Maurice O'Meara Co. v. National Park Bank of New York
Court of Appeals of New York
146 N.E. 636 (1925)
National Park Bank (defendant) issued a letter of credit in favor of Ronconi & Millar (plaintiff's assignor) for newsprint paper shipments, payable upon presentment of invoices and shipping documents; Ronconi presented documents satisfying the letter's stated requirements for multiple shipments, but National refused payment, arguing Ronconi hadn't proven the delivered paper actually matched the weight and strength specified in Ronconi's separate underlying sales contract with Sun-Herald, and that the paper in fact didn't meet those specifications. Ronconi sued for damages and moved for summary judgment, which the trial court denied and the appellate division affirmed before the Court of Appeals granted review.
Whether an issuer of a letter of credit may withhold payment in order to determine whether the description of goods in the documents presented for payment is accurate.