Grain Merchants of Indiana, Inc. v. Union Bank and Savings Co.
Is it still good law? What later courts have actually done to this case.
Status
33 later cases cite Grain Merchants of Indiana, Inc. v. Union Bank and Savings Co.; 33 of those citations sat close to treatment language and were flagged for reading, and all of them have been read. Citations that did not sit near treatment language were not flagged and were not read one by one, so a court that weakened this case without using any of that language would not appear here.
Relying on Grain Merchants of Indiana, Inc. v. Union Bank and Savings Co.?
This page shows what later courts did to it. Ask about your specific facts and see whether it still carries your argument, with citations you can check.
Treatments
Superseded by statute
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The court held that § 547(c)(5) displaced Grain Merchants’ protection for floating liens by imposing an improvement in position test.
Meyers v. Vermont National Bank (In Re Music House, Inc.) · United States Bankruptcy Court, D. Vermont · filed
As pointed out in Collier’s 15th Edition Sec. 547.41 the foregoing statute codifies the “improvement in position” test and thereby overrules such cases as DuBay v. Williams, 417 F.2d 1277 (9th Cir. 1969) and Grain Merchants of Indiana, Inc. v. Union Bank and Savings Co., 408 F.2d 209 (7th Cir.).
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The bankruptcy court held that § 547(e)(3) of the 1978 Bankruptcy Code displaced Grain Merchants’ rule that a transfer of after-acquired receivables occurred when the security interest was perfected.
Cox v. General Electric Credit Corp. (In Re Cox) · United States Bankruptcy Court for the District of Maryland · filed
In Grain Merchants, the bankruptcy referee held that an account receivable was transferred to a secured party at the time that the account came into existence. The Seventh Circuit affirmed the District Court reversal of the referee’s decision on the ground that the transfer of the account occurred at the time that the creditor perfected its security interest; Because the creditor had perfected rights in after-acquired accounts receivable more than four months prior to the bankruptcy petition, the Seventh Circuit concluded that the rights subsequently acquired in the accounts were not a preference under § 60(a) of the Act. Such a holding, however, is now expressly contrary to the provisions of § 547(e)(3).
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The court held that § 547(e)(3) displaced Grain Merchants’ timing rule for after acquired receivables.
Diversified World Investments, Ltd. v. Omni International, Ltd. (In Re Diversified World Investments, Ltd.) · United States Bankruptcy Court for the Southern District of Texas · filed
The legislative history reveals that § 547(e)(3) is intended to overrule such cases as DuBay v. Williams, 417 F.2d 1277 (9th Cir.1966), and Grain Merchants of Indiana, Inc. v. Union Bank and Savings Co., 408 F.2d 209 (7th Cir.1967).
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The bankruptcy court held that Bankruptcy Code § 547 displaced Grain Merchants’ former Act rule treating a filed floating lien as perfected before the debtor acquired the collateral.
Jahn v. First Tennessee Bank of Chattanooga (In Re Burnette) · United States Bankruptcy Court for the Eastern District of Tennessee · filed
In re Grain Merchants of Indiana, Inc., ... If the reasoning was strictly followed, a creditor with a floating lien could be preferred by a build-up in the collateral during the preference period. Section 547, particularly (e)(3), 6 was meant to overrule those cases and make it clear that the time of transfer is the time of perfection under Article 9.
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The Bankruptcy Code’s inventory and receivables exception displaced Grain Merchants’ protection for floating liens.
Roemelmeyer v. Walter E. Heller & Co. Southeast (In Re Lackow Bros., Inc.) · United States Bankruptcy Court for the Southern District of Florida · filed
The inventory/receivable exception represents a significant departure from former law as it was construed under the Bankruptcy Act, overruling such cases as DuBay v. Williams, 417 F.2d 1277 (9th Cir. 1969), and Grain Merhants of Indiana, Inc. v. Union Bank and Savings Co., 408 F.2d 209 (7th Cir.); cert. denied, 396 U.S. 827, 90 S.Ct. 75, 24 L.Ed.2d 78 (1969).
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The Seventh Circuit held that § 547(e)(3) displaced Grain Merchants’ rule concerning after-acquired receivables, while distinguishing the garnished wages before it.
In re Coppie · United States Court of Appeals for the Seventh Circuit · filed
This section was enacted to overrule this court’s decision in Grain Merchants of Indiana, Inc. v. Union Bank and Savings Co., 408 F.2d 209 (7th Cir.1969).
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The bankruptcy court held that the transfer-timing rule in Grain Merchants is contrary to § 547(e)(3) of the later Bankruptcy Code.
Tabita v. Internal Revenue Service (In Re Tabita) · United States Bankruptcy Court for the Eastern District of Pennsylvania · filed
In Grain Merchants, for example, the bank-creditor had a security interest in the debtor’s accounts receivable. ... Such a holding, however, is now expressly contrary to the provisions of section 547(e)(3) of the Code.
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The bankruptcy court held that Bankruptcy Code § 547(e)(3) displaced Grain Merchants’ former Act rule on when a transfer of after-acquired property occurs.
