Schimmelpennich v. Bayard. 1P

have performed some act in relation to the particular bills, which imposes on them in law the character of acceptors.

This point was considered by this court, in the case of Cooledge and others v. Payson and others, 2 W. 66.

Cooledge and Co. held the proceeds of a cargo, claimed by Cornthwaite and Cary, whose claim depended on the decision of this court, of a case depending therein. Cornthwaite and Cary were desirous of drawing these funds out of the hands of Cooledge and Co., and offered a bond, with sureties, as an indemnity, in the event of an unfavorable decision. Cooledge and Co. in a letter to Cornthwaite and Cary, state some formal objections to the bond, and add, "we shall write to our friend Williams, by this mail, and will state to him our ideas respecting the bond, which he will probably determine.

If Mr. Williams * feels satisfied on this point, he will inform [*284] you; and in that case, your draft for $2,000 will be honored."

In answer to the letter addressed by Cooledge and Co. to Williams, on this subject, he declared his satisfaction with the bond, as to form; declared his confidence that the last signer was able to meet the whole amount himself; but that he could not speak certainly of the principals, not being well acquainted with their resources. He added, "under all circumstances, I should not feel inclined to withhold from them any portion of the funds for which the bond was given.”

On the same day, Cornthwaite and Cary called on Williams, who stated the substance of the letter he had written, and read a part of it. One of the firm of Payson and Co. also called on him, and received the same information. Two days afterwards Cornthwaite and Cary drew on Cooledge and Co. for $2,000, and paid the bill to Payson and Co., who presented it to Cooledge and Co., by whom it was protested. Payson and Co. sued them as acceptors.

The court instructed the jury that if they were satisfied that Williams, on the application of the plaintiffs, made after seeing the letter from Cooledge and Co. to Cornthwaite and Cary, did declare that he was satisfied with the bond referred to in that letter; and that the plaintiffs on the faith and credit of the said declaration, and also of the letter to Cornthwaite and Cary, did receive and take the bill in the declaration, they were entitled to recover in the action.

The jury found a verdict for the plaintiffs; the judgment on which was affirmed in this court.

In this case, the drawee had written a letter to the drawer, promising to honor his bill for $2,000, if Mr. Williams should be satisfied with a bond of indemnity, which had been placed in their possession. Mr. Williams declared his satisfaction with it, both to the drawer

Schimmelpennich v. Bayard. 1 P.

and holder of the bill, within two days after this declaration. In this case the promise to accept was express, and applied to a particular bill, the precise amount of which was specified in the promise.

The court in its opinion reviews several decisions in England on this point; in all of which the promise to accept was express; and in some of which the court declared the opinion that the promise ought to be accompanied by circumstances which may induce a third person to take the bill. After reviewing these cases, this court laid down the rule, "that a letter written within a reasonable time before or after the date of the bill of exchange, describing it in terms not to be mistaken, and promising to accept it, is, if shown to the person who afterwards takes the bill on the credit of the letter, a virtual acceptance, binding the person who makes the promise."

[* 285 ]

It cannot be alleged that these bills are brought within this rule. The plaintiffs, therefore, cannot be considered as acceptors of them.

But, although the plaintiffs cannot be viewed as the acceptors of these bills, it does not follow, necessarily, that they can maintain the present action. To entitle them to maintain it, the court must be satisfied that the payment is, in fact, what it professes to be, — a payment really for the honor of the indorsees. If the drawees, thus refusing to honor the bill, and thus denying the authority of the drawer to draw upon them, were bound, in good faith, to accept or pay as drawees, they will not be permitted to change the relation in which they stand to the parties on the bills by a wrongful act. They can acquire no rights, as the holders of bills paid supra protest, if they were bound to honor them in their character of drawees. The single and unmixed inquiry, therefore, on the second and third questions is, whether the drawees were bound to accept or to pay these bills. And, first, were they so bound because the bills were drawn in pursuance of the authority they had given to the drawer? This demands a more critical examination of the evidence than was required when considering the first question.

It is apparent, from the contract of the 11th of January, 1818, that Mr. Delprat came to the United States as the agent of N. and J. and R. Van Staphorst, to manage their mercantile interest; "consisting chiefly in forming new solid connections and procuring of consignments;" and also with commercial views of his own. The principal object of the contract is to define his authority, and to regulate his conduct as agent. He is allowed to draw on the plaintiffs for such moneys as he should employ, in making advances on current articles consigned to his principals, to the amount of two thirds of the invoice price of articles laden in chartered vessels. He was still

further restricted in his advances, by orders received long before the bills in question were drawn, to one half of the true invoice. Mr. Delprat's authority, then, to make advances was limited, at the date of this transaction, to one half the invoice price. One, and perhaps the most usual mode of conducting business of this description is, to draw in favor of the consignor, or to indorse his bill. The agent might, however, if not otherwise instructed, draw immediately on his principal, and advance the money to the consignor which was raised by the bill. In either case, however, drafts beyond one half the invoice price of the consignments actually made would exceed the authority given. Circumstances may exist, which would impose on the principal the obligation to pay such drafts; but the question we are now considering relates only to the authority under which the bills were drawn. That authority restricted * the [286] agent in the amount of his drafts to one half the invoice price of the articles actually consigned; and also required him to accompany his letters of advice with bills of lading and invoices. Were the bills in question drawn in conformity with powers and instructions thus limited?

