Court Opinion

ID: 9457872
Source: CourtListenerOpinion
Date Created: 2023-08-04 20:36:00.219306+00
Date Added: 2024-06-11T17:35:32.831339
License: Public Domain

ELY, Circuit Judge (dissenting):
I respectfully dissent. As I interpret the majority opinion, it is based primarily upon tacit acceptance of the appellant’s acquiescence in the District Court’s legal conclusion that the Bank’s security interest was in “general intangibles,” and thus could be perfected without filing a financing statement. Unlike my Brothers, I adhere to the established principle that “the court cannot be controlled by agreement of counsel on a subsidiary question of law.” Swift & Co. v. Hocking Valley Ry. Co., 243 U.S. 281, 289, 37 S.Ct. 287, 290, 61 L.Ed. 722 (1917). See also, Estate of Sanford v. Commissioner of Internal Revenue, 308 U.S. 39, 51, 60 S.Ct. 51, 84 L.Ed. 20 (1939). In my view, therefore, the majority’s discussion amounts to nothing more than an advisory opinion.
As the majority recognizes, the payments due Nunnemaker from Nilsen were attributable to hauling services rendered by Nunnemaker. The Official Code Comment, quoted in footnote four of the majority opinion, leads me to believe that the district judge erred in categorizing the collateral as “general intangibles.” It is only “in some special cases” that “a contract right to receive money crystallizes not into an account but into a general intangible, for in such cases it is a right to payment of money that is not ‘. . . for services rendered.’ ” Uniform Commercial Code § 9-106, Comment (emphasis added). The effect of correctly categorizing the collateral as an “account” is that perfection could be achieved only by complying with the Code’s filing requirements. See Cal. Com.Code § 9302(1).
The Bank did not file a financing statement; therefore, its interest was not perfected within the four-month period. In this type of case, section 60a(2) of the Bankruptcy Act provides that the transfer “shall be deemed to have been made immediately before the filing of the petition.” I would hold, contrary to the majority’s conclusion, that the transfer was thus accomplished within the four-month period.
There remains the issue concerning the effect of Cal.Com.Code § 9108, the antecedent debt provision. I agree with the majority that there was a “security agreement” which elevated the Bank to the status of a “secured party.” Furthermore, section 9108, by its terms, would afford its protection to a “secured party,” without imposing any requirement that the party “perfect” his security interest. Hence, under California law, the transfer, even though deemed made immediately before the filing of the petition, would not be on account of an antecedent debt. Under section 60a of the Bankruptcy Act, however, the transfer immediately before filing the petition was on account of the antecedent debt, i. e., the loan of February 23. The majority, in concluding that there is no conflict between the state and federal statutes, relies heavily on its belief, which I think mistaken, that the Bank had perfected its security interest. As I have previously shown, that interest had not been perfected. I therefore see a conflict between the Bankruptcy Act’s policy against secret liens and the California Code’s relation-back approach, and the conflict should, of course, be resolved in favor of the federal enactment. Elliott v. Bumb, 356 F.2d 749, 755 (9th Cir. 1966).
I would reverse.