Chelsea Factors, Inc. v. United States

MADDEN, Judge.

The plaintiff sues, claiming that it is the assignee of the proceeds of a contract between the Government and Suburban Frosted Foods, Inc. The Government asserts numerous defenses. The plaintiff is a corporation that engages only in the business of lending money on the security of specific merchandise. Its customers are wholesalers who need funds with which to purchase merchandise for resale, and who can pledge with the plaintiff as collateral their warehouse receipts or other evidence of title to the merchandise. When the borrower resells the merchandise, he has to obtain the…