Faravelli v. Bankers Trust Co.
| Decision Date | 18 March 1982 |
| Citation | 85 A.D.2d 335,447 N.Y.S.2d 962 |
| Court | New York Supreme Court — Appellate Division |
| Parties | Alessandro FARAVELLI d/b/a Guisto Faravelli, s.a.s., Plaintiff, v. BANKERS TRUST COMPANY and M. G. Chemical Company, Inc., Defendants-Respondents. BANKERS TRUST COMPANY, Defendant and Third Party Plaintiff, v. CREDITO ITALIANO, Third Party Defendant, Interpleaded Defendant-Respondent. BANKERS TRUST COMPANY, Defendant, Third Party Plaintiff & Interpleading Plaintiff-Respondent, v. The PUNJAB & SIND BANK, LTD., Third Party Defendant & Interpleaded Defendant-Appellant. |
Kurt Dinkelmeyer, of counsel (DiNardo & Co., P. C., New York City, attorneys), for third-party defendant and interpleaded defendant-appellant.
Jack H. Weiner, New York City, of counsel (Charles Leeds, New York City, attorney), for defendant, third-party plaintiff and interpleading plaintiff-respondent.
Before KUPFERMAN, J. P., and SULLIVAN, FEIN and ASCH, JJ.
The sole issue on this appeal is whether jurisdiction was properly obtained over Punjab & Sind Bank, Ltd. (Punjab), a bank located in Calcutta, India.
Plaintiff Alessandro Faravelli (Faravelli), an Italian businessman located in Milan, Italy, in 1976 purchased from defendant M. G. Chemical Co., Inc. (M.G.), a New York corporation with offices in New York City, a quantity of blue synthetic dye to be delivered to Faravelli in Italy. Faravelli posted an irrevocable letter of credit in the sum of $64,000 through his bank, Credito Italiano (Credito), in favor of M.G. Credito confirmed the letter to the beneficiary, M.G., for payment at Bankers Trust Co. (Bankers) in New York City on presentation of appropriate documentation.
On request of M.G., $26,000 of the credit was irrevocably transferred to Indian Chemicals and Metallurgical Co. (Indian Chemicals). The transfer was accomplished through Punjab. Indian Chemicals caused the dye, valued at $26,000, to be exported from Calcutta to Milan. Indian Chemicals then drew a sight draft for that sum under the transfer of the letter of credit. It negotiated the documents against the letter of credit through Punjab, which paid Indian Chemicals in Indian rupees an equivalent sum as advance payment against the letter of credit, conditioned on the obligation of Indian Chemicals to repay Punjab the amount of the advance in the event of dishonor or non-payment. Punjab forwarded the documents to Bankers, directing Bankers to remit the proceeds to Punjab's account with Manufacturers Hanover Trust Co. (Manufacturers) in New York City. Bankers never remitted any funds to Manufacturers by reason of the fact that in this suit, instituted by Faravelli against Bankers and M.G., a temporary injunction and later a preliminary injunction issued enjoining payment on the letter of credit upon the grounds that (1) the documentation submitted by M.G. did not satisfy the requirements of the letter of credit issued by Credito on behalf of Faravelli, (2) the merchandise delivered did not comply with the contract, and (3) payment of the funds would cause irreparable damage. Faravelli sought to void the letter of credit and to require Bankers to pay Faravelli the $64,000 deposited by it with Credito in connection with the letter of credit. Bankers asserts that it never received the funds necessary to pay the letter of credit. Bankers impleaded and instituted a third party action against Credito, and asserted a cross claim against M.G.
By way of affirmative defense to the cross claim, M.G. asserted that Bankers was obligated to release the funds secured by the letter of credit to M.G. on the ground that Punjab had found the documents in order and transferred $26,000 to Indian Chemicals in reliance thereon. M.G. alleged that Punjab's approval of the documents bound all parties and estopped Bankers from raising any objections to the documents. As the litigation proceeded, Bankers warned Punjab several times to come into the litigation to protect its interests, asserting that if it failed to do so Punjab would be bound by the result. Punjab responded by demanding that Bankers pay Punjab as soon as the court injunction was lifted. Punjab instituted action in India against Bankers, M.G., Indian Chemicals, Faravelli and others, serving process by registered mail, apparently authorized under Indian law.
Thereafter, the instant case came to trial. After three days it was determined that the trial could not proceed in the absence of Punjab, whereupon the court granted leave to Bankers to institute this third party interpleader action against Punjab and to issue a third party summons and complaint to be served by registered mail upon Punjab in India. The order also directed service upon any three correspondent banks with which Punjab had accounts in New York. Pursuant to that order, Bankers served Punjab by registered mail and served notice of the law suit upon four banks, enumerated by the trial justice as correspondent banks. Punjab admitted receipt of the third party summons and complaint by registered mail in India. The correspondent banks all admitted receipt of the notice but denied they were authorized to accept service on behalf of Punjab. In addition, Manufacturers, the bank to which Punjab had directed Bankers to make payment, advised Punjab to obtain counsel to take action to protect the Punjab interests in this action.
This appeal is from the denial of Punjab's motion to dismiss the third party complaint and to vacate the order authorizing service upon it by registered mail in India and by serving notice upon its correspondent banks in New York.
Punjab alleges that the manner of service authorized did not give the court jurisdiction over Punjab.
We agree.
On this record there is no showing that Punjab is engaged in any business activities in New York City sufficient to satisfy the long-arm jurisdictional requirements under CPLR 302. The record does not reveal that Punjab transacts any business within the State or contracts anywhere to supply goods or services in the State (CPLR 302 It neither owns, uses nor possesses any real property within the State (CPLR 302 It has no office or place of business within the State. So far as appears, its sole nexus is the transmittal of the documents calling for payment on the letter of credit and the maintenance of correspondent accounts with three or four banks in New York City. The mailing of a draft or documents to New York for payment does not rise to the level of activity contemplated by CPLR 302 as a basis for personal jurisdiction (Amigo Foods Corp. v. Marine Midland Bank-New York, 39 N.Y.2d 391, 384 N.Y.S.2d 124, 348 N.E.2d 581,...
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