Consolidated Aluminum Corporation v. Bank of Virginia and Graf-Comm., Inc.

MURNAGHAN, Circuit Judge:

The question presented here is a narrow one of commercial law. Consolidated Aluminum Corporation contracted to sell merchandise to Graf-Comm, Inc. Previous difficulties over payment and the fact that Consolidated had had experience of GrafComm’s prior bankruptcy reorganization, resulted in Consolidated’s requiring security for payment before it would ship goods sold to Graf-Comm. The security took the form of a letter of credit issued by the Bank of Virginia, by which the Bank undertook to honor a purchase price draft in an amount up to $35,000. That sum was to cover…