Duncan v. Edgerton — 19 N.Y. Super. Ct. 36

Majority

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Alexander Duncan and others, Plaintiffs and Respondents, v. Abel T. Edgerton, Defendant and Appellant.

Headnote

1. A letter of credit issued by the plaintiffs authorizing the defendant, during a period therein specified, to draw, or direct the drawing of Bills of Exchange for his account, to a limit mentioned, and agreeing with the drawees and all bona fide holders of such bills that such bills shall be honored on presentation at the counting-house of plaintiffs’ correspondents in London,—and a counter agreement by the defendant, to provide, by payment to the plaintiffs in New York, one month previous to the maturity of the bills drawn, sufficient funds to meet the payment thereof in London, are together, as between the plaintiffs and the defendant, mutual and dependent agreements, and on the breach by one party, the other is at liberty to decline further performance.

2. Hence in such case, where the defendant neglected to provide funds on the 28th of May, 1857, to meet a bill drawn under the letter of credit, and due in London, June 28th, 1857, (by reason whereof, after as great a delay as was prudent, the plaintiffs were compelled to remit their own funds on the 9 th of June to meet such bill,) the plaintiffs had a right to revoke the said letter of credit, and refuse its further continuance.

3. Although in such case the plaintiffs gave to the defendant no notice of such revocation, and he, on the 17th day of June, paid to them, in New York, the amount of the said bill due in London, and afterwards, on the 2d of July, in ignorance of such revocation, made a purchase of whiskey by letter, addressed to Dublin, and directed the vendors to draw for the price on London, in conformity to the credit before mentioned, but by

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reason of the said revocation their drafts were refused due honor, and such vendors thereupon refused to ship the whiskey: Held, that the plaintiffs were not liable to the defendant for any damages, either arising from a loss of the purchase, or the difference between the cost of the whiskey and its value in New York, when it would (if shipped) have arrived. That the plaintiffs had a right to revoke the credit, and were not liable to the defendant for any damage, general or special, he may have sustained in consequence of such revocation.

(Before Bosworth, Ch. J., and Hoffman and Moncrief, J. J.)

Heard, December 13th, 1859;

decided, January 7th, 1860.)

This action came on for hearing by the defendant’s appeal from the judgment for the plaintiffs, for $1,622.49, damages and costs, entered on the decision of Timothy D. Pelton, Esq., Referee, before whom it was tried on the 3d day of May, 1858.

The action was brought upon a promissory note made by the defendant and indorsed to the plaintiffs. To this note, although the defense of usury was pleaded, no defense was in fact made at the trial, but the whole controversy related to a counter-claim set up in the defendant’s answer, by which he sought not only to defeat a recovery by the plaintiffs but to have a judgment in his own favor for a considerable overplus.

The counterclaim was as follows:

And defendant further says, and alleges as a counterclaim against the plaintiffs, that it was heretofore and before the making of said note agreed by and between the plaintiffs and defendant for a valuable consideration, under a certain letter of credit, that the plaintiffs should allow and give to the defendant a standing credit of fifteen hundred pounds sterling, for and during one year from the date thereof, with the correspondents of said plaintiffs on England, and that the plaintiffs would protect, or cause to be protected, the drafts of defendant to that amount upon the house of George Peabody & Company, in London, or the drafts of any other persons whose drafts said Peabody & Company might be directed by the written order of the. said defendant to accept.

That before the commencement of tbis action, the said plaintiffs violated the said agreement and refused to protect the paper of this defendant, but suffered the same to be protested whereby the defendant was greatly injured in property, reputation and credit, and suffered loss and damage to the amount of three thousand nine hundred and fifty dollars.

