Court Opinion

ID: 8829353
Source: CourtListenerOpinion
Date Created: 2022-11-26 15:58:06.951554+00
Date Added: 2024-06-11T17:04:52.556856
License: Public Domain

WADDICT, Circuit Judge
(dissenting). I concur fully with the majority of the court that the judgment against the Arctic Ice & Coal Company should be affirmed, and dissent in so far as the decision reverses the judgment of the District Court, and relieves from liability the Atlantic Bank & Trust Company, guarantor of the Arctic Ice & Coal Company. It is true the first contract given for the purchase of sugar, referring to payments, used the language “on presentation of dock receipt or bill of lading,” and the new or extended contract of purchase used the language “on presentation of delivery order.” This change from “dock receipt or bill of lading” to “delivery order” was in the contract of sale between the vendor and vendee, and the letter of credit given by the Atlantic Bank & Trust Company to guarantee the Arctic Ice & Coal Company’s indebtedness was prior to the execution of the extended or new contract of sale.
Although the letter of credit by the Atlantic Bank & Trust Coim pany was given during the life of the first contract, the same was apparently allowed to remain in full .force and effect as security to the vendor during the running of the extended contract, dated June 22d, until the 15th of September, 1920, and in the clause referring to payments thereunder, the precise term used was neither that of the first or second contracts, but, on the contrary, the letter of credit provides:
“Payment to be made in par funds against shipping documents on presentation covering 200 sacks of Java white sugar (about 224 pounds each), shipment August or September from India or Java via New York.”
The letter of credit provided further that the credit was to be under their guaranty, and to expire the 15th of September, 1920. That there may have been some uncertainty in the minds of the parties as to what was the correct terminology regarding the shipping papers in *52question is not unnatural; but the testimony seems to make clear just what was intended in making the contract, and that, in shipments of parts of a cargo, as here, the correct term was that used in the new ■or extended contract of sale, viz. “delivery order,” as distinguished from “dock receipt or bills of lading”; a bill of lading being used in cases of whole cargoes, and delivery orders in cases of part shipments of freight. The letter of credit wisely avoided this embarrassment, and provided for payment being made upon presentation of “shipping ■documents.”
The cargo of sugar reached New York on the 13th of September. The importers were paid therefor by the vendors, T. S. Southgate & •Co., who arranged for delivery of the sugar to the vendee, and on that day drew their sight draft on the Arctic Ice & Coal Company for the amount due for the sugar, with a delivery order thereto attached. The Arctic Ice & Coal Company refused to pay the draft, on the ground that a dock receipt or bill of lading, and a delivery order accepted by the importer, should have been furnished. This the majority opinion holds the Arctic Ice & Coal Company could not ask, and that it was liable for the payment of the draft; it having been drawn in accordance with the latter contract, which substituted “delivery order” for “dock receipt or bill of lading.”
I do not entirely concur in this view. The words “shipping documents,” as used by the guarantor, were broad enough to cover either •delivery orders or dock receipts and bills of lading, and in the sense used meant to have the Atlantic Bank & Trust Company become liable for a debt lawfully incurred by the vendee; and since the court holds the latter (who may be entirely irresponsible) clearly liable in the premises, it follows that those standing for it and guaranteeing it, are .and should be held liable, and not escape responsibility upon their guaranty given, and in good faith accepted and acted upon,'by any such quibble as they interpose.
The sugar, the purchase price of which is involved, was regularly and in due course of business purchased and paid for, and was in New York three days before the expiration of the letter of credit, awaiting the call of the buyer, who simply would not call for it, though it was lawfully tendered, and its delivery could have been arranged for by the use of the phone or wire, and the sugar actually delivered in Greensboro during the life of the letter of credit, had it been desired. Moreover, every assurance against possible loss was -fully and carefully guaranteed alike to the Arctic Ice & Coal Company and the Atlantic Bank & Trust Company, its guarantor. Not only did the vendor, Thomas S. Southgate (trading as T. S. Southgate & Co., one of the largest business concerns in the South, whose probity and financial standing is first-class in the financial and business world), give every guarantee against possible loss, but in addition offered ánd tendered the guaranty of the Trust Company of Norfolk, Va., one of the leading financial institutions of the country, as further assurance against harm •or loss arising from any imaginary difficulty in connection with the shipping documents mentioned in the letter of credit, either to the venadee or its guarantor.
*53From my viewpoint, the action of the lower court should be affirmed as a whole, and particularly that the defendant Atlantic Bank & Trust Company, the guarantor of the payment of the debt incurred, should not be allowed to escape responsibility upon any such excuse as interposed. To do so will greatly tend to lessen the faith in and weaken the stability of commercial transactions of the character here.