LETTER OF CREDIT

letter of credit, a letter, open or sealed, from a banker or merchant, containing a request to some other person or firm to advance the bearer of the letter, or some other person named therein, upon the credit of the writer a particular or an unlimited sum of money. a letter of credit is either general or special. it is general when addressed to merchants or other persons in general, requesting an advance to a third person, and special when addressed to a particular person by name requesting him to make such an advance. a letter of credit is not a negotiable instrument. when a letter of credit is given for the purchase of goods, the letter of credit usually states the particulars of the merchandise against which bills are to be drawn, and shipping documents (bills of lading, invoices, insurance policies) are usually attached to the draft for acceptance. letters patent. it is a rule alike of common law and sound policy that grants of freehold interests, franchises, liberties, &c., by the sovereign to a subject should be made only after due consideration, and in a form readily accessible to the public. these ends are attained in england through the agency of that piece of constitutional machinery known as "letters patent." it is here proposed to consider only the characteristics of letters patent generally. the law relating to letters patent for inventions is dealt with under the heading patents. letters patent (_litterae patentes_) are letters addressed by the sovereign "to all to whom these presents shall come," reciting the grant of some dignity, office, monopoly, franchise or other privilege to the patentee. they are not sealed up, but are left open (hence the term "patent"), and are recorded in the patent rolls in the record office, or in the case of very recent grants, in the chancery enrolment office, so that all subjects of the realm may read and be bound by their contents. in this respect they differ from certain other letters of the sovereign directed to particular persons and for particular purposes, which, not being proper for public inspection, are closed up and sealed on the outside, and are thereupon called _writs close_ (_litterae clausae_) and are recorded in the close rolls. letters patent are used to put into commission various powers inherent in the crown--legislative powers, as when the sovereign entrusts to others the duty of opening parliament or assenting to bills; judicial powers, e.g. of gaol delivery; executive powers, as when the duties of treasurer and lord high admiral are assigned to commissioners of the treasury and admiralty (anson, _const._ ii. 47). letters patent are also used to incorporate bodies by charter--in the british colonies, this mode of legislation is frequently applied to joint stock companies (cf. rev. stats. ontario, c. 191, s. 9)--to grant a _conge d'elire_ to a dean and chapter to elect a bishop, or licence to convocation to amend canons; to grant pardon, and to confer certain offices and dignities. among grants of offices, &c., made by letters patent the following may be enumerated: offices in the heralds' college; the dignities of a peer, baronet and knight bachelor; the appointments of lord-lieutenant, custos rotulorum of counties, judge of the high court and indian and colonial judgeships, king's counsel, crown livings; the offices of attorney- and solicitor-general, commander-in-chief, master of the horse, keeper of the privy seal, postmaster-general, king's printer; grants of separate courts of quarter-sessions. the fees payable in respect of the grant of various forms of letters patent are fixed by orders of the lord chancellor, dated 20th of june 1871, 18th of july 1871 and 11th of aug. 1881. (these orders are set out at length in the _statutory rules and orders revised_ (ed. 1904), vol. ii. _tit._ "clerk of the crown in chancery," pp. i. et seq.) formerly each colonial governor was appointed and commissioned by letters patent under the great seal of the united kingdom. but since 1875, the practice has been to create the office of governor in each colony by letters patent, and then to make each appointment to the office by commission under the royal sign manual and to give to the governor so appointed instructions in a uniform shape under the royal sign manual. the letters patent, commission and instructions, are commonly described as the governor's commission (see jenkyns, _british rule and jurisdiction beyond the seas_, p. 100; the forms now in use are printed in appx. iv. also the _statutory rules and codes revised_, ed. 1904, under the title of the colony to which they relate). the colonial letters patent act 1863 provides that letters patent shall not take effect in the colonies or possessions beyond the seas until their publication there by proclamation or otherwise (s. 2), and shall be void unless so published within nine months in the case of colonies east of bengal or west of cape horn, and within six months in any other case. colonial officers and judges holding offices by patent for life or for a term certain, are removable by a special procedure--"amotion"--by the governor and council, subject to a right of appeal to the king in council (leave of absence act, formerly cited as "burke's act" 1782; see _montagu_ v. _governor of van diemen's land_, 1849, 6 moo. p.c. 491; _willis_ v. _gipps_, 1846, 6 st. trials [n.s., 311]). the law of conquered or ceded colonies may be altered by the crown by letters patent under the great seal as well as by proclamation or order in council (_jephson_ v. _riera_, 1835, 3 knapp, 130; 3 st. trials [n.s.] 591). _procedure._--formerly letters patent were always granted under the great seal. but now, under the crown office act 1877, and the orders in council made under it, many letters patent are sealed with the wafer great seal. letters patent for inventions are issued under the seal of the patent office. the procedure by which letters patent are obtained is as follows: a warrant for the issue of letters patent is drawn up; and is signed by the lord chancellor; this is submitted to the law officers of the crown, who countersign it; finally, the warrant thus signed and countersigned is submitted to his majesty, who affixes his signature. the warrant is then sent to the crown office and is filed, after it has been acted upon by the issue of letters patent under the great or under the wafer seal as the case may be. the letters patent are then delivered into the custody of those in whose favour they are granted. _construction._--the construction of letters patent differs from that of other grants in certain particulars: (i.) letters patent, contrary to the ordinary rule, are construed in a sense favourable to the grantor (viz. the crown) rather than to the grantee; although this rule is said not to apply so strictly where the grant is made