Coolidge vs. Payson | MARSHALL, J., 18171 • This case is similar to the case of Pillans & Rose v.
his case is similar to the case of Pillans & Rose v. Van Mierop & Hopkins,
DOCTRINE
A letter, written within a reasonable time before or after the date of a bill of
exchange, describing it in terms not to be mistaken, and promising to accept it is, if
shown to the person who afterwards takes the bill on the credit of the letter, a
virtual acceptance binding the person who makes the promise. The prevailing
inducement for considering a promise to accept as an acceptance is that thereby
credit is given to the bill.
FACTS
• Coolidge & Co. held the proceeds of part of the cargo of the Hiram, claimed
by Cornthwaite & Cary.
• Cornthwaite then executed a bond of indemnity worth $2,700, executed at
Baltimore with scrolls in the place of seals, drawn on Cooolidge, and payable
to the order of John Randall. This was endorsed by Randall to Payson & Co.
NOTE: I think the scrolls/seals were customarily placed on the signatures of
sureties.
• Said bill was presented to Coolidge but was not accepted. Payson
protested.
• After its protest, Coolidge wrote to Cornthwaite a letter saying that the
bond was not executed as it ought to be, though that it may be otherwise in
Corntwaithe’s state. And so Coolidge required that they be assured that the
scroll was usual and legal with them instead of a seal. They also
informed Cornthwaite that they would seek the advice of one Mr.
Williams about the propriety of the bill, and should Mr. Williams be
satisfied, the bill would then be honored.
• Coolidge then wrote a letter to one Mr. Williams to ask for advice as to the
capacity of the sureties therein.
• Williams then replied that he was assured that the bond transmitted was
sufficient for the purpose for which it was given. He stated that, as to the last
signer, he had no hesitation that he would be able to meet the whole amount,
but that he was not so sure about the capacity of the principals.
• Both Cornthwaite and Payson called on Williams to inquire as to WON he
was satisfied with the bill. Williams then, read to them parts of the letter-reply
he sent to Coolidge.
• Days after, a bill was drawn by Cornthwaite payable to Payson, in part of
the protested bill of $2,700, presented to Coolidge who refused to accept it.
• Hence, Payson brought suit.
• LC: ruled in favor of Payson.
ISSUE
WON a promise to accept a bill amounts to an acceptance to a person who has
taken it on the credit of that promise, although the promise was made before the
existence of the bill and although it is drawn in favor of a person who takes it for a
preexisting debt?
HELD
YES.
1
JESSA ALVAREZ
wherein the credit on which the bill was drawn was given before the promise to
accept was made, and the promise was made previous to the existence of the
bill. Yet in that case, the Court considered the promise to accept as an
acceptance.
• However, it is contended that the authority of the case of Pillans & Rose v.
Van Mierop & Hopkins is impaired by subsequent decisions as in Pierson v.
Dunlop. Here, the bill was drawn and presented before the conditional promise
was made on which the suit was instituted. This case laid down the general
rule that the mere answer of a merchant to the drawer of a bill, saying, 'he will
duly honor it,' is no acceptance, unless accompanied with circumstances which
may induce a third person to take the bill by endorsement; but if there are any
such circumstances, it may amount to an acceptance though the answer be
contained in a letter to the drawer.
• Hence, it seems that the case of Pillans & Rose v. Van Mierop & Hopkins
had been understood to lay down the broad principle that a naked promise to
accept amounts to an acceptance, and on the other hand the case of Pierson v.
Dunlop certainly narrows that principle so far as to require additional
circumstances proving that the person on whom the bill was drawn was bound
by his promise, either because he had funds of the drawer in his hands or
because his letter had given credit to the bill and induced a third person to take
it.
• On the argument that Pierson v. Dunlop seems to imply that the additional
circumstances must be apparent on the face of the letter, the Court said that
there’s even no reason for distinguishing between circumstances which appear
in the letter containing the promise and those which are derived from other
sources. Because the great motive for construing a promise to accept as an
acceptance is that it gives credit to the bill, and may induce a third person to
take it.
• On a final note, the Court ruled that a letter written within a reasonable
time before or after the date of a bill of exchange, describing it in terms not to
be mistaken and promising to accept it is, if shown to the person who
afterwards takes the bill on the credit of the letter, a virtual acceptance binding
the person who makes the promise.
DISPOSITIVE
Judgment affirmed.
Bulliet vs. Allegheny Trust Co.2 | SCHAFFER, J., 1925

DOCTRINE

FACTS
• C. C. Mitchell was negotiating for the purchase of an oil property; Grove
McNair was his agent. The memorandum agreement of sale between the parties
provided that Mitchell would place in the hands of N.C. Bolling & Company
$5,000 in escrow in evidence of good faith that he would pay the remainder of
the purchase price.
• It says further that in the event of Mitchell's failure to carry out his
undertaking, the $5,000 should be forfeited to the seller, V. J. Bulliet, trustee
for the Woolfolk Oil Company.
• To meet the requirement of the agreement of purchase, Mitchell drew his
check to the order of McNair for the sum named drawn on Allegheny Trust Co.
Mitchell then made his account in the bank good for the amount of it.
• In response to a telegram from Bulliet to Allegheny inquiring whether it
would honor Mitchell's check. Allegheny replied by wire that it would.
• Mitchell failed to pay. When the check was presented for payment,
Allegheny refused to honor it, owing to the stop payment order by Mitchell.
• LC: ruled in favor of Bulliet.
ISSUE
WON there was a valid certification.

HELD
YES.
• Where the holder of a check inquires by telegraph of the bank on which the
check is drawn whether the check will be honored, and the bank by telegraph
responds that it will, such action by the bank amounts to a certification of the
check.
• The effect of such certification at the request of the holder is to create a
new obligation on the part of the bank, whereby the holder becomes in fact a
depositor, and the bank cannot, thereafter, in a suit against it on the check, set
up any defenses which the maker might have as against the holder.
• Hence, a bank cannot set up as a defense a delay in presenting a check
which it had certified, and especially is this so where the bank has notice that
the check was not to be payable until a day stated, and on this day it was
mailed for collection.
• So far as the bank is concerned, demand for payment of a certified check
may be made upon it at any time within the statute of limitations.

DISPOSITIVE
Judgment is affirmed.

2
JESSA ALVAREZ