Investment Service Co. v. North Pacific Lumber Co.

The plaintiff, as assignee of a bank, is attempting to recover the invoice price for lumber sold to defendant. The bank contends it is entitled to recover because Browne, a lumber producer, assigned the proceeds of the invoice to it and transferred a security interest in the lumber to it. The defendant, a lumber wholesaler, contends it does not owe the entire invoice for the reason that it has a setoff because of defective lumber which Browne previously sold defendant.

Prior to all the sales involved here, the bank did perfect its security interest in Browne’s lumber inventory.

Browne shipped a…