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Phair v. L. Figueiredo S.A.

Supreme Court of New York, Appellate Division

February 15, 1955

L. Figueiredo S.A.

APPEAL from a judgment of the Supreme Court in favor of defendants, entered June 16, 1953, in New York County, upon a dismissal of the complaint by the court at a Trial Term (WALTER, J.) at the close of the entire case.


Milton P. Kupfer of counsel (Eli S. Silberfeld, Theodore M. Newman and Jordan H. Eskin with him on the brief; Kupfer, Silberfeld, Nathan & Danziger, attorneys), for appellant.

Thomas W. Kelly of counsel (Thornton C. Land and Frank E. Nattier, Jr., with him on the brief; Breed, Abbott & Morgan, attorneys), for respondents.


On a trial before the court and a jury, the complaint in this case was dismissed at the close of the whole testimony. The question on appeal is simply whether plaintiff established a prima facie case requiring submission to the jury.

Four causes of action were set forth in the complaint, two

Page 452

against each defendant. The first and the second were based upon an alleged sale of flour to these defendants. Plaintiff now concedes that no such cause of action was established.

The third and fourth causes of action were based upon a claim that on May 2, 1949, in Brazil, the Brazilian defendant requested the plaintiff's assignors to release and deliver certain shipping documents representing 72,187 sacks of flour to said defendant or upon its order, and in consideration of such release said defendant promised and agreed to pay or cause to be paid to the plaintiff's assignors (the owners of the flour) in New York $451,150.07, representing that it had received and was holding sufficient funds to make said payment. The complaint further alleges that plaintiff's assignors released the documents as requested by the defendant. It states that no part of the sum of $451,150.07 has been paid, except $193,000, leaving an unpaid balance of $258,150.07.

The evidence would permit a finding that late in April, 1949, a quantity of 72,187 one-hundred-pound sacks of milled flour owned by the plaintiff's assignors had arrived by steamer S.S. Evgenia in Santos, Brazil. An intended sale to others having fallen through, plaintiff's assignors sent a flour broker, one Ueland, to Santos, to dispose of the flour. He was met there by one Berson, the manager of the defendant L. Figueiredo S. A., a Brazilian corporation (hereinafter referred to as the Brazilian defendant). After several days of discussions, in which Ueland made clear that the offer was for sale of the documents in exchange for dollar payments in New York, Berson told Ueland, according to the latter's testimony, that he had 'received payment for * * * the flour' and wanted to 'buy' it; that he would 'buy' the flour--'take possession of the documents;'--'he would pay us in New York dollars, $50,000 to be paid the next day and $200,000 * * * within ten days and the total amount to be paid within a maximum of thirty days.'

Berson, on the other hand, testified, in substance, that on May 2d he told Ueland that a group of Brazilian merchants headed by one Mofarrej had made an offer to buy this flour, and, when Ueland expressed concern over securing payment of dollars in New York, Berson suggested that it might be arranged to have sufficient Brazilian cruzeiros deposited in Brazil by the Mofarrej group with some neutral firm in Brazil to insure the payment of the dollars, and the Brazilian defendant agreed at the request of Ueland and Mofarrej to act as the depository. At Berson's suggestion, an excess of 25% of cruzeiros was to be obtained to cover fluctuations in the foreign exchange. Thereupon,

Page 453

Berson obtained checks from Mofarrej for 13,138,000 cruzeiros. Some of these checks were certified; others could not be certified. Ueland indicated a willingness to close immediately. Berson also said that Ueland desired $50,000 to be paid immediately in New York, and, after consultation with Mofarrej, Berson reported that this would be satisfactory. He added that Mofarrej had authorized him to request the New York defendant 'to start paying right away and that within a very short time * * * they [Mofarrej and associates] would refund the L. Figueiredo (U. S. A.) Corporation for the amounts which until then' the New York corporation would have paid on account of the deal. Thereupon several letters were written and exchanged between the parties to evidence the transaction. In addition, indorsements were made on the numerous shipping documents, and they were delivered by Ueland to Berson.

It must be conceded that, standing alone, the letter addressed by the Brazilian defendant to Ueland and one written by Ueland to Mofarrej indicate that Mofarrej was the buyer, and the Brazilian defendant was merely the depository of the security. The indorsements on the shipping documents and some statements made by Ueland in communication to his principal had like import. On the other hand, on May 3, 1949, the Brazilian defendant cabled to the New York defendant, and a copy of this cable was delivered by Berson to Ueland at the time the other documents were exchanged. This cable could well be construed to evidence a direct agreement by the defendants that they would be obligated to pay the dollars in New York. It said to its subsidiary that 'We are undertaking that you will pay' certain sums within ten days and the balance within thirty days, and to pay immediately $50,000 on account, and, requested the subsidiary to advise the New York attorney for the sellers that the New York corporation would pay the total within thirty days. The following day the New York defendant wrote a letter to the sellers' attorney, which again evidenced a direct obligation on defendant's part to pay the dollars on specified dates. In fact, the $50,000 was paid by the ...

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