Lewis Johnson et al., Respondents, v. Myron H. Clark et al., Appellants

Lewis Johnson et al., Respondents, v. Myron H. Clark et al., Appellants. Under the statute, a promise to accept a draft to be drawn by a party is equivalent to an acceptance. Defendants agreed to accept the draft of J., drawn on them for $95, at twenty days’ sight. J., showing his authority, drew on them for the amount at twenty days from date, and procured the same to be discounted by plaintiffs. Defendants refused to accept and pay the draft, because not drawn according to authority. Subsequently, plaintiffs procured a new draft from J., drawn according to the terms of the authority, and delivered up the first draft to be canceled. The defendants refused to pay the second draft. Ilelgl, they were liable on the same. This was an action to charge the defendants as acceptors of a draft, upon a written promise to accept, under the statute (2 R. S. 768, § 8). The promise in this case was a telegram from the defendants in New York, to one Ingraham at Washington, authorizing him to draw on them for $95, at twenty- days’ sight. Ingraham drew for the sum named at twenty days from date / the plaintiffs discounted the draft on the faith of the defendants’ telegram, and the draft was presented to defendants, and refused acceptance, because it did not conform to the authority to draw. This draft was dated June J, 1859, the day of the date and receipt of the telegram. On. the 20th of August following, the plaintiffs wrote the defendants, asking an explanation of the nonacceptance of the draft, stating that they had cashed it upon the faith of their telegram, and intimating that legal proceedings might be resorted to to collect it. The defendants did not answer this letter, but immediatelyowrote Ingraham, as follows: “ New York, Aug. 22,1859. “ B. T. Ingraham, Esq., “ Dear Sir: * * * * * We have a letter from Messrs. Lewis, Johnson & Co., bankers of your city, relative to your draft on us, dated some time since. “ You and Mr. Lomax gave us positive assurance that the draft which we made you a small advance on, when you were here, should he paid at maturity. Such was not the case. We, therefore, feel that you should pay the small advance which we made, and settle the matter with your Washington bankers, and we will hand you back Mr. Lomax’s draft. What we did was to accommodate you, and we hope you will prevent our having any trouble in the premises, and save us from loss. We shall rely upon the good service of Messrs. Lewis, Johnson & Co., and settling the matter with them. “Yours truly, “ CLARK & FAULKNER.” There is no proof that this letter was ever communicated to the plaintiffs. About the middle of March, 1860, the plaintiffs procured a second draft from Ingraham, on the defendants, for the amount, at twenty days sight, which was dated June 8, 1860, intended probably for June 8, 1859, and thereupon canceled and gave up to him his former draft. This second draft was presented to defendants on the 15th of March, 1860, and acceptance was refused. It does not appear that the defendants at any time had funds of Ingraham in their hands ; the consideration of their promise to accept for him was the Lomax draft referred to in their letter, which, it seems, was not collected. This action was brought on the second draft above described. The judge at the Circuit dismissed the complaint. The General Term ordered a new trial, and from that order the defendants appeal to this court, giving the usual stipula tion for judgment absolute, in case of affirmance. Edward Fitch, for the appellants. John N. Whiting, for the respondents. [MAJORITY — Dwight, J.] Dwight, J. The statute upon which this action is based provides that “ an unconditional promise in writing to accept a bill before it is drawn, shall be deemed an actual acceptance in favor of every perso'n who, upon the faith thereof, shall have received the bill for a valuable consideration.” The telegraphic authority to draw, was an unconditional promise to accept, within the statute (Ulster Co. Bank v. McFarlan, 5 Hill, 532); and, on the authority of the same case, it is conceded that the promise covered only a draft at twenty days’ sight, and that the defendants were not bound to accept Ingraham’s first draft, which was payable twenty days from date. So the plaintiffs seem to have learned at some time subsequently to the dishonor of the first draft, and hence they procured the second one. In the mean time the defendants wrote Ingraham the letter of the 22d of August, which the learned judge at the Circuit held to be a revocation of the authority to draw. But it is clear that this letter can have had no effect upon the rights of the plaintiffs. It never was communicated to them, and, if it had been, it raised no question of the defendants’ liability to them, but contained rather an implied admission of such liability, and an appeal to Ingraham to protect them against it. Hor was it in the power of the defendants to revoke their promise after the plaintiffs had parted with their money on the faith of it. The statute makes the promise to accept, equivalent to an actual acceptance of the bill to be drawn, or, in other words, makes it a constructive acceptance, which maybe treated as if it weije actually made, and, as such, it was no more to be revoked after money had been advanced on the faith of it, than an actual acceptance written on the face of a bill. I think the liability of the defendants was fixed when the plaintiffs paid their money for this constructive acceptance of the defendants, and that, when the first attempt to make a draft to which that acceptance should apply, proved to be ineffectual, it was the right of the plaintiffs to have another draft, which should be within the prescribed conditions. Under other circumstances, it might well have been a question whether the time which the plaintiffs supposed to elapse before the second draft was presented was a reasonable time within which to avail themselves of the promise to accept. But, in this case, a draft had been drawn immediately, which was refused as not being within the authority to draw; then, two months later, the plaintiffs wrote to the defendants, informing them that they had paid their money for this draft upon the faith of defendants’ promise to accept it, and asking what their objection to it was. They had a right to wait for an answer to this lettei before procuring another draft, and it is not for the defendants to object that they waited so long. They were fully informed of the plaintiffs’ claim upon them, and I cannot see that they were prejudiced by the delay to enforce it. 1 have no difficulty in deciding, that, under all the circumstances of this cáse, the defendants’ promise to accept applied to the draft in suit. The fact that this draft was post-dated, was not material; that date was an evident mistake, and, as the draft was payable twenty days from sight, the time of payment was determined by the date of its presentation. The order of the General Term, reversing the judgment at the Circuit, should be affirmed, and, under the defendants’ stipulation, judgment absolute should be rendered for the plaintiffs. Grover, J., dissents. Judgment affirmed.