one question from CDCS practice test 4

[ofei]

Dear all,
Right now I found one question from test 4. It's below:
An LC calls for a B/L issued to the order of issuing bank. The presented BL shows that it was made out to the order of shipper and endorsed to the order of issuing bank. Is the BL acceptable?
A. Yes B. No
The reference answer is B.However i couldn't agree to it.
I once talked about it with T.O.Lee.He thinks if the document is made so, it would be better for the issuing bank, coz he can be the holder in due course. Though this concept only occurs in draft, check or promissory note. But it does occur in USA legislations, ie. the commercial code.
So the answer should be A.
Your comments to it appreciated.

[Currer]

Dear Ofei,

I agree with you, the answer should be A, the B/L is complying. But my opinion is based on a different reason.

While the B/L has not been issued to the order of the bank initially, the bank's position is now exactly as if the B/L have been issued to order of it from the very beginning.

Thus, from the document checker's point of view it is now the issuing bank which holds the power to endorse this document. And this is exactly the position required by the documentary credit.


Kind regards


Currer

[shahriar]

i read that article from mr. Lee also. he did say this. but so far i remember he at last agreed that the BL was discrepant!!

regd

shahriar

[ofei]

Dear shahria,
I don't know which article you were reading by Mr. Lee. From the contents he explained , he would accept answer A. Will u tell me the title of the mentioned article?

Regards

Ofei

[shahriar]

dear ofei,

please check this. http://www.lcviews.com/swq_101.htm

here Mr. Lee gave a similar opinion on a similar issue. but he didnt forget to mention the "bankers perspective". im not saying that you are wrong or the question answer is correct. there is every possibility that the answer suggested here may be wrong. so just for a discussion..

regd

shahriar