and indorsers are held liable, provided that, when the delay is over, due diligence is exercised in making the presentment afterward."

The delay in making presentment in this case was caused by circumstances beyond the control of the plaintiff, and was not imputable to its default, misconduct, or negligence, and was therefore excusable. In accordance with the authorities, and upon principle, we are alike sat

Bills and notes-letter of credtimeliness of draft.

isfied that the presentment made to the Irving National Bank was under the circumstances in time, the delay in presentment not being due to the negligence of the plaintiff.

Moreover, if this draft was entitled to days of grace, its presentment on February 2d was in due time in any event. In Daniel on Negotiable Instruments, 6th ed. vol. 1, § 617, in discussing what instruments are by the law merchant entitled to grace, it is said: "And we have no hesitation in saying, in concurrence with the doctrine expressly stated, or to be derived from what is said by Chitty,

Byles, Maxwell, Roscoe, Edwards, Story, Parsons, Kent, and others, that negotiable instruments payable at sight are, and should be, entitled to grace, though there is respectable authority and opinion to the contrary. The weight of authority in the United States is to this effect."

-letter of credit-sight draft

We have no doubt that the draft herein involved is a negotiable instrument, and Mr. Daniel in the secdays of grace. tion above quoted says: "It seems clearly reasonable that bills at sight should have grace, as they are never presented for acceptance but for payment and the theory of indulgence to the drawee, upon which grace is allowed upon drafts payable at a specified time after date, or after sight, would apply with greater force to those payable at sight."

A letter of credit is a letter whereby one person requests some other person to advance money or

give credit to a third person, and

promises to repay Letter of credthe same to the per- it what is. son making the ad

vancement. It partakes of the nature of a negotiable instrument. See Liggett v. Levy, 233 Mo. 590, 136 S. W. 299, Ann. Cas. 1912C, 70; 7 C. J. 594, § 237.

The law regarding the sanctity of contracts has been long established and rests upon "a solid foundation of reason and justice." As was said in Dermott v. Jones (Ingle v. Jones) 2 Wall. 1, 8, 17 L. ed. 762, 764, the law requires parties to do what they have agreed to do. "If unexpected impediments lie in the way, and a loss must ensue, it leaves the loss where the contract places it. If the parties have made no provision for a dispensation, the rule of law gives none. It does not allow a contract fairly made to be annulled, and it does not permit to be interpolated what the parties themselves have not stipulated." We shall not depart from that principle.

In this case the contract which the defendants made with the plaintiff's assignor has been fully performed by the latter, but remains in part unperformed by the Irving National Bank, inasmuch as the bank, which issued the letter of credit, acting under defendant's instructions, declined to pay the draft drawn and presented pursuant to its terms. In other words, the defendant wrongfully induced the Irving National Bank to break its contract, which was to pay to the bona fide holder of the draft the amount thereof when presented in accordance with the terms of the aforesaid letter of credit.

The plaintiff has not seen fit to sue the Irving National Bank at law, which it might have done. Instead it has seen fit to bring suit against the defendant, who induced the bank not to comply with its contract. This, in our opinion, it could do, but not in equity, and we will proceed to state our reasons therefor. "Property rights, public and private morality, and liberty itself are inse

Case-liability for procuring breach of contract.

rights are property, and as such are entitled to the protection of the law, and knowingly to induce one of the parties wrongfully to repudiate a contract is as distinct a wrong as it is to injure or destroy his property. In Temperton v. Russell [1893] 1 Q. B. 715, 730, 1 Eng. Rul. Cas. 717-C. A., Lopes, L. J., said: "I presume that the principle is this, viz. that the contract confers certain rights on the person with whom it is made, and not only binds the parties to it by the obligation entered into, but also imposes on all the world the duty of respecting that contractual obligation." The other judges concurred with him in holding that one who wrongfully induces another to break his contract is liable as for an actionable wrong.

In American Malting Co. v. Keitel, 126 C. C. A. 284, 209 Fed. 358, this court had occasion to consider at some length the wrong committed by a third party who induces a party to a contract to break it. In that case we said: "It is an actionable wrong for a third person, without justification, to induce a party to a contract to break his agreement." We are still of that opinion. See Heath v. American Book Co. (C. C.) 97 Fed. 533; Dail-Overland Co. v. Willys-Overland (D. C.) 263 Fed. 171, 183; Westinghouse Electric & Mfg. Co. v. Diamond State Fibre Co. (D. C.) 268 Fed. 123; Beekman v. Marsters, 195 Mass. 205, 210, 11 L.R.A. (N.S.) 201, 122 Am. St. Rep. 232. 80 N. E. 817, 11 Ann. Cas. 332; McGurk v. Cronenwett, 199 Mass. 461, 473, 19 L.R.A. (N.S.) 561, 85 N. E. 576; Wheeler-Stenzel Co. v. American Window Glass Co. 202 Mass. 473, L.R.A.1915F, 1076, 89 N.

E. 28; Tracey v. Osborne, 226 Mass. 29, 114 N. E. 959.

From the days of Lord Mansfield's decision in Moses v. Macferlan, 2 Burr. 1065, 97 Eng. Reprint, 676, decided in 1760, the common-law courts have recognized the right to sue in the equitable action of indebitatus assumpsit to recover money paid by mistake, or if "the defendant upon the circumstances of the case is obliged by the ties of natural justice and equity to refund the money." And as stated in Mr. Woodward's Woodward's work on Quasi Contracts, § 3, quasi contractual obligations are defined as "arising without reference to the assent of the obligor, from the receipt of a benefit the retention of which is unjust, and requiring the obligor to make restitution." "They rest solely upon the universally recognized moral obligation of one who has received a benefit, the retention of which would be unjust, to make restitution." Id. § 6.

