226 A.D. 117 | N.Y. App. Div. | 1929
The plaintiff appeals from an order denying its motion for summary judgment under rule 113 of the Rules of Civil Practice and section 476 of the Civil Practice Act in an action to recover reimbursement for the payment by the plaintiff of drafts drawn upon it under two letters of credit issued by it for defendant’s account. The contract by which the defendant agreed to indemnify the plaintiff contained this clause: “ We will assume all risk of the acts and omissions of the users of such letter of credit, who shall be considered, our agents, and agree that the bank shall hold the delivery to it of the documents named therein or documents purporting on their face to be the documents named therein, as sufficient evidence of the good faith of the shippers or drawers, without the bank assuming any responsibility in regard to correctness of the shipment.”
The letters of credit were in favor of a firm, Cosculluela & Brown,
The defendant asserts three objections to the documents common to all the transactions and a fourth objection which applies only to the transactions under the March fourth letter of credit. It urges first that the drafts were drawn by and the shipping documents specified as shipper “ A. James Brown,” whereas the letter of credit required the drafts to be drawn by and the invoices to be issued by “ Arthur James Brown.” It is conceded, however, that the person signing “ A. James Brown ” was the identical person intended by the plaintiff and defendant. By paying upon documents signed A. James Brown the bank may have taken the
The second objection is that the letters of credit specified documents covering shipment of “ casein,” whereas the documents presented covered “ unground casein.” The authorities relied upon by the respondent relate entirely to situations where a specified quality of a commodity was required by the letter of credit and the shipping document named the commodity generally without limitation to the specified quality. They hold that the plaintiff here would be unable to recover if the letter of credit had specified “ ground casein ” and the bill of lading had covered merely casein. (Lamborn v. Lake Shore Banking & Trust Co., 196 App. Div. 504, 506; affd., 231 N. Y. 616; International Banking Corp. v. Irving National Bank, 274 Fed. 122, 125; affd., 283 id. 103; Bank of Italy v. Merchants Nat. Bank, 236 N. Y. 106; Moss v. Old Colony Trust Co., 246 Mass. 139; Banco Nacional Ultramarino v. First Nat. Bank, 289 Fed. 169; Crocker First Nat. Bank v. DeSousa, 27 F. [2d] 462.) They do not hold that a bank is under greater obligation than to procure bills of lading for merchandise described in such a manner as reasonably to bring it within the connotation of the description contained in the letter of credit. Some effort is made by the defendant to show a peculiar trade nomenclature by which casein is held to mean “ ground casein.” The affidavits fall short of showing any such general trade usage. Indeed, it appears clearly that the difference between ground and unground casein is merely what the words indicate and that unground casein may be pulverized into ground casein at a comparatively nominal cost. Nor is any attempt made to bring home to the bank knowledge or reasonable ground to know of such a usage. There is a further circumstance which is conclusive against the defendant on this point. Mr. Scanlon, an officer of the bank, swears that when Mr. Howard inspected the papers on April 28, 1926, he read aloud from the invoices and other documents the words “ 50.811 kilos of unground casein in 1427 bags ” and “ 2836 bags of unground casein; ” that after reading this aloud, Mr. Howard said: “ That’s the best news I’ve had in some time, and I’m glad that shipment is coming through.” This statement is not denied by Mr. Howard. Indeed, he deposes: “ Deponent admits calling at the plaintiff bank on
The next objection is that there was not attached to the draft, as required by the letter of credit, a certificate that “ the necessary documents have been sent direct to the Bank of New York & Trust Company as stipulated in this credit.” There was no such certificate; but there was something which rendered its absence utterly nugatory. All the documents called for by the letters of credit were physically attached to the drafts. The letters of credit required that two bills of lading together with an abstract of invoice had to be forwarded to the plaintiff “so as to reach them not later than the vessel bringing the goods.” The drafts had to be accompanied by one bill of lading together with the other papers and there was to accompany the draft a certificate that the necessary documents, that is, the additional bill of lading and other papers not physically attached to the draft, had been sent to the Bank of New York and Trust Company. The purpose of this clause could be nothing other than as sworn to by an officer of the bank. If the vessel carrying the shipment sailed before the draft had been negotiated, the shipment would arrive before the documents, and the consignee could not get delivery unless the documents were sent on the same vessel. In such case it was required that the two bills of lading must be forwarded to reach the Bank of New York and Trust Company not later than the vessel bringing the goods. The two bills of lading would not then be attached to the draft and it was, therefore, required that in such event the certificate be attached to the draft. But there could not be the slightest point in requiring a certificate that all the documents had been sent when in fact they were physically attached to the draft. Indeed, Mr. Howard’s affidavit on behalf of the defendant says the purpose of having a certificate of documents accompanying the drafts is to show what disposition has been made of all the various sets of documents. That disposition was here shown by the actual presence of the required documents.
A further and more difficult question is raised with respect to the two drafts drawn under the March fourth letter. It was required by the letter of credit that the bill of lading should be an “ on board ” bill and not a “ received for shipment ” bill.
This bill of lading reached New York prior to the date which it bore in Buenos Aires. It was accompanied by invoices and other documents which clearly showed the date of the transaction to be March thirtieth. The bank was justified to this extent in reading the documents together. (Laudisi v. American Exch. Nat. Bank, 239 N. Y. 234.) The provisions in American bills of lading statutes tending to make the date an element of the document could have no application to an Argentine bill. (Archibald & Lewis Co. v. Banque Internationale de Commerce, 216 App. Div. 322; 327; Baker Co. v. Brown, 214 Mass. 196.) The inconsequentiality of this objection as to misdating, as well as of the other objections is additionally demonstrated by the conduct of the defendant in executing and delivering trust receipts for the documents and retaining them without protest for two weeks. Indeed, the documents were in the defendant’s possession for three days before it executed the trust receipts.
We hold that no material issue of fact is raised by the defendant’s affidavits.
For these reasons the order appealed from should be reversed, with ten dollars costs and disbursements, and the motion for summary judgment granted, with ten dollars costs.
Dowling, P. J., Merrell, Martin and O’Malley, JJ., concur.
Order reversed, with ten dollars costs and disbursements, and motion granted, with ten dollars costs.