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An'd this defendant, by way of allegation of special damage, says, that the defendant without any notice or knowledge, that the plaintiffs had intended to, or would withdraw or revoke said letter of credit, or prohibit said George Peabody & Co., from acting under said letter of credit, on or about the 3d day of July, 1857, purchased and ordered thirty puncheons of whiskey, of Jameson & Robertson, Dublin, Ireland; and duly requested them to draw upon, and by written request or direction, ordered the said George Peabody & Co., to accept, honor, or provide for the amount of said whiskey, viz.': $3,315; whereupon the said Jameson & Robertson accordingly drew upon said George Peabody & Co. for that amount, but in consequence of the withdrawal or revocation of said letters of credit by the plaintiffs, previous to that time, the said George Peabody & Co., refused to accept for the amount of said whiskey, and the whiskey was not shipped from Dublin, aforesaid, to the city of New York, and whereby the defendant lost the difference between the value of the said whiskey, as purchased, together with expenses of bringing the same to New York, and the price or value thereof in New York, to wit: the sum of $1,833; and that defendant kept and performed said agreement upon his part.

Wherefore the defendant demanded judgment for the said sum of $3;950, with interest, and that the note be canceled and destroyed.

The facts appearing on the trial relating to the counterclaim, so far as it is material to state them, were, that on the 22d day of January, 1857, the plaintiffs and the defendant entered into the arrangement expressed in the following letter of credit, and the agreement of the defendant thereunder written:

“ OFFICE OF DUNCAN, SHERMAN & CO.,

“ BANKERS,

“No. 1087. New York, Jan. 22d, 1857.

“Abel T. Edgerton, Esq., of New York, or any other parties, whose drafts Messrs. George Peabody & Co., of London, may be directed by the written order of the said Abel T. Edgerton, to accept under this credit, are hereby authorized to value on Messrs. George Peabody & Co., in London, at four months’ date

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for account of himself, for any sums not exceeding, in all, fifteen hundred pounds sterling, running at one time uncovered by remittances in the hands of the drawees, to be used in Europe, and is intended only to be used for the purchase of, or advances on goods or merchandise to be imported into the United States; and we do hereby agree with the drawers, indorsers and bona fide holders of bills drawn under and in compliance with the terms of this credit, that the same shall be duly honored on presentation at the counting house of Messrs. George Peabody & Co., in London.

“ The bills must be drawn prior to the first day of January, 1858. For £1,500 sterling. .

“ Duncan, Sherman & Co.

“ Please sign bills as being drawn under credit,

“ No. 1087, dated January 22d, 1857.

“N. B. Whenever Messrs. George Peabody & Co., confirm the above credit, or any part thereof, at the request of the said Abel T. Edgerton, or their agents, such confirmation will be limited to two months, and for the amount so confirmed, the usual commissions will be charged, whether the same be used or not, as it is not necessary to confirm the credit, until it is ascertained that it will be used.

“Received the original of the above letter of credit for fifteen hundred pounds sterling, in consideration whereof, I, Abel T. Edgerton, do hereby agree with Messrs. Duncan, Sherman & Co., to provide by payment to them in New York, one month previous to the maturity of the bills drawn under the same, sufficient funds to meet the payment thereof in London, and for that purpose if required so to do to accept, and pay the drafts of Messrs. George Peabody & Co., on us, in their favor, at three months from the date of Messrs. George Peabody & Co.’s acceptances, with commission on the amount of this credit of one per cent, and that all property which shall be purchased or shipped by means of this credit, and the proceeds thereof, and the policies of insurance thereon, together with the bills of lading, are hereby pledged and hypothecated to them as collateral security for the payment as above, and held subject to their order on demand, with authority to. take possession and dispose of the same at

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discretion, for their security or reimbursement, unless the amount be otherwise paid or satisfactorily secured or remitted. It being understood that remittances made in bills drawn by Duncan, Sherman & Co., or moneys paid to them, shall be taken as payment without recourse; all settlements arising under this credit, the pound sterling shall be calculated at the current rate of exchange at the time of such settlement, and interest charged together with one-tenth of one per cent for stamp duty on bills of exchange, imposed by the laws of Great Britain. Interest at bank rate if over five per cent.

11 This credit being issued on our personal liability and without the deposit of securities, we do hereby agree with Messrs. Duncan, Sherman & Co., that we will regard and treat the same as confidential, and to be protected and paid in all emergencies, and that we will at any time give them securities to cover the same if required.