Perry v. General Motors Acceptance Corp. (In Re Perry) · United States Bankruptcy Court for the Middle District of Tennessee · filed
Under the Act, it was unnecessary for the debtor to acquire rights in the property before a transfer was complete. See, e.g., Grain Merchants of Indiana, Inc. v. Union Bank & Savings Co., 408 F.2d 209 (7th Cir.) cert. denied, 396 U.S. 827, 90 S.Ct. 75, 24 L.Ed.2d 78 (1969); DuBay v. Williams, 417 F.2d 1277 (9th Cir.1966). 10 The legislative history reveals, however, that § 547(e)(3) was added to overrule these cases and conform the Bankruptcy Code to the commercial practices applied under the Uniform Commercial Code.
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The court held that § 547(c)(5) displaced Grain Merchants’ protection for after acquired inventory and receivables during the preference period.
Savig v. Americana State Bank of Danube (In Re Savig) · United States District Court for the District of Minnesota · filed
Section 547(c)(5) specifically overrules cases upholding a security interest in after-acquired inventory and receivables attaching during the 90-day preference period. ... For example, in Grain Merchants of Indiana, Inc. v. Union Bank and Savings Co., 408 F.2d 209 (7th Cir.1969), decided before enactment of the present Bankruptcy Code, the Court of Appeals held that the creditor bank was entitled to the proceeds of the debtor’s inventory sales and collected receivables, where the sales and collections were generated within the four-month preference period prior to commencement of the debtor’s bankruptcy case.
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The court held that § 547(e)(3) displaced Grain Merchants’ rule on when a transfer of future property occurs.
In re SLL, Inc. · United States Bankruptcy Court for the District of Massachusetts · filed
Section 547(e)(3), as revealed by the legislative history,1 was included to overrule such cases as DuBay v. Williams, 417 F.2d 1277 (9th Cir.1969) and Grain Merchants v. Union Savings Bank, 408 F.2d 209 (7th Cir.1969), cert. den., 396 U.S. 827, 90 S.Ct. 75, 24 L.Ed.2d 78 (1969) which held that the transfer took place when the security agreement was executed and not when the payment was made.
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The Seventh Circuit held that Bankruptcy Code § 547(c)(5) displaced the earlier line of cases that included Grain Merchants.
In Re Ebbler Furniture and Appliances, Inc., Debtor. Donald Samson, Trustee v. Alton Banking & Trust Co. · United States Court of Appeals for the Seventh Circuit · filed
Subparagraph five (5) codifies the “improvement in position test” and overrules an earlier line of cases such as Grain Merchants of Indiana, Inc. v. Union Bank & Savings Co., 408 F.2d 209 (7th Cir.), cert. denied, 396 U.S. 827, 90 S.Ct. 75, 24 L.Ed.2d 78 (1969).
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The court held that § 547(e)(3) displaced the floating lien rule stated in Grain Merchants.
In Re Long Chevrolet, Inc. · U.S. District Court for the Northern District of Illinois · filed
Section 547(e)(3) of the bankruptcy code was enacted by Congress to overrule the “floating liens” theory enunciated in cases such as Grain Merchants of Indiana, Inc. v. Union Bank & Savings Co., 408 F.2d 209 (7th Cir.1969).
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The court held that Bankruptcy Code §§ 547(e)(3) and 547(c)(5) displaced Grain Merchants’ rule on transfers of accounts receivable.
Gull Air, Inc. v. Embraer Aircraft Corp. (In Re Gull Air, Inc.) · United States Bankruptcy Court for the District of Massachusetts · filed
Section 547(e)(3), in conjunction with section 547(c)(5) of the Bankruptcy Code, was intended to overrule DuBay v. Williams 417 F.2d 1277 (9th Cir.1969) and Grain Merchants of Indiana, Inc. v. Union Bank and Savings Co., 408 F.2d 209 (7th Cir.1969).
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The court held that § 547(e)(3) displaced Grain Merchants’ rule for security interests in after acquired property.
Siemers v. AG Services of America, Inc. (In Re Siemers) · United States Bankruptcy Court for the District of Nebraska · filed
Subsection 547(e)(3) of the Bankruptcy Code overrules such cases as Grain Merchants of Indiana, Inc. v. Union Bank & Sav. Co., Bellevue, Ohio, 408 F.2d 209 (7th Cir.1969), cert. denied, France v. Union Bank & Savings Co., 396 U.S. 827, 90 S.Ct. 75, 24 L.Ed.2d 78 (1969), which had concluded that for purposes of bankruptcy preference avoidance, a transfer of certain security interests in after acquired property took place not at the time of perfection but, rather, at the time a security interest was granted, which often took place long before commencement of the 90 day preference period!
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The bankruptcy court held that Bankruptcy Code § 547(e)(3) reversed Grain Merchants’ rule for timing transfers of after-acquired collateral.
Official Committee of Unsecured Creditors of Tousa, Inc. v. Citicorp North America, Inc. (In Re Tousa, Inc.) · United States Bankruptcy Court for the Southern District of Florida · filed
Section 547(e)(3) was enacted specifically to overrule such cases as ... Grain Merchants of Indiana, Inc. v. Union Bank and Savings Co., ... Section 547(e)(3)was expressly enacted to reverse these results.
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