A letter of credit was written by Edmondston of Charleston,
South Carolina, to a commercial house at Havana in favor of J. and
T. Robson for $50,000, "which sum they may invest through you in
the produce of your island." On the arrival of Thomas Robson in
Havana, the house to whom the letter of Mr. Edmondston was
addressed was unable to undertake the business, and introduced
Thomas Robson to Drake & Mitchel, merchants at that place,
exhibiting to them the letter of credit from Mr. Edmondston. Drake
& Mitchel, on the faith of the letter of credit and at the
request of Thomas Robson, made large shipments of coffee to
Charleston, for which they were, by agreement with Thomas Robson,
to draw upon Goodhue & Co. of New York, at sixty days, where
insurance was to be made. Of this agreement Edmondston was
informed, and he confirmed it in writing. For a part of the cost of
the coffee so shipped, Drake & Mitchel drew bills on New York,
which were paid, and afterwards, in consequence of a change in the
rate of exchange, they drew for the balance of the shipments on
London. This was approved of by J. and T. Robson, but was not
communicated to Edmondston. To provide for the payment of the bills
drawn on London by Drake & Mitchel, the agents of J. and T.
Robson remitted bills on London, which were protested for
nonpayment, and Drake & Mitchel claimed from Edmondston, under
the letter of credit, payment of their bills on London.
Held that Mr. Edmondston was not liable for the same.
It would be an extraordinary departure from that exactness and
precision which is an important principle in the law and usage of
merchants if a merchant should act on a letter of credit such as
that in this case and hold the writer responsible without giving
notice to him that he had acted on it.
The leading facts in this case, from the record, were: Messrs.
John and Thomas Robson, of Columbia, in the State of South
Carolina, being desirous of making a speculation in coffee, and
Thomas Robson, one of the firm, being about to proceed immediately
to Havana in execution of this purpose, procured from Charles
Edmondston, of Charleston, the plaintiff in error, a letter of
credit dated 16 April, 1825, to Castillo & Black of Havana, in
the Island of Cuba, in these words:
"Charleston, 16 April, 1825"
"Messrs. Castillo & Black -- Gentlemen -- The present is
intended as a letter of credit in favor of my regarded friends,
Page 30 U. S. 625
Messrs. J. and T. Robson, to the amount of $40,000 or $50,000,
which sum they may wish to invest through you in the purchase of
your produce. Whatever engagements these gentlemen may enter into
will be punctually attended to. With my best wishes for the success
of this undertaking, I am, &c., C. Edmondston."
With this letter, Thomas Robson sailed for Havana the day after
its date; upon his arrival, he presented his letter of credit to
Castillo & Black who were then engaged in the execution of a
similar contract, and could not act on this. Mr. Black, one of the
partners, introduced Mr. Robson to Messrs. Drake & Mitchel, the
defendants in error, merchants residing in Havana, at the same time
showing, but not delivering to them Edmondston's letter of credit.
After this interview, an agreement was entered into between Drake
& Mitchel and the Robsons, the particulars of which are
exhibited in a letter dated 28 April from Thomas Robson to Drake
& Mitchel.
"Havana, 28 April, 1825"
"Messrs. Drake & Mitchel -- Gentlemen -- I intend sailing
tomorrow morning, in the schooner
Felix, bound for
Charleston, South Carolina, wind and weather permitting. I will
thank you to execute the following order at your earliest
convenience, provided you feel yourselves warranted in so doing
from the letter of credit I produced,
viz., two to 3,000
bags of prime green Havana coffee, provided the same can be had at
prices from eleven to $13, and for extra prime, large lots,
thirteen and a half. Bills on New York at sixty days at two and a
half to five percent premium, and to be governed in said purchase
by the rise or fall in foreign markets, exercising your better
judgment thereon. Said coffee to be forwarded by first good
opportunity to Charleston, South Carolina, on board of a good,
sound and substantial vessel, addressed to the care of Boyce and
Henry, Kunhart's Wharf, Charleston. Bills of lading to be
immediately forwarded to New York, and insurance ordered thereon to
the full amount. Invoice of coffee, with duplicate bills of lading,
to be made out in the name of J. and T. Robson, and forwarded with
advice of drafts to the care of Boyce and Henry, Charleston.
