First National Bank of Seattle v. Gidden

Headnote

First Nat. Bank of Seattle v. Gidden, 175 App. Div. 563 , affirmed.

Appeal from a judgment entered January 12, 1917, upon an order of the Appellate Division of the Supreme Court in the first judicial department, reversing a judgment in favor of defendant entered upon a dismissal of the complaint by the court at a Trial Term and directing judgment in favor of plaintiff. A corporation in Seattle sold and shipped to defendant 4,000 cases of salmon, at the same time drawing a draft for the amount of the purchase price, which it sold to plaintiff with the bill of ' lading attached. The draft with the attached bill of lading was sent to the Irving National Bank for collection and after some negotiations, resulting in an extension of time for payment, was accepted by defendant. On the day of maturity defendant sent to the Irving National Bank a certified check for the amount of the draft but neither it nor the warehouse receipt could be found and the check was brought back, the draft remaining unpaid. The next day the draft was found but defendant refused to pay. This action was brought to recover the difference between the amount thereof and the price for which the

salmon was subsequently sold. The trial court dismissed the complaint on the ground that the defendant, under his contract for the purchase of the salmon and the terms of his acceptance of the draft, was entitled to the delivery of the salmon on the day of maturity of his acceptance, and the goods, or the documents representing them, not having been delivered to him on that day he was discharged from his liability on the draft. The Appellate Division reversed on the ground that the bill of lading and warehouse receipt for the salmon were held by the plaintiff as collateral security only; that when the defendant accepted the draft he became obligated to pay it, irrespective of the collateral; and that the failure to surrender the collateral was not a defense to an action on the acceptance.