Court Opinion

ID: 9443742
Source: CourtListenerOpinion
Date Created: 2023-08-03 19:29:25.940521+00
Date Added: 2024-06-11T17:29:35.378187
License: Public Domain

DENMAN, Chief Judge.
I concur in Judge HARRISON’S opinion as to what it says concerning the appeal of the Steel Company. However, the appeal of the Bank from Mr. Londono’s judgment against it is based upon entirely different grounds not considered in that opinion which require the reversal ordered.
On the appeal of the Bank from the judgment against it, it appears that Mr. Londono purchased from the Bank the following letter of credit to the Steel Co.:
“Citizens National Trust & Savings Bank of Los Angeles
“Dulien Steel Products Inc. 11601 So. Alameda Street Los Angeles, California
Irrevocable Credit No. 3645 Los Angeles 54, California July 27, 1946
“Gentlemen:
“We hereby authorize you to value on us for account of J. B. Londono, Los Angeles, California up to the aggregate amount of Two Hundred Fourteen Thousand (US$214,000.00) U.S. Dollars available by your drafts at sighi for full invoice cost to be accompanied by the following documents:
*380“Full Set Clean On Board Ocean Bills Of .Lading Made Out To Order, Blank Enclosed, Marked Freight Prepaid — ■ “Commercial Invoices— Evidencing Shipment of: Two Thou- " ’ sand (2000) Tons Barbed Wire C.I.F. Los An-geles Harbor In One Shipment
“From: Honolulu T. H. To: Los Angeles Harbor
“All drafts drawn under this credit must bear the following clause: ‘Drawn under Citizens National Trust & Savings Bank of Los Angeles L/C No. 3645’ and all amounts so drawn must be endorsed on the back hereof.
“We hereby agree with the drawers, endorsers and bona fide holders of drafts drawn under and in compliance with the terms of this credit, that such drafts will be duly honored on due presentation to the drawee if negotiated on or before July 31, 1946.
. “Yoiirs very truly,
,/s/ Wm. H. Schroeder Wm. H. Schroeder, Vice President & Mgr. /s/ W. Glenn Powers W. Glenn Powers, Pro-Manager”
For this letter of credit Mr. Londono paid the Bank $160,000 on July 27, 1946, when he received it and on July 29 gave his promissory note of $54,535, of which the $535 was added as the Bank’s charge for issuing the letter. The letter required the delivery of a particular kind of bill of lading. It was to be an “on board” bill, not one issued when the wire had not been loaded. It was to be for 2,000 tons. It was to be “made out to order, blank endorsed.”
The evidence shows that no "on board” bills of lading ever were issued on the 2,000 tons referred to in Londono’s contract with the Bank. The only bills in evidence state the goods are “received for shipment * * to be transported,” etc. Further, the evidence shows that no bill of lading of any kind was issued for 2,000 tons of cargo. Further, it appears that no negotiable bill of lading “made out to order and blank endorsed” was issued for the wire agreed to be sold to Mr. Londono, but that the bill for that wire was an unnegotiable bill issued to the Steel Co. as consignee.
It is thus, obvious that the major provision of the letter of credit, the delivery of the described bill of lading, was impossible of performance and the letter nudum pactum as between the Bank and the Steel Co. Also, the letter was no consideration for Mr. Londono’s payment to and his promissory note given the Bank. Yet the Bank paid the Steel Co. its $214,000 by its cashier’s check without receiving any bill of lading and has not brought any cross action against the Steel Co. for the recovery of the $214,000 on the ground of total absence of consideration or mutual mistake.
Nor has Mr. Londono sued the Bank to recover the $160,000 and the return of his. promissory note on the ground of total absence of consideration or mutual mistake. Instead, the case was tried and decided below and argued here on the erroneous theory that Mr. Londono had given the Bank $214,000 of his money to hold in trust and be paid over to the Steel Co. for the bill of lading which had been wrongfully given to the Steel Co. without obtaining the bill. The findings of the district court, at page 139, state of the purchase of the wire that it was “wire for which plaintiff’s money had been paid by the bank to Dulien,” and Mr. Londono’s brief in reply to the Bank’s, at. page 7, argues here that the Bank paid Du-lien “Londono’s money.”
Mr. Londono and the court below apparently had the erroneous impression held by some bank depositors that they “have money in the bank.” Instead, of course, they have no more than the bank’s implied promise that it will pay them amounts equal to the deposits. So here the $160,000 and the promissory note for $54,535. secured from the Bank no more than the Bank’s promise to pay $214,000 of its money to the Steel Co. upon delivery of the described bill of lading. It in no way affected Mr. Londono *381that the Bank made its erroneous use of its own money in paying it out without receiving that bill of lading.
Not only does Mr. Londono’s complaint fail to allege any act of the Bank which proximately caused any damage to Mr. Lon-dono, but the case was tried and decided below on grounds which make irrelevant any question concerning the bill of lading or any act of the Bank. Mr. Londono’s basic contention below and in his same brief here at page 46 is that the court properly found (Tr. 152) “that ‘at no time was there an acceptance of the wire’ by Mr. Londono and ‘that he rejected all of it’.”
The judgment in favor of Mr. Londono and against the Bank is reversed and the district court ordered to take further proceedings on its present record in accord with the views on that judgment here expressed.