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Creations v. United Parcel Service

April 17, 1975

SILVER CREATIONS, LTD., A CORPORATION OF THE STATE OF NEW JERSEY, PLAINTIFF,
v.
UNITED PARCEL SERVICE, A CORPORATION AUTHORIZED TO DO BUSINESS IN NEW JERSEY, DEFENDANT



Dalton, J.s.c.

Dalton

This is an action initiated by a shipper, Silver Creations, Ltd., against United Parcel Service (UPS), a carrier for hire. The issues are whether the form of payment collected by defendant UPS upon delivery of plaintiff's goods to its consignee, Gotham Sales, was in conformity with the type of payment which it was authorized to receive and whether, by accepting the payment tendered, plaintiff waived any and all claims for breach against the carrier.

The facts are not in dispute, the parties having submitted a stipulated set of facts and legal briefs in lieu of trial.

Under the terms of the shipment contract defendant was required to collect either cash or check. Three deliveries are in dispute. In each delivery defendant collected a check, properly dated on its face, but containing instructions on the reverse side requesting that the check be deposited on a future date.

On the first delivery UPS collected a check from the consignee, Gotham Sales, in the amount of $1,203.30 dated May 16, 1973 on its face, with the written instructions, "Do not deposit until June 2, 1973" on the reverse side. Plaintiff accepted the check from defendant UPS on May 22, 1973 and held it until June 4, 1973, at which time plaintiff deposited it for collection.

On the second delivery defendant collected a check for $602.15 dated May 23, 1973, with the instructions to hold until June 6. Defendant presented the check to plaintiff on May 30 and plaintiff did not deposit it until June 4.

The third check collected, also for $602.15, was dated May 24, 1973 and instructed plaintiff to hold it until June 8. Defendant presented the check to plaintiff on May 31 and plaintiff did not deposit the check until June 4.

The checks, subsequent to their deposit, were returned as uncollectible. Consequently, plaintiff has filed this action for breach of contract, contending that the instruments collected were not checks within the meaning of the Uniform Commercial Code. The complaint originally alleged that defendant had breached the contract by accepting checks which were post-dated.

This court had previously ruled, on a motion for summary judgment by defendant, that since the date on the faces of the checks were the same dates as their issuance, the checks were, as a matter of law, not post-dated. Plaintiff amended its complaint to state that the instructions on the backs of the checks make them conditional promises, thereby removing them from the definition of a check contained in Article 3 of the Uniform Commercial Code. Article 3 provides as follows:

12A:3-104. Form of Negotiable Instruments; "Draft"; "Check"; "Certificate of Deposit"; "Note".

(1) Any writing to be a negotiable instrument within this Chapter must

(a) be signed by the maker or drawer; and

(b) contain an unconditional promise or order to pay a sum certain in money and no other promise, order, obligation or power given by the maker or drawer ...


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