Page 30 U. S. 626
Wishing you success in said purchase, and claiming your
particular attention thereto; I am, gentlemen, your obedient
servant, Thomas Robson."
"Please inform me the name of the house to whom the bills of
lading, &c., will be addressed."
Notice of this arrangement was communicated by Drake &
Mitchel to Charles Edmondston, in the following letter.
"Havana, 29 April, 1825"
"Charles Edmondston, Esq. -- Dear Sir -- In virtue of your
letter of credit to Messrs. Castillo & Black in favor of
Messrs. J. and T. Robson, and at their request, we have consented
to purchase 2,000 bags of coffee, to be consigned to Messrs. Boyce
and Henry of your city, the insurance to be effected by Messrs.
Goodhue & Co. of New York, upon whom we are to draw for the
amount, by reason of the facility of negotiations, Mr. Robson or
his friends remitting the money to these gentlemen to meet our
drafts. Mr. Robson, who carries this, will no doubt explain to you
in person this negotiation, and we trust that there will be no
demur in forwarding the necessary funds, with the cost of
insurance. We are, &c., Drake & Mitchel."
On the 25th of May, Charles Edmondston acknowledged the receipt
of this letter in these words:
"Charleston, 25 May 1825"
"Messrs. Drake & Mitchel -- Gentlemen -- In acknowledging
the receipt of yours of 29 April, I cannot help expressing my
grateful feelings at the manner you treated my letter of credit in
Robson's favor. I am, &c., Charles Edmondston."
The shipment of coffee for the Robsons was completed by 17 May,
and in conformity with the agreement with the Robsons, Drake &
Mitchel, on 21 May, drew bills on New York for nearly $25,000,
which were all regularly paid.
On that same day on which they drew their last bill on New York,
they determined to alter the mode of reimbursement, as agreed on by
the Robsons and themselves, and instead
Page 30 U. S. 627
of drawing on New York, to draw on London for four thousand
pounds sterling. Their determination to do this, and their probable
motive for doing it, appear by the following letter from them to
Boyce and Henry, of Charleston.
"21 May, 1825"
"Gentlemen -- We crave reference to our last respects per brig
Catharine, which vessel we hope is safely arrived at this
date. We have this day received accounts from your city and from
New York announcing to us the decline in the price of coffee; it is
therefore well that we had not gone to the full extent of the
instructions of Mr. Robson. We also note the decline of your
exchange on London, and as ours is still maintained at fourteen
percent, it has occurred to us to alter our plan of reimbursement,
for the benefit of the interested in these coffee purchases, by
drawing on London for the balance of our shipments -- for some
houses here are drawing on the United States at par to one percent,
a rate which we cannot submit to -- we are accordingly about to
value on our friends Messrs. Campbell Bowden, and Co., to be
covered by you or Messrs. Goodhue & Co., as you may direct, to
the amount of four thousand pounds sterling, which at four hundred
and forty-four, and fourteen percent, amounts to $20,246,40. And we
have already drawn upon Messrs. Goodhue & Co. $12,699,12, with
premium three and two and a half percent, $337.43, and to complete
this account we have again drawn on the same $2,071.34 at two and a
half percent, $2,123.12, making together $35,406.07, from which
deducting our commission for drawing and negotiating, two and a
half percent, the remainder $34,522 will then be equal to the
amount of our three invoices per Eagle, Hannah, and Catharine, as
per enclosed statement. We trust that these dispositions will meet
your approbation, and we pray you to make the necessary remittances
to Messrs. Campbell Bowden and Co., including their commission and
any other incidental charges. Coffee is still maintained here at
$13 and upwards, but second
Page 30 U. S. 628
qualities are plenty and cheaper in proportion; both this
article and sugar are likely to decline a little, &c."
