Page:Harvard Law Review Volume 32.djvu/45

LETTERS OF CREDIT ii terms.^" Accordingly, if addressed to a specific person, some- times called a "special letter of credit," ^^ it cannot be accepted by anyone else.^^ The courts often discuss this as if it were a question of assignability or negotiabihty,^^ or of strict construction of the liability of a surety or guarantor.^^ If the letter of credit were treated as an institution of the law merchant, requiring no common- law theory to uphold it, the result would l?e the same, as the in- stnmaent does not confer a power upon anyone but the addressee named. But the same courts usually end by putting the matter in terms of offer and acceptance.^^ Where the letter is addressed generally to whomsoever may act upon it {i. e., a general letter of credit), the apparent procedural exigencies of special assumpsit and the elusive word "privity" formerly gave rise to difficulties.^^ Our courts, however, soon came to hold that this was a case of an offer addressed to the world at large, which became a contract as soon as anyone accepted or performed its terms, exactly as in the case of an offer of reward. ^^ Here also the same result would be reached if the letter were treated simply as an instrimient of the law merchant, since by its express terms it confers upon anyone who will act thereon the power of becoming a creditor of the issuer. It should be noted also that the instrument treated as an offer of payment to be accepted by extension of credit to the holder has sometimes been in form a statement addressed by the issuer to the holder, advising the latter of the issuer's willingness to become ^^ Cairns, L. J., In re Agra and Masterman's Bank, 2 Ch. App. 391, 395 (1867). "The liability of a writer of a letter of credit is founded on the simple law of contracts, where the minds of the parties must meet in the common purpose. The act of the writer is an offer, or request, or proposition, and the act of him who furnishes the money is an acceptance." Bank of Seneca v. First National Bank, 105 Mo. App- 722, 726, 78 S. W. 1092 (1904). 51 Birckhead v. Brown, 5 Hill (N. Y.) 634 (1843); Union Bank v. Coster, 3 N. Y. 203 (1850). 52 Fletcher Guano Co. i;. Bumside, 142 Ga. 803, 83 S. E. 935 (1914); Robbins v. Bingham, 4 Johns. (N. Y.) 476 (1809); Birckhead v. Brown, 5 Hill (N. Y.) 634 (1843), aff'd, 2 Den. (N. Y.) 375; Taylor v. Wetmore, 10 Ohio, 491 (1841). ^ Robbins v. Bingham, supra; Birckhead v. Brown, supra. '* Walsh V. Bailie, 10 Johns. (N. Y.) 180 (1813); Birckhead v. Brown, supra; Taylor V. Wetmore, supra. ^ E. g., Bronson, J., in Birckhead v. Brown, supra. ^ Bank v. Archer, 11 M. & W. 383 (1843); see also Russell v. Wiggin, 2 Story (U. S.) 213 (1842); Franklin Bank v. Lynch, 52 Md. 270, 281 (1879). '^ Lawrason v. Mason, 3 Cranch (U. S.) 492 (1806); Birckhead v. Brown, supra; Union Bank v. Coster, supra.