Appeal from the United States District Court for the Southern District of Illinois, Northern Division. No. RI CIV-76-16 - Robert D. Morgan, Judge.
Swygert*fn2 and Bauer, Circuit Judges, and William J. Jameson, Senior District Judge.*fn1 Bauer, Circuit Judge, dissenting.
In this appeal we must determine whether an instrument executed by an Illinois-chartered bank is a letter of credit. If it is, and if it is proper in Illinois for a state bank to issue such a letter, we must reverse the district court's dismissal of the complaint for failure to state a claim.
The facts of this case are relatively simple. As this action is an appeal from a motion to dismiss, we are obliged to treat all of the factual allegations in the complaint as true. Parr v. Great Lakes Express Co., 484 F.2d 767, 769-70 (7th Cir. 1973). On June 5, 1969 William H. Kearney, then president of defendant Rock Island Bank, executed the following instrument to Lorraine Realty Company on the bank's letterhead:
Lorraine Realty Corporation
748 South Mississippi Boulevard
St. Paul, Minnesota 55116
We hereby issue to Lorraine Realty Corporation, 748 South Mississippi Boulevard, St. Paul, Minnesota, our irrevocable and unconditional commitment to purchase your Promissory Note of this date in the amount of $400,000.00, said Promissory Note to bear a maturity date of June 5, 1971.
We will purchase said Promissory Note from its holder in due course at maturity, provided the holder of such Promissory Note shall give us at least 60 days written notice of its intent to sell to us prior to delivery date, said delivery date not to be prior to maturity date of June 5, 1971.
We hereby agree with the drawers, endorsers, and bona fide holders that this credit will be duly honored on presentation in an amount not to exceed unpaid balance of principal and interest due upon presentation.
/s/ William H. Kearney/William ...