Reference no: EM131760968

Allied Chemical, a U.S. exporter, shipped chemicals to Banylsa in Brazil under bills of lading showing that the goods were consigned to the order of Banylsa. Allied sent the bill of lading, draft, and invoice to a Brazilian bank for collection, together with a letter of instruction to deliver the documents only on payment of the sight drafts. In the meantime, the goods had arrived in Brazil and were put into a warehouse under the supervision of the port authority. However, in Brazil and in some other Latin American countries, it is customary for goods to be released from a state warehouse to anyone holding either a bill of lading or a carta declaratoria. The latter is not a bill of lading, but only a document indicating that Brazilian import fees have been paid. Banylsa obtained a carta declaratoria from Lloyd and used it to obtain possession of the goods from the warehouse. Banylsa never purchased the bill of lading and never paid for the goods. Banylsa then became insolvent and filed for receivership in Brazilian civil court. Allied sued Lloyd for misdelivery in New York. Judgment for whom, and why? Explain a bailment. Allied Chemical International Corp. v. Companhia De Navegacao Lloyd Brasileiro, 775 F.2d 476 (2nd Cir. 1985).