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Sweetwater Cattle Co., L.L.C. v. Leigh Murphy (In re Charles & Margaret Leonard), Ch. 11, BK15-82016, A16-8002 (July 22, 2016)

In a priority dispute between the man who sold cattle to the debtor but didn't receive payment for them and the lender and  feedlot that financed and fed the cattle for the debtor, the court granted summary judgment to the lender and the feedlot. The seller sent a valid bill of sale with the cattle, which transferred title to the debtor. The seller relied on the debtor's word and took no steps to protect himself against the risk of non-payment. Title did not revest in the seller when the debtor failed to pay. Even if the seller were to have a security interest in the cattle, the perfected security interest of the lender took priority over the seller's unperfected interest because, under U.C.C. § 2-403, the debtor was able to transfer greater title rights to the lender as a good-faith purchaser than he could claim himself.

Date: 
Friday, July 22, 2016
Judge: 
Judge Thomas L. Saladino