(dissenting) :
I am unable to join with the majority in their decision that the Packers & Stockyards Act, 7 U.S.C. § 181 et seq., and the regulations issued thereunder, prevail over the Uniform Commercial Code by imposing a trust upon proceeds of sale of meat products processed from cattle carcasses delivered by the sellers, thus entitling the sellers to recover as beneficiaries of the trust. Neither the general scope of the Act nor the specific regulations relied upon support the majority’s conclusion. Prior cases in this circuit and elsewhere have rejected contentions that with respect to matters not specifically covered by it, the Act supplanted what might be termed commercial law of the states.
The District Court concluded as a matter of law that CIT had a perfected lien on the inventory and accounts receivable of Samuels & Co., Inc. (“Samu-els”) which prevailed over the rights of the sellers under the U.C.C., as adopted by the State of Texas, Tex.Bus. & Comm.Code Ann. § 1 — 101 et seq. (Tex. *564U.C.C. 1968) and rejected the conclusion of the referee that the interests of the sellers were paramount.1 The majority majority revérse the District Court’s conclusion of law and reinstate that of the referee.
The majority conclude that in certain circumstances the Act, considered together with the regulations and the usages of the trade, imposes a trust upon proceeds in the hands of a meat packer, received by the packer from the sale of meat products. The “certain circumstances” are these: the cattle must have been received by the packer in the type of transaction well known to the trade and described by 9 CFR 201.99, pursuant to which regulation the packer is required to maintain the identity of carcasses when the animals are killed and also maintain sufficient records concerning the carcasses; and the packer has destroyed the identity of the, carcasses by processing them into fungible meat products.2 Under these circumstances the majority impress a trust relationship with the consequence that Samuels has less than full title, and the seller, as beneficiary of the trust, has an equitable interest conferring on him a status superior to that of CIT which, as secured creditor, held a lien on the inventory and accounts receivable of Sam-uels. Obviously this does considerable violence to the state commercial law concerning passage of title to chattels, manner of perfecting liens, and the protective scope of liens. The predicate for this imposition of a trust consists of implications drawn from the overall scheme of the Act and from Regulation 201.99, neither of which expressly makes Samuels a fiduciary.
The Act was promulgated in 1921 as a regulatory and antitrust act to deal with monopolistic and deceptive practices of the major stockyards and meat packers. Stafford v. Wallace, 258 U.S. 495, 42 S. Ct. 397, 66 L.Ed. 735 (1922); Denver Union Stock Yard v. Producers Livestock Marketing Ass’n, 356 U.S. 282, 78 S.Ct. 738, 2 L.Ed.2d 771 (1958). In 1958 and 1968 it was amended to meet changed conditions in the industry by authorizing broader authority for regulation by the Secretary of Agriculture and by more precisely delineating the division of authority between the Federal Trade Commission and the Secretary of Agriculture. 1958 U.S.Code Cong. & Admin.News p. 5213; 1968 U.S.Code Cong. & Admin.News p. 2864.
I am unable to find, nor do the majority refer to any legislative history evidencing Congressional intent that — except to the extent specifically done — the Act should supplant or modify the general body of state laws governing commercial transactions. Congress has not undertaken to regulate every aspect of the packing and stockyards industry, so state law continues to fill out the federal regulatory scheme. Florida Lime & Avocado Growers, Inc. v. Paul, 373 U.S. 132, 83 S.Ct. 1210, 10 L,Ed.2d 248 (1963); Chemical Specialties Manufacturers Ass’n, Inc. v. Clark, 482 F.2d 325 [1973].
