James J. Biggins, Jr., as Trustee for Peterson Ford, a California Corporation v. Southwest Bank, a California Corporation

This is an appeal by a trustee in bankruptcy from an adverse decision rendered by the district court sitting under its original jurisdiction over all matters and proceedings in bankruptcy. Jurisdiction lies with this Court under 11 U.S.C. § 47 .

The facts were stipulated to at trial, and were set forth by the district court. See 322 F.Supp. 62, 63-64 (S.D.Cal., 1971). For purposes of this discussion, those facts presented by the district will be summarized as follows.

Appellant, as trustee for the bankrupt, Peterson Ford, brought an action against Southwest Bank under section 60 of the Bankruptcy Act, 11 U.S.C. § 96 , seeking to recover the value of property and credits allegedly taken and received from Peterson Ford as voidable preferences in relation to other creditors of the same class. Southwest Bank claims that it is entitled to the property and credits by reason of a perfected security interest under the California Commercial Code, and by reason of a banker’s lien exercised under the common law.

Peterson Ford, a retail automobile dealer, was a customer of Southwest Bank, which financed the former’s sales and service of new and used cars. On October 10, 1966, Peterson Ford…