“ Abel T. Edgebton.”

To this was added a guaranty by one Winebrener that Edger-ton would perform his agreement.

Among other bills of exchange, drawn by or by direction of the defendant on George Peabody & Co., under the said letter of credit, was one for £404 8s. sterling, accepted in March and payable on the 28th June, 1857. The defendant neglected to provide the plaintiffs in Hew York, one month previous to the maturity of such bill, with funds to meet the payment thereof, and the plaintiffs, on the 9th of June, remitted their own funds to Peabody & Co., to meet the payment.

The plaintiffs thereupon, on the 12th of June, 1857, without the knowledge of the defendant, revoked the said letter of credit by instructions to Peabody & Co., and gave no notice of such revocation to the defendant, who, on the 17th of June, paid to the plaintiff the amount of the said bill of exchange so becoming due. The defendant, on or about the Sd July, 1857, not knowing of said revocation, entered into an agreement with Messrs. Jameson & Robertson, of Dublin, Ireland, to purchase and ship to the defendant at Hew York, thirty puncheons of whiskey, and the difference between the cost, (including charges,) of said whiskey to the defendant, and the market value of whiskey of the same quality in Hew York, at the time the same would pro

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bably have arriyed here, was $1,833. The said Peabody & Oo., in consequence of the revocation of said letter by the plaintiffs, refused to accept the drafts of Jameson & Robertson, for the purchase price of said whiskey, and Jameson & Robertson for that reason refused to ship the whiskey to the defendant.

On the trial, the defendant not only claimed the above difference in value between the cost of the whiskey and its value in New York, ($1,833,) but he offered evidence to show how much profit the defendant could have made by using the letter of credit, until the expiration of the year, if it had not been revoked, and put some other questions to the witnesses of a similar character in order to prove what was denominated by his counsel, general damages. The evidence was rejected.

The Referee, in rejecting the counterclaim and giving judgment for the plaintiffs, stated his conclusion of law thus: 11 And I do further find, as a matter of law, that the agreement of the plaintiffs to continue the credit under said letter, was dependent upon the performance, by the defendant, of his covenants and agreements as mentioned in said letter, and to be by him performed. And that the failure of the defendant to provide funds to meet the payment of the bills, as aforesaid, or any of them, was such a breach of his agreement as entitled the plaintiffs to revoke said credit, and that the defendant is not entitled to recover of the plaintiffs for the losses on said whiskey, or for any losses or damages arising from said revocation by way of counterclaim.”

From the judgment entered for the plaintiffs for the amount of the note sued upon and interest and costs, the said counterclaim being rejected, the defendant appealed to the General Term.

H. Z. Sayner for the defendant (appellant).

I. The letter of credit being given for a valuable consideration, it was a special contract, for the breach of which the defendant was entitled to damages by way of counterclaim in this action.

1. It was a special contract. (Russell v. Wiggins, 2 Story R., 213.)

2. Such damages may be recovered by way of counterclaim. (Code, § 150, subs. 1, 2.)

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3. A counterclaim must be a cause of action or cross-demand. This is both. ( Gleason v. Moen, 2 Duer, 642 ; Spencer v. Babcock, 22 Barb., 335 ; Lemon v. Trall, 2 How. Pr. R., 248; Kneedler v. Steinbergh, 10 id., 67; Williams v. Upton, 8 id., 205; Silliman v. Eddy, id., 122.)

II. The Referee’s overruling the evidence offered on the part of the defendant for the purpose of ascertaining the amount of damage occasioned by the withdrawal of the letter of credit by the plaintiff, was erroneous.

The letter of credit was to continue or run until the 1st January, 1858. It was withdrawn or revoked on the 12th June, 1857; and thus the breach of the special contract, whereby the letter of credit was granted by plaintiffs to defendant, was clearly proved.

