Steinmeyer

Defendants Warner Consolidated Corporation and Warner National Corporation (hereinafter “Warner”) appeal from a preliminary injunction restraining presentation of documents necessary to obtain payment under a bank letter of credit. The instrument had been procured by respondent Donald P. Steinmeyer (hereinafter “Steinmeyer”) to assure payment of sums owing upon the purchase by him, from Warner, of the entire capital stock of Tahoe Sierra Development. Corporation.

Steinmeyer executed and delivered to Warner several promissory notes, one of which entitled Steinmeyer to offset “The amount of any loss, liability or damage suffered by or in connection with the provisions of this agreement.” Steinmeyer also caused to be delivered to Warner letters of credit issued by the Bank of America to guarantee payment of the promissory notes. The letter of credit here in question called for payment by the bank upon presentation of the letter of credit, the promissory note and a statement by at least one of Warner’s officers that Steinmeyer had defaulted in paying the note.

Before the letter of credit had been presented for payment. Steinmeyer notified Warner and the bank that he was…