They executed this purpose on the day of the date of this
letter, the Robsons being credited on that day with the amount of
their bills on Campbell Bowden, and Co., for �4,000. They
drew on the same day, according to their agreement, on New York at
two and a half percent, which bill was duly honored.
The Robsons, on 4 June, 1825, assented to this alteration in the
mode of reimbursement, with relation to the draft for
�4,000, and their agents Boyce and Henry, by their
direction, and according to the request of Drake & Mitchel,
remitted to Campbell Bowden and Co. a bill of exchange of J. B.
Clough, on his firm of Crowder, Clough and Co. of Liverpool, at
sixty days sight, on account of Drake & Mitchel, which bills
were protested for nonpayment.
During all these operations, Mr. Edmondston was wholly
uninformed of the change which had been made in the mode of
reimbursement, and which had been stated to him by Drake &
Mitchel, in their letter of 29 April.
On 16 September, Drake & Mitchel enclosed to Mr. Edmondston
for collection an order on Thomas Robson in the following
words.
"Havana, 16 September 1825"
"Thomas Robson, Esq. Charleston -- Please pay Charles
Edmondston, Esq. or order the sum of $26 for balance of your
account with, dear sir, your obedient servants, Drake &
Mitchel."
After calling upon Mr. Edmondston, as their attorney in fact, to
collect the amount of the protested bills on Liverpool, from the
Robsons, or from Boyce and Henry, and he not succeeding, Messrs.
Drake & Mitchel instituted this suit in the circuit court.
On the trial, the counsel for the defendant requested the court
to charge the jury as stated in the bill of exceptions, which being
refused, and a verdict and judgment being rendered for the
plaintiff, this writ of error was prosecuted.
The exceptions are stated in the opinion of the court.
Page 30 U. S. 629
MR. CHIEF JUSTICE MARSHALL delivered the opinion of the
Court.
This suit was instituted by Drake & Mitchel, merchants of
Havana, in Cuba, against Charles Edmonston, merchant of Charleston,
in the Court of the United States for the Sixth Circuit and
District of South Carolina in order to recover the balance of an
account due to Drake & Mitchel from J. and T. Robson, who were
merchants and partners of Columbia, in South Carolina.
Thomas Robson, being about to proceed to the Havana for the
purpose of making a speculation in coffee, obtained from Mr.
Edmonston the following letter of credit.
"Charleston, April 16, 1825"
"Messrs. Castillo & Black -- Gentlemen -- The present is
Page 30 U. S. 630
intended as a letter of credit in favor of my regarded friends,
Messrs. J. and T. Robson, to the amount of $40,000 or $50,000,
which sum they may wish to invest through you in the produce of
your island. Whatever engagements these gentlemen may enter into
will be punctually attended to. With my best wishes for the success
of this undertaking, I am, gentlemen, yours respectfully, Charles
Edmondston."
On his arrival in Havana, Mr. Robson presented his letter of
credit to Messrs. Castillo & Black, who being unable to
undertake the business, introduced him to Drake & Mitchel, and
showed them the letter of Mr. Edmondston, but did not deliver it to
them. At this interview, an agreement was entered into between
Robson, and Drake & Mitchel, the particulars of which are
stated in the following letter.
