Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

CROCKER COMMERCIAL SERVICES v. COUNTRYSIDE BANK

December 30, 1981

CROCKER COMMERCIAL SERVICES, INC., PLAINTIFF,
v.
COUNTRYSIDE BANK, DEFENDANT.



The opinion of the court was delivered by: Shadur, District Judge.

MEMORANDUM OPINION AND ORDER

Crocker Commercial Services, Inc. ("Crocker") sues Countryside Bank ("Bank") for having dishonored Bank's $20,000 irrevocable letter of credit (the "Letter of Credit") in Crocker's favor as beneficiary, issued for the account of Bank's customer Everyone's Effort, Inc. ("Effort"). Crocker and Bank have filed cross-motions for summary judgment. For the reasons stated in this memorandum opinion and order Crocker's motion is granted and Bank's is denied.

Facts*fn1

Crocker, a California corporation, is a wholly owned subsidiary of Crocker National Bank engaged in the factoring business. It provides financial services to manufacturers and suppliers of clothing, in part by purchasing accounts receivable generated by their sales of that clothing. On January 17, 1980 its corporate name was changed from Crocker United Factors, Inc. to Crocker Commercial Services, Inc.

Some two weeks later Bank issued the Letter of Credit to Crocker reading in relevant part (emphasis added to indicate the material language for purposes of this action):

Drafts must be accompanied by:

  Your signed statement certifying that the funds
  drawn hereunder are due you on account of
  Everyone's Effort, Inc., failure to pay, within
  terms quoted therein, invoice(s) issued to them by
  Crocker Commercial Services, I IBM Plaza, Suite
  3335, Chicago, Illinois 60611 that demand for
  payment has been made and the funds have not been
  forthcoming from Everyone's Effort, Inc., or any
  other source.

Crocker proceeded to factor the accounts receivable of its several customers who sold clothing to Effort. Concurrently with each sale the resulting account receivable was assigned to Crocker on the invoices preprinted with legends reflecting the assignment and identifying the assignee as Crocker United Factors, Inc.*fn2

Crocker made every reasonable effort to collect from Effort but was not successful. On January 16, 1981, within the extended period of the Letter of Credit (which by renewal was to expire January 21, 1981), Crocker delivered to Bank its $20,000 sight draft and the following certification (again emphasis has been added for the same reason as above):

  We hereby certify that the funds drawn hereunder
  are due us on account of Everyone's Effort Inc.'s
  failure to pay, within terms quoted therein,
  invoices issued to them by factored clients of
  Crocker Commercial Services, and which are assigned
  to Crocker Commercial Services, 1 IBM Plaza, Suite
  3335, Chicago, Illinois 60611. We also certify that
  demand for payment has been made, and the funds
  have not been forthcoming from Everyone's Effort,
  Inc. or any other source.

Although not required to do so Crocker accompanied the draft and certification by copies of the underlying invoices and a summary schedule on a "Crocker United Factors, Inc." form, listing past due invoices aggregating $37,392.50. Its forwarding letter concluded:

  Please use the enclosed return envelope for your
  payment, otherwise it may result in unnecessary
  delays in processing. If you have any questions,
  please retain all documents and place an urgent
  telephone call to the undersigned at (312)
  853-3460.

Instead Bank waited until the Letter of Credit had expired and wrote Crocker January 30, 1981 stating:

  The documents on their face are not in accordance
  with the terms and ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.