Chief Justice Rehnquist delivered the opinion of the Court.
Under the Bankruptcy Code's preference avoidance section, 11 U. S. C. § 547, the trustee is permitted to recover, with certain exceptions, transfers of property made by the debtor within 90 days before the date the bankruptcy petition was filed. We granted certiorari to decide whether, in determining if a transfer occurred within the 90-day preference period, a transfer made by check should be deemed to occur on the date the check is presented to the recipient or
The relevant facts in this case are not in dispute. The debtor
Respondent Johnson was appointed trustee for the bankruptcy estate. He filed an adversary proceeding against petitioner, claiming that the check payment was recoverable by the estate pursuant to 11 U. S. C. § 547(b). That section generally permits the trustee to recover for benefit of the bankruptcy estate transfers of the debtor's property made within 90 days of the bankruptcy filing. Respondent asserted that the transfer occurred on November 20, the date the check was honored by the drawee bank, and therefore was within the 90-day period. Petitioner defended by claiming that the transfer occurred on November 18, the date he received the check (the so-called "date of delivery" rule), and that it therefore fell outside the 90-day period established by § 547(b)(4)(A).
The Bankruptcy Court concluded that a date of delivery rule should govern and therefore denied the trustee recovery. The trustee appealed, and the District Court affirmed. The trustee then appealed to the Court of Appeals for the Tenth Circuit.
In relevant part, § 547(b) provides:
. . . . .
"(4) made—
Section 547(e) provides further guidance on the meaning and dating of a transfer. For purposes of § 547, it provides
Our task, then, is to determine whether, under the definition of transfer provided by § 101(54), and supplemented by § 547(e), the transfer that the trustee seeks to avoid can be said to have occurred before November 20.
"What constitutes a transfer and when it is complete" is a matter of federal law. McKenzie v. Irving Trust Co., 323 U.S. 365,
A person with an account at a bank enjoys a claim against the bank for funds in an amount equal to the account balance. Under the U. C. C., a check is simply an order to the drawee bank to pay the sum stated, signed by the maker and payable on demand. U. C. C. §§ 3-104(1), (2)(b), 2 U. L. A. 224 (1991). Receipt of a check does not, however, give the recipient a right against the bank. The recipient may present the check, but, if the drawee bank refuses to honor it, the recipient has no recourse against the drawee. § 3-409(1), 2A U. L. A. 189 (1991).
That is not to say, however, that the recipient of a check is without any rights. Receipt of a check for an underlying obligation suspends the obligation "pro tan to until the instrument[`s] . . . presentment[;] . . . discharge of the underlying obligor on the instrument also discharges him on the obligation." § 3-802(1)(b), 2A U. L. A. 514 (1991). But should
With this background we turn to the issue at hand. Petitioner argues that the Court of Appeals erred in ignoring the interest that passed from the debtor to the petitioner when the check was delivered on a date outside the 90-day preference period. We disagree. We begin by noting that there can be no assertion that an unconditional transfer of the debtor's interest in property had occurred before November 20. This is because, as just noted above, receipt of a check gives the recipient no right in the funds held by the bank on the drawer's account. Myriad events can intervene between delivery and presentment of the check that would result in the check being dishonored. The drawer could choose to close the account. A third party could obtain a lien against the account by garnishment or other proceedings. The bank might mistakenly refuse to honor the check.
The import of the preceding discussion for the instant case is that no transfer of any part of the debtor's claim against the bank occurred until the bank honored the check on November 20. The drawee bank honored the check by paying it. U. C. C. § 1-201(21), 1 U. L. A. 65 (1989) (defining honor); § 4-215(a), 2B U. L. A. 45 (1991). At that time, the bank had a right to "charge" the debtor's account, § 4-401, 2B U. L. A. 307 (1991)—i. e., the debtor's claim against the bank was reduced by the amount of the check—and petitioner no longer
In the face of this argument, petitioner retreats to the definition of "transfer" contained in § 101(54). Petitioner urges that rather than viewing the transaction as involving two distinct actions—delivery of the check, with no interest in property thereby being transferred, and honoring of the check, with an interest being transferred—that we instead should view delivery of the check as a "conditional" transfer. We acknowledge that § 101(54) adopts an expansive definition of transfer, one that includes "every mode . . . absolute or conditional . . . of disposing of or parting with property or with an interest in property." There is thus some force in petitioner's claim that he did, in fact, gain something when he received the check. But at most, what petitioner gained was a chose in action against the debtor.
