Barnhill v. Johnson

503 U.S. 393 (1992)

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Barnhill v. Johnson

United States Supreme Court
503 U.S. 393 (1992)

Facts

On November 18, Alan Atwell and others (collectively, Atwell) (debtors) paid William Barnhill (creditor) with a check that the drawee bank honored on November 20. Atwell subsequently filed for Chapter 11 bankruptcy. November 20 was the ninetieth day before Atwell’s bankruptcy. Elliot Johnson, the bankruptcy trustee, filed an adversary proceeding seeking to recover the Barnhill payment as preferential under Bankruptcy Code (code) § 547(b), which permitted a trustee to recover certain debtor transfers that occurred in the 90 days preceding bankruptcy. Per the trustee, the transfer occurred during the 90-day preference window because November 20 was the transfer date for the purposes of § 547(b). Barnhill responded that the § 547(b) transfer date was the check-delivery date (November 18). The bankruptcy court ruled that the transfer date was the delivery date. The district court affirmed. The court of appeals reversed, holding that the transfer occurred when the drawee bank honored the check. Barnhill appealed, arguing that (1) code § 101(54) defined “transfer” to include the conditional dispositions of property or a property interest and that the check delivery was a conditional transfer and (2) the legislative history for code § 547(c) demonstrated Congress’s intent that the delivery date be the transfer date.

Rule of Law

Issue

Holding and Reasoning (Rehnquist, C.J.)

Dissent (Stevens, J.)

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