The defendant has entered into no contract with the plaintiff herein. The contract appears to have been with the Irving National Bank, which issued the letter of credit. The defendant procured the Irving National Bank to issue the letter of credit, and it, and not the defendant, was therefore the promisor. While no contractual relation exists between the plaintiff and the defendant, the defendant has assumed a quasi contractual relation with the plaintiff. That relationship grows out of the fact that the defendant received a benefit the retention of which would work a serious injustice to quasi-inducing the plaintiff. And dishonor of this quasi contractual obligation is imposed without reference to the obligor's assent. It is essential to the existence of a quasi contractual obligation that it be shown: (1) That the defendant has received a benefit from the plaintiff. (2) That the retention of the benefit by the defendant is inequitable.

Contracts

draft.

The benefit which the defendant

received from the plaintiff's assignor was the merchandise which he turned over to the defendant, and which the latter was to pay for by turning over an irrevocable letter of credit. It was pursuant to that agreement that the Irving National Bank issued its "irrevocable letter of credit," and agreed to pay to the holder of a draft drawn under the latter and presented according to its terms. The retention of the benefit by the defendant is inequitable, inasmuch as the bank, acting under the instructions of the defendant, refused to pay the last draft drawn on the bank, and which the plaintiff, having purchased, presented to it in accordance with its terms.

It clearly appears in this case that the benefit conferred upon the defendants was due to misreliance on the promise of the defendant that it would furnish an irrevocable letter of credit, which it in fact furnished, but afterwards wrongfully directed the bank not to pay before it had been paid in full. The assumption that the letter of credit would be paid in accordance with its terms, therefore, turned out to be erroneous; and the goods were delivered by the plaintiff's assignor, and the draft was purchased and the money paid by the plaintiff under a mistake "of anticipated fact." The result is that the defendant, who revoked the letter of credit, has in its hands the merchandise, for which it has not paid in full, and for which, in equity and good conscience, it is liable in quasi contract to the plaintiff in the sum of $8,038.73, with interest thereon from January 31, 1923, that being the date upon which the draft was payable by the Irving National Bank.

As there is no question but that defendant has received property for which it has not paid, and the retention of which is an injustice, there is a clear moral obligation to make. restitution to the plaintiff, who parted with its money under a mistake of fact and in reliance upon a letter of credit, which was, upon its

face, irrevocable, but which the defendant induced the bank wrongfully to revoke.

Upon the commission of a tort an obligation rests upon the tort-feasor

to compensate the Case-liability person injured. The of tort-feasor.

commission of a

tort not only results in damage to the person injured, but often in a benefit to the tort-feasor. It so resulted in this case, as the defendant benefited to the extent of the draft which remained unpaid; and whenever the tort-feasor is so enriched he is under a clear moral obligation (aside from the obligation to pay damages) to make restitution either in specie or in value. And this obligation may be enforced against the tort-feasor in an action of indebitatus assumpsit. Woodward, Quasi Contr. § 270.

sumpsit.

It has been held that, where the remedy by assumpsit is full and complete, the resort Equity-other must be to that ac- remedy-astion and not to a suit in equity. Wolf v. Irons, 8 Ark. 63; Canfield v. Johnson, 144 Pa. 61, 22 Atl. 974; Fanning v. Chadwick. 3 Pick. 420, 15 Am. Dec. 233. And in Gaines v. Miller, 111 U. S. 397, 28 L. ed. 466, 4 Sup. Ct. Rep. 426, the court, sustaining a demurrer to a bill in equity, said: "Whenever one person has in his hands money equitably belonging to another, that other person may recover it by assumpsit for money had and received. The remedy at law is adequate and complete."

In Knapp v. Hobbs, 50 N. H. 476, 478 (1871), the court, after stating that in order to support the count in assumpsit there must be privity of contract, said: "But there need be no other privity of contract in order to support this action than that which results from one man's receiving another's money which he has no right conscientiously to retain. In such a case the law and the equitable principle upon which the action is founded imply the contract and the assumpsit. Mason v. Waite, 17 Mass. 563; Hall v. Mar

that remedy being adequate, the bill in equity should be dismissed, and the cause transferred to the law side of the court.

The order dismissing the complaint is reversed, and the cause remanded to the District Court, with directions to reinstate the complaint and transfer the case to the law side, and proceed therewith in accordance with rule 22 of the Equity Rules promulgated by the Supreme Court, and in accordance with the principles laid down in this opinion.

Petition for writ of certiorari denied by the Supreme Court of the United States November 1, 1926.

I. In general, 57.

a. In general, 59.

a. In general, 65.

b. As to time, 67.

primary contract, 70.

As to construction of provision for letter of credit in contract of sale, see annotation in 38 A.L.R. 608 [Letter of Credit, § 1]. Some other annotations involving certain phases of letters of credit are referred to under specific subdivisions of the present annotation.

1. In general.

As bearing upon the rights and remedies of the holder of a draft drawn under a letter of credit and taken on the faith thereof, it is of value to note that a letter of credit may be properly regarded as an acknowledgment by the promisor of the receipt of a sum of money, or of an arrangement made to advance a sum of money for the

use of a designated person, or anyone who may act upon the letter, provided the conditions of liability imposed in the letter, if any, are complied with. The primary purpose of such a letter is to assure anyone dealing on the faith of the letter of credit prompt payment, upon compliance with the conditions set forth in the letter. annotation in 30 A.L.R. 1310 [Letter of Credit, § 1], as to what constitutes a letter of credit. As hereinafter more specifically pointed out, a letter of credit is either special or general.

See

In order that a letter of credit shall be binding upon the issuer thereof, it must describe the bill to be accepted in terms not to be mistaken. The let