Finally, we note that our conclusion that no transfer of property occurs until the time of honor is consistent with § 547(e)(2)(A). That section provides that a transfer occurs at the time the transfer "takes effect between the transferor and the transferee . . . ." For the reasons given above, and in particular because the debtor in this case retained the ability to stop payment on the check until the very last, we do not think that the transfer of funds in this case can be said to have "taken effect between the debtor and petitioner" until the moment of honor.
Recognizing, perhaps, the difficulties in his position, petitioner places his heaviest reliance not on the statutory language but on accompanying legislative history. Specifically, he points to identical statements from Representative Edwards and Senator DeConcini that "payment of a debt by means of a check is equivalent to a cash payment, unless the check is dishonored. Payment is considered to be made when the check is delivered for purposes of sections 547(c)(1) and (2)." 124 Cong. Rec. 32400 (1978); id., at 34000. We think this appeal to legislative history unavailing.
To begin, we note that appeals to statutory history are well taken only to resolve "statutory ambiguity." Toibb v. Radloff, 501 U.S. 157, 162 (1991). We do not think this is such a case. But even if it were, the statements on which
Affirmed.
Justice Stevens, with whom Justice Blackmun joins, dissenting.
In my opinion, a "transfer" of property occurs on the date the check is delivered to the transferee, provided that the check is honored within 10 days. This conclusion is consistent with the traditional commercial practice of treating the date of delivery as the date of payment when a payment is made by a check that is subsequently honored by the drawee bank.
The definition of the term "transfer" in § 101(54) is plainly broad enough to encompass the conditional transfer of the right to funds in the debtor's bank account that occurs when the debtor delivers a check to a creditor. Section 101(54) defines a "transfer" as "every mode, direct or indirect, absolute or conditional, voluntary or involuntary, of disposing of or parting with property or with an interest in property. . . ." 11 U. S. C. § 101(54) (1988 ed., Supp. II). A check
Of course, the fact that delivery of a check effects a "transfer" within the meaning of the Code does not answer the question whether the trustee may avoid the transfer by check in this case because § 547(b) only authorizes the trustee to avoid transfers made "on or within 90 days before the date of the filing of the [bankruptcy] petition." 11 U. S. C. § 547(b)(4)(A). That raises the question: When did the "transfer" occur? Section 547(e)(2) provides the answer. It states that for purposes of the preference avoidance section, § 547, a transfer is made:
The Court interprets this section as supporting its conclusion that the transfer does not occur until the check is honored by the drawee bank because, it reasons, a transfer cannot take effect between the transferor and transferee as long as the transferor retains the ability to stop payment on the check. Ante, at 401. But that reasoning is foreclosed by § 101(54), which states that even a conditional transfer is a "transfer" for purposes of the Code. Because delivery of a check effects a conditional transfer from the transferor to the transferee, the "transfer" is made, for purposes of § 547, on the date of delivery, provided that the transfer is "perfected" within 10 days as required by § 547(e)(2).
As the Court of Appeals for the Seventh Circuit recognized, the use of the term "perfected" is "jarring" because the meaning of the word "perfected" is not immediately apparent in this context. Global Distribution Network, Inc. v. Star Expansion Co., 949 F.2d 910, 913 (1991). "Debtors transfer assets; creditors perfect security interests." Ibid. The answer lies in the fact that the term "perfected" has a broader meaning in § 547(e) than it does in the Uniform Commercial Code. Section 547(e)(1)(B) states that "a transfer of . . . property other than real property is perfected when a creditor on a simple contract cannot acquire a judicial lien that is superior to the interest of the transferee." Under this definition, a transfer by check is "perfected" when the check is honored because after that time no one can acquire a judicial lien superior to the interest of the transferee.
Thus §§ 101(54) and 547, when read together, plainly indicate that a "transfer" by check occurs on the date the check
An additional consideration reinforces this interpretation of the statutory text. The Courts of Appeals are unanimous in concluding that the date of delivery of a check is controlling for purposes of § 547(c), and the Court does not dispute that conclusion for the purposes of its decision today. Ante, at 402-403, n. 9. These Courts of Appeals decisions are consistent with the legislative history,
I would therefore reverse the judgment of the Court of Appeals.
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