author: Avert, J.

text:
    Lonsdale & Gray v. The Lafayette Bank of Cincinnati.
    Upon a letter from persons in New Orleans, addressed to one in Cincinnati, stating that bills to the extent of $10,000 would be duly honored by them up to a certain date, the" same being accompanied by a bill of lading of shipments to their address, by steamboats, an action may be maintained for a breach of promise to accept in his own name, by a third person, who, upon the faith of such letter, has taken bills drawn according to its provisions.
    Such a letter of credit does not, as in the case of commercial guaranties, require notice to be given either of its acceptance or of bills drawn under it.
    'The law of Ohio, and not of Louisiana, governs the contract.

      This is a writ of error to the Superior Court of Cincinnati.
    The action below was assumpsit, brought by the Lafayette ■Bank of Cincinnati against Lonsdale & Gray. The plaintiff -counted upon two bills of exchange drawn by E. Carter & Co. upon Lonsdale & Gray, one for $1,150, dated March 23d, 1846, the other for $1,300, dated March 28th, 1846, both •payable in sixty days. The declaration charged the defend-ants as acceptors, and upon their promise to accept. The case was submitted to the court and judgment rendered for the plaintiff.
    On the trial the plaintiff offered in evidence the letter of Lonsdale & Gray to E. Carter & Co., dated New Orleans, January 31st, 1846, and proved that Henry T. Lonsdale and George O. K. Gray composed the firm of Lonsdale & Gray, and that the letter was signed by them.
    The plaintiff also exhibited the bills of exchange declared upon — protested, and then offered as a witness W. G. W. Gano, ■cashier of the Lafayette Bank of Cincinnati, who testified that the bank discounted, on the faith of the letter of credit, eight bills of exchange, as the same are indorsed on said letter. That six of said bills were duly paid by Lonsdale & Gray, at maturity; and the last two, being the bills of exchange offered m evidence in the case, were returned under protest. That the whole amount of said bills so discounted was within $10,000; and a list thereof was entered at the foot of said letter on or about the time the several discounts were made. That E. Carter & Co., in such case, in handing a bill of exchange to the bank to be discounted, handed a bill of lading to the bank, which, according to the custon of the bank, was filed away. That the bills of exchange in suit were sent to New York, by the plaintiff, and there sold, and the proceeds thereof passed to the credit of the plaintiff; that said bills were then sent to New Orleans, and were afterwards taken up by the plaintiff. That since these bills were protested, the plain tiff had received some securities from E. Carter & Co., for their payment; but at the time of discounting them the plaintiff relied mainly on the letter of Lonsdale & Gray.
    The plaintiff further offered as a witness on his behalf, E. S. Haines, Esq., who testified that being about to visit New Orleans, after the intelligence was received of the protests of said bills for non-acceptance, the president of the Lafayette Bank handed to him the said bills of exchange, the letter and the bills of lading. That he carried the same to New Orleans, and there, at the counting-room of Lonsdale & Gray, about May 10th, 1846, he handed the same to them, and requested acceptance of said bills of exchange, advising them at same time of the purchase thereof by the Lafayette Bank. They admitted the protests of the same for non-acceptance on April 18th, 1846, but declined accepting the bills, saying they would correspond with E. Carter & Co.
    The testimony having been closed, the counsel for the defendants asked the court to hold and decide: 1. That the evidence offered by the plaintiff did not sustain either count of the declaration; 2. That there was no privity of contract between the said Lonsdale & Gray and the plaintiff; and that the plaintiff could not maintain an action upon said letter against the defendants; 3. That the plaintiff was bound, in law, to give notice to Lonsdale & Gray of having purchased bills, drawn upon the faith of said letter of credit, so soon as the same were purchased, or at least before Lonsdale & Gray had sold the goods of E. Carter & Co., and closed their account with them; 4. That E. Carter & Co., or the plaintiff, should have given notice of drafts being drawn, as aforesaid; 5. That the plain tiff could only recover for bills of exchange which, when presented for acceptance, were accompanied with bills of lading; and no sufficient evidence was offered by the plaintiff of such presentment.
    But'the court held differently on all the points made, and this is alleged as error.
    The letter relied upon as evidence of an agreement by the defendants to accept, is as follows:

      New Orleans, Jan. 81st, 1846.

      Messrs. JE. darter Co., Cincinnati:

    Gents : — Yours of the 7th inst. is at hand. Your bills to us at thirty days sight, or sixty days date, to the extent of' ten thousand dollars, (say $10,000 in sums to suit you,) will be duly honored by us up to next July; the same being accompanied by a bill of lading of shipments to our address, by steam boats. Whisky, rectified, at 18 cents, laid down on our levee; flour, $4.50, and indorsed on this credit.
    Respectfully,
    (Signed) Lonsdale & Gray.

