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Sztejn v. J. Henry Schroder Banking Corp.
Citation:
31 N.Y.S.2d 631, 177 Misc. 719 (1941)Facts
The plaintiff Chester Charles Sztejn and his coadventurer Schwarz contracted on January 7, 1941, to purchase a quantity of bristles from Transea Traders, Ltd., a corporation in Lucknow, India. To finance the purchase, they arranged with J. Henry Schroder Banking Corporation to issue an irrevocable letter of credit providing for payment upon shipment and presentation of proper documents. Transea allegedly placed fifty cases on board a steamship and obtained a bill of lading and invoices describing bristles as required by the letter of credit. However, the complaint alleged that Transea intentionally filled the crates with cowhair, worthless material, and rubbish to defraud the plaintiff. Transea drew a draft under the letter of credit and delivered it with the fraudulent documents to The Chartered Bank in India for collection. The Chartered Bank then presented the draft and documents to Schroder for payment, prompting the plaintiff to seek injunctive relief.
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