Mr. Justice Breese
delivered the opinion of the Court:
Appellant makes these points: First. The drafts having been drawn under this letter of credit, signed by the Bank of Peru, are regarded as accepted drafts, and being accepted drafts, they became the debt of the Bank of Peru, the acceptor being primarily liable. Fie is regarded in the same light as the maker of a promissory note. It is his debt. He is the party looked to for payment, and being the original debtor and primarily liable, a promise by any other person to pay them is a collateral promise, and must be proved to have been made in writing.
In'support of this proposition, the following authorities are cited: 2 Sto. 213; 4 Mich. 450; 2 McLean, 452; 3 Comst. 203; 2 Carter (Ind.), 408.
This proposition assumes that the drafts were drawn under the authority of the letter of the Bank of Peru, of the date of Juno 7, 1860. That authority is to R. G. Parks, or his agent, to draw. The jury have ignored the fact that appellant was the agent of Parks to draw these drafts, for that question was distinctly put to them by the appellee’s third instruction. It was this: “ In order to entitle the letter of. credit referred to in this case to any consideration as evidence, the jury must be satisfied from the proof that the drafts sued on were drawn by the defendant Kupfer, agent of R. G. Parks; and if the jury believe from the evidence that the drafts were drawn by Kupfer on Ms own responsibility, and that he was not the agent of R. G. Parks, then said letter of credit should be disregarded by the jury.”
The fact is found by the jury that these drafts were not drawn by appellant, as the agent of Park's, on the letter of credit given by the Bank of Peru, consequently they were not accepted drafts by that bank. The Bank of Peru at no time agreed to accept appellant’s drafts. It follows, then, that those drafts were like other commercial paper, which, if not paid by the drawee, the drawer must pay. Ho question of original or collateral undertaking can arise in any such case — no question of guaranty, and no question as to the nature of the guaranty, whether it must be in writing or may be by parol. The testimony, to the point that Corwith would take the drafts only on the responsibility of appellant, and his alleged promise to guaranty them, amount to nothing; for by the very act of drawing he guarantied their payment, and could he called on for payment on certain conditions; that having funds in the hands of the drawee, the drafts were presented to the drawee and payment refused, and he duly notified of the refusal. His liability is then complete. But if he had no funds in the hands of the drawee, nor the expectation of any, he would not be entitled to notice of the refusal of the drawee. And the reason is, having no funds, notice could do him no good; there was nothing in jeopardy which he might save by timely notice.
But the appellant had every reason to expect there were funds in the hands of his drawee to meet these drafts when he drew them, as the railroad receipts for the wheat were transmitted at the same time, of value sufficient to pay them all. He was then entitled to notice of the refusal of the Bank of Peru to pay these drafts, and that is all he could claim. He occupied the position of any ordinary drawer of a bill, and nothing better. Did he have this notice, and what did he do when the fact was brought to his knowledge that the drafts were not paid % That he had notice is not denied, and that he promised to pay them in four months thereafter is proved. It is true, no formal notice was given appellant, but it is fairly inferable, from the conversation with Corwith in the Bank of Galena, that appellant well knew all the facts in relation to the non-payment of the drafts by the Bank of Peru, and with this knowledge he made the promise to pay them in four months. Tibbetts v. Dowd, 23 Wend. 379, and cases there cited.
It would seem, however, from the manner in which this trial was conducted, in the various efforts to prove a guaranty of these drafts by appellant, that appellee really considered the Bank of Peru the party liable, and that it was necessary to their success they should prove a guaranty. And, in truth, there was ground for such an idea, furnished by the repeated drafts drawn after the date of the letter of credit, and their payment by Parks, who was enabled to control the wheat sent forward to meet them. But their true position was that of holder of unpaid drafts, on which the drawer was responsible after their dishonor by the drawee, and notice thereof to the drawer.
The next point made by appellant is, that appellee cannot recover on the special counts on the bills of exchange, against appellant, their sole remedy being against the bank of Peru. The bills of exchange here spoken of, are the drafts in suit, which are all counted on in the declaration, with proper averments of presentment and non-payment and notice to appellant, and a promise by him, with a knowledge of all the facts to pay them.