"Havana, April 28, 1825"
"Messrs. Drake & Mitchel -- Gentlemen -- I intend sailing
tomorrow morning in the schooner
Felix bound for
Charleston, South Carolina, wind and weather permitting. I will
thank you to execute the following order, at your earliest
convenience, provided you feel yourselves warranted in so doing
from the letter of credit I produced,
viz., two to 3,000
bags of prime green Havana coffee, provided the same can be had at
prices from eleven to $13, and for extra prime large lots thirteen
and a half. Bills on New York at sixty days at two and a half to
five percent premium, and to be governed in said purchase by the
rise and fall in foreign markets, exercising your better judgment
thereon. Said coffee to be forwarded, by first good opportunity, to
Charleston, South Carolina, on board of a good, sound and
substantial vessel, addressed to the care of Boyce and Henry,
Kunhart's Wharf, Charleston. Bills of lading to be immediately
forwarded to New York, and insurance ordered thereon to the full
amount. Invoice of coffee, with duplicate loading, to be made out
in the name of J. and T. Robson and forwarded with advice of drafts
to the care of Boyce and Henry, Charleston. Wishing you success in
said purchase and claiming your particular attention thereto, I am,
gentlemen, your obedient servant, Tho. Robson."
"Please inform me the name of the house to whom the bills of
lading, &c., will be addressed. "
Page 30 U. S. 631
On the succeeding day, notice of this arrangement was
communicated to Charles Edmondston in the following letter.
"Havana, April 29, 1825"
"Charles Edmondston, Esquire -- Dear Sir -- In virtue of your
letter of credit to Messrs. Castello and Black in favor of Messrs.
J. and T. Robson, and at their request, we have consented to
purchase 2,000 bags of coffee to be consigned to Messrs. Boyce and
Henry of your city, the insurance to be effected by Messrs. Goodhue
& Co. of New York, upon whom we are to draw for the amount by
reason of the facility of negotiations, Mr. Robson or his friends
remitting the money to these gentlemen to meet our drafts. Mr.
Robson, who carries this, will no doubt explain to you in person
this negotiation, and we trust that there will be no demur in
forwarding the necessary funds, with the cost of insurance. We are,
&c., Drake & Mitchel."
On 25 May, a short letter on business from Charles Edmondston to
Drake & Mitchel concluded in these terms:
"In acknowledging the receipt of yours of 29 April, I cannot
help expressing my grateful feelings at the manner you treated my
letter of credit in Robson's favor; I am, &c., Charles
Edmondston."
The shipment of coffee for J. and T. Robson was completed by 17
May, and on the 21st of that month, Drake & Mitchel had drawn
bills on New York for nearly $25,000, which were regularly paid. On
that day they determined of their own accord to change the mode of
reimbursement, and on the 25th drew bills on London for
�4,000. This was communicated to Messrs. Boyee and Henry,
the agents of J. and T. Robson at Charleston in the following
letter:
"21 May, 1825"
"Gentlemen -- We crave reference to our last respects per brig
Catharine, which vessel we hope is safely arrived at this
date. We have this day received accounts from your city and from
New York announcing to us the decline in the price of coffee; it is
therefore well that we had not gone to the full extent of the
instructions of Mr. Robson. We also
Page 30 U. S. 632
note the decline of your exchange on London, and as ours is
still maintained at fourteen percent, it has occurred to us to
alter our plan of reimbursements for the benefit of the interested
in these coffee purchases by drawing on London for the balance of
our shipments -- for some houses here are drawing on the United
States at par, to one percent, a rate which we cannot submit to; we
are accordingly about to value on our friends Messrs. Campbell
Bowden and Co., to be covered by you, or Messrs. Goodhue & Co.
as you may direct, to the amount of �4,000, which at $444 at
fourteen percent amounts to $20,246.40. And we have already drawn
upon Messrs. Goodhue & Co. $12,699.12, with premium three and
two and a half percent, $337.43, and to complete this account we
have again drawn on the same, $2,071.34 at two and a half percent,
$2,123.12, making together $35,406,07, from which deducting our
commission for drawing and negotiating, two and a half percent, the
remainder, $34,522, will then be equal to the amount of our three
invoices per
Eagle, Hannah, and
Catharine, as per
enclosed statement. We trust that these dispositions will meet your
approbation, and we pray you to make the necessary remittances to
Messrs. Campbell Bowden & Co. including their commission and
any other incidental charges."