1. The testimony offered by the defendant, and rejected by the Referee, was admissible to prove or ascertain the damage done the defendant by such breach of plaintiffs. (Myers v. Y. & C. R. R. Co., 2 Ourtis C. C. R., 28; Masterton v. Mayor of Brooklyn, 7 Hill, 61 ; Dewint v. Wiltsie, 9 Wend., 325 ; The Narraganset, 1 Blatch. R., 211; Waters v. Towers, 20 Eng. L. & Eq. R., 410; Nourse v. Barnes, T. Raym. R., 77.)

(a.) The damages in question come expressly within the definition of special damage, (Wybert v. The N. Y. & E. R. R. Co., 19 Barb., 39 ; Low v. Archer, 2 Kern., 282; Vanderslice v. Newton, 4 Comst., 130; Armstrong v. Percy, 5 Wend., 535 .)

(b.) Evidence of the amount of probable profits has been allowed. (McNeill v. Reid, 9 Bing., 68; Ingram v. Lawson, 6 Bing. N. C., 212; Donnell v. Jones, 17 Ala. R., 689; Cha. & R. I. R Co. v. Ward, 16 Ill. R., 522.)

2. The testimony sought to be elicited was admissible to prove the damage for the general breach of the special contract by the withdrawal of the letter of credit. The only legitim^e mode of ascertaining the actual damage the defendant sustained by the revocation of the letter of credit, was to ascertain how much of the credit the defendant could, in his business, use to advantage, and to ascertain how much profit it would havé been to him for the term limited by the contract. And the above authorities authorize such profits to be proved as the measure of damages for the breach of such a contract.

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III. The revocation of the letter of credit by the plaintiff was not merely a breach of the contract for which an excuse might answer, or special damages be recovered, but it was an absolute rescission of the contract.

1. The cancellation-of the letter of credit was not merely a refusal on the part of the plaintiffs to perform until the defendant performed on his part. (Ketchum v. Evertson, 13 J. R., 359; Green v. Green, 9 Cow., 46 ; Dowdle v. Camp, 12 J. R., 451; Frost v. Clarkson, 7 Cow., 24 ; Dubois v. Del. C. Co., 4 Wend., 285 .)

2. A contract is, in law, deemed rescinded when the party who is to perform an act places it beyond his power to do the act. (Frost v. Clarkson, 7 Cow., 24 ; Dubois v. Del. C. Co., supra; Franklin v. Miller, 4 Ad. & Ellis, 599; Weaver v. Sessions, 6 Taunt., 154.)

IV. The plaintiffs have proved no legal excuse for the rescission of the contract with the defendant, by wholly revoking or withdrawing the letter of credit. (Wybert v. N. Y. & E. R. R. Co., 19 Barb., 36 .)

V. The letter of credit is, in law, an independent contract, and does not depend upon the performance of the defendant’s contracts for its continuance, or for the right to have it performed on the part of the defendant. (Pepper v. Haight, 20 Barb., 429 ; Bingham v. Weiderwax, 1 Comst., 509; Grant v. Johnson, 5 Barb., 161 ; S. C., 6 id., 337; Dox v. Dey, 3 Wend., 356 ; Dey v. Dox, 9 id., 129; Pearsal v. Fraser, 14 Barb., 564 ; Tompkins v. Elliott, 5 Wend., 496 ; Pordage v. Cole, 1 Saund., 320, n. 4; Betts v. Perine, 14 Wend., 219 .)

1. There are no conditions expressed in the letter of credit: it is absolute on its face; and although the contract executed by the defendant refers to the letter of credit, there is no express provision that its performance is a condition precedent to the continuance of the letter of credit, or that the non-performance thereof should work its forfeiture.

2. It is analogous to the relation existing between a deed of conveyance and a mortgage given for the purchase-money. (Cornell v. Todd, 2 Denio, 130 ; Jackson v. Dunsbagh, 1 John. C., 91; Stow v. Tifft, 15 J. R., 458; Jackson v. McKinney, 3 Wend., 233 ; Hull v. Adams, 1 Hill, 601 ; Coddington v. Davis, 1 Comst.,

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186; Rogers v. Kneeland, 10 Wend., 219 ; Pepper v. Haight., 20 Barb., 430 ; Bingham v. Weiderwax, supra.)

