Page:Harvard Law Review Volume 32.djvu/39

5 LETTERS OF CREDIT 5 The letter of credit discussed in the continental treatises on commercial law ^ is of the sort most familiar to us as the conven- tional traveler's letter, addressed to a particular correspondent, a group of correspondents or to the world at large (in the latter case called a circular letter of credit),^ requesting the addressee or addressees to pay money or give credit to the holder up to a cer- tain amount ^ within a time limited and agreeing to become re- sponsible therefor to the addressee or to accept the addressee's bill therefor. The importance to us of continental law as to letters of credit is twofold. In the first place, as has been said, we got this idea from the continental books and practice, and it has had its fullest theo- retical development in their commercial law; and in the second place it has always been legitimate in any discussion of our law merchant, which in its formative period drew so largely on .conti- nental sources, to refer to the civil law by way of analogy. More- over in the present connection it happens that the commercial law of continental Europe is able to furnish us two fruitful suggestions : one, the idea of treating a commercial promise as being enforceable as such; the other, the practice of treating such a letter as an ouverture de credit and as conclusive evidence of money, had and received and held for the use of the addressee. According to the French books, the letter of credit has two aspects, depending on whether it is looked at as between the issuer of the letter and the correspondent or as between the issuer of the letter and the holder. In the former aspect — as between issuer and correspondent — the French treat the letter of credit as a species of mandate.^ By mandate the Romanist means a transac- tion whereby one party known as the mandans gives to another, known as the mandatary, a commission to do something, whereby the mandatary having done the thing in question, is entitled to be 2 B£darride, De la Lettre de Change, 2 ed., §§ 633-41; 2 Pardessus, Cours de Droit Commercial, § 585; Pothier, Traite du Contrat de Change, § 236; Co- sack, Lehrbuch des Handelsrechts, 2 ed., § 188. For the history of the letter of credit see Goldschmidt, Universalgeschichte des Handelsrechts, 397 #. ' This is usual. 4 Lyon-Caen et Renault, § 736. But it may also be unlimited. 2 ed., § 633.
 * 4 Lyon-Caen et Renault, Traite de Droit Commercial, 4 ed., §§ 736-48;
 * 4 Lyon-Caen et Renault, § 736-, note 3.
 * 4 Lyon-Caen et Renault, § 738; 2 B^darride, De la Lettre de Change,