      Storer §• Gr Wynne, for plaintiff in error.
    It was claimed by the plaintiff below, that the plaintiff could recover upon the letter of authority offered as an acceptance. In England, a promise to accept a non-existing bill of exchange is not an acceptance. Bank of Ireland v. Archer, 11 Mees. & Wels. 383. See, also, opinions of Thesiger and others, in 2 Metef. Rep. 318, and 2 Story Rep. 214. In the United States, the courts, proceeding upon the early English case of Pillans v. Van Murop, 3 Burr., although the adoption of the principle of that case -was regretted, 1 East Rep. 98, and 1 Story Rep. 22, 114, have held that an authority to draw is an acceptance of bills drawn in conformity thereto, provided the bills are sufficiently described, so as to leave no doubt as to the specific bill intended. 5 Mass. 11; 2 Wheat. 66; 15 Johns. 6; 5 Wend. 414; 1 Story Rep. 22. But a general authority to draw to amount of $10,000, does not amount to an acceptance in the United States, since in that case there is no specific designation of the bills; and any number may be drawn under it which the party may desire. 2 Metc. Rep. 381, 406; Von Phul v. Sloan, 2 Robinson’s La. Rep. 148. So, also, -where any thing remains to be done, under the letter of credit, besides drawing the hills, it is no acceptance. As if the bills are to be at so many days after sight — 1 Story Rep. 22; 2 Mete. Rep. 381; or if cargoes are to be advanced upon — 1 Pet. Rep. 264, 285 ; or, if the bills are to be drawn, when bills of lading are sent — 4 Pet. Rep. 122.
    Could the plaintiff recover upon the letter in this case, as a promise to accept bills of exchange, for the breach of which they may sue ? There is no privity of contract between the plaintiff and defendants. The letter is from the defendants to E. Carter & Co. It is a close contract between those two. There is no necessity of traveling out of it to find a promisee. In 26 Wend. R. 425, the guaranty was general — “ I guaranty the payment of the within note” — without saying to whom. It was therefore necessary to go into the world to find a promisee. Even there the court held a second indorsee could not recover; that the contract was with the party who first took it. Here the Lafayette Bank sold the bills to a bank in New York; that bank sent them to a bank in New Orleans; and finally the drafts came back to the Lafayette Bank, with all the indorsements still upon them. This case, in 26 Wend. Rep. 425, does not sustain the right of the Lafayette Bank to sue under such circumstances.
    But one authority is to be found for the right of the Lafay •ette Bank to sue upon this breach of promise to accept. Judge .Story, in Russell v. Wiggin, 2 Story Rep. 214, sustains the •right; but no other case, English or American, can be found, .where a plaintiff, not named, recovered. In 4 Pet. 122, and 2 Robinson’s La. Rep. 148, are obiter dicta that the party to whom the letter was directed, may sue for a breach. In Carnegie v. Morrison, 2 Metc. Rep. 381, C. & Co., who sued, were named in the letter. Judge Story, therefore, who was anxious 'to increase the negotiability of mercantile papers, stands alone. He expressed doubts, and probably was influenced by them, as to the English rule; which doubts have since been removed by the decision in 11 Mees. •& Weis. 383. In opposition to Judge Story’s opinion, which, we admit, is entitled to great consideration, wo may cite many and equally distinguished .names. The ..most eminent barristers of England, Pollock and others, give their opinions, as published in 2 Story Rep. 214, that plaintiffs, situated like the bank, can maintain no action upon a similar letter of credit. In 11 Mees. & Wels. 383, there was a count on a breach of promise, and still judgment was for defendant. The cases in 2 Metc. Rep. 381 and 2 Story 214, are doubted in Birkhead v. Brown, 5 Hill Rep. 634, a case very similar to the present, where the defendant succeeded. To sustain the position of the plaintiff, the court must incorporate into the statute and custom of merchants, a new negotiable instrument, and lose sight of the fundamental principle that a chose in action is not assignable. The only case in Ohio (10 Ohio Rep. 495) on this subject, confines the right to sue to the party to whom the letter of credit is directed. It is a general rule that a guaranty is not negotiable, unless it is indorsed on the. note or bill guarantied, and made payable to order or to bearer. 5 Wend. 307; 26 Wend. 434. The authority of Chancellor Kent and others is express, that an agreement to accept bills to be drawn, is not assignable. 10 Johns. 207; 12 Wend. 598; 4 Greenl. Rep. 199, 203; 20 Pick. 140.
    In this case we are to look to the law of Louisiana. There the contract was made ; there the letter was written; and there the acceptances were to be made. The lex loci contractus, the law of Lousiana, governs and prescribes the liabilities of the parties. 4 Pet. Rep. 122; 2 Metc. 381; 2 Story 214. The plaintiff below should have proyed what is the law of Louisiana. So far as we have any light on the subject, the cases of Carrolton Bank v. Tayleur, 16 Curry’s La. Rep. 490, and Von Phul v. Sloan, 2 Robinson’s La. Rep. 148, show that this is not an acceptance, because the bills are not specifically designated. The latter case admits a liability to the person to whom the letter was directed, as upon promise to accept. It seems evident, that had the court been of opinion that there was a liability to any other person, they would have so stated, since' the parties before them as plaintiffs, were persons who had taken the drafts on the faith of the letter of credit. By omitting to state any such liability, the court negative the idea that such a liability existed.
    An acceptance is known to the law merchant as negotiable; not so with a promise to accept.
    We have thus far examined the law involved in'this case, to discover whether, in any event, the plaintiff below could main tain an action. If a right to sue were admitted, the case of the plaintiff is defective in several points.
    1. It is well established, that in point of law, the party wh( gives such a letter as this is entitled to notice. Notice need not be stipulated for in the contract, any more than an indorser need agree for notice; the law inserts the stipulation in every con tract. Upon this subject the courts of New York hold a differ ent rule from the courts of any other state, or the United States. Notice must be given of advances upon a guaranty or letter of credit. Adams v. Jones, 12 Pet. Rep. 207. To en title a party to recover on a letter of credit, notice must be given a reasonable time after said letter of credit has been accepted, of the acceptance by those who accept it. 12 Pet. Rep. 497 ; S. C. 7 Pet. R. 125. Demand of payment must be made of the principal debtor, and notice given to the guaranty. Ib. That notice of advances upon a letter of credit must be given, is decided, as above stated, in the supreme court U. S.; in the circuit for Mass. 1 Mason 340; in the state courts of Mass. 12 Pick. 133; 22 Pick. 228; in Maine, 4 Greenl. 521; in Vermont, 11 Vermont R. 444; in Connecticut, 3 Conn. R. 438; in North Carolina, 1 Dev. 404; in Mississippi, 4 How. Miss. R. 231; in Ohio, 10 Ohio R. 495. And the notice must be given immediately after the transaction closes. 10 Ohio R. 495. Here the drafts are drawn March 23 and 28; no notice is given until April 18, 1846, when the drafts are presented. Then the defendants had closed all sales and their accounts with Carter; even then there was nothing to show the drafts were drawn under the letter.
    2. What is conclusive of the present case is, that the plain tiffs have not complied with the conditions of the letter of credit. A conditional promise to accept cannot be sued upon, unless the conditions are performed. Mason v. Hunt, Doug. 296; 1 East 98; 4 Peters’s R. 121; 12 Wend. 599. Thus a promise to accept, upon property to be consigned, insured, etc., does not bind, unless the condition is complied with. Doug. 296. An engagement to accept bills, if made subject to the receipt of shipments, does not bind the party who engages, unless the shipments are received. Storer v. Logan, 9 Mass. R. 55; Murdock v. Mills, 11 Metc. R. 6.
    Here the drafts were to be accompanied by bills of lading of shipments. There is no count in the declaration which sufficiently alleges that the drafts were so accompanied, nor doe.s the proof show such a state of fact. There is no proof that any shipments were made or advices given of them; the letters of Lonsdale & Gray show the opposite. If property did go forward, Lonsdale & Gray had no information that it was to pay these bills. They cannot be held, therefore, for those two drafts now sued upon. It is true, if property did go forward, the bill of lading gave them the power to receive any property shipped to them, but the shippers, E. Carter & Co., might still give to others rights in the property, or demand the proceeds of its salé, unless there was a specific appropriation thereof in the mode named in the letter of credit. The defendants were factors of E. Carter & Co. Now, if the bill of lading be indorsed, transmitted and delivered to a factor, for the express purpose of enabling him to sell the goods, without any reference to any loan or balance due, or without any specific pledge of the cargo, or any particular appropriation of the bill of lading 'to any specific draft or balance, it will give him no other rights in respect of the goods, than a factor, as such, would have without such indorsement of the bill. Long on Sales 304. It was necessary, therefore, to show a compliance with the letter, else the defendants could not say the goods were specifically appropriated to these drafts. To comply with the letter, the drafts must be accompanied with bills of lading. 1 Pet. S. C. R. 282, 283; Murdock v. Mills, 10 Metc. R. 6. They must be seen by the defendants to be 30 accompanied. “ Accompanied with,” means that both must be presented together; they must not be disunited, for the object was that the bill of lading might not be disposed of apart from the draft. The bill of exchange cannot travel over the world alone, and be presented without the bill of lading, after the goods are sold and appropriated, without any objection of E. Carter & Co., to discharge the lien of the defendants below for past advances. The right to sue, lost by neglect to comply with the letter, cannot be revived twenty days afterwards, by E. S. Haines calling May 8,1846, with the bills of lading in his pocket, the drafts having then traveled around extensively, unaccompanied with the'bills of lading, and then belonging probably to a bank in New York or New -Orleans, and not to the plaintiff below, whose agent he was. The account of Lonsdale & Gray with E. Carter & Co., was- then closed.

