McKenzie v. Irving Trust Co. - 323 U.S. 365 (1945)
U.S. Supreme Court
McKenzie v. Irving Trust Co., 323 U.S. 365 (1945)
McKenzie v. Irving Trust Co.
Argued December 14, 1944
Decided January 8, 1945
323 U.S. 365
1. The purpose of the Assignment of Claims Act of October 9, 1940, 54 Stat. 1029, is the protection of the Government, and not the regulation of equities of claimants as between themselves. P. 323 U. S. 369.
2. For the purpose of determining whether a transfer is a preference under § 60a of the Bankruptcy Act, that section provides that the transfer shall be deemed to have been made
"when it became so far perfected that no bona fide purchaser from the debtor and no creditor could thereafter have acquired any rights in the property so transferred superior to the rights of the transferee therein."
Since, in the absence of any controlling federal statute, a creditor or bona fide purchaser could acquire rights in the property transferred by the debtor only by virtue of state law, § 60a thus adopts state law as the rule of decision for determining the effectiveness of a transfer and the time when a transfer is deemed to have been made or perfected. P. 323 U. S. 370.
3. In determining in this case that the transfer of a check was completed not later than when the debtor endorsed and mailed the check to its assignee -- rather than when the assignee received the check and credited the proceeds upon an antecedent debt -- the state court applied the proper test under § 60a, and its conclusion that, under state law, the transfer was perfected more than four months before bankruptcy is accepted. Hence, the transfer was not a preference within the meaning of § 60a. P. 323 U. S. 371.
4. In this proceeding by the trustee to set aside an alleged preference, the court cannot adjudicate upon the present record the claim of a surety whose claim, if it has one, is adverse and superior to that of the trustee in bankruptcy and the other creditors, and who is not a party to the suit. P. 323 U. S. 372.
5. Under the federal rule, a subsequent assignee is entitled to retain assigned moneys which it receives without notice of a prior assignment. Martin v. National Surety Co., 300 U. S. 588, distinguished. P. 323 U. S. 373.
292 N.Y. 347, 55 N.E.2d 192, affirmed.
Certiorari, post, p. 687, to review the affirmance of a judgment which dismissed a cause of action in a complaint by the trustee in bankruptcy seeking to set aside an alleged preference.