Wilshire Oil Company of California v. John Costello, as Trustee of the Estate of Elliott Oil Co., Bankrupt

BARNES, Circuit Judge:

Appellee Costello is trustee of the estate of Elliott Oil Company, a bankrupt. The district court held he was the owner of the bankrupt’s accounts receivable, and any moneys paid thereon, free and clear of any claim of appellant Wilshire Oil Co.

Bankrupt had assigned these accounts to appellant on November 19, 1959, as security for $100,000 in notes representing an indebtedness to Wilshire. Wilshire collected after default on the notes on February 15, 1961. On March 27, 1961, Elliott Oil filed a voluntary petition in bankruptcy, one year and four months after assignment.

Th…