      E. S. Saines, for defendant.
    As to the first point, it need only be said that we have declared on the bills as accepted bills, and also on a breach of promise to accept; and that the evidence is conclusive, to sustain an action upon the breach of promise to accept, if not as accepted bills. A clear authority is given to draw the bills in question, and a promise or undertaking that such bills would be accepted. If they do not say in terms, “ we will accept your bills,” they use the well understood mercantile phrase, “ they will be duly honored.” And, the only question under the count upon the acceptance is, whether they have been sufficiently described to bring them within the principle settled in the leading case of Coolidge v. Payson, 2 Wheaton 66.
    In 5 Hill 434, the court says, “ that the written promise to accept need not contain a particular description or identification of the bill to be drawn. It is enough that it is drawn in pursuance of the authority.” 2 Wend. 245; 5 Do. 414; 17 Do. 508; Baldwin 38, 44. Bub should it be considered important that the letter of credit should designate the amount of the several bills, then the count for the breach of promise to accept will sustain the action, as was decided in 4 Peters’s 122, 123; 2 Story C.,C. R. 213.
    In considering the subsequent points, it may be proper to advert to the importance of settling the law in Ohio, as connected with these “ mercantile instruments,” and to say that large transactions take place annually, based upon letters very similar to the one now before the court.
    And as to the construction, that in the language of Judge Story, 2 Howard 449, “ we should never forget that letters of guarantee are commercial instruments, generally drawn up by merchants in brief language, sometimes inartificial, and often loose in their structure and form: and to construe the words of such instruments with a nice and technical care, would not only defeat the intention of the parties, but render them too unsafe a basis to rely on for extensive credits, so often sought in the present active business of commerce throughout the world and “ further, that if the language used be ambiguous, and admit of two fair interpretations, and the guarantee has advanced his money upon the faith of his interpretation most favorable to his rights — that interpretation will prevail in his favor; for it does not lie in the mouth of the guarantor to say that he may without peril scatter ambiguous words by which the other party is misled to his injury.” Mr. Justice Story adds, “ that the remarks made by the court in 1 Howard 186, meets with their entire approbation,” which are to the same effect.
    As to the question, then, whether there was such a privity of contract between the guarantors and the defendants in error, as to enable the latter to maintain an action against the former, we infer there can be no doubt upon a fair construction of the letter of credit. That such a privity exists, there can be no question upon principle and authority. Lonsdale & Gray au thorize E. Carter & Co. to draw on them upon certain terms, to a limited amount; when the money is advanced upon the faith of such promise, and the conditions are complied with, the law creates the privity. In this case it appears, from an examination of the account current between Lonsdale & Gray and E. Carter & Co., that some prior shipments to them, connected with this transaction, resulted in a loss, but that the plaintiffs in error have funds on hand from the last shipment equal, or nearly so, to the amount of the bill now in suit, and consequently, if we are compelled to use the name of E. Carter & Co., that our rights are gone. Such was not the intention of the parties as derived from the letter of credit; but on the contrary, an offer or promise was held out to all the world, which when accepted, advances made upon the faith thereof will inure to the benefit of such persons. The undertaking in every such case, though general in its offer, becomes, when accepted, definite and binding between the guarantor or promisor and the person trusting upon its credit. This question it is certainly unnecessary to discuss, as it has been fully examined by Judge Story with his usual ability; 2 Story C. C. R. 213, and has also been decided in 2 Metcalf 381; 11 Ibid. 10 ; 3 Cranch 492; 1 Bald. 43; 12 Mass. 155; 36 Wendell 435; Story on Bills, sec. 462. The case in 6 Hill 643, has been adverted to as favoring a contrary doctrine; but there the court decide, “ that when a letter of credit is general, any one to whom it is presented may act upon and enforce it.” And the state of case there was entirely different from the present one, wherein Lonsdale & Gray promise to honor bills to the amount of $10,000, in favor of whom ? Why, in favor of any one advancing Carter & Co. funds to purchase flour and whisky, upon prescribed terms, and ship to them as commission merchants. The very object of the letter of credit was to enable Carter & Co. to raise funds to make such shipments. And it is in evidence that the credit was given by the Lafayette Bank, and the money advanced, mainly upon the faith of the “ letter of credit ” above set forth.
    The third and fourth points are substantially the same as to notice, and will be considered together.
    It will be borne in mind, that this is not a mere guaranty of bills to be drawn, but Lonsdale & Gray confer the right to draw on themselves, and to consider themselves as the paymasters
    In the language of Mr. Justice Johnson, 3 Wheaton 146, “ It is an original substantive undertaking,” and not in the nature of suretyship: Lonsdale & Gray have themselves prescribed the mode in which they should be advised of their liability, “ by draft at 30 days sight or 60 days date,” and for their security “ bills of lading of shipment to their order by steamboat.” In the words of Judge Bronson, 6 Hill 544, “ there is nothing in the undertaking which looks like a condition, or even a request that notice should be given if the guaranty was acted upon; and there is no principle upon which the court can hold that notice was an essential element of the contract.” Why should the necessity of notice be urged in this case ? The presentment of the bills for acceptance, drawn in pursuance of the “ letter of credit,” is the only notice required by Lonsdale & Gray, and the best advice that could be given.
    The present is not one of the class of cases which hold that under a contract guarantying a debt yet to be made, the guarantor is not liable to suit without notice that the guaranty has been accepted and acted upon. Even upon such guaranties, it has been decided in England that no notice is necessary, for the reason that the guarantor, by inquiry of his principal, with whom he is presumed to be on intimate and confidential terms,' may inform himself whether the guaranty has been accepted. All the cases requiring notice are American, and depart from the rule of the common law; and no American case can be found, where, upon a letter of credit, which is absolute in its terms and definite as to its amount, a notice is necessary. But if notice should be considered as essential, it can only be required in a reasonable time after the acceptance of the terms of the letter of credit; and in this case, it' is in evidence that Lonsdale & Gray were advised, by the Lafayette Bank, through Haines, their agent, prior to the maturity of the bills, that the bank purchased these bills upon the strength of their letter of credit; and of this fact express notice was given them. 7 Pet. 126; 11 Vermont 444; 24 Wend. 49, 84; 12 Pet. 504.
    In relation to the 5th point, “ that the bills of exchange must be accompanied by the bills of lading,” it is necessary to refer to the letter of credit, for the purpose of ascertaining the intent and meaning thereof. It is undoubtedly true that Lonsdale & Gray intended to protect themselves by having the shipments of flour and whisky made prior to the maturity of the bills, or the acceptance thereof. That could have been their only object in requiring bills of lading, to furnish them with satisfactory evidence that produce was coming forward, and thus enable them to meet the payment of those bills. But we show shipments by the steamer “ Grace Darling ” on the 23d of March, and by the “ Duke of Orleans ” on the 28th of March, 1846 (of even date with the bills in judgment), of produce, to an amount within the terms of the letter of credit. And by the depositions of Lonsdale & Gray’s clerks it appears that the said shipments were received and sold by the said plaintiffs in error, prior to the maturity of the said bills.
   Avert, J.

It appears, from the testimony offered below, that soon after the letter of credit was drawn, E. Carter & Co., at Cincinnati, commenced making shipments of produce to the defendants, by steamboats, according to the terms of the letter, and within the period of about one month, sent forward the produce by eight different shipments, of the value, in the aggre gate, of some ten thousand dollars. The first shipment was made on the 26th of February, 1846, on which day E. Carter & Co. drew their first bill upon the defendants, and forwarded it for discount to the bank, the plaintiff in the action. ■ They presented also at the same time, the above letter of credit and the bill of lading, and left them all with the bank. The bank, on the faith of the letter of credit, discounted the bill, and paid over the amount, in money, to E. Carter & Co. As each remaining shipment was made, the bill of exchange was drawn, indorsed and, with the bill of lading, handed over to the plaintiff, who advanced the money upon it, and thus supplied E. Carter & Co. with funds, as they were needed to buy property that was to be shipped to the defendants. The first six of these bills of exchange were duly paid by the defendants ; the two last are the bills in controversy.

They were presented on the 16th of April, but without the bills of lading, and were then protested for non-acceptance. Afterwards, about the tenth of May, and before becoming due, they were again presented, accompanied by the bills of lading, when acceptance was again refused. Payment of the bills was demanded at maturity, but refused. The defendants now claim a right to apply the avails of the last two shipments to a balance in their favor against E. Carter & Co., and deny that they are under any legal obligation to pay the drafts. In the letter of credit which they signed, is an agreement that the bills shall be honored, which means that they shall be accepted and paid. That letter was an instrument sufficiently understood in the mercantile community. Its-well known object was to give credit to E. Carter & Co., to enable them, upon the strength of it, to raise money with which they were to purchase property to be consigned to the defendants. It has accomplished its end. If this be the meaning of the agreement, and the parties have acted upon such an understanding of its import, have they been mistaken ? Are there no legal rights or obligations between them created in the case ?

The plaintiffs insist that there are, and that they have a remedy against the defendants as acceptors, or upon their breach of the agreement to accept. It is certain that a promise to accept a bill of exchange, whether made before or after its date, may become, in effect, an acceptance, without being actually noted upon the bill itself; and if the defendants can be held as acceptors, the remedy in behalf of the plaintiffs is clear, and relieved from all difficulty.

But the authorities are not uniform as to the circumstances and acts necessary to constitute such an acceptance, when not noted upon the bill. The case of Coolidge and others against Payson and others, 4 Condensed U. S. Reports 33, decided that a letter written within a reasonable time before or after the date of a bill, 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.” The rule here laid down is again recognized in Boyce & Henry v. Edwards, 4 Peters’s U. S. Reports 121, where the court add, “ and this rule we believe to be in perfect accordance with the doctrine that prevails, both in the English and American courts, on this subject.”

The judgment was in that case reversed, because the court had instructed the jury that the evidence was sufficient to charge the defendants as acceptors. They say that the distinction between an action on a bill, and one founded on a breach of promise to accept, seems not to have been adverted to. * * * To maintain the former, as has been already shown, the promise must be applied to the particular bill alleged in the declaration to have been accepted.” That was an action of assumpsit on bills of exchange, and for the purpose of charging the defendants as acceptors, a letter of theirs was offered in evidence, in which authority was given to draw bills, but it did not describe them minutely, as required by the rule.

Under this decision, the count in the bills in the case before them, could not be sustained against the defendants, as acceptors. It will not, however, be necessary to examine other authorities, with a view to support the judgment on this count, if the plaintiffs in the action are entitled to recover on the other counts in the declaration, which charge a breach of promise to accept; for in such case, the judgment of the superior court of Cincinnati cannot be reversed. Our inquiry then will be, can a suit be maintained upon this letter of credit in the name of the plaintiffs ? It is said there is no privity of contract between the parties, and therefore the plaintiff has no right to institute a suit upon the agreement. The letter, it is true, does not show any other names than Lonsdale & Gray, the writers, and E. Carter & Co., the persons to whom it is sent. But it is drawn for the express purpose of being shown to others, and of inducing them to make advancements of money for the object contemplated in it; and after the purpose has in this way been accomplished, to withhold a remedy against the writers, would seem to be giving a direct countenance, by law, to the perpetration of a fraud. It would be strange if authorities could not be found to obviate the difficulty supposed to exist in a ease like the present, from the want of a privity of contract.

It is said in the above case in 4th Peters, that courts have leaned latterly very much against extending the doctrine of implied acceptances; but they make use of this language at the same time with respect to a proceeding under a promise to accept, “ as it respects the rights and the remedy of the immediate parties to the promise to accept, and all others who may take the bills upon the credit of such promise, .they are equally secure and equally attainable, by action, for the breach of the promise to accept, as they are by an action on the bill itself.” The letter of credit in the above case, was addressed, to be sure, to Edwards, the plaintiff in the action, but the promise was not in terms made to him. The letter names another person— states that he is authorized to draw, and that his bills will be honored. But at all events, the language of the opinion applies clearly to a case circumstanced like the one now before the court.

