(146 N.E.)

the action must be commenced must be computed from the time when the right to make the demand is complete." Civil Practice Act, 15; Reining v. City of Buffalo, 102 N. Y. 308, 6 N. E. 792. Claimant had the right to make a demand forthwith and the statute began to run on March 31, 1898.

HISCOCK, C. J., and CARDOZO, CRANE,
and ANDREWS, JJ., concur.
MCLAUGHLIN, J., not voting.
LEHMAN, J., not sitting.

[7, 8] 3. What was the nature of the obligation of the city to pay the award? The relation of the claimant and the city is that of vendor and vendee, debtor and creditor. The city owes the amount of the award to claimant. Kahlen v. State of New York, 223 N. Y. 383, 388, 119 N. E. 883. Obviously, the city does not detain the property of the elaimant in any representative capacity, nor as a deposit of money to be paid on special. demand. It is not one of the cases excepted from the provisions of the Civil Practice Act,

§ 15. The ingenious reasoning of the learned justice, who made the Special Term order herein, rests on a distinction between the warrant drawn in payment of the award and held by the city and the award itself. The award, it was held, is merged in the warrant, and the statute does not run on the warrant until it is presented. But the same rule that bars recovery on the award bars recovery on the warrant. Demand might have been made both for the warrant and for payment on the warrant at any time after the award was confirmed. Civil Practice Act, § 15. The warrant was drawn more than 20 years before this proceeding was instituted. It is in no sense a written acknowledgment of the indebtedness which was created by the con

firmation of the award which starts the statute running anew.

The singular anomaly is here presented of the refusal of the city to pay a just debt because it is in a position to defeat claimant's remedy. Ethical considerations may condemn its attitude. The beneficent purpose of the statute as expressed in the act of James I, "for quieting of men's estates and avoiding of suits" is not served. Yet the city authorities would have been remiss in their duty if they had recognized the natural obligation in this proceeding. They lacked authority to waive the provisions of the statute. Relief must be sought elsewhere. The statute of limitations does not pay the debt. It merely deprives claimant of its remedy. That it does effectually exclude claimant from the courts by denying remedial justice is too plain to permit us to allow good conscience to prevail or to permit particular instances to destroy the force of wellestablished rules of law.

The order should be reversed, with costs in all courts, and the claimant's motion denied, with $10 costs.

Orders reversed, etc.

(239 N. Y. 229)

ISLAND TRADING CO., Inc., v. BERG
BROS., Inc.

(Court of Appeals of New York. Dec. 19, 1924.)

Sales

219(2)-If credit given or condition of payment waived by delivery title passed from seller.

credit was given by seller, or condition of payment was waived by delivery, sale was unconditional and title passed from seller, and seller could only look to person to whom it sold goods.

Under Personal Property Law, § 100, if

2. Sales219(1)-Seller surrendering parcel post receipts held not entitled to retake goods as against subsequent purchaser.

Where plaintiff purchased goods from and opened letter of credit in favor of B., requiring invoices and parcel post receipts, and B. purchased goods from defendant and secured parcel post receipts by representations that he would secure cash and return and pay defendant, but failed to do so, held that, under Personal Property Law, § 104, having made fraud possible, defendant should suffer loss, and could not reclaim goods.

3. Trial 395 (5)-Where decision found ultimate fact not necessary to find evidentiary fact that sale on credit.

Where decision found ultimate fact as to seller's act in permitting buyer to obtain possession of goods, whereby he obtained payment from subsequent purchaser, it was not necessary to find evidentiary fact that sale was on

credit.

4. Evidence 354 (24)-Seller by crediting buyer with price of goods resold to plaintiff admitted market value of goods converted.

Where defendant seller credited buyer with price of goods resold by buyer to plaintiff, and retaken by defendant, held, that this was admission by seller of market value of goods at time

of their conversion.

Appeal from Supreme Court, Appellate Division, First Department.

Action by the Island Trading Company, Inc., against Berg Bros., Inc. From a judg ment of the Appellate Division (209 App. Div. 63, 204 N. Y. S. 523), affirming a judgment for plaintiff, defendant appeals. Affirmed.

Herman Shulman, David L. Podell, and | ceipts on his promise to go to the bank and Jacob J. Podell, all of New York City, for appellant.

