59 F.2d 8 (9th Cir. 1932), 6637, Yangtsze Rapid S.S. Co., Federal Inc., U.S.A. v. Deutsch-Asiatische Bank
|Citation:||59 F.2d 8|
|Party Name:||YANGTSZE RAPID S. S. CO., Federal Inc., U.S. A., v. DEUTSCH-ASIATISCHE BANK.|
|Case Date:||May 16, 1932|
|Court:||United States Courts of Appeals, Court of Appeals for the Ninth Circuit|
Rehearing Denied June 24, 1932.
Appeal from the United States Court for China.
Pillsbury, Madison & Sutro, of San Francisco, Cal., for appellant.
Schuhl & Lurton, of Shanghai, China, and Chickering & Gregory, Donald Y. Lamont, and Blair S. Shuman, all of San Francisco, Cal., for appellee.
Before WILBUR and SAWTELLE, Circuit Judges, and ST. SURE, District Judge.
SAWTELLE, Circuit Judge.
This is an appeal from a judgment of the United States Court for China.
The pertinent facts, as embodied in the narrative 'Findings of Fact' of the court below, are substantially as follows:
On or about July 6, 1928, at Shanghai, China, appellant, the Yangtsze Rapid Steamship Company, entered into a contract in writing with one A. C. Seidel, whereby the latter as 'seller' undertook to design, construct, and build for the appellant as the 'buyer' one twin screw Diesel motorship in accordance with the specifications attached to said contract for the sum of Tls. 190,000.00. This contract provided, among other things, that the ship so constructed should be delivered to the appellant on July 1, 1929, and that payment therefor should be made as specified in said contract. On March 25, 1929, a supplemental contract in writing was entered into by the respective parties whereby the cost of the construction of said vessel was to be increased from Tls. 190,000.00 to Tls. 212,400.00. In the latter part of June, 1929, the work on the vessel was about 90 per cent. completed, and the appellant had paid to Seidel, under said contracts, the sum of Tls. 175,000.00 in cash and materials furnished, leaving a balance of Tls. 37,400.00 to be paid by the 'buyer' one week after the delivery of the ship in accordance with the terms of the contract.
On or about June 25, 1929, Seidel called upon Lansing Hoyt, the president of the Yangtsze Rapid Steamship Company, and informed him that he (Seidel) was financially embarrassed and did not have sufficient funds available with which to complete the ship under his contract, and requested that the Yangtsze Rapid Steamship Company advance to him funds for such purpose. Hoyt refused to do this, and informed Seidel that he would have to make other arrangements for financing the completion of his contract. Seidel then consulted the officers of the appellee, the Deutsch-Asiatische Bank, with a view to securing a loan, and was advised by the bank that if he (Seidel) would secure from the Yangtsze Rapid Steamship Company an assurance in writing that the balance which he was to receive under his contract, namely, Tls. 37,400.00, when such contract should be completed, would be paid direct to the bank by the Yangtsze Rapid Steamship Company, the bank would make cash advances to Seidel to the extent of Tls. 37,400.00.
Seidel reported to Hoyt the result of his conference with the officers of the bank, and on June 25, 1929. Hoyt, on behalf of the appellant, wrote a letter to the bank which said:
'This confirms that we will pay to Messrs. Seidel and Company the sum of Tls. 37,400.00 sixty days after they have turned over the M. V. 'Ichang' ready for operation on the Yangtsze River.
'We have already paid them Tls. 75,000.00
under our contract, and have opened a confirmed credit covering the Koerting motors for G$65,000. The sum first mentioned is the balance due Seidel & Company after we have thoroughly tried out the vessel.'
When the bank received this letter, it considered it insufficient security for the advances which Seidel was requesting them to make. Thereupon the bank sent the letter to Seidel stating that the Yangtsze Rapid Steamship Company must obligate itself to pay the sum of Tls. 37,400.00 directly to the bank, and requested Seidel to obtain from the appellant a confirmation of such suggested obligation on its part. When the matter was again brought to Hoyt's attention by Seidel, Hoyt added the following postscript to his letter of June 25: 'P. S. We confirm that this payment of Tls. 37,400.00 will be made direct to you for Seidel & Company's account. (Signed) L. M. Hoyt, President.'
Within a few days thereafter Hoyt left China for the United States and did...
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