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PETITIONER: Maurice O'Meara Co.

RESPONDENT: National Park Bank of New York

SUMMARY
FACTS: Sun-Herald had a letter of credit issued in favor of Maurice O’Meara Company’s assignor, Ronconi &
Millar by National Park Bank of New York (National) for payment for newsprint paper. National was to make
payment on presentment by Ronconi of an invoice and shipping documents for each shipment of paper. Ronconi
presented documents that satisfied the requirements of the letter of credit for multiple shipments but National
refused to make payment. Ronconi sued for damages. National contended that payment did not have to be made,
because Ronconi failed to present proof to National that the paper delivered was of the correct weight and strength,
as agreed upon in the contract with Sun-Herald, and that the paper delivered was, in fact, not the correct weight and
strength ISSUE: W/N National can refuse payment due to the fact that the papers are not of the correct weights and
strength HELD: NO. What was involved here was an irrevocable letter of credit, a contract solely between the bank
and plaintiff's assignor, in and by which the bank agreed to pay sight drafts to a certain amount on presentation to it
of the documents specified in the letter of credit. It is not the duty of the bank to ascertain the quality of the papers.

FACTS:

 Sun Herald opened a confirmed or irrevocable credit in the amount of $224,853.30 covering the shipment
of 1322-2/3 tons of newsprint paper
o The said drafts are to be drawn at sight on National Park, and are to be accompanied by the
following documents: (I) Commercial Invoice in triplicate (II) Weight returns and (III) Negotiable
Dock Delivery Order
 O’Meara’s assignor presented drafts for a certain quantity of paper, accompanied by documents which it is
claimed complied with the requirements of the letter of credit. Rejected.
o No evidence was presented to prove that it passed the “11-12 test” to prove that it has the bursting
or tensile strength of eleven to twelve points at a weight of paper of thirty-two pounds

ISSUE: W/N National Park can refuse payment on the basis of failing the quality test- NO

HELD:
 What was involved here was an irrevocable letter of credit, a contract solely between the bank and
plaintiff's assignor, in and by which the bank agreed to pay sight drafts to a certain amount on presentation
to it of the documents specified in the letter of credit.
o This contract was in no way involved in or connected with, other than the presentation of the
documents, the contract for the purchase and sale of the paper mentioned. That was a contract
between buyer and seller, which in no way concerned the bank.
 The bank's obligation was to pay sight drafts when presented if accompanied by genuine documents
specified in the letter of credit.
o If the paper when delivered did not correspond to what had been purchased, either in weight, kind
or quality, then the purchaser had his remedy against the seller for damages.
o Hence, the bank had no right to insist that a test of the tensile strength of the paper be made before
paying the drafts. Nor did it even have a right to inspect the paper before payment, to determine
whether it in fact corresponded to the description contained in the documents. The letter of credit
did not so provide.
o A provision giving it such right, or imposing such obligation, might, of course, be provided for in
the letter of credit. The letter under consideration contains no such provision.