If the views we have presented in discussing the first point be correct, and of this we do not doubt, this point is disposed of also.
The drafts not being accepted drafts by the bank of Peru, or if accepted, not paid by that bank, the remedy over, by appellee against the drawer, cannot be disputed. The transaction with appellee does not appear to us to be of the character given to it by the appellant. He seems to think that by drawing these drafts and getting the money on them from the appellee, he was but selling his grain, whereas, it seems to us, that this was the mode appellant resorted to, by which to raise money to purchase grain. The advances were all made by appellee on appellant’s responsibility, and to inspire confidence in the drawee, the bank of Peru, that the drafts had a sufficient basis to rest on, the receipts of the railroad were attached to, and sent on with the draft, thereby assuring the bank of Peru that value would be under their control sufficient to satisfy them. Such transactions are quite common, and sometimes greatly aid the enterprise of business men, and increase trade. In no light in which we can look at the transaction, can the appellee be considered as the purchaser of this grain. They advanced the money to purchase it, taking for their protection, the drafts on the bank of Peru, with railroad receipts to their value, attached to them, and the drafts being all payable fifteen days after sight, the bank of Peru, the consignee, was enabled in that time to get the funds to meet them, which they did do, in all but three cases, as Parks, for whose benefit the arrangement was made, took up the drafts as fastas presented with' the exception stated. How the transaction can be regarded as a sale by appellant of the grain to appellee, we.cannot understand. "When appellant wrote to Parks that it was against his principles to sell grain on time, and he Parks must make such arrangements at Galena as to get the cash for the wheat on delivery, had no references to a sale of wheat at Galena; that is the place where it was bought, but it was to be delivered at La Salle, and an arrangement must be made, at Galena, by which, when the wheat was delivered at La Salle, it would be paid for, and this arrangement was the letter of credit from the bank of Peru, and which answered the purpose from June to November. Appellee was not buying grain, but furnishing funds to appellant with which he could buy it.
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Mr. Justice Breese
delivered the opinion of the Court:
Appellant makes these points: First. The drafts having been drawn under this letter of credit, signed by the Bank of Peru, are regarded as accepted drafts, and being accepted drafts, they became the debt of the Bank of Peru, the acceptor being primarily liable. Fie is regarded in the same light as the maker of a promissory note. It is his debt. He is the party looked to for payment, and being the original debtor and primarily liable, a promise by any other person to pay them is a collateral promise, and must be proved to have been made in writing.
In'support of this proposition, the following authorities are cited: 2 Sto. 213; 4 Mich. 450; 2 McLean, 452; 3 Comst. 203; 2 Carter (Ind.), 408.
This proposition assumes that the drafts were drawn under the authority of the letter of the Bank of Peru, of the date of Juno 7, 1860. That authority is to R. G. Parks, or his agent, to draw. The jury have ignored the fact that appellant was the agent of Parks to draw these drafts, for that question was distinctly put to them by the appellee’s third instruction. It was this: “ In order to entitle the letter of. credit referred to in this case to any consideration as evidence, the jury must be satisfied from the proof that the drafts sued on were drawn by the defendant Kupfer, agent of R. G. Parks; and if the jury believe from the evidence that the drafts were drawn by Kupfer on Ms own responsibility, and that he was not the agent of R. G. Parks, then said letter of credit should be disregarded by the jury.”
The fact is found by the jury that these drafts were not drawn by appellant, as the agent of Park's, on the letter of credit given by the Bank of Peru, consequently they were not accepted drafts by that bank. The Bank of Peru at no time agreed to accept appellant’s drafts. It follows, then, that those drafts were like other commercial paper, which, if not paid by the drawee, the drawer must pay. Ho question of original or collateral undertaking can arise in any such case — no question of guaranty, and no question as to the nature of the guaranty, whether it must be in writing or may be by parol. The testimony, to the point that Corwith would take the drafts only on the responsibility of appellant, and his alleged promise to guaranty them, amount to nothing; for by the very act of drawing he guarantied their payment, and could he called on for payment on certain conditions; that having funds in the hands of the drawee, the drafts were presented to the drawee and payment refused, and he duly notified of the refusal. His liability is then complete. But if he had no funds in the hands of the drawee, nor the expectation of any, he would not be entitled to notice of the refusal of the drawee. And the reason is, having no funds, notice could do him no good; there was nothing in jeopardy which he might save by timely notice.
