246 Mass. 546 | Mass. | 1923
This is an action of contract to recover damages for the alleged failure of the defendant to pay sums of money in accordance with the terms of its letter of credit. The plaintiff is engaged at its place of business in Boston extensively in exporting food products to foreign countries. Through one Tarsouli, a commission merchant doing business in Athens, Greece, the plaintiff negotiated with the Dimitriou Compagnie of Piraeus, Greece, for sale to it of one hundred twenty tons of Labrador codfish. In order to finance the transaction and to provide security for payment, Tarsouli, acting in behalf of the Greek importer, arranged with the defendant for the issuance of a letter of credit sufficiently large to cover cost, insurance and freight. The plaintiff declares on the letter of credit, which was directed to the plaintiff at St. Johns, Newfoundland, and was dated December 14,1918. The original letter and the two amendments were issued by the American Express Company at the request and for the account of the defendant. It opened a confirmed credit for $74,400, available by draft at sight,
The goods were delivered into the possession of Harvey and Company, Ltd., St. Johns, Newfoundland, agents for the steamship Eskasoni, on or about January 28, 1919, and were put on board ship probably between January 31, 1919, and February 5, 1919, the trial judge not being able to determine the precise date. Drafts and the necessary shipping documents were presented on February 19, 1919.
The question is whether on these facts the defendant is liable on its letter of credit as amended, on which alone the plaintiff declares.
The nature of a letter of credit and the liability of the drawer or writer to the person to whom it is addressed and
It is plain that the time of the letter of credit, as first drafted and sent, by its express terms expired on January 14, 1919. Draft presented to the defendant after that date would impose on it no liability whatever. It is not contended that the first amendment contained in the letter of January 3, 1919, made any change in this provision as to the time of the credit. Since there was no compliance with this term of the letter of credit as thus amended, the plaintiff’s entire case rests upon the second amendment.
It is plain that the second amendment under date of January 20, 1919, extended the time for presenting draft or demanding any payment of the defendant under the credit only until the first day of February, 1919. The original letter of credit had expired by its own terms on January 14,1919, six days earlier than the date of the second amendment. Its validity must be revived before any liability could arise under it. In such circumstances the words, “ we extend validity until February first 1919,” were used in the letter of January 20, 1919. Those words are susceptible of no other meaning than that the validity of the letter of credit as a whole, with all its terms, was extended until the date named, including its time limit. The word “ validity ” cannot be confined to shipment. There is nothing in the original letter of credit or either of its amendments concerning the date of shipment of the goods. The only vital date fixed in the original letter of credit was the date of its expiration, in connection with provision that draft must
This construction of the letter and its amendments is not affected by the geographical situation of Newfoundland nor by the fact that only one steamship cleared St. Johns during January or February, 1919, for any port in Greece. The written instrument is unmistakable in its meaning.
Wliere a date is fixed as the time for the expiration of a letter of credit, that becomes an important and essential condition. There must be strict compliance with it before there can be liability on the part of the bank issuing the letter of credit. Moss v. Old Colony Trust Co. 246 Mass. 139, and cases there collected. Barde Steel Products Corp. v. Franklin National Bank, 281 Fed. Rep. 814.
There is nothing inconsistent with this conclusion in Krakauer v. Chapman, 45 N. Y. Supp. 127, affirmed in 162 N. Y. 623.
Exceptions overruled.