John T. Loughran, of Kingston, and John W. Hannon and James A. Delehanty, both of New York City, for respondent.

POUND, J. This is an action for conversion. Murat Bey of New York sold merchandise to plaintiff, a corporation of Manila, P. I., and bought of defendant, a New York corporation. He had a letter of credit, issued at request of plaintiff by the Philippine National Bank whereby the bank agreed that its New York agency would cash drafts accompanied by parcel post receipts and certified invoices to cover cost of leather goods and hosiery to be shipped by him to plaintiff.

get the cash to make the payment at once, which he did not do. Why put this condition on him if the sale was on his credit? Some point is made that the defendant's books were altered so that an original entry in the form of a sale on credit had been changed by striking out the printed word "regular" (meaning a credit of thirty days or so), and writing in place thereof the word "cash." This evidence is relied on as sufficient to permit an inference that the sale was on credit. Defendant did business on credit on 90 per cent. of its accounts; but it had not done business on credit with Murat Bey, and it does not appear that this change was made after the transaction in question. There is no evidence of the actual transaction of the defendant with MuHe bought from defendant such merchan- rat Bey. Defendant's vice president, called as dise of the value of upwards of $1,200. De-a witness by plaintiff, had no transactions fendant did up the merchandise, addressed with him. Murat Bey was not called. The the packages to plaintiff, and mailed them plaintiff's case rests on the book entries, and from the New York office by parcel post, a concession of counsel on the trial as to the paying postage thereon, issuing its invoice delivery of the postal receipts, which point therefor to Murat Bey. It also delivered to to the conclusion that the sale to Murat Bey him the postal receipts on his assertion that was for cash, and that possession of the posthe would go and get the cash and pay de-al receipts was obtained by trick. In othfendants. Thereat Berg then made out an er words, that Murat Bey stole defendant's invoice to plaintiff in his own name for his goods that it was entitled to possession of selling price, drew draft on plaintiff for the them, did not assent to the transfer of ownamount, took invoice, insurance policy is- ership by him, and had the right to retake sued in plaintiff's name as owner, and the them (Williston on Sales [2d Ed.], § 346), expostal receipts to the bank, and got the mon- cept for the circumstances of the sale to ey thereon. He did not pay the defendant. the subpurchaser, the plaintiff. Plaintiff and After waiting about three weeks defendant | defendant are strangers to each other. obtained a stop order from the New York post office on the Manila post office, and the goods, not having been delivered to plaintiff, were returned to it. Plaintiff sued for the value of the goods. Both parties moved for the direction of a verdict, and verdict was directed for plaintiff.

[1] Defendant's theory is that the case depends on whether title, the right to possession, passed to plaintiff by delivery of the goods to the post office. The first question considered below was whether the sale was a cash sale. The court refused so to find, and made no finding whether the sale was for 'cash or credit. If a credit was given or the condition of payment waived by delivery, the sale was unconditional, title passed out of defendant, and defendant could look only to Murat Bey for the price. Personal Property Law (Cons. Laws, c. 41), § 100; Gibson v. Tobey, 46 N. Y. 637, 7 Am. Rep. 397.

[2] But the result herein would not be different if the sale to Murat Bey was for cash. The evidence points in that direction. No term of credit is suggested. It is conceded that plaintiff gave Murat Bey the postal re

No

question arises as to the bona fides of plaintiff. It bought the goods from Murat Bey and paid for them. Defendant put it into Murat Bey's power to obtain plaintiff's money to pay for the goods. It assented to the resale by shipping the goods to the subpurchaser and allowing Murat Bey to take the postal receipts to obtain the money from the subpurchaser which paid for them. As between two innocent victims of the fraud, the one who made possible the fraud on the other should suffer. Personal Property Law, § 104; Dows v. Kidder, 84 N. Y. 121, 128; Parker v. Baxter, 86 N. Y. 586, 591.

[3] Appellant contends that the judgment against defendant is not sustained by the findings because there is no finding that the sale was on credit. The decision finds the ultimate facts, and it is not necessary to find the evidentiary facts. From the present viewpoint, it is immaterial whether the sale was for cash or on credit.

