LETTERS OF CREDIT 17 "We are of opinion that this entire transaction, beginning with the issuing of the letter of credit and closing with the settlement referred to, presents all the elements of an estoppel, and defendants are precluded from setting up a defense based upon the alleged invalidity of the letter of credit for any cause. . . . We have here the representation of cer- tain facts by the defendants with knowledge that the plaintiff proposed to act thereon; the fact that he did so act and took the letter of credit and money in payment of his claim, releasing all parties from further liability. This constituted a taking of the letter of credit in good faith and for value. The plaintiff by the representations of defendants was induced to change his position, to give up his cause of action and pro- posed legal proceedings, acknowledge full settlement and payment of his claim, and to release all parties." Gray, J., dissented on the ground that the letter of credit was a mere offer and that when it was discovered that the holder was about to use it for a different purpose than that which he hkd represented, it might be revoked. He was also of the opinion that taking on a precedent debt and giving- a receipt for it did not con- stitute such a change of position as to raise an estoppel. This decision obviously is quite out of line with the offer theory. In the first place if the letter was an offer it contemplated accept- ance by addressee accepting bills drawn by the holder and in turn drawing on New York.^^ But, so far as appears, the letter had been revoked before any bills were drawn or accepted. If it be held that a promise not to revoke an offer makes it irrevocable, yet here there was no consideration for the issuer's promise, in
- 8 The letter read:
"No. 5687 Office of John Munroe & Co. Bankers, 32 Nassau St., New York Messrs. Munroe & Co., Feb. 26, 1892. Paris: Gentlemen: We hereby open a credit with you in favor of Capt. J. A. Johannessen, S. S. Raylton Dixon for fifteen thousand francs (fcs 15,000) available in bills at ninety days date; on acceptance of any bill or bills drawn under this credit you are to draw on Carsten Boe, New York, at seventy-five days date; payable at the current rate of exchange for firsts class bankers' bills on Paris on day of maturity. Commission is arranged. Bills imder this credit to be drawn at any time prior to May ist, 1892. Truly yours, John Munroe & Co." "The bill may be availed of in sterling, if desired, say six hundred pounds sterling (£600). J. M. & Co."
