Refinance Corp. v. Northern Lumber Sales, Inc.

Defendants appeal from a judgment for plaintiff for $54,025.77, growing out of a contract for the “factoring” by plaintiff of all accounts receivable of defendant Northern Lumber Sales, Inc. (hereinafter designated as Northern); performance of the obligations of this contract was guaranteed by the individual defendants, John M. Goughian and Xerline Goughian, his wife. Plaintiff sued upon the ground that certain receivables were sold and assigned to it, between June 3,1955, and August 10, 1955, which were “false, fictitious and non-existent for the reason that said defendant Northern Lumber Sales, Inc., did not sell or deliver merchandise to the persons named in said bills of sale, and no accounts receivable were due, owing and payable as set forth in said bills of sale.” The court found this allegation to be true, held that plaintiff had been damaged in the sum of $62,379.41, and, after adjusting the account between, the parties, awarded judgment for the sum first mentioned herein.

Plaintiff Refinance Corporation (hereinafter designated as Refinance) was engaged in the factoring of accounts receivable in the sense of buying same for its own account from vendors of various…