VI. There was no legal failure of performance, on the part of the defendant, proved by the plaintiffs. The defendant is not to be presumed to have known when the bills, or drafts, drawn on Peabody & Co., matured, without notice from the plaintiffs.

John Van Buren, for the plaintiffs (respondents).

I. The contract between plaintiffs and defendant is contained in the agreements signed by them, respectively; it is a single and entire contract, consisting of mutual and dependent undertakings, to be performed in the order of time specifically provided for. The neglect or refusal of the defendant to comply with the engagement on his part relieved the plaintiffs from any further obligation to perform on theirs.

1. The obligation of the defendant to deposit with the plaintiffs, in-Hew York, thirty days before the maturity of each draft in London, funds sufficient to provide for its payment, was a condition precedent to the plaintiffs’ suffering future credits to be given. (King v. Preston, cited in Jones v. Barclay, Doug., 690; Grant v. Johnson, 1 Seld., 247; Sergeant Williams’ note to Pordage v. Cole, 1 Wm. Saund., 819.)

2. The contract between the parties must be read according to its legal effect. Its construction is not to be enlarged or diminished by the fact that it was guaranteed by the collateral undertaking of David Winebrener.

(a.) Some argument might, possibly, be drawn from this collateral guarantee in support of the defendant’s claim, that the stipulations in the original agreement were independent, if it could have had no operation except under that construction ; but here, there must necessarily have been a credit given to the extent of one bill or draft, for which the surety became responsible that funds should be provided in due season for its payment.

Such a “ counterbind ” is the usual mode of securing such credits. (Story on Bills, § 460.)

8. Ho notice to the defendant that payment was required, was necessary; his contract to pay the money was absolute, and as the draft for which such funds were 'to be provided emanated from him, he had the especial means of knowing, when payment was due.

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4. The testimony fully discloses that the defendant neglected to pay the plaintiff’s in Hew York, on the 28th May, 1857, the amount of draft drawn under the letter of credit by Otard, Dupuy & Co., £400, due in London, June 28th, 1857. That the plaintiffs delayed remitting the amount till the latest opportunity (June 9, 1857); that they revoked the letter of credit on the 12th of June, and that the defendant did not refund to them their advances on account of this draft, till June 17.

5. The limit of the credit to be fixed by the letter, to be running at one time, uncovered by remittances in the hands of the drawees, was £1,500. On the 12th of June, 1857, when the credit was revoked, there were four drafts outstanding, amounting in the aggregate to £1,473 7s. 6d. uncovered by remittances, and the most that could be claimed in any event would be a forfeiture of defendant’s right to draw £26 12s. 6d., being the balance that remained undrawn under the letter.

II. But if the plaintiff^ inexcusably revoked the credit and violated their agreement, no damages were sustained by the defendant which can be claimed from plaintiffs.

1. Such damages as were sought to be proved, were not the natural and proximate consequence of plaintiffs’ act. “ Causa proxima, non causa remota spectatur.” ( 2 Greenleaf’s Ev., § 256; Sedgwick on Damages, 75; Griffin v. Colver, 16 N. Y. R., [2 Smith,] 489.)

2. These damages, if any, were the sole consequence of defendant’s lack of credit with Jameson & Robertson, with whom he was dealing. If his credit had been good, the whiskey would have been sent.

3. There is no evidence but that a similar credit elsewhere might have been obtained on as favorable terms.

4. The utmost that could be recoverable by any person under the circumstances, in case a bill had been drawn under the letter and protested for non-acceptance, would have been the damages of redrawing or exchange. (Russell v. Wiggin, 2 Story, 213 ; S. C., Story on Bills, § 463, note.)

In this case, no parties could complain of the breach of plaintiffs’ agreement, except Jameson & Robertson, who sustained no damage.

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5. No damages for the non-payment of money, or a failure to cause money to be paid, are recoverable on any contract, beyond interest and damages on bills of exchange. (Sedgwick on Damages, [2d ed.,] 234.)

