The Southern Cotton Oil Co., Inc. v. Merchants National Bank

Southern Cotton Oil Co., Inc. (Southern) brought this suit on the basis of three “draft” instruments which the Merchants National Bank (Bank) held for extended periods of time before returning them to Southern. 1 The District Court, following a trial without a jury, found that the Bank exercised reasonable care and dismissed Southern’s complaint. We affirm that judgment on the basis of (i) both parties’ argument at trial that these “drafts” were not “documentary drafts” as that term is defined under U.C.C. § 5 — 103(l)(b), 2 (ii) the District Court’s implied finding that the Bank was in this…