Basic Tool Industries, Inc. v. C. Douglas Wikle, Trustee

Basic Tool Industries, Inc., appellant herein, appeals to this court from an order of the United States District Court for the Southern District of California, Central Division, affirming an order of a referee in bankruptcy which determined that appellant’s chattel mortgage was void as against the trustee in bankruptcy. This court has jurisdiction under the provisions of 11 U.S.C.A. § 47 and 28 U.S.C.A. § 1291 .

The facts in the case are generally undisputed. On August 22, 1958, a petition in bankruptcy was filed against Jet Air-Age, Inc., hereinafter called the bankrupt. Prior to that time the bankrupt was engaged in the machine shop business in Gardena, California. Among the bankrupt’s assets taken into possession by the trustee in bankruptcy were various items of machinery, equipment, fixtures, etc., which were the subject of and described in a chattel mortgage in favor of appellant.

During the period from February 19, 1958, to August 5, 1958, appellant made various loans to the bankrupt at the times and in the amounts set out in the margin.

Certain of the referee’s findings of fact and conclusions of law adopted by the district court were as follows:

Section 70e of the…