In 2 Story’s Rep. 214, it is decided, “ that a promise contained in a letter of credit, written by persons who are to become the drawees of the bills drawn under it, promising to accept such bills when drawn, which letter is designed to be exhibited for the purpose of inducing persons to advance money on it, and take the bills when drawn, is an available contract ic favor of the persons to whom the letter of credit is shown, who advance money and take bills on the faith thereof.”

This is a case directly in point, and restores, as far as it may be taken to be authority, the entire claim of the plaintiff.

But further, with respect to this objection, the event of privity of contract, the books abound with cases to show that it cannot be employed to defeat an action sustained as this has been by the evidence. See Carnegie et al. v. Morrison et al., 2 Mep. Rep. 381; McLaren v. Watson's Ex’rs, 26 Wend. Rep. 425; Lawrason v. Mason, 3 Cranch’s Rep. 492; Story on Bills 544, 545.

But supposing the objection as to parties removed, it has been urged in behalf of the defendants, that a recovery cannot be had, because no proof has been introduced to show what are the laws of Louisiana; that upon the principle of the “ lex loci contractus,” the law of that state must determine the rights and liabilities of the parties. That is not the view which the court has taken of this contract. The letter, indeed, is dated New Orleans, and the acceptances were to be there ; but the contract -was closed in Cincinnati; the bills were to be drawn and indorsed there ; the money upon them to be obtained, and the produce brought there. -With such a state of the facts, we suppose that Ohio furnishes the law of the contract.

It is further objected that there is no evidence of the acceptance of the terms contained in this letter, or at least of no acceptance within,the reasonable time, supposed to be necessary in the case, and no evidence of the timely notice to these defendants of the issuing of drafts under the authority of the letter.

The court does not regard this letter in the light of a com mercial guaranty requiring notice. In the case of Lanusse v. Barker, 4 W. S. Cond. Rep. 204, where the letter of credit contained, as does the one in controversy, a direct promise to honor the bills of the drawee, the court distinguishes between a mere guarantee of bills to be drawn, and such a direct promise. They say, “ but where the defendant confers the right to draw upon himself * * * he makes himself the paymaster, and we consider it an original substantive undertaking. * * * The law on the subject of securityship undertakings cannot be applicable.

Lonsdale & Gray undertake, in their letter, to honor bills drawn on them at 30 days sight, or 60 days date, until the July following its date, and to the extent of $10,000, the same being accompanied by a bill of lading of shipments to their address by steamboats. The bills in controversy were taken by the plaintiffs on the faith of that letter, and in pursuance of its terms; they were presented before they were due, accompanied with the appropriate bills of lading, and afterwards, at the maturing of the bills, payment was demanded of these defendants. They have neither accepted nor paid the bills, and were therefore properly held liable in the action by the court below to pay them.

Judgment affirmed.


source: Caselaw Access Project

author: Caldwell, J.

license: Public Domain

text:
    David Wilson v. The State.
    Where, in an indictment, there are counts under the 24th section of the act for the punishment of crimes, for shooting with intent to hill, and under the 17 th section of the same act, for assaulting with intent to murder, and the jury find the defendant guilty of the first charge, the court cannot, with the consent of the jury, enter a verdict of- guilty, generally, on all the counts in the indictment.
    This is a writ of error to the Court of Common Pleas of Lucas county.
    The plaintiff in error was tried in the court of common pleas of Lucas county, on an indictment charging him, in the two first counts, with shooting at George Lewis, with a loaded pistol, with intent to kill and murder. In the third count he is charged with an assault, with intent to murder; and in the fourth count with a simple assault and battery.
    The court charged the jury that, if they found the defendant guilty under the first and second counts of the indictment, as there was no proof of any assault, except with a loaded pistol, such finding would include the crimes charged in the third and fourth counts; and they might bring in a verdict of guilty on all the counts. The defendant' excepted to this charge, and the court signed a bill of exceptions.
    The jury returned a verdict of guilty on the two first counts. The court thereupon, in the presence of the jury, and with their consent, entered up a general verdict of guilty on all the counts, and sentenced the prisoner to confinement in the penitentiary.
    The charge of the court, the alteration of the verdict of the jury, with other matters, are assigned for error.

      Thomas Dunlap, for plaintiff in error.

      Waite Mall, for defendant.
   Caldwell, J.

It will be seen, by reference to the statute, that the punishment provided by the 24th section of the act for the punishment'of crimes, for maliciously shooting at one with intent to kill, under which the two first counts are framed, and which the evidence appears to have applied to, is confinement in the penitentiary from one to twenty years. The punishment, under the 17th section of the statute, for assault with intent to murder, on which the third count is framed, is confinement in the. penitentiary from three to seven years. So that under the two first counts the court could sentence the prisoner to one year’s confinement in the penitentiary; whereas, under the third count, they could not sentence him for less than three years. We think the court erred in charging the jury that if they found the defendant guilty on the first two counts, they might find a verdict of guilty on the third, and that they consummated this error by changing the verdict from guilty on the two first counts, to a verdict of guilty generally. The minimum punishment, as the jury returned the verdict, was one year; as the court entered it, it was three years. It is true, the offenses are of a kindred character, and in several particulars', similar. As the shooting, under the 24th section, is required to. be done maliciously; when the intent is to kill, as is here charged, if life were actually taken, it would be murder; just as an assault with intent to murder would be, were it to result in taking, life. It is true they are both assaults. But the legislature has-made a distinction between these two assaults, and has affixed different punishments, and they cannot be blended.

In the 24th section, no doubt on account of the dangerous character of the weapon used, they have fixed a much higher-punishment as the maximum than is provided in the 17 th section ; but as a number of other acts of a less grave character-are provided for in the 24th section, they have fixed the minimum less than in the 17th section.

It is contended, however, that the first two counts are good-counts under the 17th section of the statute — containing all the terms that are necessary to set forth the crime of assault with, intent to murder.

If that were true it would not help the cause on the part of the-state. As no exception has been taken to the first two counts,, on the ground of duplicity, we have not thought it necessary to decide whether they are double or not. They clearly contain a charge under the 24th section of the statute for shooting with intent to kill, and if they are also counts under the 17th section for assault with intent to murder, they are then bad for duplicity. And under the finding of the jury, as returned, the defendant would have had a right to have the judgment arrested ; which he could not do after the court had changed the verdict to one of guilty generally — the third and fourth counts not being objectionable on that ground. If the jury found that the defendant had maliciously shot at George Lewis with intent to kill, it would warrant them in returning a verdict of guilty on the two first counts of the indictment; but would not be sufficient to warrant in a finding of guilty on the third count.

We think the court of common pleas erred in their charge to the jury, and in changing the verdict to correspond with the charge. The judgment will therefore be reversed.


author: Hitchcock, C. J.

text:
    Thomas W. Cooch et al. v. Lowen R. Cooch et al.
    A person who has not been aggrieved by a decree cannot have a bill of re view, because some other person may have been injured.
    Fraud in procuring a decree cannot be relieved against by bill of review, but the decree must be impeached by original bill charging the fraud.
    One who has assented to a decree cannot afterwards file a bill of review to reverse it.
    This is a bill of review reserved in Butler county.
    The bill is filed to reverse a decree of the supreme court for Butler county, entered at the May term, 1849. A statement of the case will be found in the opinion of the court.

      13. Chase, for complainants.

      G-. J. Smith, for defendants.
   Hitchcock, C. J.

Little more is necessary in deciding this case than to give the facts connected with it as they appear on record. The original bill was filed on the 28th day of February, 1844, by Lowen R. Cooch, one of the defendants in the present case, Thomas W. Cooch, one of the present complainants, Abraham S. Darr and Eliza Darr, his wife, and Daniel Mclntire and Sarah Ann Mclntire, his wife. In that bill the complainants represented themselves to be the heirs of Thomas Cooch, deceased. They further represented that the said Thomas Cooch died seized of real and personal property in the county of Butler, and that he left a last will and testament, which had been proved in the court of common pleas of said county, and letters of administration with the will annexed had been granted to one John Irwin, who had taken upon himself the trust of administering, etc.

The object of the bill was to contest the validity of this will for reasons therein assigned, under the provisions of the statute in such case made and provided.

John Irwin, the administrator, Isabella Cooch, the widow, and Wm. P. Cooch,'one of the heirs of Thomas Cooch, deceased, were made defendants.

Answers were subsequently filed by the defendants, and an issue was made up between the parties, presenting the question whether the paper writing purporting to be the last will and testament of said Thomas Cooch was in truth and in fact his true last will, etc.

At the February term, 1845, of the court of common pleas of Butler county, this issue was submitted to a jury, according to the statute, and the jury found that the said paper writing was the last will and testament of the said Thomas Cooch, deceased, whereupon the court decreed accordingly. From this decree an appeal was taken to the supreme court.

