Easton Tire Co. v. Farmers & Merchants Bank

SMITH, Presiding Judge.

Plaintiff, Easton Tire Company, appeals from the trial court’s judgment in favor of defendant, Farmers and Merchants Bank, on plaintiff’s action to recover damages for wrongful dishonor of an irrevocable letter of credit. The matter was tried to the court. We affirm.

Prior to July 1978 Arrowhead Tire Company sought to purchase tires from plaintiff on a regular and substantial basis. Because of its belief of Arrowhead’s undercapitalization, plaintiff agreed to make such sales on credit only if Arrowhead secured a letter of credit from a bank in favor of plaintiff.…