Brodie Hotel Supply, Inc. v. United States

Brodie Hotel Supply, Inc. (Brodie), brought' this action against the United States to determine which of the parties had priority, under their respective chattel mortgages, to the proceeds of the sale of certain restaurant equipment. The facts were stipulated and the property was sold and proceeds impounded by agreement. The district court granted summary judgment for Brodie and the United States appeals.

In 1959, Brodie sold the restaurant equipment to Standard Management Company, Inc., for use in a restaurant at Anchorage, Alaska. Standard Management went bankrupt. Brodie repossessed the equipment but left it in the restaurant. With the consent of Brodie, James Lyon took possession of the restaurant and began operating it on June 1, 1964. Throughout the summer of 1964, Brodie and Lyon negotiated over the price and terms under which Lyon was to purchase the equipment.

On November 2, 1964, Lyon borrowed seventeen thousand dollars from the National Bank of Alaska and, as security for the loan, which was evidenced by a promissory note, executed a chattel mortgage covering the restaurant equipment. This equipment consisted of 159 separate types of items, including a refrigerator, a…