During the pendency of the case in the supreme court, Eliza Darr, one of the complainants, died, and her heirs were made complainants, the adults in their own right, and the infants by their next friend.

At the May term, 1847, of the supreme court, a final decree was entered, which appears upon its face to have been made by and with the consent and agreement of all the parties in interest before the court. In the decree reference is had to two written agreements assenting to a decree, and these agree ments by reference are made part of the decree, and ordered to be recorded in the record of the case. The decree is of great length, and purports to settle matters and things which under the pleadings did not belong to the case. Amongst other things, the decree sets aside the will, and distributes or disposes of the property of the testator according to the terms and provisions of the aforesaid agreements.

To reverse the decree so as aforesaid rendered, this bill of review is prosecuted.

The first.error assigned is, that Eliza Darr, one of the origi nal complainants, died during the pendency of the suit, ano that certain of her heirs, living in the State of Iowa, had no notice of the pendency of the suit, and that they did not ap pear by guardian or otherwise.

As to this error, it is sufficient to say that the record shows that the heirs of the said Eliza Darr are not defendants requiring notice, but are complainants, and were made complainants upon notice to the court, the adults in their own proper persons, and the infants by their next friend and guardian. Besides, none of the heirs of Eliza Darr are complaining of being injured by the decree. The complainants in review are Thomas W. Cooch, William P. Cooch, and Isabella Cooch. It will be soon enough to determine whether the heirs of Eliza Darr are bound by this decree, when they attempt to impeach it, or claim to have been injured by it.

The second error assigned is, that the complainants entered into the agreement'made part of the record and decree, under a mistaken apprehension that Lowen R. Cooch, who acted for the heirs of Eliza Darr, had power so to act, and without the knowledge of the death of Christiana Rolf, one of the children of Eliza Darr, and that these misapprehensions were induced by the false representation of the said Lowen R. Cooch.

This assignment admits the execution of one of the written agreements upon which the decree was based, but seeks to avoid it on the ground of fraud. I apprehend that fraud practiced in procuring a decree, does not lay the foundation for a bill of review. In such case the party injured must resort to an original bill to impeach and avoid the decree for the fraud. And if up on the hearing, the fraud can be proved, the decree may be set aside. This question, however, cannot be well tried on a bill of review. Possibly it might be reached where it was sought to review the former.decree for newly discovered evidence. The bill in the present case does not allege any newly discovered evidence, nor was it filed by leave of the court.

There is, however, another objection to this assignment of error. True, the agreement therein referred to was signed by Lowen R. Cooch for a part of'the heirs of Eliza Darr. It bears date the 4th day of May, 1846. Subsequently the heirs of said Eliza Darr were made parties complainant, and by agreement, dated the 7th of April, 1847, the infant heirs of said Eliza, by their -guardian, expressly assent to a decree to be entered according to the agreement signed by the complainants, and bearing date as aforesaid on the 4th day of May, 1846.

The third assignment of error is, that the decree purports to have been made by consent, whereas the complainants never did consent, except by signing the agreement of 4th May, 1846, which they afterwards retracted, and resisted the decree at the hearing.

This assignment impeaches the correctness of the record, denies that to be true which is asserted to be true in the decree. The court find that there are such agreements as set forth in the record ; they further find that the parties consent to a decree, and decree accordingly. A party to a decree might, under a bill properly framed, invalidate the finding of the court, by the introduction of newly discovered testimony. But as before remarked, this is not a bill of that character. Besides there is not one scintilla of evidence in the case to invalidate the finding of the court. Everything conduces to sustain that finding, except the single allegation of the complainants, in this assignment of error..

The following additional errors-are assigned, which may be considered together: ■**

1. That the decree setting aside a will approved by the court of probate and by tbe verdict of a jury, is a fraud upon the rights of the testator.

5. That the court had no jurisdiction to set aside or annul said will, until a jury had found that it was not the last will and testament of the testator.

6. Said decree proposes incidentally, to pass the title to lana from the devisee, where it had vested by the probate of the will, to the heir, by compelling specific performance, which is a matter entirely foreign to the object of the bill.

7. The decree goes beyond the object of the bill, and orders the distribution of property not known in the controversy.

8. Said decree in effect, by agreement of the parties, destroys the title paper, while the title remains in the devisees.

There can be no doubt that the decree in the original case is erroneous, unless the error is done away by the consent of all the parties. The object of the original bill was to try the validity of the will of Thomas Cooch, deceased. The mode of trial is pointed out by statute. The question must be settled by a jury, and without the verdict of a jury against the will, the court, in the ordinary course of practice, must sustain it. The decree in the case under consideration, certainly assumes to settle various matters no way connected with the particular cause in litigation. In this respect it is erroneous, unless consent of parties takes away the error. Had this bill of review been filed by a party in interest,’ who had not assented to the decree, that decree must have been reversed.

It is a grave question, whether a court can, with propriety, set aside a will without the intervention of a jury, even when all the parties interested agree to it. It ought not to be done, at any rate, but with the utmost caution. It cannot be done unless all intei’ested, let the interest be near or remote, direct or indirect, agree to have it done. As a general rule, if not an invariable one, when the case is before the court on a bill contesting the will, it is better that the case should go to a jury. This is the course provided by law. If the parties interested are anxious to compromise or settle the controversy, they can do it without the aid or assistance of a court.

The decree in the case under consideration, was, as before stated, erroneous, and would be so considered, if brought before this court by any person in interest, who had not assented to it. How is it with these complainants ? It appears from the decree itself, that they assented to it — that it was, in effect, made at their request. It not only appears from the body of the decree, but it also appears from an instrument of writing, by them signed, which is referred to in the decree, and recorded as a part thereof, that they assented to it. And there is nothing in the case to show that this assent was ever withdrawn. If the decree is to them injurious, that injury is in consequence of their own conduct. The court would never have entered the decree complained of, except by the common consent of the parties in interest.

Under these circumstances, the complainants are not in a situation that they can come into court to have a review of this decree, and their bill must be dismissed with costs.


author: Spalding, J.

text:
    Davis B. Lawler et al. v. James H. Walker et al.
    Under tke act of 1816, entitled “ an act to prohibit the issuing and circulation of unauthorized bank paper,” and the act amendatory thereof, passed March 18, 1839, the stockholders of the Cincinnati and Whitewater Canal Company are holden in their individual capacity for notes issued by the company, intended to circulate as money.
    Notes of this description axe not barred by the Btatute of limitations till after the lapse of fifteen years.
    This is a writ of error to the Court of Common Pleas of Hamilton county.
    The suit below was brought against the plaintiffs in error, to recover the amount due on certain notes issued by the Cincha nati and Whitewater Canal Company.

      The first count in the declaration charges, that the defend ants were stockholders and shareholders, and otherwise interested in a certain association not incorporated as a bank, nor authorized to loan money or to act as a bank, called the Cin cinnati and Whitewater Canal Company.
    That the said company, by its officers, the defendants and others, on the 2d day of January, 1841, issued certain notes and bills calculated and intended to circulate by delivery, and certain other notes and bills payable to order and indorsed by the payee for the purpose of putting the s.ame in circulation to circulate by delivery; and that said company used such shifts and devices that, thereby, the said notes and bills so-issued by said company, did pass and circulate by delivery.
    That the plaintiffs, on the 1st day of Januray, 1842, became the holders of said notes and bills to the amount of two thousand dollars; and they aver that the defendants were stockholders and directors, or otherwise interested in said company, and ■thereby became liable to pay to plaintiffs the amount of said notes, and being liable, promised, etc.
    The second count is like the first, except it avers that the plaintiffs became the holders of the notes at the request of defendants.
    The third count is the common count for money had and received, paid, laid-out, etc.
    The defendants plead, 1st, non-assumpsit; 2d, the statute of limitations to the first, and second counts; that they did not assume, etc., within four years next preceding the commencement of the suit. To this last plea the defendants demurred, and the court of common pleas sustained the demurrer.
    On the trial of the cause, the plaintiffs offered in evidence certain notes in the similitude of bank notes, to the amount of two thousand four hundred and ninety-seven dollars. They purport to be promises by the Cincinnati and Whitewater Canal Company to^pay the person named therein, or order, twelve months after date, a certain • sum (1, 2, 3, and 5 dollars) for value received, at their office.

