Anglo-South American Trust Co. v. Uhe

• Decision Date: 28 February 1933
• Citation: 261 N.Y. 150,184 N.E. 741
• Parties: ANGLO-SOUTH AMERICAN TRUST CO. v. UHE et al.
• Court: New York Court of Appeals Court of Appeals

261 N.Y. 150

184 N.E. 741

ANGLO-SOUTH AMERICAN TRUST CO.

v.UHE et al.

Court of Appeals of New York.

Feb. 28, 1933.

Action by the Anglo-South American Trust Company against George Uhe and another. From a judgment of the Appellate Division (236 App. Div. 667, 257 N. Y. S. 1010), affirming a judgment of the Trial Term on a directed verdict for plaintiff (146 Misc. 642, 262 N. Y. S. 786), a jury being waived, named defendant appeals.

Reversed, and complaint dismissed.

Appeal from Supreme Court, Appellate Division, First Department.

Carl E. Peterson, of New York City, for appellant.

Charles F. Bailey and Donald K. Miller, both of New York City, for respondent.

CRANE, Judge.

Upon application of the appellant George Uhe, of New York City and Hempstead, Long Island, the respondent, the Anglo-South American Trust Company, issued its letter of credit, dated at New York, February 6, 1926, reading as follows:

‘The Anglo-South American Trust Company

‘Number 4/133 Expiration date March 31st, 1926

‘Commercial Letter of Credit

‘New York, February 6th, 1926.

‘Mr. George Uhe, Managua, Nicaragua, is hereby authorized to value upon The Anglo-South American Trust Co., New York, N. Y., for account of Mr. George Uhe, New York, N. Y., at sixty days' sight for any sum or sums not exceeding in all Eight Thousand Dollars U. S. Currency ($8,000.00 USC) for full invoice value of Ten (10) Long Tons of India Rubber, 3 Tons at 32c and 7 tons at 35c per pound from Nicaragua to New York, N. Y., in one or more lots.

‘The drafts are to be negotiated on or before March 31st, 1926. The ‘on board’ Bills of Lading to bear a date not later than March 31st, 1926, and unless specified in this credit, two copies of the Bills of Lading with Commercial Invoice, Weight Note, Inspection Certificate, and Consular Invoice to be forwarded to this Company by the Bank or Bankers negotiating the draft attached to the first via of the draft. All other documents to accompany the second via of the draft.

‘Bills of Lading to be made out to the order of The Anglo-South American Trust Co., New York, N. Y.

‘Insurance to be effected by Mr. George Uhe, New York, N. Y.

‘All drafts drawn under this credit are to contain the clause:

“Drawn under Letter of Credit of The Anglo-South Maerican Trust Company, New York, No. 4/133j, dated February 6th, 1926-' and the amount of the drafts to be noted on the back hereof by the negotiating Bank or Bankers.

‘The Anglo-South American Trust Company hereby engages with the drawers, endorsers and bona fide holders of drafts drawn in compliance with the terms of this credit that the same shall be duly honored upon presentation.

‘The Anglo-South American Trust Company

‘[Signed] Cecil Platt

‘Vice President

‘[Signed] J. M. Tinsley,

‘Assistant Sec'y.’

The application for this letter of credit took the form of an agreement between Uhe and the bank, wherein it was stated that the trust company was to open a commercial letter of credit by cable for the account of George Uhe in favor of himself, at Managua, Nicaragua, for a sum not exceeding $8,000, ‘available by drafts at 60 days sight on your agents or correspondents who are to be advised of the terms of the credit by cable. The drafts to be drawn and negotiated on or before March 31st, 1926, for 100 per cent invoice value of the goods and be accompanied by such documents as are indicated by the answers of the applicants to the printed questions hereunder, such documents purporting to evidence shipment, in one or more lots, of goods described in the Commercial Invoice as shown hereunder from Nicaragua direct or indirect to New York on or before March 31st, 1926.’ The documents to accompany the draft were stated to be bills of lading to the order of the Anglo-South American Trust Company commercial invoice, consular invoice, net weights and inspection certificate.

The rubber was shipped in two lots and the first draft was presented to the respondent on April 20, 1926, for $3,909.50, dated March 23, 1926, drawn upon the respondent by George Uhe, at Managua, payable 60 days from date. Accompanying the draft were bills of lading, weight notes, and commercial and consular invoices covering ninety-five bags of rubber. One important document was missing so that the terms of the letter of credit were not complied with. This document was the inspection certificate. As the drafts were to be payable by the trust company 60 days after sight, or acceptance, to wit, June 20, 1926, the appellant, by the terms of his agreement, had until the day before the 20th to furnish the bank with the money to meet the drafts. This was contained in the following provision: ‘If the drafts drawn under the credit are payable in United States currency, to pay to the Company at its said office, on demand, but in any event not later than one business day prior to the maturity of the drafts under the credit, the face amount of said drafts.’

Another provision of the agreement apparently provided for a custom of the trade permitting the purchaser of the letter of credit to assume possession of the documents for the purpose of sale or resale of the goods before the maturity of the drafts. This provision is couched in this language: ‘The applicants hereby recognize and admit the ownership of the Company in and its right to the possession and disposal of all goods and the proceeds thereof for which the Company or the drawees named in said credit may come under any engagement in virtue of said credit, as also to the possession of all bills of lading or other documents for and policies or certificates of insurance on said goods until such times as any and every indebtedness or liability of the Applicants, now due to or hereafter accruing in favor of the Company under said credit or otherwise, shall have been fully paid and discharged, and in the event of the Company hereafter entrusting the said goods to the Applicants for the purpose of sale or otherwise, the Applicants hereby consent that the right of the Company to repossess itself of the same or of the proceeds hereof may be, at any time, exercised at the option or discretion of the Company.’

Accordingly, on the 21st of April, or the day after the acceptance of the draft by the trust company, George Uhe, in New York, was notified of the arrival of the documents with the acceptance of the...