The opinion of Mr. Justice Laughlin, as it seems to me, fails to take cognizance of the basic fact that foreign exchange *112or credit is a subject of purchase and sale and not only may be but is commonly contracted for in the same manner and governed by the same laws as in the case of purchase of wheat, cotton or any other subject of commerce. When a merchant in New York wishes to discharge an obligation maturing in a foreign country he does not ordinarily forward foreign money, or procure it to be forwarded. He goes to a banker, or dealer in foreign exchange and buys credit, available in the foreign country and sufficient to discharge the obligation. The banker has various ways of making the credit available. He may purchase the bills of foreign merchants maturing here; he may' direct his foreign branch or correspondent to pay the amount involved; he may deliver to the purchaser his draft for acceptance abroad. The method followed is immaterial to the purchaser of the exchange or credit. He has bought the credit and the seller has contracted to have the credit available at the time and place agreed. When the purchaser pays over the sum involved and in addition the agreed price of the exchange and the seller delivers a memorandum of the transaction, the bargain or contract is a completed transaction, and for failure to perform his contract and make the credit available the seller of the exchange is liable in damages, just as he would be for the breach of any other contract. The fact that the credit is to be available on the following day, thus necessitating the use of cable or wireless communication, can have no bearing upon the legal nature of the transaction.
The soundness of this position has complete sanction in the very recent decision of this court in Strohmeyer & Arpe Co. v. Guaranty Trust Co. (172 App. Div. 16), where Mr. Justice Scott, writing for a unanimous court, said: “ The learned court from whose judgment this appeal is taken decided in favor of the plaintiff upon the theory that what defendant contracted to transmit was the identical money paid to it by the plaintiff, likening the case to one in which a common carrier had received ten trunks for transmission and delivered only nine of them. He was, therefore, of the opinion that the money paid to defendant remained the property of plaintiff until it or its equivalent had actually been paid over in Genoa, and that all plaintiff was entitled *113to retain was the value in New York on November eleventh, at the current rate of exchange for cable transfers, of 75,000 lire in Genoa. We are of opinion that this decision rests upon an erroneous view of the nature of a cable transfer, and that the supposed analogy of a common carrier transmitting merchandise is not appropriate, for there was here no failure to deliver in Genoa the 75,000 lire contracted for, but only a delay in making such delivery. * * * The very term ' cable transfer ’ precludes the idea that an actual transmission of money is contemplated. What the seller of a cable transfer does is to sell a sum of money, or a credit for a sum of money, payable at the place indicated in the contract. What the buyer does is to purchase a credit available at such place. In the present case the plaintiff bought 75,000 lire to be paid in Genoa. The transaction was a completed one, and plaintiff or its correspondent ultimately received precisely what defendant engaged should be received, to wit, 75,000 lire in Genoa. * * * As we regard the transaction it was complete on October twenty-third when the cable transfer was sold. The money paid for it became defendant’s money against which plaintiff received defendant’s obligation that payment would be made in Genoa. For a failure to comply with this obligation plaintiff might, under some circumstances, although not under those in this case, have an action for damages.”
It is intimated that this was dictum and by way of argument. But the decision turned upon whether the transaction was complete when the cable transfer was sold.
Reference is made to People ex rel. Zotti v. Flynn (135 App. Div. 276), wherein the court sustained a charge of grand larceny against a banker and broker who appropriated American money delivered to him for the purpose of forwarding its equivalent in Austrian money to a designated person in Vienna. There is an important distinction between such a transaction and a contract to sell a credit, available in a foreign country. In this case of the purchase of credit, to be made available by a cable transfer, there was, as Mr. Justice Laughlin concedes, no intention “ that the plaintiff’s money should be transmitted or forwarded and deposited to his credit in Naples.” In the Zotti case the intention was that *114the money delivered to the broker should, to the extent of its equivalent in Austrian money, be forwarded to a designated person in Vienna. That was the specific use that the broker agreed to make of the money (as in Cutler v. American Exchange Nat. Bank, 113 N. Y. 593), and when he appropriated it to his own use he was a defaulting trustee. The form of the receipt given showed that the money was received for the specific purpose of being forwarded. Here there was no such receipt or agreement. Instead there was delivered a memorandum showing that the plaintiff had “ bought of A. Bolognesi & Co.” a “ cable transfer to Italy ” in the sum of 18,000 lire. Yet, although the transaction was complete, as held in the Strohmeyer case, when the money and the cost of the exchange were paid to the banker and the memorandum given, it is said that the banker would not get title to the check until he had actually established the credit in Italy. If the transaction was complete when the credit was purchased and paid for and the memorandum delivered, and if a binding sale of credit was then made from which neither party could withdraw, as held in the Strohmeyer case, I fail to see why title to the check, or its proceeds, was not immediately vested in the seller of the credit, just as it would be on a sale of wheat in New York, to be delivered three months later, say, in Chicago.
It does not follow that, because the receipt of money by ticket agents and brokers for the agreed specific purpose of forwarding has been held to constitute an agency or trust, the widely different and well-established business of selling foreign exchange or credit is founded upon the relation of agency or trust. The latter business is frequently carried on by issuing drafts and orders or letters of credit. The distinction between issuing a draft or traveler’s check and receiving money for transmission is recognized in Musco v. United Surety Co. (132 App. Div. 300, 305); also in the statute (Laws of 1907, chap. 185, as amd. by Laws of 1908, chap. 479; revised by General Business Law [Consol. Laws, chap. 20; Laws of 1909, chap. 25], § 25 et seq. added by Laws of 1910, chap. 348, as amd. by Laws of 1911, chap. 393),* which *115requires persons who engage in the business of receiving money for the purpose of transmitting it to foreign countries to execute a bond to secure the faithful transmission of the money.
The transaction at bar is very analogous to the purchase of a draft on the bankers’ foreign correspondent. In the latter case the draft would evidence the bankers’ obligation to establish the credit in Italy, whereas in the case of the cable transfer the memorandum delivered by the bankers evidences the obligation. In the case of a draft, where time is not so important, the purchaser would ordinarily mail the draft. In the case of a cable transfer, where time is all important, the seller, who necessarily is supposed to have an existing credit in the foreign country wholly independent of any money being forwarded, issues his orders to transfer the credit, employing a cablegram instead of a draft. Can there be any doubt but that when a traveler, wishing to establish credit in foreign countries, pays his money over to the banker, who agrees to honor his drafts abroad and evidences the agreement by a letter of credit, the transaction is then complete and title to the traveler’s money vested in the banker? Could the banker ■ be held as a defaulting trustee if he went into bankruptcy before the letter of credit was actually drawn upon? Clearly not. Mr. Justice Latjghlin concedes that in the purchase of a draft the seller gets immediate title to the money paid for it, but says in such case, “ the purchaser receives the draft, which is what he desires, and he uses that himself.” I doubt that what he desires is the draft which he receives. He desires the transfer of credit which the draft, if accepted, assures. If the draft should not be accepted, he would be in precisely the situation of this plaintiff, not able to hold as a defaulting trustee the issues of the draft, but with a good cause of action against him for breach of contract. ;
The judgment should be affirmed, with costs.
Judgment reversed, with costs, and judgment directed for plaintiff for the relief demanded, with costs. Order to be settled on notice.
Now Banking Law (Consol. Laws, chap. 2; Laws of 1914, chap. 369), art. 4.— [Rep.