      They are signed J. Bonsall, president, and Samuel C. Eoote, secretary, and indorsed by the payees respectively.
    They also proved by the resolutions passed by the board of directors, that these notes were issued by order of said board; and a resolution, passed March 5, 1840, authorizes the president to prosecute the work on the canal, if it can be done on the credit of the company, and that he cause to be issued the promissory notes of the company, payable at twelve months, in payment of the debts of the company contracted for the execution of the work, if the creditors and contractors are willing to receive the same in payment of their claims. No proof was ■offered of the handwriting of the indorsers. It was also proved that the company never acted as a bank ■ in loaning money, •buying and selling bills, or in receiving deposits. None of the notes were ever re-issued. It was proved that the notes passed and circulated as other paper currency for more than a year.
    It was also proved that the plates from which the notes were struck, were engraved on the order of the president of the .company, and the price of engraving was charged to the company, and was finally paid in the notes of the company struck from said plates. The introduction of the notes in evidence was objected to by defendants for several reasons, which appear in the bill of exceptions. The objections were overruled, and, .after refusing to charge the jury specifically as requested by defendants, the court did charge as follows :
    1. If the paper was issued under the direction of the defendants, and was intended to circulate as currency, they would be liable, whether issued for their individual benefit or for the benefit of the company. But if the company had issued notes not intended to circulate as currency, as bank paper generally does, but merely to pay off their creditors, defendants would not be liable.
    2. If the defendants, in issuing the notes, merely acted as directors of the company, and within the limits of their corporate powers, they would not be personally liable. But that the charter of the company did not authorize the issuing of notes calculated to be circulated as money; and therefore could not protect the defendants, if the jury should be satisfied that they issued such notes.
    8. That although .in' ordinary cases, where notes are made payable to order, it may be necessary for a plaintiff to prove the indorsement, yet if the jury find that these notes were issued, and intended to circulate as a currency, it is not necessary to prove the handwriting of the indorser; and the mere fact of the plaintiffs having the notes in their possession, is prima facie evidence of ownership.
    To these charges the defendants excepted. The jury having returned a verdict for plaintiffs, a motion was made for a new trial, which was overruled; and the whole case is now before this court to be decided on its merits.

      W. 8. Cfroesbeck and Charles Fox, for plaintiffs in error.
    1. The notes offered in evidence were oblgatory on the company. In a suit against the company, it cannot allege a want of power to defeat the action. Whether the company has exceeded its power in issuing the notes cannot be inquired into .this collateral way. The Bank of Chillicothe v. The Town of Chillicothe, 7 Ohio Rep., 2d part, 32; Johnson v. Bentley et al., 16 Ohio Rep. 97; Moss v. Lead Mining Co., 5 Hill’s Rep. 139; State of Indiana v. Woram, 6 Hill’s Rep. 37; 9 Paige’s Rep. 476; 8 Ohio Rep. 552; 9 Ohio Rep. 287; 15 Ohio Rep. 337.
    2. The company has never sought to avoid liability upon these notes, but recognizes its obligation to pay them. The officers issuing them were acting in accordance with resolutions of the company. Their acts were the acts of the company, and the company alone is liable. The holders of the paper cannot have a double remedy. Mott v. Hicks, 1 Cowen’s Rep. 513.
    3. The plaintiffs in error are not liable, individually, even if the company had no power to issue the notes. They have not, in terms, acknowledged their liability, nor is there any implied of obligation. The law only presumes a promise where there is no special agreement. Nor will it imply a promise where the contract is unlawful. 2 Greenl. Ev. sec. 108, 111; Nichols v. Poulson, 6 Ohio Rep. 305; Spurgeon v. McIlvaine, Ibid. 442; Smith v. Commissioners of Portage County, 9 Ohio Rep. 25.
    4. If the officers did. exceed their authority in issuing this paper, they are not liable in this form of action. The remedy against them is an action for deceit. Story on Agency, sec. 264, 274; 2 Greenl. Rep. 358; 2 Wend. Rep. 251; 3 Barn. & Adol. Rep. 114; 11 Mass. Rep. 97; 11 Serg. & Rawle’s Rep. 129; 19 Johns. Rep. 60.
    5. The liability, if any exists, is not a contract liability, but a liability in the nature of a penalty, and therefore barred, by the statute of limitations, after the lapse of four years. Chit. on Con. 692; Bailey v. Turner, 5 Mass. Rep. 286.

      Chase, Ball Hoadley, for defendants in error.
    1. It is not necessary, in a declaration under the act of 1816, to “ prohibit the issuing and circulating of unauthorized bank paper,” to set out the notes sued on, specifically. Stephens on Pleading, 359.
    2. The plaintiffs can recover, notwithstanding it appears that the notes were issued in payment of debts of the company; or that the company did not do a banking business in any form. Bonsall v. The State, 11 Ohio Rep. 81.
    3. The notes are admissible in evidence, although they appear to be the obligations of an incorporated association.
    4. The act of 1839, though passed subsequently to the charter of the Cincinnati and Whitewater Canal Company, impairs the obligation of no contract, and is binding on its stockholders.
    5. It is not necessary to prove that the indorsements in blank were made before the notes were issued by the company.
    6. To establish ownership of the notes sued on, the blank in dorsements need not be filled up, and made special to the plaintiffs. 2 Greenl. Ev. sec. 167, 168; Ord v. Portal, 3 Camp. Rep. 239; 6 Moore’s Rep. 579; 1 Stark. Rep. 446.
    7. It is not necessary to prove the handwriting of the indorser.
    8. It is not necessary to prove that the plaintiffs received the notes while they were circulating as currency. Porter et al. v Kepler et al., 14 Ohio Rep. 127.
    9. The liability of the stockholders of an unauthorized banking association, under the 11th and 12th sections of the act of 1816, is upon the written contract itself, and therefore is not barred by the statute of limitations until the lapse of fifteen years. Harger v. McCullough, 2 Denio’s Rep. 119; Moss v. Oakley, 2 Hill’s Rep. 265; Ex parte Van Riper, 20 Wend. Rep. 614; 14 Ohio Rep. 127; 26 Wend. Rep. 43; 3 Denio’s Rep. 589; Corning et al. v. McCullough, 1 Comstock’s Rep. 47.
   Spalding, J.

The defendants in this case are stockholders, :and, at the time the notes in question were issued, were directors and agents of the Cincinnati and Whitewater Canal Company.

This association was incorporated by an act of the general .assembly, passed April 1st, 1837, with full power to locate and •construct a navigable canal from some suitable point in the city of Cincinnati, along the valleys of the Ohio, Great Miami, and Whitewater rivers, to a junction with the Indiana Whitewater •canal, at or near the town of Harrison.

The charter confers ample powers upon the company for all purposes connected with the construction of their contemplated •canal, and for the protection of their works; but it nowhere authorizes the company to transact a banking business, or to issue bills of credit to circulate as money.

It appears that -in January, 1841, the company was in want of funds to pay the contractors upon their line of canal, and •the directors resolved that they would issue the notes of the company, for the purpose of liquidating the claims of such of .their creditors as might be willing to receive them. These notes were carefully struck from engraved plates, upon banknote paper; were signed by the president, and countersigned by the secretary, and in all respects were made to resemble the bank-notes or bills then circulating as a currency in the com munity. They were evidently intended by the officers of the company, who directed their issue, to circulate as money, and they did in fact so circulate for more than a year.

The company, as such, is irresponsible. Many of its stock holders who were instrumental in creating this spurious currency have abundant means. The plaintiffs are endeavoring to obtain payment at their hands, and it is objected to a recovery that inasmuch as the notes are the notes of an incorporated company,, and as a legal liability exists against the company, the defendants are not holden in law for their payment.

I will confess that I have no veneration for corporate immunities.

Immense mischief has been done in the world under the supposed sanctity of corporations. The industry of our own country has been more severely taxed through the broken promises of worthless corporations, and the supposed exemption of its component members from an individual responsibility, than for all the expenses of the general and state governments.

I would, therefore, as one member of the court, feel prepared to say that the defendants were liable for the redemption of these notes, by the rules of the common law. True, they are individual members of a corporation; but it must be kept in view that they were incorporated to make canals — not to make paper money.

They can escape from pecuniary ■ responsibility by taking refuge behind their franchises only when found pursuing the-legitimate object for which those franchises were granted.

If they lose sight of the object for which they were incorporated and engage in other and different pursuits, they must do so under all the obligations and responsibilities of ordinary partners in business.

But the plaintiffs are not left to a doubtful remedy, in their endeavors to enforce the individual liability of the shareholders in the Cincinnati and Whitewater Canal Company.

The action is predicated upon the provisions contained in the act passed January 27,1816, entitled “ an act to prohibit the issuing and circulating of unauthorized bank paper,” as amended by the act of March 18,1839.

The 11th section of the act of 1816, provides — “ That every stockholder, shareholder, or partner hereafter interested in any such bank, shall be jointly and severally answerable, in their individual capacity, for the whole amount of the bonds, bills, notes and contracts of such bank, hereafter executed; any agreement, shift or device in such bond, bill, note or contract to the contrary notwithstanding.”

And the 13th and 14th sections of the same act, read as follows : '

“ That the holder of any bond, bill, note or contract of such bank, may institute suit and recover judgment thereon against any part or the whale of the persons who were interested in such bank at the date of such bond, bill, note or contract, or who became interested in such bank at any time between that and the commencement of such suit.”

