196 A.D. 380 | N.Y. App. Div. | 1921
Four causes of action are alleged in the complaint. The first is to recover the proceeds of a draft for $41,625 accepted
As partial defenses, defendant alleges a breach of contract by Rothwell & Co. with it, whereby it was damaged in the "sum of $20,000, and a failure by Rothwell & Co. to pay for a shipment of copra at the agreed, price of $18,552.67, which sums it has applied in liquidation and payment of said claims. Defendant also alleges these transactions as counterclaims. Plaintiffs’ demurrer to these defenses and counterclaims has been sustained. Appellant contends: 1. Plaintiffs’ demurrer searches the entire record and it requires prior consideration of the sufficiency of the complaint. 2. Neither the first nor second cause of action states facts sufficient to constitute a cause of action for money had and received. (Miller v. Schloss, 218 N. Y. 400.) 3. Neither the third nor fourth cause of action states facts sufficient to constitute a cause of action. 4. Plaintiffs’ fourth cause of action is insufficient, because the bank’s acceptance of the draft was after it had examined and weighed the oil and knew the shortage. 5. The demurrer attacks the partial defenses and counterclaims upon the sole ground that the plaintiffs are not asserting the rights of Rothwell, but are only asserting the rights of the bank under the letter of credit, and, therefore, defendant’s rights against Rothwell may not be pleaded in this action. 6. Plaintiffs err as to the legal effect of the bank’s alleged title to the goods represented by the bill of lading.
It is argued that the action for money had and received,
The letter of credit in the instant case was irrevocable. It contained the same provisions as the one under consideration in Frey & Son, Inc., v. Sherburne Co. (193 App. Div. 849, 853), and if the bank had refused to pay the drafts it could have been compelled so to do. Similarly, the buyer, Rothwell & Co., could not have maintained a proceeding to restrain the bank from paying the drafts. If the buyer rejected the goods, it seems to me the bank’s remedy was to sell the goods, and if an insufficient amount was realized thereon to cover its advances, it had recourse to Rothwell & Co. for the difference. (Benecke v. Haebler, 38 App. Div. 344; affd., 166 N. Y. 631.)
Having in the instant case, however, paid the drafts, and, as it claims, parted with its security, is it or its indemnitor entitled to maintain an action against the seller to recover the proceeds of the drafts? I think not. A bank issuing a letter of credit is in no way concerned with any contract existing between the buyer and seller. (Frey & Son, Inc., v. Sherburne Co., supra.) Disputes between buyer and seller are likewise no concern of it.
The bank’s assignee' is the indemnitor under the letter of credit. The bank has been fully repaid by the indemnitor for its advances, and it would seem that if the plaintiff has any remedy it would be against Rothwell & Co., but we are
The order must, therefore, be reversed, with ten dollars costs and disbursements.
Jenks, P. J., Mills, Kelly and Jaycox, JJ., concur.
Order reversed, with ten dollars costs and disbursements.