Appeal from the United States District Court for the Eastern District of Illinois. No. BK-72-410 - James L. Foreman, Judge.
Fairchild, Chief Judge, Castle, Senior Circuit Judge, and Cummings, Circuit Judge.
John Lester Griswold was adjudicated a voluntary bankrupt on July 21, 1972. On four occasions between October 1969 and September 1971, he purchased eleven tractors, some with trailers, from defendant Harris Truck & Trailer Sales, Inc. These purchases were made under four discrete and separately perfected security agreements and had not been fully paid for at the time of Griswold's adjudication. None of the four security agreements was ever consolidated.
Two of the eleven motor vehicles were seized by other creditors of Griswold and are not involved herein. A third was delivered to defendant for repairs seven months before the bankruptcy. This vehicle apparently remained in defendant's possession until its sale on October 5, 1972. The other eight units in question were repossessed by defendant because of Griswold's default between July 8 and 24, 1972, and were sold between July 16, 1972, and August 10, 1973. All sales but one*fn1 occurred after Griswold was adjudicated bankrupt and without notice to or the permission of the bankruptcy judge.
Under two of the security agreements, defendant sold the units for gains of $2,489.95 and $3,955.13 respectively over what was owed under the agreements. Under the remaining two security agreements, defendant sold the units for losses of $2,552.82 and $9,120.84. In February 1973, defendant filed its claim in the bankruptcy proceeding for $8,898.87.*fn2
Adam W. Pabst, who had been appointed Trustee in Bankruptcy on August 22, 1972, filed an amended petition on May 13, 1974, for an order directing defendant to make an accounting of the proceeds of the sales of the repossessed equipment and to show cause why he should not be paid the sales proceeds. In its answer to the petition, defendant asserted that it had an unsecured claim against the bankrupt calculated as follows:
July 16, 1972, sale with loss under
August 10, 1973, sale with loss
agreement dated 9/27/71 9,120.84