CITIZENS AND SOUTHERN FACTORS, INC., PLAINTIFF-APPELLANT,
v.
SMALL BUSINESS ADMINISTRATION, AN AGENCY OF THE UNITED STATES, ET AL., DEFENDANTS-APPELLEES
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The court held that the Alabama Supreme Court's rulings on security interests and UCC priority disputes were correct, requiring summary judgment for the defendant.
The case involved a priority dispute over returned goods between an accounts receivable purchaser and another party. The court certified two questions…
The full statement of facts, procedural history, and disposition for this case are member content.
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PER CURIAM:
The result in this case rests on the answers to two questions which we certified to the Supreme Court of Alabama.1 On September 7, 1979, the Supreme Court of Alabama answered the certified questions. Ala., 1979, 375 So. 2d 251. The Court ruled: (1) that the conveyance of title to returned goods to an accounts receivable purchaser results simply in the retention of a security interest in favor of that purchaser, and (2) that the Uniform Commercial Code provision governing the priority dispute involved in the case is § 7-9-312(5), not § 7-9-306(5).
The Government concedes — as it must— and then only after a dying gasp that the Alabama Supreme Court’s holding “flies in the face of” § 7-9-306(5) and is clearly wrong — that the Alabama Supreme Court’s rulings demonstrate that Citizens and Southern Factors’ motion for summary judgment should have been granted by the District Court. Accordingly, the judgment of the District Court is reversed and the case is remanded to the District Court with directions that judgment be entered in favor of Citizens and Southern Factors.
REVERSED and REMANDED WITH DIRECTIONS.
. The facts of this case and the questions certified are reported at 593 F. 2d 729.