Sztejn v. Henry Schroder Bank Corp.

31 N.Y.S.2d 631 (1941)

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Nature of the Case

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Facts

On January 7, 1941, P and his co-adventurer, Schwarz, contracted to purchase a quantity of bristles from Transea Traders, Ltd. (Transea), a corporation having its place of business in Lucknow, India. P and Schwarz contracted D for the issuance of an irrevocable letter of credit to Transea which provided that drafts by the latter for a specified portion of the purchase price of the bristles would be paid by Schroder upon shipment of the described merchandise and presentation of an invoice and a bill of lading covering the shipment, made out to the order of Schroder. The letter of credit was delivered to Transea. Transea placed fifty cases of material on board a steamship, procured a bill of lading from the steamship company and obtained the customary invoices. P alleges that in fact Transea filled the fifty crates with cowhair, other worthless material and rubbish with intent to simulate genuine merchandise and defraud P. The complaint then alleges that Transea drew a draft under the letter of credit to the order of The Chartered Bank and delivered the draft and the fraudulent documents to the 'Chartered Bank at Cawnpore, India, for collection. The Chartered Bank presented the draft along with the documents to Schroder for payment. P seeks a judgment declaring the letter of credit and draft thereunder void and for injunctive relief to prevent the payment of the draft. D moved to dismiss.