Bank, who states that until February 16, 1989, the date of a hearing in the bankruptcy court, he had no knowledge of the existence of PACA, and thus, that the debtor's receivables might be subject to a trust, and had no knowledge that certain of the debtor's *377 suppliers claimed an interest in the debtor's receivables superior to the Bank's security interest. Mr. Schwerin further states that pursuant to the terms of the Bank's security agreement with the debtor, the Bank received weekly reports concerning the debtor's accounts receivable, and that these reports showed that the debtor made beverage sales representing approximately three percent of the debtor's average monthly sales. The parties agree that beverages are not a perishable agricultural commodity. Significant for present purposes, however, is thesubject monies were trust funds that the bank was required to refund. The district court affirmed.
On appeal, the Fifth Circuit Court of Appeals analyzed the legislative history of the Packers and Stockyards Act and concluded that its trust provisions were intended to protect unpaid cash sellers against the competing claims of lenders with security interests in inventory and accounts receivable. In arriving at its opinion sustaining the district court, the court stated that "those who receive a transfer of assets from the commingled fund with actual or constructive notice of the trust" are subject to the claims of the trust beneficiaries, and that "the Bank had constructive notice of the trust because a federal statute created the trust". Id. at 1011. See also In re G & L