Motores De Mexicali, S.A. v. Bank of America National Trust & Savings Ass'n

Between March 5 and April 3, 1953, Motores de Mexicali, S.A., 1 sold five automobiles to Erbel, Inc., a California corporation doing business as Bi-Rite Auto Sales. 2 Physical possession with bills of sale and the Mexican title documents pertaining to each car was delivered in Mexico to a representative of Bi-Rite, who drew nonnegotiable drafts for the purchase price of these cars. These drafts, which were delivered to Motores, were payable through Bank of America National Trust & Savings Association, 3 and by their own terms provided that they were to be forwarded for “collection only” and that they were to be transmitted to the Bank with the documents of title.

As to no one of these cars was the draft accompanied by the title documents or bills of sale. The drafts of the first two cars were dishonored by Bi-Rite on March 18, 1953, and were returned to Motores’ bank in Mexico, which again forwarded them to the Bank on March 28, where they were again dishonored and returned on May 19. After these two drafts had been returned, Motores delivered three other cars to Bi-Rite, with bills of sale and Mexican title certificates, on April 2. These drafts were dishonored on April 7, and…