Caterpillar Financial Services v. Peoples National Bank, N.A.

Federal 7th Circuit Court
Civil Court
Citation
Case Number: 
No. 12-2854
Decision Date: 
March 4, 2013
Federal District: 
S.D. Ill.
Holding: 
Affirmed
Dist. Ct. did not err in entering judgment in favor of plaintiff in action accusing defendant of converting sales of collateral to which plaintiff had secured claim that was superior to secured claim of defendant. While record showed existence of three secured claims to same collateral, and that defendant had acquired third-party’s secured claim that was more senior than plaintiff’s secured interest in collateral, defendant could not enforce third-party’s secured interest where defendant had failed to produce copy of third-party’s actual security interest to said collateral. As such, defendant could not establish that third-party’s security interest covered collateral that defendant took possession to satisfy its loan. Moreover, defendant could not invoke “composite document theory” as substitute for actual security agreement by relying on financing statement that recited existence of security and subordination agreements, where financing agreement was unclear whether missing security agreement had itemized equipment in which third-party had acquired security interest.