The Hub Carpet Company (the Hub), a New York company, agreed in writing on May 23, 1921 to assign its accounts receivable to Ratner (plaintiff). The assignment served as security for two loans totaling $30,000. The arrangement was secret. The Hub gave Ratner a list of outstanding accounts each month, and the accounts on the September 23 list were worth $90,000. Ratner had the right to demand an accounting and require the payments be applied to the loans, but the Hub was under no obligation to do so until then. The Hub collected the payments but continued to use the proceeds as it liked. Four months after the assignment, the Hub was forced into involuntary bankruptcy in the United States District Court for the Southern District of New York. Ratner asked the court to force Benedict (defendant), the receiver and trustee, to turn over money collected on the accounts. Benedict objected, claiming that the assignment was fraudulent under New York law, and asked the court to force Ratner to turn over any money he had collected. The district court held Ratner’s assignment valid and his title to the accounts perfected by delivery of the September 23 list. The appellate court affirmed. Benedict petitioned the Supreme Court of the United States for certiorari, which was granted.