United States v. Code Products Corp.

KIRKPATRICK, District Judge.

This is a petition by the chattel mortgagee of certain machinery for an order directing the return to him of the mortgaged property. It is opposed by the Government which has a claim against the debtor for taxes. The pertinent facts are as follows:

The chattel mortgage in question was given on September 20, 1950, and recorded the next day. Later it was assigned to Herbert Scharf, the petitioner. In 1952 the mortgaged property was transferred to Code Products Corporation, subject to the mortgage. On June 20, 1955, Code Products filed a petition for reorganization…