On the same day Drake & Mitchel drew their last bill on New
York, which was duly honored.
J. and T. Robson, afterwards, on 4 June, assented to this
alteration in the mode of reimbursement and directed their agents
Boyce and Henry to conform to it. They remitted a bill drawn by J.
B. Clough on his firm of Crowder, Clough & Co. of Liverpool, at
sixty days sight, for �4,000, on account of Drake &
Mitchel.
No notice of this transaction appears to have been given to Mr.
Edmondston. On 16 September, Drake & Mitchel
Page 30 U. S. 633
enclosed to him for collection a small order on T. Robson, in
the following words:
"Havana, 16th September 1825"
"Thomas Robson, Esq., Charleston -- Please pay Charles
Edmondston, Esq., or order, the sum of $26 for balance of your
account with, dear sir, your obedient servants, Drake &
Mitchel."
The bill on Crowder, Clough and Co. having been returned under
dishonor, Drake & Mitchel, in a letter of 15 October, employed
Mr. Edmondston as their agent to obtain its amount from the Robsons
or from Boyce and Henry. In a letter of 5 November, Mr. Edmondston
informed Drake & Mitchel of the ill success of his endeavors to
procure payment. The Robsons, who were insolvent, considered
themselves as discharged from the debt by remitting the bill on
London in conformity with the directions of Drake & Mitchel,
and Boyce and Henry, whose names were not on the bill, said they
had acted only as agents of the Robsons and of Drake & Mitchel.
After some correspondence between Mr. Edmondston and Drake &
Mitchel on the liability of the former for the protested bill on
Crowder, Clough and Co. in the course of which Mr. Edmondston
transmitted to them a copy of his letter to Castillo & Black,
this suit was instituted on the original letter of credit of 16
April, 1825, and on the letter addressed by Edmondston to Drake
& Mitchel on 25 May following.
At the trial of the cause, the following bills of exceptions
were taken:
"First Exception. The counsel for the defendant insisted that
the letter of the defendant of 16f April, 1825, addressed to
Castillo & Black was not a general letter of credit, but an
engagement only to guarantee the contracts of J. and T. Robson with
Castillo & Black and not with the plaintiffs, and that the said
guarantee was not assignable, and that the defendant on the said
letter was not accountable to the plaintiffs. But the court
instructed the jury that the said letter of 16 April, 1825, was a
general letter of credit in favor of J. and T. Robson; that it
authorized the said Castillo & Black
Page 30 U. S. 634
not only to give but to procure a credit for the said Robsons,
and if the jury believed that under the said letter the said
Castillo & Black had procured such credit for them with Drake
& Mitchel, that Drake & Mitchel, the plaintiffs, had under
this letter the same right to call on the defendant to make good
the contracts of J. and T. Robson with them the plaintiffs as
Castillo & Black would have had, if they, Castillo & Black,
had, on the faith of this letter, contracted with the said J. and
T. Robson."
"Second. And the counsel for the defendant contended, and so
moved the court to instruct the jury, that in order to make the
defendant liable to the plaintiffs under the said contract, they
were bound by the law merchant to give him due notice thereof, and
as the defendant neither received notice of nor ever assented to
the subsequent change as to the place or form of payment, he was
fully discharged therefrom, on which the court, being divided in
opinion, refused to give the instruction. It was therefore not
given to the jury. And on the contrary, his honor Judge Lee, one of
the presiding judges, charged and instructed the jury that they,
the plaintiffs, were not bound to give the defendant notice of the
original contract, and though they gave him notice of it, they were
not bound to give him notice of the alteration made in it."