[4] It is also contended that there is no evidence as to market value at time of conversion. The verdict directed was for the price which Murat Bey agreed to pay for

(146 N.E.)

the goods.. The motion to dismiss was on | credit, is entirely distinct and apart from the the general ground that "no cause of action contract between customer and his vendor, unhas been established." But a cause of ac- der which goods are to be shipped. tion was established for nominal damages at least, and defendant credited Murat Bey with the price of the goods, and that is an admission of value.

The judgment should be affirmed, with costs.

HISCOCK, C. J., and CARDOZO, McLAUGHLIN, CRANE, ANDREWS, and LEHMAN, JJ., concur.

Judgment affirmed.

(239 N. Y. 234)

LAUDISI v. AMERICAN EXCH. NAT. BANK.

(Court of Appeals of New York. Dec. 19, 1924.)

1. Banks and banking 191-Bank which transgresses limitations prescribed in letter of credit pays draft at own peril.

Bank which has issued letter of credit is protected in payment of draft if it keeps within the powers conferred, but pays at its peril if it transgresses the prescribed limitations.

2. Banks and banking 191-Rule as to construction of letter of credit, stated.

5.

Banks and banking 191-Bank held warranted in payment of draft under irrevocable letter of credit notwithstanding previous notice from buyer not to pay draft.

Bank which had issued irrevocable letter of credit providing for payment of draft when accompanied by invoice and negotiable bill of lading, was warranted in payment of draft so accompanied by invoice and bill of lading though buyer had previously notified bank that, goods did not comply with requirements of his contract with seller, and had requested bank not to pay draft.

Crane, J., dissenting.

Lehman, J., dissenting in part.

Appeal from Supreme Court, Appellate Division, Second Department.

Action by Lawrence Laudisi against the American Exchange National Bank. Judgment for plaintiff entered on order granting motion to strike out defendant's answer, and for summary judgment, and denying defendant's motion to dismiss complaint (122 Misc. Rep. 635, 203 N. Y. S. 432), was af firmed by the Appellate Division (209 App. Div. 906, 205 N. Y. S. 932), and defendan appeals. Reversed with directions.

Edgar J. Nathan and Michael H. Cardozo, Jr., both of New York City, for appellant. Ralph Stout, of New York City, and Adolph

Since customer may prescribe and phrase limitations in letter of credit on bank's pay-Ruger, of Brooklyn, for respondent.

ment of drafts, court will construe language in accordance with its ordinary and sensible meaning so as not to destroy the protection which the customer has exacted, nor impose on bank some obligation not fairly warranted by the

language.

3. Banks and banking 191-Bank held warranted in payment of draft under letter of credit on presentation of draft with bill of lading describing merely "grapes," and not particular kind purchased.

HISCOCK, C. J. The plaintiff, who lived on Long Island, made a contract with GrandeDi Paola, Incorporated, which was doing business in New York City, for the purchase of a quantity of Alicante Bouchez grapes which were to be shipped from California. As a method of paying for said grapes, he made a contract with the defendant for the issue to said vendor of a letter of credit Where letter of credit provided for pay-under which the latter's drafts for the purment by bank on presentation of drafts for chase price of the grapes were to be paid purchase price of particular kind of grapes to be shipped from California to New York, where accompanied by "invoice and negotiable railroad bill of lading showing destination," bank was warranted in payment of draft where bill of lading described goods merely as "grapes" and not the particular kind purchased, and though invoice had been made out by seller in

New York.

4. Banks and banking 191-Contract between customer and bank under which bank issues irrevocable letter of credit distinct from customer's contract with his vendor.

The contract between customer and bank, under which bank issues irrevocable letter of

by defendant on presentation when accompanied by certain documents. Grapes were shipped to plaintiff from California in purported execution of this contract, and a draft for the purchase price thereof was paid by defendant on account of plaintiff, and on presentation therewith of certain documents. The latter now claims that the grapes so shipped were much inferior to those which he had contracted to buy, and that the documents presented by the vendor did not so comply with the letter of credit issued in pursuance of his contract with defendant as to entitle it to pay said draft.