The first bill on the list is for £500, drawn in favor of J. P. Krafft, on the 23d of May, 1822, and indorsed by him to the defendants. The letter of advice states this bill to be drawn on account of shipments by The Edward, Jason, and May Flower, as by letter of 21st, which is to be charged to account of P. Krafft. The letter of the 21st is not in the record.

The shipment by The Jason had arrived, and The May Flower had sailed before the bill was drawn. Mr. Krafft was at the time indebted to N. and J. and R. Van Staphorst. The bill was returned by Krafft to Delprat, and then indorsed by the defendants.

It does not appear certainly who remitted this bill; although the probability is that, as it was indorsed by the defendants, not as purchasers but for a commission, it was remitted by Delprat, to whom it was returned by Krafft, as is stated in Delprat's testimony, or by some person to whom Delprat sold it. It is true that he further states that, after the bill was so returned, he sent it to the defendants; but this was, no doubt, done for the purpose of having it indorsed by the defendants, in order to give it credit. Neither does it appear, from the evidence in the cause, that Krafft accompanied the shipments on account of which this bill was drawn, by any letter of advice, or otherwise directing the proceeds thereof to be applied to the discharge of this bill; but, on the contrary, the letter of advice addressed to the plaintiffs by Delprat directed the bill to be charged to the account of Krafft, generally. Under these circumstances, taken

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in connection with the additional one that Delprat was concerned, generally, with Krafft, in the shipments made to the plaintiffs, the court is of opinion that there is no material difference between this bill and those drawn on account of shipments made by and in the name of Delprat, which are now to be considered.

As

It has already been stated that Mr. Delprat was a merchant, trading on his own account, at the same time that he was the agent of N. and J. and R. Van Staphorst. His transactions, in his two characters, were as distinct from each other as if they had been the transactions of distinct persons. As an agent, he was bound to act "in conformity to the authority and instructions" of his principals. a merchant, he was himself the principal, and acted in conformity with his own judgment. It would seem, then, that the [* 287] contract must contain some very peculiar *and unusual provisions, to place Mr. Delprat under the authority of the house in Amsterdam, whilst carrying on trade in the United States on his own account. Upon reference to the contract, we find a stipulation between the parties in the following words: "The second undersigned (Delprat) binds himself to procure to no person or persons in this kingdom any consignments or commissions, from himself or any other, except to the first undersigned; but, on the contrary, to use his utmost exertions toward the benefit of the mercantile house of the first undersigned; they being willing, on their side, to facilitate all such commercial operations as might benefit the second undersigned, without their prejudice."

This article contains the only limitation on the entire independence of Mr. Delprat as a merchant. It is, perhaps, a necessary limitation, which was, in part, the price of his agency, and for which he finds a compensation in the profits of the business confided to him. This restriction does not change the character of his transactions as a merchant. His waiving the right to consign to any other house, does not impress on his consignments to the Van Staphorsts, or on his bills drawn on those consignments, a character different from that which would have belonged to them had his shipments been made from choice. He does not bind himself to make consignments to them; but not to make consignments to any other house in the Netherlands.

If any doubt could arise from this article, it would be produced by the peculiar manner in which it is expressed. Mr. Delprat binds himself to procure to no person in the kingdom of the Netherlands any consignments or commissions, from himself or any other, except to the Van Staphorsts. The singular application of the word procure," to consignments made by Mr. Delprat himself, may be

Schimmelpennich v. Bayard. 1 P.

connected with the succeeding article, which authorizes him to draw bills, and may have some influence on its construction. In that article, the Van Staphorsts allow Mr. Delprat "the faculty to value on them direct, or payable in London," for such moneys as he shall employ to make advances on the whole or part of cargoes of current articles consigned to them, to the amount of two thirds of the invoice price.

It may be said that, as in the preceding article, consignments made by Delprat on his own account were considered as procured by him, and were placed on the same footing with consignments made by others; so in this the express authority to draw bills might embrace transactions of both descriptions. But we do not think that the inaccurate use of words in one article will justify a departure from the correct construction of a succeeding article; unless the same words are used, or the bearing of the one [288] on the other is such as to require that departure.

The same motives existed for restraining the agent from making as from procuring consignments to any other house in the Netherlands. His utmost exertions were required for the benefit of his principals. The restriction, therefore, might be expressed in the same sentence; and a slight inaccuracy of language was the less to be regarded, because it could produce no possible misunderstanding with respect to the extent of the prohibition.

The third article might not be intended to prescribe the same rules for the conduct of Mr. Delprat, as a merchant and as the agent of the Van Staphorsts. As a merchant, he had a right to draw on effects placed in their hands, independent of contract. The usage of trade allows such drafts to be made on a shipment; and the consignee must pay the bills, if the shipment places funds in his hands to pay them. But, as agent, his line of conduct was to be prescribed by contract. We must, therefore, consult the language of the agreement, in order to determine whether it provides for the future connection between the parties, further than as regards their characters as principal and agent.

The faculty given to Mr. Delprat by the third article, to value on the Van Staphorsts, is "for such moneys as he should employ to make advances" on articles consigned to them. Money laid out in the purchase of articles on his own account cannot, with any propriety of language, be denominated money employed in making advances on articles consigned to him. The distinction between money advanced on articles consigned and money employed in purchases, although the articles may be purchased for the purpose of being consigned, is obvious. Money advanced is always to another.