"Third. And the counsel for the defendant argued to the court,
and requested the court so to instruct the jury, that if the
defendant was bound at all to the plaintiffs, he was bound for the
performance of the agreement made between the Robsons and the
plaintiffs as set forth in the letter of Thomas Robson to them
dated 28 April, and the plaintiffs' letter of 29 April, 1825, to
the defendant, and that the arrangement afterwards made between the
plaintiffs and Robson for payment in London, instead of New York,
was an alteration of the contract, and the defendant, not having
consented thereto, was not bound for the performance of the
agreement thus altered, but was discharged from his liability if in
fact, he was at all liable, but, the court being divided, refused
to give such instruction."
"Fourth. And the counsel for the defendant further argued to the
court, and requested the court so to charge and instruct the jury,
that the guarantee of the defendant was not a
Page 30 U. S. 635
continuing guarantee, and could not be extended to any other
engagements than those mentioned in the letter of the plaintiffs to
him of 29 April aforesaid and set forth in that of Thomas Robson to
them of 28 April aforesaid, and that the change in the place of
payment from New York to London, made without due notice thereof
given to the defendant, discharged him from the said guarantee, but
the court, being divided in opinion, refused to give such
instruction."
"Fifth. And the counsel for the defendant further argued to the
court and requested the court so to charge and instruct the jury
that the plaintiffs in their letter of 29 April, having given
notice to the defendant of the contract made by them with the
Robsons in virtue of his the defendant's letter of 16 April, were
bound to give him notice of the change of the contract, and as they
did not give him any such notice, he is thereby discharged. But the
court, being divided in opinion, refused to give the instruction;
it was therefore not given to the jury, and on the contrary, his
honor Judge Lee, one of the presiding judges, charged and
instructed the jury that the plaintiffs were not bound to give the
defendant notice of the original contract, and though they gave him
notice of it, they were not bound to give him notice of any
alteration made in it."
The jury found a verdict for the plaintiffs, the judgment on
which is brought before this Court by writ of error.
In the view which the Court takes of the case, it is unnecessary
to decide on the first instruction given by the circuit court. If
the letter of 16 April, 1825, was limited to Castillo & Black,
that of 25 May unquestionably sanctioned the advances made by Drake
& Mitchel on its authority and made Edmondston responsible for
Robson's contract with them. It is on his part a collateral
undertaking, which binds him as surety for the Robsons that they
will comply with their contract. No doubt exists respecting his
original liability. The inquiry is has the subsequent conduct of
the parties released him from it?
It is necessary to ascertain exactly what the contract really
was. The evidence of it is to be found in the letter of T. Robson
to Drake & Mitchel, of 28 April, 1825, and in the letter
written by Drake & Mitchel to Edmondston on
Page 30 U. S. 636
the succeeding day. The first states the order to be executed by
Drake & Mitchel. It is for
"2,000 to 3,000 bags of prime green Havana coffee, provided the
same can be had at prices from eleven to $13, and for extra prime
large lots, thirteen and a half. Bills on New York at sixty days,
at two and a half to five percent premium, and to be governed in
said purchase by the rise or fall in foreign markets, exercising
your better judgment thereon."
The last states it to Edmondston in the following words:
"We have consented to purchase 2,000 bags of coffee, to be
consigned to Messrs. Boyce and Henry of your city, the insurance to
be effected by Messrs. Goodhue & Co. of New York, upon whom we
are to draw for the amount by reason of the facility of
negotiation, Mr. Robson or his friends remitting the money to these
gentlemen to meet our drafts."
The contract consists of the quantity of coffee to be purchased,
the house to which it was to be shipped, and the mode of payment.
On the quantity to be purchased, Drake & Mitchel were to
exercise their judgment. It was to be from 2,000 to 3,000 bags, as
the rise or fall of foreign markets might render advisable. The
letter of Drake & Mitchel, giving notice of the contract to
Edmondston, shows their determination to limit their purchase to
2,000 bags. On the other parts of the contract, if we are to judge
from its language, they could exercise no discretion. The coffee
was to be shipped to Boyce and Henry of Charleston, and the mode of
payment was settled definitively. It was to be by remittances to
Messrs. Goodhue & Co. of New York, on whom Drake & Mitchel
were to draw at a rate of exchange settled between the parties.
