pas de deux

“perfect movement of two together”

Supreme Court of the United States
Swift v. Tyson, 41 U.S. 1 (1842)
This high court has once and again decided the very question involved in this case, in the case of Coolidge v. Payson, 2 Wheat. 66-73, and in Townsley v. Sumrall, 2 Pet. 170-80. The general rule as to negotiable paper is, that where it is not unlawful and void in its inception, he to whom it is transferred, while current, in due form, and who receives it in good faith, and for a valuable consideration, without notice of anything which would exonerate the maker or acceptor of it from paying it to the one from whom he receives it, can recover its amount from such maker or acceptor, although the party from whom he received it could not. 1 Ld. Raym. 738; 1 Salk. 126; 3 Ibid. 71; Grant v. Vaughan, 3 Burr. 1516. But surely, the discharge of a just debt is a valuable consideration. 1 Com. Dig. (New York ed. of 1824) 300, tit. 'Action on the Case upon Assumpsit,' B. 3, 'Discharge of a debt a good consideration to raise an assumpsit.' In Baker v. Arnold, 3 Caines 279, it was decided by the supreme court of New York, that in an action by the indorsee of a note, not void in its creation, and indorsed before it became due, the consideration, as between the previous parties to the note, could not be inquired into. In Russell v. Ball, 2 Johns. 50, a decision upon similar principles will be found. Cited also, Warren v. Lynch, 5 Johns. 239. Herein the music for the right foot is in tune to: “and indorsed before it became due.”

522 US 211 Fidelity Financial Services Inc v. V Fink
The District Court affirmed on substantially the same grounds, as did the Eighth Circuit, holding a transfer to be perfected when the transferee takes the last step required by state law to perfect its security interest. … Held: A transfer of a security interest is "perfected'' under §547(c)(3)(B) on the date that the secured party has completed the steps necessary to perfect its interest, so that a creditor may invoke the enabling loan exception only by satisfying state law perfection requirements within the 20-day period provided by the federal statute. Section 547(e)(1)(B) provides that "a transfer of . . . property . . . is perfected when a creditor on

(c) Copyright 2011 j.mcguire@swbell.net

a simple contract cannot acquire a judicial lien that is superior to the interest of the transferee.'' This definition implies that a transfer is "perfected'' only when the secured party has done all the acts required to perfect its interest, not at the moment as of which state law may retroactively deem that perfection effective. A variety of considerations support this conclusion, including §546, which raises a negative implication that Congress did not intend state relation-back provisions or grace periods to control a trustee's power to avoid preferences, and the fact that, under Fidelity's reading, the net effect of the 1994 amendment extending the §547(c)(3)(B) perfection period from 10 to 20 days would be merely to benefit a class of creditors in only ten jurisdictions. Indeed, the broader statutory history of the preference provisions persuasively suggests that Congress intended §547(c)(3)(B) to establish a uniform federal perfection period immune to alteration by state laws permitting relation back. Thus, the statutory text, structure, and history lead to the understanding that a creditor may invoke the enabling loan exception only by acting to perfect its security interest within 20 days after the debtor takes possession of its property.

Whereas the left foot dances to the tune of: “holding a transfer to be perfected when the transferee takes the last step required by state law to perfect its security interest.”

The music for today’s modern securitization process would be better described as out of tune and offbeat in efforts to accommodate a four footed horse dancing the bull dung dingo.

Commonly, the Note was not properly negotiated by applying required indorsement in concert with failure to comply with the states requirements for securing the security to the Note.

Not only was the saddle forgotten but there was not even a horse to saddle, and it appears that

Nobody wore their dancing shoes to the Crooked Securitization Jubilee.

(c) Copyright 2011 j.mcguire@swbell.net

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