American Steel Co. v. Irving Nat. Bank
| Decision Date | 06 April 1920 |
| Docket Number | 148. |
| Citation | 266 F. 41 |
| Parties | AMERICAN STEEL CO. v. IRVING NAT. BANK. |
| Court | U.S. Court of Appeals — Second Circuit |
Larkin & Perry, of New York City (Albert Stickney and James L Banks, Jr., both of New York City, of counsel), for plaintiff in error.
Charles Oakes, of New York City, for defendant in error.
Before ROGERS, HOUGH, and MANTON, Circuit Judges.
This is an action to recover the sum of $42,336 and interest upon a draft drawn by the plaintiff upon the defendant, and presented to the latter for payment on April 24, 1918. Payment was refused for a reason presently to be stated. The draft was drawn pursuant to a letter of irrevocable export credit issued by defendant and which was in the following form:
Irving National Bank of New York, 'Penny, Vice President. 'W. N. Estrom, Manager Foreign Department.
'Entered E.A.R.'
The above letter of credit was afterwards amended by a letter, dated July 11, 1917, in which the defendant wrote:
'Please note that we have been informed by the MacDonnell Chow Corporation of this city that the insurance certificates covering marine and war risk will not be required under the above credit.
'All other conditions remain as before.'
The complaint alleges that the letter of credit was issued by defendant to plaintiff for a valuable consideration received by defendant, as an inducement to plaintiff to enter into and perform a contract for the sale of tin plate made between plaintiff and the MacDonnell Chow Corporation. The latter is a New York corporation, and the contract between plaintiff and it provided for the sale to it of 3,000 base boxes of sheet tin, 14x20, 224 sheets in a box, of a base weight of 85, and of a weight per box of 170 pounds, at a price per box of $28.90 f.o.b. Pittsburgh district. It also alleges that plaintiff duly sold and shipped to the said MacDonnell Chow Corporation, f.o.b. Pittsburgh district, the merchandise above referred to, and the plaintiff duly presented its draft to the defendant at its New York office in the amount of $42,336, accompanied by bills of lading covering said shipment, issued to order, indorsed in blank, and invoices, all as required by the irrevocable letter of credit. It also alleges that plaintiff has duly performed all the requirements and stipulations of the irrevocable export credit issued by defendant and modified in the form pointed out above.
The defendant in its answer, in addition to a general denial, set up three affirmative defenses. The first defense set forth the terms of the contract between plaintiff and the MacDonnell Chow Corporation, and alleged that the plaintiff failed to make shipment of the merchandise within the time limited by that contract. The second defense alleged that, by reason of federal prohibition of exports from the United States of tin plates, the performance of the contract between the plaintiff and the MacDonnell Chow Corporation became impossible of execution, inasmuch as the MacDonnell Chow Corporation was unable to obtain a license permitting the export of the merchandise within the time required by the contract. The third defense alleged a resale by the plaintiff of tin plates which were the subject of the contract with the MacDonnell Chow Corporation, and claimed an offset by the amount alleged to have been realized on the resale.
Letters of credit have long been known to the commercial law, and the principles which govern them are well established. A letter requesting one person to make advances to a third person on the credit of the writer is a letter of credit. These letters are general or special. They are general, if directed to the writer's correspondents generally. They are special, if, as in the case at bar, they are addressed to some particular person. If the letter is addressed to a particular person, who advances goods or money on it in accordance with its tenor, the letter becomes an available promise in favor of the person making the advance. When acted on, and the advances made in accordance with its terms, a contract is created between the writer of the letter and the party who has acted upon it, upon which an action can be maintained.
The evidence shows that plaintiff delivered the tin plate contracted for to the ...
To continue reading
Request your trial
-
Edgewater Const. Co., Inc. v. Percy Wilson Mortg. & Finance Corp.
...929; Maurice O'Meara Co. v. National Park Bank of New York (1925), 239 N.Y. 386, 146 N.E. 636, 39 A.L.R. 747; American Steel Co. v. Irving Nat. Bank (2d Cir. 1920), 266 F. 41, Cert. denied 258 U.S. 617, 42 S.Ct. 271, 66 L.Ed. Uniform Commercial Code Section 5--114(2)(a) 1 governs the duty o......
-
Pan-American Bank & Trust Co. v. National City Bank
...and in Klipstein v. Dilsizian (C. C. A.) 273 F. 473, Harper v. Hochstim (C. C. A.) 278 F. 102, 20 A. L. R. 1232, American, etc., Co. v. Irving, etc., Bank (C. C. A.) 266 F. 41, and Old Colony, etc., Co. v. Lawyers', etc., Co. (C. C. A.) 297 F. Thus the question is this: Did the Rio branch o......
-
United Bank Ltd. v. Cambridge Sporting Goods Corp.
...Nagase & Co., 196 App.Div. 380, 187 N.Y.S. 692; Frey & Son v. Sherburne Co., 193 App.Div. 849, 853, 184 N.Y.S. 661; American Steel Co. v. Irving Nat. Bank, 2 Cir., 266 F. 41; 1955 Report of N.Y. Law Rev.Comm., vol. 3, Study of Uniform Commercial Code, pp. 1654--1655). Subdivision (2) of sec......
-
KMW Intern. v. Chase Manhattan Bank, N. A.
...55 Harv.L.Rev. 878, 880-81 (1942). Insurrection or supervening impossibility are not equivalents of fraud. American Steel Co. v. Irving National Bank, 266 F. 41 (2d Cir. 1920), Cert. denied, 258 U.S. 617, 42 S.Ct. 271, 66 L.Ed. 793 (1922) (impossibility); Frey & Son v. E. R. Sherburne Co., ......