Bank of Montreal v. Recknagle

20 Jones & S. 334
CourtThe Superior Court of New York City
DecidedDecember 7, 1885
StatusPublished

This text of 20 Jones & S. 334 (Bank of Montreal v. Recknagle) is published on Counsel Stack Legal Research, covering The Superior Court of New York City primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bank of Montreal v. Recknagle, 20 Jones & S. 334 (N.Y. Super. Ct. 1885).

Opinion

By the Court.—Sedgwick, Ch. J.

On December 1, 1831, the defendants made written application to plaintiff’s agent in New York. It was as follows : “December 1, 1881, Please telegraph authority to Vogel & Co., Hong Kong, to draw at six months, for our account, against consular invoice and full set bills of lading of 2,500 bales manila hemp, p. Eobinson, at the rate of £4 per bale, pn a basis of 8s. sterling, freight filled up in bill of lading reducing advance if freight higher.”

In the evening of that day, the plaintiff’s agent sent to Vogel. & Co., the following telegraphic dispatch: “ Vogel, Hong Kong. Credit 608, six months, issued Becknagle ten thousand pounds, documents 2500 bales manila hemp, [347]*347per Robinson, at £4 per bale, if freight eight shillings or reduced advances if freight higher.”

On the next day, December 2, 1881, a letter of credit was made out and delivered to defendants. It was dated December 1, 1881, and addressed to the agents of the plaintiff in London. It authorized Messrs. Vogel & Co., of Hong Kong, “ to value on you as follows, that is to say, against goods, shipped per Robinson, via Cape of Good Hope, at six months sight; for any sum or sums not exceeding in the aggregate £10,000 sterling, to be used as they may direct, for invoice cost of 2,500 bales of manila hemp at £4 per bale, on a basis of 8s. sterling freight filled up in bill of lading, or at a proportionate reduced rate of advance if the freight is higher, to be purchased for account of Recknagle & Co., New York, or whom it may concern and to be shipped to New York. . . The bills must be drawn in Hong Kong prior to the 1st day of June, 1882, and advice thereof given to you in original and duplicate, such advice to be accompanied by bill of lading, filled up to order of agents of the Bank of Montreal, New York, with abstract of invoice indorsed thereon, for the property shipped as above. All the bills of lading issued except the one mailed to us and the one retained by the captain of the vessel carrying the cargo, are to be forwarded direct to you. The original invoice, properly certified, to be also forwarded to us. . . And we hereby agree with the drawers, indorsers and bona fide holders of bills drawn in comph'ance with the terms of this credit, that the same shall be duly honored on presentation at your office in London.” To this was added a note, “ Please sign bills as drawn under Credit No. 608, dated December 1, 1881.” On the margin was written : “This credit opened by cable direct, December 1, 1881.”

This letter of credit was delivered to the defendants, and they by letter addressed to plaintiff’s agents in New York, and dated December, 1881, agreed “to provide for all bills which shall be drawn and accepted under ” the let[348]*348ter of credit “ by payment of the amount thereof to you in New York.”

The letter of credit was sent to Vogel & Co., on December 13, 1881. It was not sent before, because the first China mail from New York went on that day.

Vogel & Co., in Hong Kong, drew three bills, upon plaintiff at London, at six months, to their own order—the first, on December 3, was for £2,400; the second, on December 6, for £2,000 ; the third, on December 13, for £3,680. On the face of the drafts it was respectively stated that they were drawn against six hundred, five hundred, and nine hundred and twenty bales of manila hemp.

These drafts were forwarded to plaintiff’s agents in London. The draft for £2,400 was accompanied with a bill of lading for six hundred bales of merchandise ; that for £2,000, with a bill of lading for five hundred bales of merchandise ; and that for £3,6S0, with two bills of lading for nine hundred and twenty bales of merchandise. Each draft was accompanied with a letter of advice, describing the shipment referred to in it as of “ bales of hemp.” On each bill of lading was indorsed what were called abstracts of invoicés, and which described the shipment as of “manila hemp.” These indorsements were made by Vogel & Co. after the bills of lading had been signed and delivered to them by the captain, and without his knowledge or consent.

The bills of lading acknowledged the shipment of “ bales merchandise being marked and numbered as in the margin,” “weight and contents unknown.”

The plaintiff’s agents, upon the arrival of the ship in New York, delivered the documents that had accompanied the drafts, upon acceptance in London, to the defendants in trust. They gave a receipt which termed the property, “two thousand and twenty bales hemp.” They entered the goods at the custom-house and paid the duties, before inspecting the goods. In fact, there was of hemp in the various shipments, only five hundred bales. It is agreed that this accompanied the bill of lading for the draft of [349]*349December T, for £2,000. All the other packages were of matting—an article of much less value than manila hemp.

The judge found, on the evidence before him, that “a roll of matting is a round cylindrical bale or roll, weighing about forty-five or fifty pounds and covered with a grass mat. A bale of of manila hemp, weighs, within a few pounds of three hundred, is square, like a cotton bale, and of not much less size. It is not covered by any matting or other covering. It is compressed and very hard, and strings of manila hemp are laid round it, as fastenings. On each bale of manila hemp, a patch is sewed, on which to put the mark; otherwise it has absolutely no covering.”

The matting was sold by agreement, and the proceeds of sale were about $2,000.

The plaintiff claims that the defendants are liable, under their agreement, for the amounts paid upon the acceptances of £2,400 and £3,080, and the complaint asks judgment for those amounts, together with judgment that certain security given by the defendants be sold, etc.

The defendants claim that their liability under their agreement is “to provide for all bills which shall be drawn and accepted under” the letter of credit, and that the drafts upon which the plaintiff now claims were not drawn and accepted under that letter; because, first, the bills were drawn under the telegraphic despatch, and, second, the plaintiff, in accepting the bills, did not observe the conditions upon which the defendants were to become liable, under either the telegraphic dispatch or the letter.

I am of the opinion, that the various instruments, that is, the original request of the defendants, the telegraphic despatch induced by it, sent to Hong Kong, and the letter of credit, have such intrinsic or expressed reference to each other, that they must all be considered at one time, to know the agreement.

It appears from them, that defendants’ responsibility to plaintiff was not to be based upon the nature of the relation between Vogel & Co. and the defendants, or the [350]*350interest of the defendants in the hemp, but upon the character of certain instruments. If the instruments had the character described in the agreement, there was liability, otherwise, none. It is immaterial that Vogel & Co. committed the fraud of shipping matting and not hemp; for, assuming that they were agents of defendants, the agreement was that the acceptance and payment of the drafts should not create responsibility on the defendants’ part, unless the documents were of a certain kind. There was provision, in substance, for a protection of defendants against the acts of their agents, if Vogel & Co. were agents.

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Bluebook (online)
20 Jones & S. 334, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bank-of-montreal-v-recknagle-nysuperctnyc-1885.