Assignment Of Claims Act Of 1940

Assignment Of Claims Act Of 1940-75
It found it unnecessary to consider whether a creditor or bona fide purchaser could have obtained rights in the 0,000, prior to the endorsement and mailing of the government check on November 27, since it thought that the "delivery of the moneys to the assignee was complete" at that time. The court also recognized that in this respect state law controlled decision. For "Even where the state of the forum adopts and applies as its own the law of the state where the injury was inflicted, the extent to which it shall apply in its own courts a rule of law of another state is itself a question of local law of the forum." See Magnolia Petroleum Co. The Court of Appeals recognized that only such a "parting with property" in the check, as would preclude the debtor from transferring any interest in the check to a creditor or bona fide purchaser, would perfect the transfer to respondent within the meaning of § 60a. But if the statute adopts the local conflict of laws rules, the present case would turn on New York law, even though the applicable rule adopted by New York were the same as the substantive law of Massachusetts. Under the federal rule, respondent is entitled to retain the assigned money which it received without notice of the prior assignment to the surety.

It found it unnecessary to consider whether a creditor or bona fide purchaser could have obtained rights in the 0,000, prior to the endorsement and mailing of the government check on November 27, since it thought that the "delivery of the moneys to the assignee was complete" at that time. The court also recognized that in this respect state law controlled decision. For "Even where the state of the forum adopts and applies as its own the law of the state where the injury was inflicted, the extent to which it shall apply in its own courts a rule of law of another state is itself a question of local law of the forum." See Magnolia Petroleum Co. The Court of Appeals recognized that only such a "parting with property" in the check, as would preclude the debtor from transferring any interest in the check to a creditor or bona fide purchaser, would perfect the transfer to respondent within the meaning of § 60a. But if the statute adopts the local conflict of laws rules, the present case would turn on New York law, even though the applicable rule adopted by New York were the same as the substantive law of Massachusetts. Under the federal rule, respondent is entitled to retain the assigned money which it received without notice of the prior assignment to the surety.

Hence it is unnecessary to decide whether the problem of choice of law under § 60a is to be resolved by federal standards, or whether that section also adopts the conflict of laws rules of the forum.

Section 60a in this respect, as do numerous other federal statutes, see Davies Warehouse Co. As we have seen, § 1 (30) includes in the term "transfer" "every . There is no contention that the substantive law of Massachusetts determines the legal effect of these acts, nor that that law differs from the law of New York.

For here the payment was made by the Government to the assignor, which paid it to respondent before the assignment was validated by the requisite notices and consent. What constitutes a transfer and when it is complete within the meaning of § 60a of the Bankruptcy Act is necessarily a federal question, since it arises under a federal statute intended to have uniform application throughout the United States.

For the purpose of determining the adequacy of the second ground, it is unnecessary to consider the effect of the assignment upon the right of respondent, as an assignee, to demand payment from the Government or the assignor of the amounts due on the contract. The question is thus presented whether the endorsement and mailing of the check to respondent operated as a transfer on the date of mailing, rather than on the date of its receipt, so that the transfer was made and perfected before the four months period.

That question is whether a check, made payable to the bankrupt and endorsed and mailed by it to respondent more than four months before bankruptcy, but received by respondent and credited upon the bankrupt's antecedent debt within the four months, is, by the applicable law, a transfer within the four months period, within the meaning of § 60a. § 203, declares that the assignment of any claim upon the Government shall be "absolutely null and void" unless made after the allowance of the claim and the issue of a warrant for its payment.

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We granted certiorari on a petition raising questions important to the administration of the Bankruptcy Act, only one of which we find it necessary to decide. Section 1 (30) of the Bankruptcy Act declares that "`transfer' shall include the sale and every other . CHIEF JUSTICE STONE delivered the opinion of the Court. Respondent moved for summary judgment under Rule 113 of the New York Rules of Civil Practice, on the ground that the transfer did not occur within four months of bankruptcy, and hence was not a preference under § 60a. It was agreed that the loans were to be repaid from the money to be received under the contract. On November 28th, which was exactly four months before the petition in bankruptcy was filed on March 28, 1941, respondent received the checks and credited 0,000 of the proceeds of the government check on four promissory notes of the debtor, aggregating 0,000. One is that while the assignment was not perfected until December 5, 1940, within the four months period, when the necessary notices had been given and consent obtained, the assignment was to be regarded as then retroactively validated as of its date of November 22, 1940, which was more than four months before the bankruptcy. Beginning in October, 1940, respondent, a trust company, made loans from time to time to the debtor to finance its operations under the government contract. The debtor on that date endorsed the check and mailed it to respondent, accompanied by its own check for the sum of 0,000, made payable to respondent and drawn upon the debtor's account with respondent. The Court of Appeals resolved this question in respondent's favor upon two independent grounds. Under the federal rule, a subsequent assignee is entitled to retain assigned moneys which it receives without notice of a prior assignment. The provisions of the statute governing assignments of claims against the Government are for the protection of the Government and not for the regulation of the equities of the claimants as between themselves. 347, 358-359: "The test under the statute as amended in 1938 is, as I have said, whether no ` bona fide purchaser from the debtor and no creditor could thereafter have acquired any rights in the property so transferred superior to the rights of the transferee therein.' The `standards which applicable state law would enforce against a good faith purchaser' or against a creditor must be applied here. In any event the affidavits fail to establish the asserted priority of the surety over respondent. Hence the claim, if it exists, is not one which could be adjudicated here. Hence it is unnecessary to consider whether, as the Court of Appeals held, the trustee is without standing to assert alleged rights of the surety. [From] the time that the check was deposited in the mail . ., delivery of the moneys to the assignee was complete." Petitioner, relying on Martin v. The Court of Federal Claims rejected Applied's challenge to the government's setoff. Applied sought review of the government's actions in the Court of Federal Claims, arguing that the setoff violated the terms of the settlement agreement on Contract No. The Court of Federal Claims rejected each of Applied's arguments and granted summary judgment in favor of the government. § 15, barred the government from taking a setoff against the funds in the termination settlement agreement. The affidavits submitted on the motion for summary judgment do not frame any such issue, and we are not pointed to any allegation in them that any amount is due and owing from the bankrupt to the surety. These facts, which were sufficient in that case to require that the subsequent assignee relinquish the transferred funds, are lacking here. The surety, whose claim, if it has one, is adverse and superior to that of petitioner and the other creditors, is not a party to this suit. The Martin case does not control here, since the subsequent assignee in that case took with notice of an earlier assignment and as part of an obviously fraudulent scheme.

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