“ That in such suit it shall be sufficient for the plaintiff to set forth, in substance, that he is the holder of such bond, bill, note or contract; that the defendants were interested in said bank at the date of such bond, bill, note or contract, or subsequently thereto, and that it remains unpaid.”

This law was in full force in 1841, when the notes in question were issued by the company; and so was the act amendatory thereof, passed March 19, 1839, which provides, in sec. 1 — “ That every company or association, except a bank incorporated by a law of this state, that shall lend notes, bonds, bills, checks, orders, certificates of deposit or any other evidence of debt, and shall issue by their officer or officers, agents or any other person or persons, notes, bonds, bills, checks, orders, certificates of deposit or other evidence (of debt) payable to order and indorsed in blank, or payable to bearer, designed, calculated or intended to circulate as money; or shall issue, put in ármir lation, or pay out for debts or property, with or without any such loan, any such notes, bonds, bills, checks, order, certificates of deposit, or other evidence of debt, or use other shift or device when by any such notes, etc., so issued, put in circulation or paid out by said company or association, or on their behalf, pass or circulate by delivery, shall be taken and deemed an unauthorized bank, within the meaning of the act to which this is an amendment.”

If there be any doubt remaining as to the question whether the Cincinnati and Whitewater Canal Company, by paying out said notes, brought itself within the operation of the act of 1816, that doubt will be put at rest when we advert to a decision of this court, made in the winter of 1841-2. Joseph Bonsal v. The State of Ohio, 11 Ohio Rep. 72. In that case Bonsai, the president of the company, was indicted for acting as “ an officer of an unauthorized bank,” in putting his signature to these very notes, in violation of the 3d section of said act; and the, judgment of the common pleas was affirmed, which imposed upon said Bonsai a penalty of one thousand dollars for acting as such officer. Indeed we consider that the decision of this court, in the case last cited, is decisive of the most prominent questions made in the one under consideration, if we except the plea of the statute of limitations.

It brings the compaiiy, as an unauthorized bank, within the meaning and influence of the act of 1816, which we feel disposed to construe with great liberality as an act designed to protect the community against the greatest of all frauds, that of a spurious and insecure currency.

It is contended by counsel for defendants, that the court of common pleas erred in admitting the notes in evidence at all, because they were the obligations of an incorporated company, and were obligatory on the company as such.

The corporation of which the defendants are members, is supposed to derive all its powers, immunities and privileges from the legislative act which created it; and so long as it confines its operations within the sphere to which it is limited by that act of creation, it must be sued by its corporate name. The • same power which gave to it vitality, however, had also ordained that if any company, except an incorporated bank, shall issue, put in circulation, or pay out for debts, any notes designed to circulate as money, the stockholders thereof shall be jointly and severally answerable, in their individual capacity, for the whole amount of such notes, and the holder of such notes may institute suit and recover judgment thereon against any part or the whole of the persons interested in such company.

Unless we concede to members of a corporation immunities that will place them beyond the reach of legislative enactment, the notes were properly admitted in evidence against the defendants.

It matters not, in our opinion, whether the defendants attached their own or the name of the company to these written promises for the payment of money. By the force and effect of the existing law, all such promises emanating from an incorporated company, were deemed to be the promises of the indi vidual members of such company, and the “ assumpsit ” necessarily attached, on the part of the individual members, the instant the corporate body put the notes in circulation. It is further objected, that the plaintiffs offered no evidence on the trial to prove the indorsement of these notes. We hold that no such proof was necessary. The plaintiffs wefe holders of the notes, and if the jury found they were intended to circulate as cur rency, they wer e prima facie the owners thereof.

We are now brought to the consideration of that which counsel seems to regard as the chief ground of defense to this action.

It is argued with much confidence by counsel for defendants, and the cause has been argued with singular ability, that inasmuch as the liability is created by. statute, the claim of the plaintiffs falls within the bar imposed upon non-enumerated actions — that of four years. We have given to this objection all the consideration that its importance seemed to demand.

If the act of incorporation of the Cincinnati and Whitewater Canal Company had contained the individual liability clause, it will not be pretended that a right of action against the defendants would be barrel in less time than fifteen years. Such is the recent decision in New York, made in the case of Corning and Horner, by McCullough. 1 Comstock, 47.

By the operation of a general law of our state, in force at the time, so soon as this company ventured to travel out of its charter and issue notes to circulate as money, the individual members of the company were, quo ad hoc, disrobed of their corporate mantle and placed in the condition of partners in trade, “ against any part or the whole ” of whom, the statute provides, suit may be brought. Their liability under such circumstances would be one arising ex contractu, and not a liability in the nature of a penalty imposed by the statute.

The demurrer to the defendants’ plea of the statute of limitations was therefore properly sustained.

We are satisfied with the instructions given to the jury on the trial. They really placed the liability of defendants on the ground that the notes were intended by them to circulate as currency. This was taking the most favorable view of their position, and they have no cause for complaint.

Judgment affirmed.


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    Charles M. Reed v. The City of Toledo.
    Under the provisions of the 17th section of the charter of the city of Toledo, authorizing the city council to appoint assessors to award damages to those through whose property a street might be opened, and to assess such damages on the property benefited by such improvement, the city council' cannot levy a tax to pay for the other expenses of opening the street.
    This is a bill in chancery, reserved in Lucas county;

      The hill was filed in the common pleas of Lucas county, to injoin the collection of a tax assessed by the city council of Toledo upon real estate of the complainant, lying within the limits of the city. The allegations in the bill, which are sub stantially admitted by the answer, are as follows:
    In November, 1846, the city council determined, by ordinance, to extend Adams’ street, one of the streets of the town, from its then termination, so as to intersect what is known by the name of the Territorial road. "
    The ordinance provides that the city surveyor shall proceed to make a survey and plat of said extension, and return it within three weeks, when it was to be recorded, and the street so extended, declared a. public highway. The ordinance also provides that a bridge should be built, where the extension would cross the canal — that culverts should be erected where necessary — that the street should be graded and improved, and that the surveyor should make an estimate of the cost of these improvements, and return the same with this survey.
    The ordinance also required, that the city clerk should forth with give notice to the property holders through whose land the street would pass, of the action of the city council, and of their Intention to appropriate so much of their property as might be ■necessary, to open the street. It further required that three freeholders should be appointed, whose duty it should be to assess the damage to the owners of the property, on account of fits being thus appropriated; that they should proceed to assess the benefits arising from the improvement, to all the property within sixty rods of the street; that this assessment should be placed in the hands of the city treasurer, so soon as confirmed by the city council, to be by him collected, and that the pro ceeds should be used for the improvement of the extension of the street, and should be known as the Adams street fund, and the Adams street 'bridge fund.
    On the 7th of January, 1847, the provisions of this ordinance of 1846, from some cause, not having been carried info effect, and the time for its performance having passed, the city council passed another ordinance re-enacting it, and requiring it to be immediately carried into effect. The survey and plat were thereupon made out and recorded, and the opening of the street, and the improvement proceeded. The notice was given to the owners of land through which the extension passed, to give them an opportunity to present their claims for damages, but no damage was claimed by any person. Three freeholders were appointed in accordance with the provisions of said ordinances, who made a computation of the benefits arising from the improvement to the property within sixty rods thereof, and assessed the cost of such improvement on the property thus benefited. The complainant is the owner of a number of lots within sixty rods of the extended street, on which an assessment of near two hundred dollars has been made. He refused to pay this assessment, and the treasurer of the city has advertised his property for sale to pay this tax. To enjoin this sale, this bill was filed.

      Tilden f Baker, for complainants,
    cited the following authorities :

      Culbertson v. Cincinnati, 16 Ohio Rep. 577; Bennett v. Cincinnati, 3 Ohio Rep. 72; Canal Bank v. Mayor of Albany, 9 Wend. Rep. 244.

      Thomas Dunlap, for defendant,
    cited the following authorities :

      Smith v. Cincinnati, 4 Ohio Rep. 514; Rhodes v. City of Cleveland, 10 Ohio Rep. 159; 4 Ohio Rep. 500; 26 Wend. Rep. 132.
   Caldwell, J.

The question involved in this case, depends entirely upon the proper construction of the 16th and 17th sections of the amended city charter, passed Eeb. 27,1846.

The 16th section provides, “ that all owners or occupants, in front of whose premises the city council shall direct cross and side walks to be made or repaired; or any street, lane, alley, or highway, to be graded and regraded, leveled, paved, repaired, planked, replanked, flagged, graveled, or McAdamized, shall make such improvements at their own cost; but if not done in the manner, and of the materials, and within the time, prescribed by the city council, the said council may cause the improvements above specified to be made at the expense of the city, and assess the costs and expenses thereof upon such lots and grounds against which said improvements shall have been made respectively.”