This contract was obligatory in all its parts, and when
communicated to Mr. Edmondston, gave him precise information of the
extent of his liability. His letter of 25 May was written with a
view to the particular contract, which had been thus
communicated.
In estimating the influence of this notice on the cause, it has
been supposed of some consequence to establish its necessity. The
district judge, sitting in the circuit court, informed the jury
that it was not necessary. The attempt has not been made to sustain
this instruction in its terms, but to explain it so as to limit it
to the necessity of giving Mr. Edmondston
Page 30 U. S. 637
notice of the mode in which Drake & Mitchel were to be
reimbursed for the coffee. This was probably the intention of the
judge. It would indeed be an extraordinary departure from that
exactness and precision which peculiarly distinguish commercial
transactions which is an important principle in the law and usage
of merchants if a merchant should act on a letter of this character
and hold the writer responsible without giving notice to him that
he had acted on it. The authorities quoted at the bar on this point
unquestionably establish this principle.
If it were incumbent on Drake & Mitchel to give notice to
Mr. Edmondston that they had acted on his letter of credit, did the
nature of the transaction require a communication of that part of
the contract which stipulated for the mode of payment?
It cannot be alleged that this part of it was of no importance
or that it did not concern Mr. Edmondston. It is an essential
article in all contracts, and was of peculiar interest to Mr.
Edmondston in this. The parties thought the particular mode of
reimbursement of sufficient importance to stipulate for it
expressly in their agreement. We cannot determine positively
whether it was or was not a matter of indifference to them. They
selected this, and when selected, it became a part of the contract.
Each had consequently a right to insist upon it.
We have said that this part of the agreement was of peculiar
interest to Mr. Edmondston. For any failure in it he was
responsible. Being informed of the place on which bills were to be
drawn by Drake & Mitchel and to which remittances to meet them
were to be made, he was enabled to bestow that general attention on
the course of the business which he might think necessary for his
own safety. He might observe generally the shipments made on
account of the Robsons to New York, and be led to further inquiry
by any apparent remissness. Drake & Mitchel seem to have given
him the information with this view. After saying they are to draw
on Messrs. Goodhue & Co. of New York, they add, "Mr. Robson or
his friends remitting the money to these gentlemen to meet our
drafts." It was essential to Mr. Robson, or to the friends by whom
the remittances might be made,
Page 30 U. S. 638
that the place and persons to whom they might be made should be
fixed.
We cannot consider this part of the agreement as immaterial. It
was the part in which Mr. Edmondston was most deeply
interested.
Being part of the contract, it is not pretended that Drake &
Mitchel could alter it without the consent of the Robsons. They
could no more vary a contract made than they could make one
originally. The one as much as the other requires the consent of
both parties.
Drake & Mitchel and the Robsons, being capable of binding
themselves by an original contract, were equally capable of varying
that contract at will. But though capable of binding themselves,
they were not capable of binding Mr. Edmondston. To this his own
consent was indispensable. Any new stipulation introduced into it
was so far a new contract, which could only affect themselves. Mr.
Edmondston was a stranger to it unless his letter to Castillo &
Black of 16 April, 1825, in connection with his letter to Drake
& Mitchel of 25 May in the same year, made him a party to
it.