6. The damages claimed" by defendant consists solely in prospective profits, which cannot be allowed under these circumstances. (Blanchard v. Ely, 21 Wend., 342 ; Masterson v. Mayor, &c., of Brooklyn, 7 Hill, 61 ; Freeman v. Clute, 3 Barb., 424 ; Hadley v. Baxendale, 26 Eng. L. & E., 402; Wybert v. New York & Erie Railroad Company, 19 Barb., 36 ; Griffin v. Colver, 16 N. Y. R., [2 Smith,] 489; Sedgwick on Damages, [2 ed.,] 36, 58, 59, 69-73.

7. Although provision is made in the contract that all property purchased or shipped by means of that credit, its proceeds, and the policies of insurance thereon, be pledged to the plaintiffs as collateral security for the payment of the drafts ; it was intended solely for the plaintiffs’ benefit. It did not contemplate the purchase of goods at any particular place. Nor that they should be shipped to New York, or any other particular place in the United States. Nor that the market price should be higher or lower at the place of purchase than at the place to which they should be shipped. Nor that the drafts should be appropriated to making purchases rather than advances. Nor that they might not be shipped to a place at which their market value might be less, and for mere purposes of exchange.

III. There is, therefore, not the slightest ground for holding that the plaintiffs are responsible for the miscarriage of an adventure which they could not have foreseen, much less contracted to guarantee or assist.

IV. The decision of the Referee was correct, both as to facts and law; and the judgment should be affirmed, with costs.

The principal question, the question which, if determined in one way, dispenses with the examination of every other, is whether the plaintiffs were warranted in revoking the letter of credit, as they did, on the 12th of June, 1857?

The 12th of June was (as admitted by stipulation read on the trial) the day of the actual revocation in New York. It had

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been announced to Peabody & Company sometime between that day and the 18th of July, as appears by their letter of the latter date to the house in Dublin.

On the 12th of June, the draft for £404 8s., which should have been met with funds placed in the plaintiffs’ hands as early as the 28th of May, had not been provided for. Fourteen days had elapsed, and it was not paid until the 17th of June, twenty days after it should have been provided for. The Referee finds, that “ the defendant, on the 28th of May, 1857, and before the revocation of the letter of credit, failed to provide the plaintiffs at New York, one month previous to the maturity of a bill of £404 8s., drawn under such letter of credit, with funds sufficient to meet the payment thereof at its maturity in London.” The accuracy of this finding cannot be contested.

The plaintiffs remitted funds to London to meet this bill on the 9th of June, and it is stated, in evidence, that this was the latest period at which they could remit to provide' for the payment of the draft at maturity. This was the first draft under the letter of credit. It was for something more than a fourth of the whole amount.

The defendant, it appears, authorized Otard, Dupuy & Company to draw this bill. He was bound to inform himself of its amount, date and time, in order to comply with his engagement to the plaintiffs.

It appears to me clear, that the instruments of the 22d January, 1857, executed between these parties, are to be regarded together, as component parts of one contract and arrangement; and that the stipulations were dependent upon each other. Whenever there was anything to be done by the one party, which must be done prior in time to an obligation, to be fixed upon the other, it became a condition precedent, or an essential preliminary to the duty incumbent upon the other. Whenever an express and material stipulation should be violated by the defendant, the plaintiffs became exonerated from any farther obligation to perform any part of the contract which might remain incomplete.

Edgerton, the defendant, or other persons authorized by his written order, might have exhausted the whole of the credit of £1,500, in one draft, or in several drafts made at the same time.

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The obligation of Edgerton which Winebrener guaranteed, would then have been, First, to have provided funds in Hew York one month previous to the maturity of the drafts, so that the plaintiffs could remit to London in time; or, second, to accept drafts of Peabody & Company on him, in favor of the plaintiffs at three months from the date of the acceptances of that firm. The drafts under the letter of credit were to be at four months; and counsel correctly observed, that in this view of the contract, the first, or the alternative mode of providing funds to meet the bills would be in the practical result the same.