But the appellant had every reason to expect there were funds in the hands of his drawee to meet these drafts when he drew them, as the railroad receipts for the wheat were transmitted at the same time, of value sufficient to pay them all. He was then entitled to notice of the refusal of the Bank of Peru to pay these drafts, and that is all he could claim. He occupied the position of any ordinary drawer of a bill, and nothing better. Did he have this notice, and what did he do when the fact was brought to his knowledge that the drafts were not paid % That he had notice is not denied, and that he promised to pay them in four months thereafter is proved. It is true, no formal notice was given appellant, but it is fairly inferable, from the conversation with Corwith in the Bank of Galena, that appellant well knew all the facts in relation to the non-payment of the drafts by the Bank of Peru, and with this knowledge he made the promise to pay them in four months. Tibbetts v. Dowd, 23 Wend. 379, and cases there cited.
It would seem, however, from the manner in which this trial was conducted, in the various efforts to prove a guaranty of these drafts by appellant, that appellee really considered the Bank of Peru the party liable, and that it was necessary to their success they should prove a guaranty. And, in truth, there was ground for such an idea, furnished by the repeated drafts drawn after the date of the letter of credit, and their payment by Parks, who was enabled to control the wheat sent forward to meet them. But their true position was that of holder of unpaid drafts, on which the drawer was responsible after their dishonor by the drawee, and notice thereof to the drawer.
The next point made by appellant is, that appellee cannot recover on the special counts on the bills of exchange, against appellant, their sole remedy being against the bank of Peru. The bills of exchange here spoken of, are the drafts in suit, which are all counted on in the declaration, with proper averments of presentment and non-payment and notice to appellant, and a promise by him, with a knowledge of all the facts to pay them.
If the views we have presented in discussing the first point be correct, and of this we do not doubt, this point is disposed of also.
The drafts not being accepted drafts by the bank of Peru, or if accepted, not paid by that bank, the remedy over, by appellee against the drawer, cannot be disputed. The transaction with appellee does not appear to us to be of the character given to it by the appellant. He seems to think that by drawing these drafts and getting the money on them from the appellee, he was but selling his grain, whereas, it seems to us, that this was the mode appellant resorted to, by which to raise money to purchase grain. The advances were all made by appellee on appellant’s responsibility, and to inspire confidence in the drawee, the bank of Peru, that the drafts had a sufficient basis to rest on, the receipts of the railroad were attached to, and sent on with the draft, thereby assuring the bank of Peru that value would be under their control sufficient to satisfy them. Such transactions are quite common, and sometimes greatly aid the enterprise of business men, and increase trade. In no light in which we can look at the transaction, can the appellee be considered as the purchaser of this grain. They advanced the money to purchase it, taking for their protection, the drafts on the bank of Peru, with railroad receipts to their value, attached to them, and the drafts being all payable fifteen days after sight, the bank of Peru, the consignee, was enabled in that time to get the funds to meet them, which they did do, in all but three cases, as Parks, for whose benefit the arrangement was made, took up the drafts as fastas presented with' the exception stated. How the transaction can be regarded as a sale by appellant of the grain to appellee, we.cannot understand. "When appellant wrote to Parks that it was against his principles to sell grain on time, and he Parks must make such arrangements at Galena as to get the cash for the wheat on delivery, had no references to a sale of wheat at Galena; that is the place where it was bought, but it was to be delivered at La Salle, and an arrangement must be made, at Galena, by which, when the wheat was delivered at La Salle, it would be paid for, and this arrangement was the letter of credit from the bank of Peru, and which answered the purpose from June to November. Appellee was not buying grain, but furnishing funds to appellant with which he could buy it.
