Garris v. Sears, Roebuck & Co. (In re Garris)
Garris v. Sears, Roebuck & Co. (In re Garris)
Opinion of the Court
OPINION
The query, presented through the debt- or’s motion for reconsideration of our order of February 9, 1984, is whether a payment, made within the ninety day vulnerability period provided by 11 U.S.C. § 547(b)
The facts of this controversy are delineated as follows:
We note that a judgment obtained by a party in Philadelphia Municipal Court creates a lien on all realty of the judgment debtor within the confines of Philadelphia County. 42 Pa.Cons.Stat.Ann. §§ 1124 and 4303 (Purdon 1981). The parties are in apparent agreement that the lien was fully secured. When perfection of a lien such as in the case at bench occurs prior to the ninety day preference period, § 547(b)(5) is not met and consequently, any payment in satisfaction of that lien within the vulnerability period is not avoidable. In Re Markim, Inc., 15 B.R. 56 (Bankr.E.D.Pa. 1981). Such is clearly the situation in the instant-ease.
As stated above, in the case at issue Sears admitted in its answer that the debt- or met the requirement of § 547(b)(5) although in the parties’ briefs they contested whether the payment of the $659.81 at settlement effected a transfer within the meaning of § 547(b). Although the resolution of this case is more clearly supportable under § 547(b)(5), it is likewise tenable under § 547(b)(4) and § 547(e)(1)(B). Section 547(e)(1)(B) states that for the purposes of § 547 “(B) a transfer of a fixture or property other than real property is perfected when a creditor on a simple contract cannot acquire a judicial lien that is superior to the interest of the transferee.” Since Sears’ debt was fully secured prior to the running of the preference period, $659.81 payment is deemed to have occurred at the time of the perfection of the lien. § 547(e)(1)(B); In Re Wolfarth, 27 B.R. 746 (Bankr.S.D.Pla. 1983); In re Church Buildings and Interiors, Inc., 14 B.R. 128 (Bankr.W.D.Okla. 1981); In Re Burnette, 14 B.R. 795 (Bankr.E.D.Tenn. 1981). Thus, the payment is not deemed effected within the ninety day preference period and is unavoidable. § 547(b)(4); Markim, 15 B.R. 56.
We will consequently enter an order denying the motion for reconsideration.
. In relevant part § 547(b) states as follows:
(b) Except as provided in subsection (c) of this section, the trustee may avoid any transfer of property of the debtor—
(1) to or for the benefit of a creditor;—
(2) for or on account of an antecedent debt owed by the debtor before such transfer was made;
(3) made while the debtor was insolvent;
(4) made—
(A) on or within 90 days before the date of the filing of the petition; or
(B) between 90 days and one year before the date of the filing of the petition, if such creditor, at the time of such transfer—
(1) was an insider; and
(ii) had reasonable cause to believe the debtor was insolvent at the time of such transfer; and
(5) that enables such creditor to receive more than such creditor would receive if—
(A) the case were a case under chapter 7 of this title;
(B) the transfer had not been made; and
(C) such creditor received payment of such debt to the extent provided by the provisions of this title.
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(e)(1) For the purposes of this section—
(A) a transfer of real property other than fixtures, but including the interest of a seller or purchaser under a contract for the sale of such property from the debtor against whom applicable law permits such transfer to be perfected cannot acquire an interest that is superior to the interest of the transferee; and
(B) a transfer of a fixture or property other than real property is perfected when a creditor on a simple contract cannot acquire a judicial lien that is superior to the interest of the transferee.
Vf Vf * Vi Vi *
. This opinion constitutes the findings of fact and conclusions of law required by Bankruptcy Rule 7052 (effective August 1, 1983).
Reference
- Full Case Name
- In re Benjamin D. GARRIS, Debtor. Benjamin D. GARRIS v. SEARS, ROEBUCK & COMPANY
- Status
- Published