Sec. 17 provides, “that the city council shall have power to lay out and prolong and open streets, lanes, alleys, roads, public squares, landing places, and slips in said city,” etc. Whenever any street or lane, etc., is laid out, altered or widened, by virtue of this section, the city council shall give notice of their intention to take, and appropriate, the land necessary for the same; the city council shall appoint three respectable freeholders of said city to ascertain and assess the damages and recompense due the owner or owners of said land, and at the same time what persons will be benefited by such improvements, and to assess the expense thereof on such real estate in said city, situated within 60 rods of such improvements, of the persons benefited, in proportion, as nearly as may be, to the benefit resulting to each lot or parcel of land. The said section further provides, that the assessors “ shall determine and award to the owner or owners of any land, such damages as • they shall judge such owner or owners to sustain, after making due allowance for any benefit which said owner or owners may derive from such improvement; the said assessors shall at the same time assess and apportion the' expense on the real estate in said city, situated within sixty rods of such improvement, benefited thereby, as nearly as may be, in proportion to the benefits resulting therefrom to each owner.”

The subsequent part of the section refers to the proceedings of council in confirming such assessment, and the 19th section provides for the collection of the same as any other tax.

It is under the 17th section of the charter, that the city council claim to have acted in this instance. That section, it will be seen, provides for the opening of a street, and the appointment of assessors to determine the damage to the owners through which it passes; and also to determine what property will be benefited within 60 rods, and to assess the expense thereof on such property. Now it will be seen that all that this section provides for that would require an outlay of money, is the opening the street and paying for the right of way. By the term opening, we do not understand the improvement of a street or highway by grading, culverting, etc.; the term is generally (we think always) clearly distinguishable from such kind of improvement. The term opening, refers to the throwing open to the public what before was appropriated to individual use, and the removing of such obstructions as exist on the surface of the earth, rather than any artificial improvement of the surface. And we think in the charter this distinction is very clearly drawn.

The 16th section provides for the grading, levéling, paving, planking, and McAdamizing the streets,, and provides that the holders of property fronting on the. street, shall make the improvement at their own expense. If they fail to do the work by the time prescribed by the city council, the city shall do the work and assess the cost on such property.

The object, as we think, of this 16th section, is to provide for every kind of improvement to the streets, and the manner in which the tax should be assessed to defray the expense; and the 17th section providing for opening the streets, and paying the right of way.

Eor what particular improvement of the street this tax was assessed, we are unable to determine from the evidence. Reports and estimates are referred to, but their contents are not given, nor are any of them exhibited. The complainant, it is true, states in his bill that the improvement consisted in grading, embanking, and excavating the street. This the city answers by saying that it can neither admit or deny the statement, but requires proof of the complainant, which he has failed to give. These facts are, however, admitted to be true, that a tax of over three thousand dollars was assessed for improving the street, and that the property holders through which the street passed made no claim for damages on account of the property taken.

The assessment provided for in the 17th section on all the lots within 60 rods benefited by an improvement, we suppose relates merely to raising a fund to pay for what the right of way might cost. Some of its terms taken alone might bear a more liberal construction, but when we consider the main object of the section, and take it in connection with the other provisions of the charter, we cannot give it a more extended signification. It follows then, as a consequence, that when there was no claim for the right of way, there was nothing requiring the action of assessors, and the contingency contemplated by the charter, in which they should act, not having arisen, the assessment and all the proceedings under it are void.

The mode provided by the charter was for the city to require the owners of property bounding on the street to make the improvement, and if they failed to do it by the time prescribed, the city could make it and charge the cost on said property. The right to tax is a prerogative of sovereignty, that does not inherently belong to any municipal corporation. All the power that such corporation has is given by its charter, and it is strictly limited in the exercise of such power to the manner provided by the charter.

Perpetual injunction decreed.


author: SpaIjiing, J.

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    Charles Williams v. John McMillan.
    In a complaint for forcible detainer alone, under tbe act of 1831, the jury were not required to find the fact of notice, in their verdict of guilty, to warrant a judgment for costs against the defendant.
    In a proceeding under the amendatory act of 1843, where the complaint sets forth a legal notice, it is sufficient if the jury find “ the matters stated in the complaint to be true.”
    This is a writ of error to the Supreme Court for the county of Tuscarawas.
    The original action was forcible detainer before a justice of the peace.
    The complaint, filed on the 25th of November, 1846, after describing the premises, states, “ that the said Williams hath ever since the 16th day of November, A. D. 1846, and doth still unlawfully and forcibly detain the same premises from the said McMillan; that the said Williams entered as the tenant of said McMillan, and that his lease expired on the. 16th Nov. 1846, and that on the 19th November, 1846, said McMillan duly served on the said Williams, as required by law, notice in writing to leave said premises.”
    The case was tried by a jury on the 28th of December, 1846, and verdict was returned as follows :
    “ We the jury do find that the defendant is guilty, in manner and form as the plaintiff hath in his complaint set forth, and that the same and the matters therein stated are true.”
    The justice rendered judgment for plaintiff that he have res-1 titution, etc., and for costs.
    This judgment was-reviewed by the court of common pleas on certiorari, and affirmed.
    Subsequently, on error, at the October term of the supreme court for said county, A. D. 1849, the judgment of the court of common pleas was affirmed.

      It is now insisted that the supreme court erred in affirming the judgment of the common pleas, because,

      First, It does not appear, from the transcript of the proceedings before the justice, who tried the original action of forcible detainer, that notice was served, by the plaintiff upon the defendant, to leave the premises in controversy, before the commencement of the suit.

      Second, Because it does not appear that the jury impanneled to try the case, found “ whether the requisite notice had been given ” to leave the premises, before the commencement of the suit.

      Third, Because the justice, before whom the original ease was tried, rendered judgment against the defendant for costs, though the jury did not find that notice had been given to leave the premises, before the commencement of the suit.

      H. Griswold and Thomas J. Sargent, for plaintiff in error.

      Bingham Gray, for' defendant.
   SpaIjiing, J.

Under the act of 1881, entitled “ an act to regulate the action for forcible entry and detainer,” Swan 417, it is provided, in sec. 3, that where forcible detainer only shall be alleged in the complaint, it shall be the duty of the complainant to notify the defendant, at least ten days prior to issuing the writ, to leave the premises.”

The following section of the same act provides “ that when the complaint shall specify both forcible entry and detainer, it shall be the duty of the jury, if they find a verdict of guilty, to designate in such verdict whether they find the defendant guilty of forcible entry and detainer, or forcible detainer alone; and if the latter only, they shall also find whether the requisite notice had been given ; and if such notice shall not have been given, the complainant shall not recover costs.-”

If the proceedings in the case under consideration had taken place under the act of 1831, they would have been irregular, for want of ten days notice; but the complaint being for forci ble detainer alone, and not for forcible entry and detainer,” the jury could not be required to find whether the requisite notice had or had not been given.

Under that act, in a proceeding for forcible detainer alone, it would be necessary to make proof of ten days notice, before the case could properly go to the jury at all.

The act of 1831 was amended by an act passed March 13, 1843, 41 vol. Ohio Laws 78, the first section of which provided that one justice of the peace should have jurisdiction to inquire, by jury, “ as well against those who make unlawful and forcible entry into lands and tenements, and detain the same, as against those who, having a lawful and peaceable entry into lands or tenements, unlawfully and by force hold the same.” It also provides that where forcible entry only shall be alleged in the complaint, it shall be the duty of complainant to notify the defendant, at least three days prior to issuing the writ, to leave the premises.

The second section provides that when the jury shall appear, they shall be impanneled to inquire into the forcible detainer complained of, and the justice shall lay before the jury the exhibited complaints, and shall administer an oath to the jurors well and truly to try whether the complaint of the plaintiff is true according to the evidence.”

The third section provides that “ if the jury shall find the same1 true, they shall return a general verdict of guilty, or they shall return a special verdict of such parts as they do find true.” >

By a still later act, passed Eeb. 27, 1846, 44 vol. O. L. 69, it is provided that, in all actions, where either forcible entry only, or forcible detainer only, or both, shall be alleged in the complaint, it shall be the duty of the complainant to give notice, in writing, to the defendant, to quit the premises, at least three days prior to issuing the writ.”

Thus stood the law when the present complaint, showing on its face six days notice to defendant, was filed.

The jurors were sworn under the act of 1843, to well and truly try whether the said complaint” was true according to the evidence; and they were authorized to find either a general verdict of guilty, or to return a special verdict of such parts as they did find true. They returned, upon their oath, that the defendant was guilty, as the plaintiff, in his complaint, had alleged; and that the matters stated in the complaint were true. They therefore find, substantially, that six days notice in writing had been given.

Taking all the acts together, we are satisfied that judgment was properly rendered, on the verdict, for costs. The letter of the law does not require a special finding as to notice, where forcible detainer only is alleged in the complaint. The spirit of the law may require such finding, and if so, the jury have substantially ascertained the fact by pronouncing the matters stated in the complaint to be true.

Judgment affirmed.