London & San Francisco Bank v. Moore

CHIPMAN, C.

Action on bill of exchange. May

29,

1895, defendant, in the firm name of J. J. Moore & Co., drew a bill of exchange on the 'City of Melbourne Bank, Limited, at London, England, in favor of plaintiff at San Francisco, and delivered it to the latter bank, receiving therefor its value. The draft was accepted by the drawee in due course, but when presented for payment, at maturity, it was dishonored by the drawee, the latter having suspended. TJpon notice of the dishonor to and demand upon the drawer he refused payment, whereupon plaintiff brought this action and had judgment. Defendant appeals from the judgment and from the order denying his motion for a new trial.

Defendant does not dispute the foregoing facts, but he seeks to exonerate himself from the liability ordinarily attaching to the drawer of a dishonored draft. The facts relied upon are as follows: J. G-. Hay & Co., of Melbourne, Australia, procured from the City of Melbourne Bank, Limited, of Melbourne, a letter of credit for the sum of five hundred pounds sterling, au

[652]

thorizing defendant, in payment of merchandise to be purchased by defendant for account of Hay & Go. and shipped to the latter, to draw bills upon the City of Melbourne Bank, Limited, of London, England. The letter of credit was as follows:

“Eastern Credit Ho. 6. £500 Stg.

“City of Melbourne Bank, Limited.

“Melbourne, 15th Mar., 1895.

“Messrs. J. J. Moore & Co. are. hereby authorized to draw at usance upon the City of Melbourne Bank, Limited, in London, at any time prior to the 14th day of September next, for the cost of merchandise to be shipped to Melbourne on account of Messrs. J. G. Hay & Co. for any sum or sums not exceeding in the whole the sum of five hundred pounds stg.; and the City of Melbourne Bank, Limited, hereby engages with the drawers, indorsers, and

bona fide

holders of any bills so drawn, that same shall be accepted on presentation and paid at maturity. Provided they are accompanied by a certificate from the bank’s agents at San Francisco that bills of lading and invoices of goods, purporting to be of sufficient amount, have been forwarded by the vessel bearing the merchandise to the manager of the City of Melbourne Bank, Limited, at Melbourne, specifying the same, and that the bills are drawn on account of Messrs. J. G-. Hay & Co. under this credit.