
    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.  