Board of Trade of San Francisco, and Electronic Arrays, Inc., Plaintiff-In-Intervention/appellant v. Swiss Credit Bank

This action arose out of the dishonor of a letter of credit issued by Swiss Credit Bank (SCB) in favor of Antex Industries (Antex) to cover the sale of 92,000 electronic integrated circuits, or “chips,” manufactured by Electronic Arrays (Arrays) for use in electronic computers.

The magistrate found that the dishonor was justified because Antex failed to comply with the manner of shipment specified in the letter of credit. We affirm.

BACKGROUND

The buyers of the chips, North American Trading Corporation (North American), arranged. for SCB to open the letter of credit in favor of Antex and for Bank of America National Trust and Savings Association, San Francisco (BA) to act as advising bank. To obtain drafts on the credit, Antex had to present BA with various documents, including “full set clean on board bills of lading consigned to the Chase Manhattan Bank, Tokyo, for account of North American Foreign Trading Corporation, New York.”

Antex made a partial shipment of the chips by air and presented BA with a draft for $176,000 and documents covering the shipment. BA questioned whether the air waybill conformed to the terms of the credit, in other words, whether “full set clean on…