Pintel v. K. N. H. Mohamed & Bros.

MOORE, P. J.

Appellant Pintel doing business as California Trading Company sued defendants, a partnership with domicile in Ceylon, herein referred to as Mohamed, for breach of contract. Ancillary to his action he caused the attachment of a certain check in the possession of the California Bank at Los Angeles. While it was in the custody of the sheriff, respondent, Mercantile Bank of India, filed a third party claim -‘(Code Civ. Proc., § 689) to the check and the proceeds to be 'derived therefrom. Following a trial of the claim and delivery (action, the court below determined respondent to be owner of ghe check and entitled to its possession. Plaintiff appeals from ehe judgment entered.

se The controversy had its genesis in an irrevocable letter of is edit issued April 23, 1949, by the Citizens National Trust & an.yings Bank of Los Angeles. It was addressed to Mohamed enithe distant island of Ceylon. Under its terms, Citizens Bank Cowde available to the drafts of Mohamed the sum of $23,400

[condition that the drafts be presented with certain docua fots including three sets of a bill of lading made out to the secrer of Citizens Bank. By the terms of the letter of credit,

Co.,

fens Bank agreed with the drawers, endorsers and bona a rev.olders of any drafts drawn thereunder that such instruserted--—-

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ments would be honored on presentation to the bank on or before July 31,1949.

On May 27, 1949, Mohamed drew their draft for $22,848 on Citizens Bank payable to the order of the Mercantile Bank of India, which draft, together with the documents designated by the letter of credit, was delivered to Mercantile Bank on June 8, 1949. At the time of presenting the draft to Mercantile Bank, there was existing an agreement between Mohamed and the Mercantile Bank whereby the former agreed to hold Mercantile Bank harmless and free from any loss or damage which the bank might sustain in consequence of negotiating bills drawn by Mohamed under letters of credit.

Upon receiving the draft, respondent bank credited the Mohamed account with its amount. On June 11 and 20 Mohamed withdrew a total of 82,000 rupees—a sum in excess of the draft. At that time, respondent had no knowledge of plaintiff’s claim to the draft or the moneys payable thereon, and forwarded the Mohamed draft to the Bank of Montreal in San Francisco for collection. The latter forwarded it to the California Bank in Los Angeles—which institution presented it to the Citizens Bank for payment. It was promptly paid by a cashier’s check. Immediately after the California Bank received this cheek appellant caused it to be attached (Code Civ. Proc., § 537) which was followed by the third party claim of Mercantile Bank and the judgment in its favor.