Ranger v. Sargent

Citations

• 36 Tex. 26

Syllabus

<p>R. & Co. being sued on a draft drawn September 3d, 1866, on the faith of a letter of credit, as follows: “The bearer, W. H. R., is authorized to draw “ on us for six hundred dollars specie. Houston, August 31st, 1866. R. & “ Co.” They pleaded that since the giving of the letter of credit, they had paid to W. H. R. and to his order more than the sum specified in the letter of credit, whereby the authority conferred by said letter had been exhausted; and that the plaintifE, by the exercise of ordinary diligence, could have ascertained these facts. Held to be a good defense. That though the instrument sued on was a general letter of credit, in that it was directed to no particular person and limited to no time or place; yet it was special in that it was limited in amount, and a party making advances on it was bound to make inquiry whether it had been paid, or the authority to draw exhausted; and held furthm', that when the defendants delivered the letter of credit it became the absolute property of the holder, and they lost all control over it.</p>