134 Misc. 18 | N.Y. Sup. Ct. | 1928
Defendant had sold through a broker to one Koerner, of New Orleans, by contract dated April 27, 1920, “ 400 tons of Java white Sugar tel quel ”— meaning “ as is ” — to arrive at New York from India. Koerner undertook to furnish the seller with a confirmed irrevocable letter of credit and thereby provide for payment for the sugar. He at once resold the sugar to Constantin, David & Co., of New Orleans, by a contract which described the merchandise as “ Java white sugar,” with a warranty that it was “ very desirable, equal to standard American granulated, 98 to 99 polarization.” It may be observed in passing that this warranty was impossible of fulfillment, for all Java white sugar
This action followed to recover $132,700.10, the amount of the drafts as diminished by the proceeds of that sale. At the end of the letter of credit was the following clause, viz.: “ This letter of credit is subject to the terms and conditions of contract attached to the guarantee covering this letter, * * ” but no copy of
It is likewise urged that when defendant drew it warranted that it had shipped merchandise which answered the description of the contract attached to the guaranty and that its drawing without shipment of merchandise of that quality was wrongful and accordingly an action for money had and received arises and is well grounded, irrespective of whether or not defendant knew the terms of the contract between Koerner and Constantin, David & Co.,
Nor can plaintiff’s contention be sustained that it should recover upon an implied contract or as for money had and received, which in equity and good conscience belongs to it. The weight of the equities is greatly against plaintiff. Here defendant, which has performed its contract of sale, is asked to return to plaintiff the purchase moneys which plaintiff paid to it as Koerner’s agent, having upon the faith of such payment delivered to plaintiff the merchandise sold. I know of no theory of law applicable here which must be followed to accomplish that result. There was no implied contract so to do (Miller v. Schloss, 218 N. Y. 400), for there is here “ no fact through which natural equity or good conscience should obligate the defendant to pay the plaintiffs.” (Miller v. Schloss, supra, 409.) Indeed, under the contract between Koerner and Constantin, David & Co., the latter could not have rejected the sugar, but would have been entitled only to the amounts therein provided to be paid if the warrants were not lived up to. The plaintiff, if it seek to stand upon that contract, obtained no greater right. The final clause of the letter of credit was not intended to and did not place any obstacle in the way of the seller’s collecting and retaining the purchase money as between it and the bank which had issued the letter of credit. That clause could only govern the bank’s right of action against its customer. This follows from the operative language of the letter itself, as well as from the nature of the transaction and the purpose of the letter of credit.
Commercial letters of credit have come into general use in international sales transactions where much time necessarily elapses
Judgment is directed upon the merits in favor of defendant.