The contract was in the form of a letter addressed by plaintiff to defendant, and, referring to drafts of the vendor to be paid on account of the purchase price of the grapes, it provided:

Most of the details of the contract be- I [1, 2] The relation which arises between tween plaintiff and defendant and of the a customer and a bank in respect of a letter letter of credit are not material or involved of credit issued by the latter for the acin this controversy. In fact, the only pro- count of the former is a familiar one and vision which requires our consideration and in its general aspects well understood. As interpretation is the one describing the docu- a convenient method of paying for goods ments to be presented with the draft as an which he may purchase, the customer auauthority for paying the latter on account thorizes the bank to issue a letter of credit of plaintiff. providing for the payment of drafts drawn by the vendor on such conditions as he may elect. He may authorize the bank to pay drafts without any accompanying documents; he may authorize payment on a bill of lading and invoice, as in this case; he may prescribe much more stringent limitations upon the power of the bank. But in any case the bank has the power and is subject to the limitations which are given and imposed by this authority. If it keeps within the powers conferred it is protected in the payment of the draft. If it transgresses those limitations it pays at its peril. A customer having the right to prescribe and phrase limitations as he desires, it is our duty to give to language its ordinary and sensible meaning which will neither destroy the protection which the customer has exacted, nor, on the other hand, impose upon the bank some obligation not fairly warranted by the language which has been adopted by the parties.

"It is understood and agreed that you may accept and/or pay the draft and/or drafts under said letter of credit on presentation of one copy of bill of lading * together with copy of invoice and/or other documents as required by said letter of credit."

* *

The letter of credit issued in pursuance of said contract to the vendor provided for drawing of drafts against shipments to be made at a certain time of Alicante Bouchez grapes at a certain price from California to Long Island City. It then contained the following clause whose interpretation and application immediately encompass the dispute between these parties: "Invoice and negotiable railroad bill of lading showing destination to Eighth street yard Long Is land railroad, Long Island City, to accompany drafts."

Following these principles we find nothing in the description of the documents which were to accompany the drafts when presented for payment which, in our judgment, When the vendor presented the contemplat-places upon the bill of lading the requireed draft it presented therewith a bill of ment of so describing all of the characterlading duly issued at the shipping point in istics of the article shipped that it alone California, but which described the article will show that such article is the one deshipped not as Alicante Bouchez grapes but scribed in the letter of credit. The parasimply as "grapes," and an invoice made mount purpose of a bill of lading is to show out by the vendor in New York instead of the shipment of goods which, so far as ap by the shipper at the shipping point which pears, conform to necessary requirements fully described the grapes as complying with as stated in the letter of credit. If it affirmthe contract between plaintiff and his vendor. atively shows the shipment of goods which Thus the two instruments together showed do not comply with the requirements of a a shipment of the articles which plaintiff's letter of credit, a bank would not be justicontract of sale called for and which fully fied in acting upon it. If it describes the warranted the payment of the draft, but goods shipped by a nomenclature different the plaintiff says that this is not sufficient. than that employed in the letter of credit. He argues that the bill of lading by itself a bank would be justified in refusing to make should have shown a shipment of the particular kind of grapes called for by his payments on the strength of it and thereby contract and specified in the letter of cred- incurring the possible burden of establishing it, and that the defect in the description conin litigation that the different terms meant tained in it cannot be remedied by the invoice made out by the vendor in New York City. He cites no case which, in our opinion, sustains the contention, nor aware of any such one, and the allegations of the affidavits presented on the application for judgment do not sustain such contention.

are we

the same thing. Such, in the case of a guaranty, was our decision in Bank of Italy v. Merchants' National Bank, 236 N. Y. 106,

140 N. E. 211. If a customer in his contract with the bank and by the letter of credit requires that the bill of lading shall by itself and on its face show that certain described goods have been shipped, a bank

(146 N.E.)

will not be protected which pays on the the vendor which furnished no authority for faith of a bill which does not comply with payment by the defendant. Again we find this requirement. Such in its fundamental nothing which justifies these criticisms of features and in its theory was the decision the plaintiff or prevents the invoice from beof this court in Bank of Montreal v. Reck-ing regarded as a proper and sufficient supnagel, 109 N. Y. 482, 17 N. E. 217, especially relied on by the plaintiff.

defendant that the indeterminate description employed by the bill of lading in this particular case was so supplemented by the de-a particular case might have been quite scription of the invoice that the defendant was authorized to find a conformity of the shipment with the letter of credit, the plaintiff urges that the invoice was made in New York instead of California, that its correctness was not authenticated or certified by any outside party, and that it was, therefore, merely a self-serving declaration of ted.