parol acceptance, though the party who receives the bill does not know of that parol acceptance, he has a right to avail himself of it afterward. It is impossible for any man to doubt, on principles of common sense, that such ought to be the law; for if I take a bill, I take it with every advantage the holder had before it came into my hands. If the plaintiffs were ignorant of this (the parol acceptance), it is quite impossible that that which they have done in ignorance can prejudice any right which was before vested in them." 1 § 564. The measure of damages for non-performance of an agreement to accept a draft for the drawer's accommodation, which is still in his hands, is the inconvenience and loss thereby occasioned to him, and not the amount of the draft. In case a debt is lost by the negligence of an agent to present the bill for acceptance or payment, the measure of damages is prima facie the amount of the bill ; but evidence is admissible to reduce the amount to a nominal sum.3 $ 565. If, by promise and liability to accept, a drawee induces a drawer to draw upon him, and then refuses to honor the bill, he will be liable for all damages incurred, including protest. In a case before the U. S. Supreme Court it appeared that the defendant had ordered the plaintiff to purchase salt for him, and draw on him for the amount, and he having so purchased and drawn, it was held that the defendant was bound to accept the bills, and having failed to do so, that the plaintiff was entitled to recover the amount of the bills, with damages and costs of protest, upon a count for money paid and expended, and that the bills themselves were good evidence on that count.* 9 ? Fairlee v. Herring, 3 Bing., 625; 11 Moore, 520, S. C. (1826). : Ilsley v. Jones, 12 Gray, 260. * Ailen v. Suydam, 20 Wend., 321; Van H'ort v. Woolley, 5 Dow. & Ry. ; see $$ 329, 330. *Riggs v. Lindsay, 7 Cranch, 500. It seems that if a person should write a factor that he had consigned him certain goods, and would draw a bill on the credit thereof for a certain amount, the factor, if he accepted the assignment would be bound to accept the bill; and that the payee of such a bill could sue the factor as upon a breach of promise to accept.1 SECTION II. HOW PAROL ACCEPTANCE IS AFFECTED BY THE STATUTE OF FRAUDS. 566. In those States where there is no statute prescribing what shall constitute an acceptance, the question of the validity of a verbal acceptance may become referable to the statute of frauds, which declares that all promises to pay the debt of another shall be void unless in writing. An eminent legal writer says on this subject that: "The parol acceptance being no more than a parol promise, it seems to the author that whether or not the acceptance can be charged on such promise may depend on whether the promise is to pay a debt of his own, or to answer for the debt of another. For, in the latter case, no action can be lawfully brought unless the promise, or some memorandum or note thereof, be in writing and signed by the party to be charged thereby or his agent. Such is the provision of the Code of Virginia." This view has been taken in Maine, where it was held that a parol promise to accept an order from a debtor in favor of his creditor, between whom and the maker of the promise there was no privity, was invalid under the statute of frauds, as a promise to pay the debt of another. And there are other authorities to the same 2 11 Parsons N. & B., 291. Conway Robinson, in his Practice, vol. 2, new ed., p. 153. 'Plummer v. Lyman, 49 Me., 229. effect—that acceptance must be in writing if it be to pay the debt of another, otherwise it will be void.1 $ 567. Whether the statute of frauds restricts the law merchant.--It may well be doubted, however, whether or not the statute of frauds applies to that class of engagements which are regulated by the peculiar doctrines of the law merchant, and the weight of reason and of authority incline us to the opinion that it does not. A recent discriminating writer on “ Verbal Agreements” lays it down as a cardinal principle, that “contracts, the construction, validity, and evidence of which depend upon so much of the law merchant as the common law recognizes, or the provisions of some other statute, are exceptions to the operation of this clause of the statute of frauds "; ? and the numerous cases which have held a verbal acceptance or promise to accept as binding are generally based upon the open assertion or tacit acknowledgment of this theory. A standard author considers a bill of exchange as a preferable form of security, on the ground that the statute of frauds does not apply to it ;and such is the general understanding, as we believe, of the commercial world." 