This section contains the nature of the case and procedural background.

In January of 1986, J & J Wine, ordered a shipment of wine from P, through an importer, Frank Sutton & Co. Payment was to be made through an international letter of collection handled by Edekabank in Germany and D in the United States. On March 27, D received the letter of collection, bill of lading and invoices from Edeka. Payment was due 'on arrival of goods in Houston harbor,' and called for D to notify Sutton 'in case of any difficulty of lack payment.' The invoices noted an estimated time of arrival: April 2, 1986. D then presented the documents to J & J Wine on March 27. J & J Wine did not pay the amount due and asked D to hold the letter for a time while J & J Wine worked to raise the money for payment. D did not notify Edeka or Sutton. D did nothing further until early May when Sutton informed them that the wine was still at the Houston port and D cabled Edeka for further instructions. The wine had arrived in Houston on March 31, but D did not receive notice of that. The wine sat, exposed, at Houston harbor in metal containers until it had deteriorated completely. U.S. Customs agents eventually sold it at auction. J & J Wine subsequently went out of business, and P was never paid for the wine. P sued D alleging that D had negligently failed to inform it of J & J Wine's failure to pay and that because of that negligence, the wine had spoiled at Houston harbor. The district court entered a take-nothing judgment for D. It held that payment was not due until the wine's arrival, and D had no notice of that arrival and no duty to inquire further. D had no knowledge that J & J Wine was in breach of the payment terms. P appealed. D presented the letter of collection and the other documents to J & J Wine for payment on March 27, 1986, before the wine had arrived and before the payment was due. P argues that once D presented the documents, it had a duty to inform Edeka of any problem in collecting J & J Wine's payment.

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