The opinion of the court was delivered by: Whitman Knapp, District Judge.
This action arises out of the dishonor of a draft made
payable to plaintiff Philip Papadopoulos. Defendant National
Westminster Bank, PLC ("NatWest") moves for dismissal pursuant
to Fed.R.Civ.P. 12(b)(1) for want of subject matter
jurisdiction. Defendant Chase Manhattan Bank, N.A. ("Chase")
moves for summary judgment on plaintiff's claims against it.
For reasons which follow, we grant the motions and dismiss the
The pertinent facts are not in dispute. In December of 1987,
the National Bank of Greece agreed to sell to plaintiff*fn1 a
cruise ship, the M/V Castallea, for $7.5 million, but required
that plaintiff provide by January 15, 1988 a bank guarantee in
the amount of $750,000. At the time, plaintiff had
approximately $600,000 available in his account at NatWest's
Athens branch. To obtain the balance necessary for the
guarantee, plaintiff instructed Seeadler Seetpirostol GmbH
("Seeadler"), a travel company with which plaintiff had an
ongoing business relationship, and its subsidiary, Weaver
Maritime Inc. ("Weaver"), to forward $150,000 owed to him
personally. A representative of Seeadler and Weaver remitted
the sum to Volksbank Zuffenhausen EG ("Volksbank"), a bank
located in Stuttgart, Germany, and instructed Volksbank to
issue a draft payable to plaintiff. In compliance with this
instruction, Volksbank, with appropriate authorization, issued
a draft drawn on the New York account at Chase of
Genozentralbank Stuttgart-Genossenschafliche Zentralbank AG
("GZB"), another Stuttgart-based bank. The draft was personally
delivered to plaintiff, who, on December 21, 1987, deposited
the draft in his account at NatWest's Athens branch.
NatWest then sent the draft to Bankers Trust Company
("Bankers Trust"), which on December 23 presented it to Chase
for payment. On the following day, Chase — pursuant to an
agreement with its customer, GZB — dishonored the draft and
promptly returned it to Bankers Trust. The agreement, which had
been entered into in 1985 to protect against payment of
fraudulent drafts, required that Chase dishonor and return upon
presentment any draft in excess of $25,000 for which it had not
first received a telex from GZB authorizing it to make that
specific payment. Chase had received no such pre-presentment
authorization, and, on December 28, sent to GZB a telex
explaining why the draft had been returned unpaid.
Thereafter, several telexes were sent among the defendant
banks. On December 29, Bankers Trust sent a telex to NatWest
erroneously stating that the draft had been returned unpaid for
insufficient funds. On January 4, NatWest sent "top urgent"
telexes to Bankers Trust and Chase asking that the two banks
investigate. On the same day, GZB authorized Chase to pay the
draft, which, of course, Chase no longer had.
On January 15, the date by which plaintiff was required to
provide the guarantee, NatWest-Athens mailed the draft back to
plaintiff. The draft never was represented to Chase for payment
and plaintiff lost his option to purchase the ship.
Plaintiff concedes that 12 U.S.C. § 632 provides the only
possible basis for our assertion of jurisdiction over this
action. In substance, the relevant provision of § 632 provides
federal district courts with jurisdiction over actions (1)
which arise out of transactions involving international or
foreign banking, and (2) to which a corporation organized under
the laws of the United States is a party.*fn3 Plaintiff
contends that § 632 jurisdiction exists because the action
arises out of an international banking transaction, and because
Chase, a federally-chartered national banking association, is a
defendant potentially liable to him.*fn4 Defendant NatWest
contends that plaintiff's claims against Chase are without
legal basis, and that Chase is therefore a party in name only.
Consequently, NatWest asserts, § 632 jurisdiction does not lie.
Thus, the existence of subject matter jurisdiction turns on
the viability of plaintiff's claims against Chase, which, of
course, is also the focus of Chase's motion for summary
judgment. Plaintiff concedes that Articles 3 and 4 of the
Uniform Commercial Code*fn5 afford him as payee no cause of
action against Chase, the payor bank.*fn6 Plaintiff relies
instead on "window" provisions of the Code, which in substance
provide that the absence of a Code remedy does not foreclose
recovery at common law.*fn7
Plaintiff, however, recognizes that he cannot defeat Chase's
summary judgment motion merely by demonstrating that the
Uniform Commercial Code does not preempt his claims against
Chase. He therefore cites Palsgraf v. Long Island R.R. Co.
(1928) 248 N.Y. 339, 162 N.E. 99, Strauss v. Belle Realty Co.
(1985) 65 N.Y.2d 399, 492 N.Y.S.2d 555, 482 N.E.2d 34, White v.
Guarente (1977) 43 N.Y.2d 356, 401 N.Y.S.2d 474,
372 N.E.2d 315, Cullen v. BMW of North America, Inc. (E.D.N.Y.1982)
531 F. Supp. 555, rev'd, (2d Cir. 1982) 691 F.2d 1097, cert. denied,
(1983) 460 U.S. 1070, 103 S.Ct. 1525, 75 L.Ed.2d 948, and David
Graubart, Inc. v. Bank Leumi Trust Company (1979) 48 N.Y.2d
554, 423 N.Y.S.2d 899, 399 N.E.2d 930 from which he asks us to
infer that Chase had some common law obligation to him. None of
the cases supports such an inference.
Palsgraf v. Long Island R.R. Co. (1928) 248 N.Y. 339,
162 N.E. 99 was a suit by a passenger against a railroad. Assuming
the existence of an obligation of due care, the court was
concerned only with the question whether the particular
accident was foreseeable.
In Strauss v. Belle Realty Co. (1985) 65 N.Y.2d 399, 492
N YS.2d 555, 482 N.E.2d 34, the court concluded that Con
Edison, despite its negligent failure to provide electricity as
required by its agreement with the owner of an apartment
building, was not answerable to a tenant who ...