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CORPORACION DE MERCADEO AGRICOLA v. MELLON BANK IN

December 5, 1978

CORPORACION de MERCADEO AGRICOLA, Plaintiff,
v.
MELLON BANK INTERNATIONAL, Defendant



The opinion of the court was delivered by: LEVAL

MEMORANDUM OPINION

Corporacion de Mercadeo Agricola ("CMA") the plaintiff brings this action against Mellon Bank International ("Mellon") alleging that Mellon unjustifiably refused to honor plaintiff's draft drawn under Mellon's Letter of Credit 5171. Mellon moves for summary judgment on the grounds that the documentation tendered by plaintiff did not conform to the specifications of the letter of credit. Mellon's motion is granted. *fn1"

 The controversy arises out of dealings between plaintiff CMA and Pan American Fruit and Produce Corporation ("Pan American"). CMA is an autonomous institute of the Venezuelan government which engages in the business of selling Venezuelan agricultural commodities. Pan American is a New York corporation engaged in international trade.

 In March, 1974 CMA and Pan American entered into Contract No. 084 which provided that CMA would sell and Pan American would buy approximately 30,000 metric tons of Venezuelan paddy rice at a price of $ 9,630,000.

 During the course of the negotiations leading to the contract, Pan American had issued a letter of authorization addressed to CMA which (translated from Spanish into English) read as follows:

 February 13, 1974

 
Gentlemen:
 
We are pleased to inform you hereby that we have conferred a power of attorney to Mr. Gonzalo Sanchez Valera, Identity Card (Venezuelan) No. 163958, by which he is entitled to sign contracts and represent us and our company before the official and private organizations of the Republic of Venezuela.
 
Very truly yours,
 
Pan American Fruit
 
& Produce Corp.

 Pursuant to this authorization, Valera had signed the purchase contract on behalf of Pan American. *fn2"

 Contract No. 084 required Pan American to furnish certain letters of credit. In satisfaction of one such obligation, Pan American caused the issuance by Mellon on March 18, 1974, of Letter of Credit 5171 which is the subject of this action.

 The credit originally carried an expiry date of April 30, 1974, but was subsequently amended to extend its ...


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