3 3 Wakefield v. Greenhood, 29 Cal., 600, Sawyer, J., dissenting ; Manley v. Geagan, 105 Mass., 445. * Throop on Verbal Agreements, p. 159, $ 85. * Chitty on Bills, page 4, in which it is said: “This security is in some respects preferable to many others of a more formal nature; for each of the parties to a bill, by merely writing his name upon it as drawer, acceptor, or indorser impliedly guarantees the due payment of it at maturity, and the consideration in respect of which he became a party to it, can rarely be inquired into ; whereas, in the case of an ordinary guaranty, the statute against frauds requires the consideration to be expressed, and other matters of form which frequently render an implied guarantee wholly imperative." In Nelson v. First National Bank of Chicago, 48°III., 41, where a parol promise to pay checks of the drawer was held binding, the court said, per Lawrence, J. : "Il a parol promise to accept an existing though non-present check is binding, we are wholly unable to discover why it should not be equally so as to a non-existing bill, under the authority of the American cases, in none of which is any distinction made between parol and written promises of this character, except where a written promise is expressly required by statute.” See ante, pp. 416, 417. *Butler v. Prentiss, 6 Mass., 430, Parsons, C. J., says : “Neither a bill of exchange on its face nor the indorsements are within the statute of frauds." In Pillans v. Van Mierop, 3 Burr., 1674, the defendants, in expectation of having funds of the payee in their hands, agreed to honor the plaintiff's draft to be $ 568. It is not necessary, however, as it seems, to maintain that the statute of frauds is wholly inapplicable to the cases arising under the law merchant (although such is, as we think, the true doctrine), in order to sustain the validity of verbal acceptances and promises to accept They may be enforced in some cases upon well-established principles of estoppel. The theory of a bill of exchange is that the drawer puts the payee in his place, and gives him the right to receive funds in the drawee's hands belonging to him. When the drawee accepts or promises to accept, he says, in effect, to the payee, “ It is true, I have funds of the drawer, and will pay them to you as he directs.” Now, if he really has funds, he does not undertake to pay “the debt of another” than himself, but simply to pay his own debt “to another” than his original creditor, as is conceded ; and when an acceptance or promise to accept is communicated to the holder, and he takes the bill on the faith thereof, he has a right to presume the condition of things which the acceptor or promisor to accept impliedly asserts, and such acceptor or promisor should be estopped from denying it. A promise by A. to pay his debt to B., by paying B.'s debt to C., has been well said, in Wisconsin, by Dixon, C. J., not to come under the statute thereafter drawn to reimburse them for money lent him. After the loan, but before the draft was drawn, the payee failed, and the defendants notified the plaintiff that the draft would not be accepted ; but it was drawn nevertheless and dishonored. The agreement being by written correspondence, no question arose as to the statute of frauds; but Lord Mansfield said he had no idea that “ promises for the debt of another" were applicable to the present case ; that this was a mercantile transaction, and credit was given upon a supposition “that the person who was to draw upon the undertakers within a certain time had goods in his hands, or would have them. Here the plaintiffs trusted to this undertaking, therefore it is quite upon another foundation than that of a naked promise from one to pay the debt of another.” See Spalding v. Andrews, 48 Penn. St., 411. * Shields v. Middleton, 2 Cranch, C. C., 205 ; Van Reimsdyck v. Kane, i Gall., C. C., 633 ; Pike v. Irwin, i Sand. (N. Y.), 14; Strohecker v. Cohen, 1 Spears (S. C.), 349; Brown, Statute of Frauds, $$ 172-174. Agreement to pay one's own debt " to another” is not agreement to pay debt of another. Spadine v. Reed, 7 Bush (Ky.), 455; Besshears v. Rowe, 46 Mo., 501 ; see also Spalding v. Andrews, 48 Penn. St., 411; Dunbar v. Smith, S. C., Ala., Oct., 1881; Central Lo J., Feb. 3, 1882, p. 97. of frauds, because simply a promise to pay his own debt “in that particular way.” 1 $ 569. Verbal acceptance without funds.—There are cases which hold that a verbal acceptance without funds, or promise to accept, would not be valid, no consideration being given to the inquiry whether or not the holder knew the fact that the acceptance or promise was for accommodation. When the holder knows such promise or acceptance to be for accommodation, it stands on the same footing as a promise to indorse, which must be in writing in order to be valid, being plainly an engagement to answer for the debt of another ;3 but the inferences to be drawn without such knowledge are altogether different, and it would create rather than prevent fraud, to permit the drawee to repudiate his acknowledgment of funds after a third party has contracted upon the faith of it. $ 570. When statute of frauds does not apply.—Where there is a new and independent consideration moving at the time from the party to whom the promise is made, the statute of frauds does not apply. Thus, the United States Supreme Court held, that if a person verbally undertake to accept a bill in consideration that another will purchase one already drawn, or to be thereafter drawn, and as an inducement to the purchaser to take it, and the bill is purchased upon the credit of such promise for a sufficient consideration, such promise to accept was binding upon the party, and that it was an original promise, and not a promise to pay the debt of another within the statute of frauds. . In this case the suit was for damages for breach of the 1 * Putney v. Farnham, 27 Wis., 187; see $ 570, note 1. *Pike v. Irwin, i Sand. (N. Y.), 14; Quin v. Hanford, Hill (N. Y.), 82; Brown on Statute of Frauds, 174; see Townsley v. Sumrall, 2 Pet., 170. * Carville v. Crane, 5 Hill (N. Y.), 583; Taylor v. Drake, 4 Strobh. (So. Car.), 431. *See Brown on Statute of Frauds, $ 175, note. 3 |