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Chicago Roller Skate Co. v. New York Produce Exch. Bank

Supreme Court of New York, Appellate Division

November 3, 1911


Page 819

SUBMISSION of a controversy upon an agreed statement of facts pursuant to section 1279 of the Code of Civil Procedure.


Theodore L. Bailey, for the plaintiff.

Ambrose G. Todd, for the defendant.


From the agreed statement of facts herein it appears that plaintiff, a foreign corporation, having its office at Chicago, in the State of Illinois, contracted prior to March 30, 1909, to sell to A. H. Selwyn, Ltd., of London, Eng., certain merchandise, consisting of roller skates of the value of about $1,100, and subsequently and prior to May 14, 1909, contracted for other merchandise of the same character to the further amount of about $230. It was agreed between plaintiff and Selwyn that as each shipment was made by the former it was entitled to draw a sight draft on the latter, with bill of lading attached, for the amount of the shipment, which draft Selwyn would arrange to have paid by defendant at New York, upon presentation thereof with the bill of lading attached. In pursuance thereof the London City and Midland Bank, acting on behalf of Selwyn, on March 20, 1909, instructed defendant to pay plaintiff the amount of its drafts on Selwyn not exceeding $800, when accompanied by bill of lading, and authorized defendant to debit the account of the London bank with the amount of the payment. Thereafter, on March 31, 1909, the amount of the payments so authorized was increased by the sum of $550, making a total authorized disbursement of $1,350. The defendant duly acknowledged the receipt of these advices from the London bank. On April 9, 1909, plaintiff wrote defendant: 'We have been instructed by our agents, A. H. Selwyn, Ltd., of 35-37 Noble St., London, who have ordered from us some seven hundred pairs of skates, which will amount in the neighborhood of from $1,000 to $1,100, to draw sight drafts accompanied with bill of lading on you for the above amount. We write to know if we ship these goods to you if you will accept our sight

Page 820

draft in the above firm's name and pay for these goods f. o. b. cars New York, less 2%. As the shipment is about ready we would thank you for an immediate reply.' To this the defendant replied as follows, on April 12, 1909: 'Replying to your esteemed favor of the 9th inst., we take pleasure in advising you that there have been opened credits aggregating $1,300 to be availed of by sight drafts drawn by your good selves on Selwyn, Ltd., accompanied by bill of lading covering shipment of merchandise for same amount. It will be in order for you to draw in accordance with these terms on through bill of lading to London.' Thereafter plaintiff (relying on the letter of April twelfth) on April 16 and 28, 1909, presented sight drafts to defendant drawn on A. H. Selwyn, Ltd., for $498.95 and $299.88, respectively, accompanied by bills of lading covering the shipment to Selwyn at London of merchandise to such amounts, and defendant paid the drafts and accepted the through bills of lading for the goods which had been forwarded to London via the American Express Company. On May 14, 1909, still relying on the same letter, plaintiff mailed a third sight draft on A. H. Selwyn, Ltd., to defendant, amounting to $529.02, and accompanied by a bill of lading for goods to that amount which had on the day prior been shipped by plaintiff to Selwyn. Before this draft was presented to defendant, and before it had any knowledge of this third shipment, it had received a cablegram, dated May 14, 1909, from the London City and Midland Bank as follows: 'Cancel credit favor Chicago Roller Skate Company a/c Selwyn.' Defendant thereupon refused to pay the draft in question, and on May seventeenth telegraphed plaintiff, 'Yours fourteenth. Credit cancelled. Instruct what to do with documents,' and followed this by a letter on May eighteenth, returning the draft and bill of lading to plaintiff and advising it that as the credit established by defendant's London correspondent had been canceled it could make no further advances under the same. It is conceded that under the agreement between the London bank and defendant, the latter was subject to the control and direction of the former in the opening and canceling of credits, although plaintiff had no knowledge of such agreement. Plaintiff declined to retain the draft and bill of lading returned

Page 821

to it, and the same were returned and again presented to defendant by plaintiff on May twenty-first, being once more returned to plaintiff on May twenty-fourth. It appears that disputes had arisen as to the condition in which the first two shipments of skates had arrived at London, and Selwyn claimed that they were not only rusted, but defective in many particulars, and that it had paid for goods in no way up to the contract requirements. Hence their direction to cancel the credit and refusal to pay for the third lot, which finally reached London after plaintiff had endeavored in vain to stop it in transit. Correspondence ensued between Selwyn and plaintiff, in the course of which Selwyn on June 15, 1909, wrote to plaintiff, referring to the goods covered by the third bill of lading: 'We would now suggest that the last lot of six cases invoiced on the 14th May should be delivered to us by the American Express Company, you instructing them in Chicago to do so. We will then go ahead and if we can dispose of the skates without buffing at a reduction, we will do so, otherwise we will have them buffed up at your expense.

'If you deliver this shipment now to hand without collect, this will mean an allowance of 529 of the total shipment, by which we make 1,321 pairs. This will work out at an allow-of 40ยข per pair, and should the loss be less than this we will remit you the difference; should it be more we will have to charge you up with the amount of the difference.

'The American Express Company here are writing their Chicago office to cable them if you accept the above proposition, so that there may be no delay in settling this question, and so save the market by disposing of this bad stock, so that your giving instructions to the American Express Company in Chicago to deliver us the goods, we shall hear within a day or two.'

Thereafter plaintiff instructed the American Express Company at London to deliver the goods in question to Selwyn, and wrote the latter, on July 9, 1909: 'We instructed the American Express Company to turn over the six boxes of skates which they have in London. Sell these at whatever figure you can and remit to us what is due us. The skates which we ship you hereafter ...

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