Page:Harvard Law Review Volume 32.djvu/42

8 8 HARVARD LAW REVIEW acknowledgment of money received from the' holder of the letter to the use of the person to whom it is addressed upon the condi- tions named in the letter. When acted upon by the person to whom it is addressed this would certainly estop the issuer of the letter from denying that he held the money as acknowledged. As we have no such institution as the Roman mandate, we should not be confronted with the difficulty that the transaction :wouldibe irrev- ocable on the one side and revocable on the other while executory. For our purposes the doctrine of money received to the use of a third person, and the estoppel involved in change of position upon the faith of the acknowledgment, would suffice. The German law on the subject is substantially the same. It is set forth in convenient form by Cosack.^* Cosack makes a dis- tinction between a mandate of credit (kreditauftrag) and a letter of credit (kreditbrief). He says that the letter of credit strictly is in the nature of anweisung rather than mandate. The anweisung of the older law consisted of two parts, a mandate to pay and a man- date of satisfaction. For this clumsy legal theory of a bill of ex- change in terms of Roman law the Germans have now worked out a theory of the bill of exchange as a single formal legal transaction. When, therefore, Cosack says the letter of credit and the bill of exchange are species of this same general theoretical genus, he not only gives us a more scientific analysis but brings out that the letter of credit as a device of finance is really as much a substantive transaction of the law merchant as is a bill or note; a position which it seems our courts might well adopt. Summing up the situation in the continental commercial law, we may say the letter of credit is a mandate to some particular addressee, or addressed generally to such person as may comply with it, commissioning him to pay money, or give credit to the holder, whereby the addressee or the person (in case of a circular letter of credit) who complies with it, becomes entitled to hold the issuer of the letter for the sum of money advanced or the credit givien within the terms of the mandate. So far, translated into our law, there is not.hj[ng but an offer to the correspondent or to the world at large, accepted by giving credit or advancing money ac- cording to the terms of the offer. And it is significant that in the very ^ Lehrbuch des Handelsrechts, 7 ed., § 79.