secured interest and before it is perfected (Section 9-301(1)(c)); that a trustee in bankruptcy is a 'lien creditor' as defined by the Code from the date the petition in bankruptcy is filed (Section 9-301(3)).
The fact that the reclamation petitioner did not file his security agreements in the office of the Secretary of the Commonwealth until after the first meeting of creditors had been held and a trustee elected and after he had both notice and knowledge of the bankruptcy is not disputed. It follows, therefore, that the security interests of the reclamation petitioner were unperfected at the time of the bankruptcy and they were subordinated to the rights of the trustee as a 'lien creditor.'
The same would hold true under Section 70, sub. c, of the Bankruptcy Act.
Reclamation petitioner seeks to escape from the dilemma in which he finds himself by relying on Section 9-401(2) of the Code which reads:
'A filing which is made in good faith in an improper place or not in all of the places required by this section is nevertheless effective with regard to any collateral as to which the filing was proper and with regard to all collateral against any person who has knowledge of the filing of the financing statement which indicates that a security interest in all collateral wherever located was intended.'
He urges that such partial filing as was accomplished prior to bankruptcy was made 'in good faith' and that it constituted notice to the trustee and all other creditors of the bankrupts and was constructive 'knowledge of the filing of a financing statement which indicated that a security interest in all collateral wherever located was intended.'
While the language of this Section is not as clear as it might be, it is evident that petitioner's construction would nullify Section 9-401(1) which is the primary statutory provision governing where filing shall take place. Furthermore, as Referee Hiller well points out:
'This is unsound reasoning. It ignores at the outset the distinction between notice and knowledge. There is no showing anywhere that the trustee had knowledge as of the date of bankruptcy or as of the date of his election on March 15, 1957 of any filing whatsoever by the petitioner. It is difficult to understand moreover what the petitioner nad the Code mean by a filing which is made 'in good faith' in an improper place or not in all of the places required by the Code. One may ask, under what circumstances is a filing not made 'in good faith'? Conceivably petitioner's filing after bankruptcy, with knowledge of the bankruptcy, could have been a filing not made in good faith. We think it fairly certain and sound that a failure to comply with the filing requirements of the Code cannot be excused by a mere showing of good faith on the part of the party whose omission brought him to grief.'
The case of In re Consorto Construction Co., 3 Cir., 212 F.2d 676, 679, decided by the Third Circuit in 1954, does not help the petitioner. There the chattel mortgage was properly recorded before bankruptcy and for that reason alone the lien creditor's rights became superior to those of the trustee in bankruptcy. The trustee's rights, based on Section 70, sub. c of the Bankruptcy Act, are the rights of a hypothetical lien creditor whose lien accrues only on the date of bankruptcy 'whether or not such a creditor actually exists.' As Judge Hastie points out, the mortgage was properly recorded before bankruptcy and therefore 'anyone subsequently obtaining an interest in or claim against the property was subordinated to the lien.' For that reason alone the chattel mortgagee properly prevailed over the trustee.
The order of the Referee denying the reclamation petition is affirmed.