In the Matter of Amex-Protein Development Corporation, Bankrupt. M. Nolden, Trustee of Estate of Bankrupt v. Plant Reclamation

This is an appeal filed pursuant to § 24 of the Bankruptcy Act ( 11 U.S.C. § 47 ) from a judgment of the district court holding that a valid and enforceable security interest was created under the provisions of the Uniform Commercial Code.

We adopt the following opinion of the Honorable George B. Harris, United States District Judge for the Northern District of California:

“This matter is on review from an Order of the Referee which declared invalid a security interest claimed by petitioner Plant Reclamation, a creditor of the bankrupt, in certain personal property in the possession of the bankrupt.

“Plant Reclamation had sold equipment to the bankrupt on open account, but on October 16, 1972, substituted a promissory note for the open account indebtedness and caused a financing statement to be signed and filed. The parties intended to create a security interest in the property sold as collateral for the note, and the Referee so found.

“The promissory note included the following line: ‘This note is secured by a Security Interest in subject personal property as per invoices.’ The words ‘subject ... as per invoices’ were handwritten in an otherwise typewritten sentence;…