Court Opinion

ID: 9450706
Source: CourtListenerOpinion
Date Created: 2023-08-04 16:55:44.031322+00
Date Added: 2024-06-11T17:32:25.593129
License: Public Domain

SCHNACKENBERG, Circuit Judge,
(dissenting):
I find it necessary to dissent. The district court erred in holding that the designations under the factor’s lien executed and delivered within four months of bankruptcy related back to October 5, 1960, the date the notice of factor’s lien was filed. Under Burns’ § 43-1202, a factor’s lien does not attach to specific merchandise until such merchandise is designated in one or more written statements dated and signed by the borrower and delivered to the factor. Notwithstanding the further provision of said section that the lien thus acquired relates back to the date the notice of lien was filed, a transfer occurs under the provisions of §§ 60 and 1(30) of the Bankruptcy Act each time such a designation is made, since the factor’s lien does not become so far perfected that no subse*383quent lien upon such property obtainable by legal or equitable proceedings on a simple contract could become superior to the right of the factor until the designation is made.
If the factor’s lien did not relate back to October 5, 1960, then the factor’s lien obtained by the designation dated September 27, 1962, was a voidable preference on the face of the court’s findings of fact. All of the elements of a voidable preference were found by the court to exist on said date. Accordingly, the plaintiff, at the very least, was entitled to recover the proceeds of the lumber covered by this designation. With respect to the factor’s lien obtained by the designations dated June 6, 1962, July 24,1962, and August 28, 1962, the plaintiff clearly established all of the elements of a voidable preference, and the court’s finding that the defendant had no reasonable cause to believe the bankrupt was insolvent on said dates is clearly erroneous.