Mennen Medical was a major shareholder.
Mennen decided to sell their shares to a group of investors called Odessey Partners L.P. • To finance the transaction, Mennen executed and delivered a five year promissory note to each plaintiff. • The notes were identical except for the names of the shareholders and the amounts of the notes. • Each note called for five equal annual payments principals starting in September 1991, with monthly interest payments the first year, followed by annual interest payments. • Mennen obtain standby irrevocable letters of credits. • Letters of Credit is a letter obtained from a bank guaranteeing that a buyer’s payment to a seller will be received on time and for the correct amount. • Each of this letters were identical in form except for the name of the beneficiary and face amounts. • On this appeal, appellant Morgan argues that it should be entitled to recover overpayments made to plaintiffs on the UCP governed letters of credit pursuant to pre Uniform Commercial Code common law, notwithstanding that plaintiffs allegedly false documentation facially complied with the terms of the instrument. • Morgan contends that it did not learn until after making payments that the documents fraudulently (as it perceives and alleges the circumstance) specified the amounts owing and, as such, it should be permitted to assert a claim against the payee beneficiaries subsequent to satisfaction pursuant to the letters of credit. • The trial court correctly determined that there are no sustainable or cognizable issues of fact as to fraud. That was impliedly adopted by the Appellate Division. The fraud exception theory of recourse against beneficiaries of letters of credit, thus, provides no outlet for Morgan. • Accordingly, the order of the Appellate Division should be affirmed with costs. • In my opinion, I believe that the letters of credit were pretty clear regarding the amounts and the beneficiaries names, but I also think it can relate to a breach contract and a breach of warranty. • I also believe that the plaintiffs should not return the money that J.P. Morgan over paid.