Merchants National Bank of Mobile v. United States

The plaintiff bank seeks to recover the unpaid balance under a contract by which the plaintiffs assignor, Concept National, Inc. ("Concept”), agreed to furnish goods to the government. The bank received the assignment as security for a loan it made to Concept to finance the transaction. The financing took the form of an international letter of credit. The goods were manufactured in Korea, and the government refused to pay for part of the goods upon their delivery in the United States, because they were defective. The plaintiff does not deny that the goods were defective but contends that the…