Borg-Warner Acceptance Corp. v. First National Bank of Prestonsburg

HAYES, Judge.

This appeal arises from a finding in the Floyd Circuit Court favorable to the plaintiff bank and unfavorable to the United States and the Borg-Warner Corporation.

It presents rather complex questions of interpretation of the Federal Tax Lien Statute, of the Kentucky law on the effect of unrecorded mortgages against third parties, and of the time at which an equitable mortgage will be deemed to have been created.

On October 25, 1973, Shoppers Faire, Inc. executed and delivered to the First National Bank a promissory note in the amount of $53,500.00. On the same day, a purported…