, and renewed the request to draw for $1500. Such were the facts when this draft was drawn — an offer by the appellee to accept a draft for $750 and its refusal by Ulm & Co. By this refusal he was no longer bound by the original offer, unless it was renewed and accepted by Ulm & Co. No principle is better settled than that an offer must be accepted on the terms proposed. If it be rejected and new terms are introduced, the party making the offer is no longer bound, unless he accepts the terms thus proposed.

(Decided 28th February, 1884.)

There was no error therefore in granting the defendant’s first prayer and in refusing to grant the prayer of the plaintiff.

Judgment affirmed.