First Commercial Bank v. Gotham Originals, Inc.
| Decision Date | 31 May 1984 |
| Citation | 101 A.D.2d 790,476 N.Y.S.2d 835 |
| Parties | , 38 UCC Rep.Serv. 946 FIRST COMMERCIAL BANK, Petitioner-Appellant, v. GOTHAM ORIGINALS, INC. and Bank Leumi Trust Company of New York, Respondents-Respondents. |
| Court | New York Supreme Court — Appellate Division |
S.A. Weiner, New York City, for petitioner-appellant.
R.A. Altman, A. Cassirer, New York City, for respondents-respondents.
Before MURPHY, P.J., and SANDLER, SULLIVAN, CARRO and KASSAL, JJ.
Judgment entered November 23, 1983, Supreme Court, New York County which denied appellant's application for a judgment pursuant to CPLR 6221 and dismissed the petition, reversed on the law, the petition is granted and the matter is remanded for entry of a judgment in accordance with this decision with costs.
We first note that "law of the case" is not established by the denial of summary judgment in a previous lawsuit, since factual issues may well have precluded an assessment of the applicable law. In any event, we are not bound by "law of the case" precepts and we exercise our discretion to reach the merits of this matter.
Respondent Bank Leumi issued a letter of credit (an irrevocable document by its terms) upon application of respondent Gotham. Petitioner was designated the "advising" bank. On September 10, 1981, one of the manufacturers with whom Gotham had contracted, and a "transferee" of the letter of credit, negotiated to petitioner signed drafts at 60 days sight, drawn upon the letter of credit. Petitioner forwarded the drafts to Bank Leumi for payment, and by letter of September 24, 1981, respondent advised petitioner that the drafts were accepted and that payment according to the terms (i.e., in 60 days) would be made on November 23, 1981.
This did not occur, however, because Gotham subsequently brought an action against its various manufacturers in Supreme Court and there secured an order, served on Bank Leumi on October 30, 1981, enjoining and restraining transfer of "letter of credit No. 5671 or any monies or assets of defendants." By telex of November 2, 1981 respondent bank informed petitioner bank of the temporary restraining order and by telex ten days later, asserted that order as a bar to its release of the funds. Although petitioner protested, respondent would not change its position. On June 7, 1982 an order of attachment issued in the Gotham litigation, directing the sheriff to levy upon Bank Leumi as garnishee.
Prior to the actual levy (which occurred on August 5, 1982), First Commercial brought an action for nonpayment, to which Bank Leumi asserted the attachment order as a defense. First Commercial moved for summary judgment, noting that, by operation of UCC § 4-303, there could be no defense to its action. By decision dated December 22, 1982 (entered as an order February 15, 1983), Special Term (per Ascione, J.) denied the motion without reaching the merits of the dispute. Instead, that decision merely stated that "Bank Leumi is bound by orders of this court it may not--and indeed cannot--make payment to Commercial pursuant to its acceptance under the Letter of Credit."
This action followed, a petition under CPLR 6221 for a determination that Bank Leumi "is obligated to make payment of the drafts accepted by it" (by virtue of UCC § 4-303), and for an order vacating the attachments and voiding the sheriff's levy. Special Term, by the order...
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...1024, 431 N.E.2d 309; Kaufman v. Chase Manhattan Bank, Nat. Assoc., 370 F.Supp. 276, 278; see, also, First Commercial Bank v. Gotham Originals, 101 A.D.2d 790, 476 N.Y.S.2d 835, supra ). Indeed, we cannot perceive why the bank has failed to object to the imposition of restraint. Similarly, ......
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