But the bills were drawn, as it may have been expected they would be, at different times, and for various amounts. The security which the plaintiffs stipulated for by the pledge of bills of lading and policies, or the guaranty of Winebrener, related to the whole agreement, and to every part of it, which Edgerton was to perform. It was additional and collateral. It could not, as I think, interfere with any right which the plaintiffs might otherwise possess under the agreement, to revoke and rescind the letter of credit, upon a violation of such agreement, in any important particular, by the defendant.

The neglect of the defendant to furnish funds as agreed upon if justifiable, would produce the effect of an extension of credit to him for the period of fifteen days; of compelling the plaintiffs to raise money out of their own resources to remit to London, and to look to the obligation of the defendant to repay, for their indemnity. How that extension of credit is not merely not permitted by any just construction of the contract, but the contrary is manifestly its true import, and conforms to the obvious intention of the parties as disclosed by it.

If we examine these correlative stipulations upon the rules applicable to conditions precedent, on which the learned counsel have mainly presented the case, the doctrine which we find in Dakin v. Williams, ( 11 Wend., 67 ,) will decide the question. Courts lean against construing covenants to be independent, unless such is the obvious intent of the parties; and when the covenant on the one side goes to the whole consideration of that which is to be performed on the other, the failure of a party to fulfill the one, exonerates the other party from his obligation. The case of The Duke of St. Albans v. Shore, (1 H. Black., 270,)

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is cited and relied upon by Chief Justice Nelson in deciding Dakin v. Williams.

What was the consideration of the stipulation to give this letter of credit ? It was the agreement to provide funds in anticipation in the manner prescribed—the agreement to give security by a lien on the bills of lading and policies of insurance—the guaranty of Winebrener, as well as the personal responsibility of the present defendant for the amounts to be drawn. All these constituted the consideration of the advance of credit. No one of them constituted it more than the other. The neglect to fulfill either, struck away the consideration of the engagement, and discharged the plaintiffs from it as effectually and completely as the violation or neglect of all. The rule is not, as I apprehend, that the stipulation as to which the failure takes place, formed the sole consideration, but that it was plainly as much the motive, and inducement to the promise, as anything else. In the Duke of St. Albans’ case, the trees were part of the consideration, and the cutting them down altered the estate to be conveyed, and discharged the party from the penalty, which was provided in case he broke his contract, by not taking the property.

But I think there is another ground upon which the case may be decided, apart from the technical learning of conditions precedent. In commercial transactions, exactness, promptitude, and precision in adhering to the plain requisitions of a contract is the ruling and fundamental principle of the law, and essential to commercial prosperity and safety. A Court of Justice can very rarely have a right to weigh the importance of particular stipulations, and to judge whether they are of moment, or matters of indifference. The parties have deemed them important, when, in express language, they have introduced them into their agreement.

I support this view by the case of Edmondston v. Drake; (5 Pet., U. S. R., 629;) a case which appears to me to involve principles decisive of the present action in favor of the plaintiffs. The letter of credit which was given by Edmondston in conjunction with the other "admitted documents, made out a case, of his guaranteeing the purchases of Draper & Company, of coffee, to a certain amount, to be consigned to Boyce & Company at Charleston for Hobson’s account; and for which Drake & Com

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pany were to draw bills on Hew York, upon a particular firm, at sixty days. Drake & Mitchell, before the credit was exhausted, altered the mode of obtaining payment by drawing upon London at sixty days’ sight with the consent of Hobson, but without the consent of Edmondston. It was held, that he was not liable upon his letter of credit for such bills. “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 do without his consent.”

The case, also, of Hyde v. Booraem, (16 Pet. U. S. R., 169,) appears to me quite pertinent to the present question. The doctrine of the commutative contracts of the civil law, as found in the Code of Louisiana, is entered into and discussed in the able 'opinion of Justice Story, and tends to show that where the entire fulfillment of the whole contract on the one side is the basis of the agreement on the other, the contract, is indivisible, and must be complied with in toto, or the other may dissolve the contract.

The judgment must be affirmed.

Judgment affirmed, with costs.