Yokohama Specie Bank, Ltd. v. United States Fidelity & Guaranty Co.

212 P. 564, 123 Wash. 387, 1923 Wash. LEXIS 769
CourtWashington Supreme Court
DecidedFebruary 1, 1923
DocketNo. 17488
StatusPublished
Cited by2 cases

This text of 212 P. 564 (Yokohama Specie Bank, Ltd. v. United States Fidelity & Guaranty Co.) is published on Counsel Stack Legal Research, covering Washington Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Yokohama Specie Bank, Ltd. v. United States Fidelity & Guaranty Co., 212 P. 564, 123 Wash. 387, 1923 Wash. LEXIS 769 (Wash. 1923).

Opinions

Mitchell, J.

The plaintiff, the Yokohama Specie Bank, Limited, a corporation, was and is engaged in business at Dairen, Manchuria. The defendant United States Fidelity & Guaranty Company, a corporation, is a bonding and surety company authorized to do business in this state. The defendant Mitsubishi Company owns and operates a line of steamships from Dairen and other points in the Orient to Seattle. The Nisshin Oil Mills, of Dairen, a Japanese corporation, was engaged in business at Dairen, Manchuria, in the manufacture and sale of vegetable oils. Rogers Brown & Company, for several years prior to its failure in 1920, was a corporation engaged in the importing business in Seattle. During several years just preceding the year of the transaction in controversy here, Rogers Brown & Company had imported a large quantity of merchandise purchased from the Nisshin Oil Mills, paid for upon drafts forwarded to Seattle with documents for collection under letters of credit already established from time to time by Rogers Brown & Company.

Early in January, 1920, two contracts, each covering ten thousand eases of soya bean oil, were entered into between the Nisshin Oil Mills as seller and Rogers Brown & Company as purchaser. The contracts were made on the part of the purchaser through its agent, Mr. Ellis, stationed at Dairen, and promptly after-wards confirmed by the house. The contracts were in the common familiar c. i. f. form and provided that payment should be made for the oil by sixty-day sight drafts under letters of credit to be provided for by the purchaser. On January 24,1920, the steamship ‘‘Eastern Crown” operated by the Mitsubishi Company, on which the oil mills had contracted for shipping space, arrived in Dairen. The twenty thousand cases of oil were loaded on the ship January 26, 1920, and on that [390]*390date the captain issued two “on board” bills of lading, each covering ten thousand cases of oil. In each bill of lading the Nisshin Oil Mills was named as shipper and the goods were deliverable to its order, “notify Rogers Brown & Company, Seattle.” Marine insurance on the goods was procured by the shipper on January 28,1920. The ship sailed from Dairen on January 29, 1920, and Rogers Brown & Company were advised of it by a cablegram of that date.

It appears that, according' to the.course of their prior dealings, letters of credit should have been received by the Nisshin Oil Mills from Rogers Brown & Company at least a week prior to the sailing of the ship. No such letters having been received, the shipper, even before the ship left port, urged upon the local representative of Rogers Brown & Company, personally, to see that the Seattle office furnished the letters of credit; and on February 9 the Nisshin Oil Mills wired the Seattle office direct to cable letters of credit for the goods. In the usual course of her voyage the “Eastern Crown” was expected to arrive in Seattle about the 1st of March or within a few days thereafter, and on February 17, 1920, the Nisshin Oil Mills cabled to the Seattle office of Rogers Brown & Company as follows: “Eastern Crown will arrive ahead of documents take immediate delivery and cable credit at once.” The cablegram was delivered in Seattle on February 28. The steamer arrived at Seattle on March 2.

Rogers Brown & Company, not having the bills of lading with which to get delivery of the oil from the carrier, procured from the defendant United States Fidelity & Guaranty Company, on March 4, 1920, two bonds, each covering ten thousand cases of oil, whereby the bonding company agreed to furnish to the steamship company bills of lading for the oil within ninety days, or in default thereof, to hold the carrier free [391]*391from any and all claims which might he made by any party for the goods. On the back of each of the bonds the surety company made and signed the endorsement, “Deliver to Rogers Brown & Company,” as the carrier would not deliver the oil without this specific direction, although the face of the bond showed it was intended that the oil was to be delivered to Rogers Brown & Company.

The steamship company made no investigation in Seattle as to who, if anyone, was entitled to delivery of the oil on the order of the shipper, but relying solely upon the protection afforded by the bonds of the surety company and without which, as testified to by its officer and agent, it would not have delivered the oil, it delivered the oil to Rogers Brown & Company, by whom it was promptly disposed of to its customers. After the cablegram of February 17, down to March 20,1920, the oil mills, by a cablegram on March 3 to the Seattle office and by personal applications to the purchaser’s agent at Dairen, urgently and repeatedly insisted that Rogers Brown & Company establish letters of credit to cover the contracts and shipment. On the 19th or 20th of March, because of a letter from the Seattle office to Mr. Ellis, the agent, it appears that he suggested to the Nisshin Oil Mills that it approach its bank to negotiate the sale of its documents covering the oil, with open sixty-day sight drafts drawn by the Nisshin Oil Mills on Rogers Brown & Company in favor of the bank. The Nisshin Oil Mills, on the 20th of March, sold and delivered to the bank, the plaintiff in this case, all the documents, including the bills of lading properly indorsed by it and attached the two drafts, in consideration of the sum of $231,725 paid by the bank, an amount somewhat less than the face of the commercial account and interest. On March 22, 1920, the Nisshin Oil Mills drew on Rogers Brown & Com[392]*392pany for $7,057.96 on account, consisting of $3,424.51 difference in exchange because of lack of letters of credit, and interest in the sum of $3,633.45 from February 1 to March 20 on $231,725. The draft was paid by Rogers Brown & Company, April 22,1920. On April 17, the two open sixty-day drafts for $115,862.50 each were presented to and accepted by Rogers Brown & Company at Seattle. On April 19, 1920', Rogers Brown & Company forwarded two claims against the Nisshin Oil Mills in the total sum of $9,711.98 by reason of the leakage of oil after shipment, which were paid by the Nisshin Oil Mills on May 11,1920. On June 7, 1920, a receiver was appointed for Rogers Brown & Company, and such receiver has continued as such at all times since. The two drafts for $231,725 were not paid on their due date, June 16, nor at all.

It may be mentioned here that, on March 20, 1920, none of these parties residing in Dairen had the slightest knowledge that the oil had already been delivered by the carrier to Rogers Brown & Company at Seattle. It seems that the first one of them to learn of the delivery was Mr. Ellis, who testified that he first learned of it the latter part of May or the 1st of June.

Prior to the commencement of this action, the Nis-shin Oil Mills assigned to the plaintiff herein all its claim for damages against the United States Fidelity & Guaranty Company and the Mitsubishi Company.

This action in conversion was commenced on September 21, 1920. By the second amended complaint, upon which trial was had, judgment was demanded against defendants, the United States Fidelity & Guaranty Company and the Mitsubishi Company, and each of them, in the sum of $231,725, together with interest at six per cent per annum from March 4,1920, because of the conduct of the defendants acting together in arranging for and making wrongful delivery of the mer[393]

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Bluebook (online)
212 P. 564, 123 Wash. 387, 1923 Wash. LEXIS 769, Counsel Stack Legal Research, https://law.counselstack.com/opinion/yokohama-specie-bank-ltd-v-united-states-fidelity-guaranty-co-wash-1923.