The letter of 16 April, in its object and its language, is
limited to a contract to be made by Mr. Robson during his stay in
the Havana. It was written for a special purpose, and its
obligation could be extended no further when that purpose was
accomplished. It was intended to pledge the credit of the writer to
the amount of $40,000 or $50,000, to be invested by Mr. Robson in
the purchase of the produce of the island. The letter was directed
to an operation for which Mr. Robson went to the Havana, and which
was to be completed while there. It was addressed to merchants of
that place, and relates to an operation to be performed in that
place. If instead of proceeding to the Havana, and purchasing the
produce of the island, he had proceeded to Great Britain, and
purchased a cargo of woolens; it would scarcely be pretended that
the vendor trusted to this letter. Still less could it be pretended
if, after actually making the contract in Havana, he had proceeded
to Europe and made purchases in that part of the world. The cases
cited in argument show that in law and in the understanding of
Page 30 U. S. 639
commercial men, the credit given by such a letter is confined to
the particular operation and to the particular time. It extended to
no contract made by Robson after returning to the United
States.
Still less can the letter of 25 May avail the defendants in
error. That is obviously confined to the contract stated in the
letter of Drake & Mitchel to which it is an answer.
The credit then given in the letter of Mr. Edmondston was
exhausted by the contract made by Robson while at Havana, and the
extent of his responsibility under those letters is confined to
that contract. Drake & Mitchel and the Robsons could no more
affect him by any change in its terms than by an entirely new
stipulation or an entirely new contract.
It has been said that this change was made for the advantage of
the Robsons and with their consent. It is immaterial whether it was
made for the benefit of the Robsons or of Drake & Mitchel, or
of both. They had no right to vary a contract for their own benefit
at the hazard of Mr. Edmondston.
It has been urged that the risk of remittances to New York was
as great as the risk of bills on England. Were this true, it could
not affect the case. Mr. Edmondston had a right to exercise his own
judgment on the risk, and the persons who varied this contract had
no right to judge for him.
But is it true that the risk was not increased? While payments
were to be made in New York, the agents in the transaction were in
some measure within the view of Mr. Edmondston. He could observe
their situation and act for his own safety. This power is
essentially diminished when a bill, without his knowledge, on a
house of whose stability he may be ignorant, is remitted at sixty
days sight to England. It is on every reasonable calculation, at
all events, a prolongation of the risk.
The contract at the Havana may be considered as one to be
performed immediately. It does not appear that any time was given
for the shipment of the coffee, and the whole transaction has the
appearance that the bills were to be drawn as soon as the coffee
was shipped. The last bill on New York was drawn on 21 May, and
notice of the bill on
Page 30 U. S. 640
London was given on the 26th of that month. It may be
considered, then, as a transaction to be completed as soon as the
nature of the business would permit. It might be reasonably
supposed that it would be completed before the condition of the
parties would be essentially changed. Had the bill which was drawn
on London been drawn at the same time on New York, there is reason
to believe that it would have been paid.
The change in the mode of payment by substituting a bill on
London at long sight necessarily prolonged the time at which
payment should be made and prolonged the risk of Mr. Edmondston.
This they had no right to prolong without his consent.
It is admitted that Drake & Mitchel could not change the
mode of payment without the consent of the Robsons. Then it is a
part of the contract -- of that contract for which alone Mr.
Edmondston became responsible.
It has been said that the engagement respecting the place of
payment was contingent, dependent on the facility of negotiations,
and subject to any future arrangement to be made between the
parties.
We do not so understand the agreement. Its terms are positive,
dependent upon no contingency. "The facility of negotiations" was
the motive for the stipulation. No hint of a reserved power to
change it is given either in the letter of T. Robson to Drake &
Mitchel or in theirs to Edmondston. It was not a contingent, but an
absolute, arrangement -- as absolute as any other part of the
contract.
We think the court erred in not giving the second, third,
fourth, and fifth instructions to the jury, and the judgment ought
to be
Reversed and the cause remanded with directions to award a
venire facias de novo.
This cause came on to be heard on the transcript of the record
from the Circuit Court of the United States for the District of
South Carolina and was argued by counsel, on consideration whereof
it is ordered and adjudged by this Court that the judgment of the
said circuit court in this cause be and the same is hereby reversed
and that this cause be and the same is hereby remanded to the said
circuit court with instructions to award a
venire facias de
novo.
