Nelson v. the First Nat'l Bank of Chicago.

• Citation: 95 Am.Dec. 510,48 Ill. 36,1868 WL 5042
• Parties: MURRAY NELSONv.THE FIRST NATIONAL BANK OF CHICAGO.
• Decision Date: 30 September 1868
• Court: Supreme Court of Illinois

48 Ill. 36

1868 WL 5042 (Ill.)

95 Am.Dec. 510

MURRAY NELSON

v.THE FIRST NATIONAL BANK OF CHICAGO.

Supreme Court of Illinois.

September Term, 1868.

APPEAL from the Superior Court of Chicago; the Hon. JOHN A. JAMESON, Judge, presiding.

This was a proceeding in chancery, instituted by the appellant against the appellee, in the Superior Court of Chicago, to compel appellee to pay certain checks drawn upon it by one George M. Allen, and which checks, it was alleged, appellee had promised appellant it would pay, and which were thereupon taken by appellant on the faith of such promise, for a cargo of corn sold to Allen. On the hearing in the court below, the bill was dismissed for want of equity, to reverse which, the case is brought to this court by appeal.

Messrs. MILLER, VAN ARMAN & LEWIS, and Messrs. WILLIAMS & THOMPSON, for the appellant.

Messrs. BECKWITH, AYER & KALES, for the appellee.

Mr. JUSTICE LAWRENCE delivered the opinion of the Court:

This case arises upon the same state of facts set forth in The Bank v. Pettit & Smith, 41 Ill. 492, with one material and controlling difference. In this case, it appears that the promise of the bank to pay the check drawn by Allen in purchase of the cargo of corn, was communicated to appellant both by Allen himself and by Hutchinson, one of the bank directors; and appellant's then partner, who sold the corn, testifies he knew Allen was not pecuniarily responsible, and that he took the check solely on the credit given by the promise of the bank to pay. This fact did not appear in the Pettit & Smith case, and we presume did not exist. The question now is, whether, on this new state of facts, the bank must respond upon its promise.

If the appellant had sold his corn, as Pettit did, merely on Allen's credit, and without any knowledge that the bank had undertaken to pay his checks, there would be no ground for holding it liable on its promise, and no reason why it should not be permitted to apply all the money coming into its hands in payment of the debt due to itself, rather than to the payment of that due appellant. A promise to Allen to pay his checks, if it had not come to the knowledge of appellant, and been the basis of the sale made by him to Allen, would have created no privity between him and the bank, and as the promise would have been without benefit to the bank, and without injury to the appellant, if unaware it had been made, it would have been absolutely without consideration as between these parties, and therefore not binding. All the cases agree in holding, that in order to make a promise of this character binding in favor of a person who has received a bill, the bill must have been taken on the faith of the promise. But where it has been so taken, it is now the settled American law that the promisor must make his promise good.

The rule was originally laid down in the same way in England, in the case of Phillips v. Van Mierop, 3 Burr. 1663, which was twice argued and very fully considered by Lord MANSFIELD and the other judges of the King's Bench. It was subsequently shaken by Lord KENYON, in Johnson v. Collins, 1 East 98, and has since been fully overruled by the Court of Exchequer, in Bank of Ireland v. Archer, 11 M. & W. 385. It is held in the last case, and now seems to be the settled law of that country, that a promise to accept a non-existing bill is not binding as an acceptance, even where the bill is discounted for the drawer upon the faith of such promise. The court, however, express no opinion as to whether an action would lie for a breach of the promise to accept, although they refer to Beawes' Lex Mercatoria, p. 466, as laying down the rule that a promise to accept is a contract, for the breach of which an action will lie, but is not an actual acceptance.

In this country, the leading case is Coolidge v. Payson, 2 Wheat. 66, in which Chief Justice MARSHALL, after reviewing the English cases up to that date, lays down the rule, “that a letter written within a reasonable time before or after the date of a 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.” This rule has been constantly followed by the courts of this country, the only point of dispute being as to the degree of accuracy with which the promise to accept must describe the non-existing bill, and it is objected in the present case, by counsel for appellee, that the promise to pay by the bank did not sufficiently identify the checks to which the promise was to be applied, and the case of Boyce v. Edwards, 4 Peters, 122, is cited as an authority in point. The authority of that case is certainly to the effect, that the promise of the bank cannot be treated as a technical acceptance, for want of identification of the checks. We may be permitted to say, however, that the difference between a promise to accept a particular bill or check to be thereafter drawn, and a promise to accept all checks which a person might draw for a specific purpose, is so extremely technical and refined that we should be inclined, where the plaintiff had received the check or bill upon the faith of the promise, and had sued on the promise as an acceptance, to hold with the Supreme Court of Michigan, in Bissell v. Lewis, 4 Mich. 450, that it was a...