"It is very apparent, these banks kept running accounts with each other, and the appellees were creditors of the Bank of Peru for all the moneys received by that bank on account of their drafts, and the Bank of Peru was the debtor to appellee for the same. This is undeniable. The balances in favor of appellee were met by money by express, by exchange on Chicago and elsewhere, and money was passing between them all the while. So says cashier Hunt. All these drafts were charged by appellee against the Bank of Peru, and the account credited by remittances. The drafts were sent with instructions to remit. When, therefore, the two drafts described in appellee’s third and fourth counts, and which were produced on the trial, marked on their face “ paid,” and which Parks testified he had paid, when they were so paid to the Bank of Peru, that bank became the debtor of appellee for their amount; for it is apparent the Bank of Peru had this credit with the appellee all along, as the business progressed, until the 17th November, 1860. For this amount, appellee is clearly entitled to a credit, for these his drafts were paid to the party and in the mode and manner expected and understood by appellee; and if the Bank of Peru proved dishonest and unfaithful, the appellant is not implicated. His promise to pay the drafts only embraced such drafts as had not been paid,- for it would be unreasonable to suppose he would, without a consideration, undertake and promise to pay drafts which had been paid in the mode and manner agreed upon. If appellee has not been so fortunate as to receive the proceeds, the loss must be his, and the judgment, to the extent of these two drafts, is erroneous, and must be reversed.
Another point made by appellant is, that the court erred in refusing to give appellant’s fifth instruction, to the effect that the plaintiff below, before he could recover in this suit, if at all, must account for the value of the wheat.
From what we have already said, this instruction was properly refused, for appellee had nothing to do with buying or selling wheat. The receipts of the railroad were mere vouchers of the quantity of wheat shipped, which no party supposed the Bank of Galena was to go into the market with and sell. Appellee had nothing to do with the wheat, nor was it at any time agreed that the Bank of Galena should have anything to do with it. It was purchased for Parks, and he controlled the receipts after they were transmitted to the Bank of Peru. .It is not true that appellee had control of this wheat, or any power to sell it. They did not receive the railroad receipts for any purpose of control, but for the purpose stated. Appellant never passed the wheat to appellee for so much money, nor for any purpose, as the case plainly shows, consequently there is no obligation on appellee to account for the wheat, and the instruction was properly refused.
The other point made by appellant as the fourth, to the effect that Parks having taken up and paid two of the drafts sued on, no action could be maintained against the defendant, has been disposed of by allowing the same. The instruction should have been given so far as to tell the jury if any of these drafts had been paid to the Bank of Peru, then that bank became the debtors to the Bank of Galena for their amount, and Kupfer was not liable on them.
About the time these drafts should have been paid, the Bank of Peru sent a remittance to appellee, under date of November 21, 1860, of two thousand and -forty-two -f-0aó- dollars “ for balance of account as advised.” Now, as no officer of the Bank of Galena, or other person, has stated what balance this was, and when the cashier, who ought to know, fails to tell on what account this remittance was sent, but contents himself with saying it “ was irrespective of any particular drafts,” the inference is not a forced one that it was on account of these drafts. But be that as it may, the appellant is entitled to a credit for them.
The fifth point made by appellant is the refusal to give the instruction in regard to the right of appellant to have the difference allowed him between American gold and paper money.
This right, it seems to us, is very evident, very reasonable, and unquestionable. This deposit of gold coin was a special contract, to the effect that appellee would return the coin, or, on failing to do so, appellant should be entitled to the value of the coin. The appellant was entitled, if he was paid in currency at a discount, to have the amount of that discount allowed to him, or, in other words, he was entitled to receive of the bank the premium at which gold was sold over currency, and this for the whole amount deposited, unless he agreed to receive currency as coin. The bank had no right to make appellant’s check for currency a charge against this deposit of gold. What the gold was worth over and above currency, at the time appellant drew it out, should be allowed. The several acts of Congress making treasury notes a legal tender in the payment of private debts were not then enacted; consequently, appellant was entitled to recover the value of the gold coin.
These are the principal points made by the appellant. Another, of minor consideration, is, the admission of parol proof of the contents of these drafts. We think the affidavits of Corwith were sufficient to let in such proof.
For the reasons given, the judgment of the court below is reversed, and the cause remanded for other proceedings not inconsistent with this opinion.
Judgment reversed.