HCC Credit Corp. v. Springs Valley Bank & Trust Co.
Supreme Court of Indiana
712 N.E.2d 952 (1999)
Lindsey Tractor Sales, Inc. (Lindsey) bought inventory from Hesston Corporation (Hesston) on credit from HCC Credit Corporation (HCC) (plaintiff). HCC had a perfected purchase-money security interest in the inventory and proceeds. Lindsey was required to pay HCC immediately after a sale. Over the years, Lindsey had numerous loans from Springs Valley Bank & Trust Co. (Bank) (defendant), typically totaling over $100,000. In 1991, Lindsey sold fourteen tractors and deposited the money into its general account. Instead of paying HCC, Lindsey used the proceeds of the sale, $199,122, and other funds to pay the Bank $212,104.75. Lindsey did not discuss the payment, which was not yet due, with the Bank beforehand. The payment was the largest Lindsey had ever made to the Bank. Lindsey filed for bankruptcy in December 1991. HCC sued the Bank to recover the proceeds from the sale of its collateral. Both parties moved for summary judgment. The court granted the Bank’s motion, which was affirmed on appeal. HCC appealed to the Supreme Court of Indiana.
Rule of Law
Holding and Reasoning (Sullivan, J.)
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