for consideration, or where it purports to be made _ex certa scientia et mero motu_. (ii.) when it appears from the face of the grant that the sovereign has been mistaken or deceived, either in matter of fact or in matter of law, as, e.g. by false suggestion on the part of the patentee, or by misrecital of former grants, or if the grant is contrary to law or uncertain, the letters patent are absolutely void, and may still, it would seem, be cancelled (except as regards letters patent for inventions, which are revoked by a special procedure, regulated by § 26 of the patents act 1883), by the procedure known as scire facias, an action brought against the patentee in the name of the crown with the fiat of the attorney-general. as to letters patent generally, see bacon's _abridgment_ ("prerogative," f.); chitty's _prerogative_; hindmarsh on _patents_ (1846); anson, _law and custom of the const._ ii. (3rd ed., oxford and london, 1907-1908). (a. w. r.) lettres de cachet. considered solely as french documents, _lettres de cachet_ may be defined as letters signed by the king of france, countersigned by one of his ministers, and closed with the royal seal (_cachet_). they contained an order--in principle, any order whatsoever--emanating directly from the king, and executory by himself. in the case of organized bodies _lettres de cachet_ were issued for the purpose of enjoining members to assemble or to accomplish some definite act; the provincial estates were convoked in this manner, and it was by _a lettre de cachet_ (called _lettre de jussion_) that the king ordered a parlement to register a law in the teeth of its own remonstrances. the best-known _lettres de cachet_, however, were those which may be called penal, by which the king sentenced a subject without trial and without an opportunity of defence to imprisonment in a state prison or an ordinary gaol, confinement in a convent or a hospital, transportation to the colonies, or relegation to a given place within the realm. the power which the king exercised on these various occasions was a royal privilege recognized by old french law, and can be traced to a maxim which furnished a text of the _digest_ of justinian: "rex solutus est a legibus." this signified particularly that when the king intervened directly in the administration proper, or in the administration of justice, by a special act of his will, he could decide without heeding the laws, and even in a sense contrary to the laws. this was an early conception, and in early times the order in question was simply verbal; thus some letters patent of henry iii. of france in 1576 (isambert, _anciennes lois francaises_, xiv. 278) state that francois de montmorency was "prisoner in our castle of the bastille in paris by verbal command" of the late king charles ix. but in the 14th century the principle was introduced that the order should be written, and hence arose the _lettre de cachet_. the _lettre de cachet_ belonged to the class of _lettres closes_, as opposed to _lettres patentes_, which contained the expression of the legal and permanent will of the king, and had to be furnished with the seal of state affixed by the chancellor. the _lettres de cachet_, on the contrary, were signed simply by a secretary of state (formerly known as _secretaire des commandements_) for the king; they bore merely the imprint of the king's privy seal, from which circumstance they were often called, in the 14th and 15th centuries, _lettres de petit signet_ or _lettres de petit cachet_, and were entirely exempt from the control of the chancellor. while serving the government as a silent weapon against political adversaries or dangerous writers and as a means of punishing culprits of high birth without the scandal of a suit at law, the _lettres de cachet_ had many other uses. they were employed by the police in dealing with prostitutes, and on their authority lunatics were shut up in hospitals and sometimes in prisons. they were also often used by heads of families as a means of correction, e.g. for protecting the family honour from the disorderly or criminal conduct of sons; wives, too, took advantage of them to curb the profligacy of husbands and vice versa. they were issued by the intermediary on the advice of the intendants in the provinces and of the lieutenant of police in paris. in reality, the secretary of state issued them in a completely arbitrary fashion, and in most cases the king was unaware of their issue. in the 18th century it is certain that the letters were often issued blank, i.e. without containing the name of the person against whom they were directed; the recipient, or mandatary, filled in the name in order to make the letter effective. protests against the _lettres de cachet_ were made continually by the parlement of paris and by the provincial parlements, and often also by the states-general. in 1648 the sovereign courts of paris procured their momentary suppression in a kind of charter of liberties which they imposed upon the crown, but which was ephemeral. it was not until the reign of louis xvi. that a reaction against this abuse became clearly perceptible. at the beginning of that reign malesherbes during his short ministry endeavoured to infuse some measure of justice into the system, and in march 1784 the baron de breteuil, a minister of the king's household, addressed a circular to the intendants and the lieutenant of police with a view to preventing the crying abuses connected with the issue of _lettres de cachet_. in paris, in 1779, the _cour des aides_ demanded their suppression, and in march 1788 the parlement of paris made some exceedingly energetic remonstrances, which are important for the light they throw upon old french public law. the crown, however, did not decide to lay aside this weapon, and in a declaration to the states-general in the royal session of the 23rd of june 1789 (art. 15) it did not renounce it absolutely. _lettres de cachet_ were abolished by the constituent assembly, but napoleon re-established their equivalent by a political measure in the decree of the 9th of march 1801 on the state prisons. this was one of the acts brought up against him by the _senatus-consulte_ of the 3rd of april 1814, which pronounced his fall "considering that he has violated the constitutional laws by the decrees on the state prisons." see honore mirabeau, _les lettres de cachet et des prisons d'etat_ (hamburg, 1782), written in the dungeon at vincennes into which his father had thrown him by a _lettre de cachet_, one of the ablest and most eloquent of his works, which had an immense circulation and was translated into english with a dedication to the duke of norfolk in 1788; frantz funck-brentano, _les lettres de cachet a paris_ (paris, 1904); and andre chassaigne, _les lettres de cachet sous l'ancien regime_ (paris, 1903). (j. p. e.)