Bank of America National Trust & Savings Ass'n v. Vrooman

Bank of America appeals from a judgment upholding the referee’s decision in a bankruptcy contest over the proceeds of the bank’s liquidation of certain stock *939originally owned by the bankrupt, Ire-dale.

Iredale, to secure a loan from the bank, pledged as collateral 547 shares of Sears, Roebuck and Company stock. The collateral pledge agreement contained a “dragnet clause,” a common provision in collateral agreements purporting to give a secured lender the right to look to all the debtor’s assets in the lender’s hands to cover all the debtor’s liabilities to the lender, past and future as well…