In numerous cases the contention has been repeatedly made that the Act, by its overall regulatory sweep of the industry or by implications drawn from *565its specific provisions, has supplanted or modified commercial law of the states.3 In Sig Ellingson & Co. v. DeVries, 199 F.2d 677 (CA8), cert. denied, 344 U.S. 934, 73 S.Ct. 505, 97 L.Ed. 719 (1953), plaintiff sold his cattle to Brackey and received a worthless check. Brackey then sold the cattle through defendant Ellingson, a livestock commission merchant licensed as a market agency under the Act. Plaintiff sued Ellingson for conversion. The District Court found that under applicable state law (of Iowa and Minnesota) title does not pass to one paying with a worthless check, so that ownership and right to retake possession remained in plaintiff who was thus entitled to recover from Ellingson. Ellingson recognized that the Act did not purport to declare specifically the respective rights of owners and market agencies in such a situation. It contended, however, that the overall regulatory scheme of the Act, which treats stockyards and market agencies as public utilities and imposes regulations upon them, and the specific provisions of the Act requiring nondiscriminatory practices and prohibiting unjust, unreasonable and discriminatory practices and depriving the commission merchant of the freedom to choose his own customers, overrode the state law which made the market agency liable for conversion of the cattle. The Eighth Circuit rejected this as had the District Court, saying:
But it appeared to the trial court that the liability of the defendant market agency to plaintiffs which resulted from its sale of the cattle under the law of Iowa and of Minnesota was not affected either by the terms or by necessary implications of the federal Act. The services performed by the market agencies were in the nature of public utility services vitally necessary to the movement of livestock in interstate commerce before the passage of the Packers and Stockyards Act. It was on that ground that Congress had and exercised the power to regulate them for the prevention of unjust discriminations and abuses. But Congress made no attempt to declare who should be deemed the owner of cattle turned over for a bad check nor to relieve the market agencies from liability imposed by State law for selling cattle for principals who were not the owners. The Act was aimed at unjust discrimina-tions incompatible with public utility operations, but it in no wise impairs the freedom of the market agencies to adopt proper measures to prevent and suppress frauds. The court was convinced that the Act has not superseded the law of Iowa or of Minnesota under which the defendant in this case became liable to the plaintiffs.
The opinion of the trial court and cases cited reflect that earnest arguments have been presented on behalf of the livestock market agencies to the effect that the law governing their liability or immunity in such a case as is here presented ought to be uniform at all the markets regulated under the federal Act and that the agencies ought not to be held liable for conversion in respect to cattle sales made under such circumstances as are found in this case. There are also cogent considerations of the same abstract character tending strongly to contrary conclusions. But we see no occasion to add further to that discussion. We find no error in the conclusion of the trial court that the Packers and Stockyards Act does not, either by express provision or by necessary implication, establish the rights of the parties to this action resulting from the sale of the 33 head of cattle. State law is controlling and we find no error in the declaration and application of that law by the trial court.
199 F.2d at 679. A companion case reached the same result. Sig Ellingson *566& Co. v. Butenbach, 199 F.2d 679 (CA8), cert. denied, 344 U.S. 934, 73 S.Ct. 505, 97 L.Ed. 719 (1953).4
Subsequently on facts parallel to those of Ellingson the Tenth Circuit gave effect to the law of Arkansas, producing an ultimate result on liability precisely the opposite of the result in Ellingson. Under Arkansas law one giving a worthless check acquires defeasible title, so that a commission agent who sold cattle for such a person was not liable to the original owner who had parted with the cattle for the worthless check. Adams v. Greeson, 300 F.2d 555 (CA10, 1962).
In 1954 this circuit followed the two Ellingson cases and held that the Act did not absolve market agencies from liability under Texas law for sale of cattle obtained by worthless cheek. John Clay & Co. Livestock Commission v. Clements, 214 F.2d 803 (CA5, 1954).5
Numerous state cases, including a Texas case, have rejected arguments that the Act has supplanted state law in various commercial transaction contexts. Walker v. Caviness, 256 S.W.2d 880 (Tex.Civ.App.1953), Mason City Prod. Credit Ass’n. v. Sig Ellingson & Co., 205 Minn. 537, 286 N.W. 713, cert. denied, 308 U.S. 599, 60 S.Ct. 130, 84 L.Ed. 501 (1939), and Moderie v. Schmidt, 6 Wash.2d 592, 108 P.2d 331 (1940) [market agent liable for sale of mortgaged or stolen cattle]; Birmingham v. Rice Bros., 238 Iowa 410, 26 N.W.2d 39, 2 A. L.R.2d 1108 (Iowa), cert. denied, 332 U.S. 768, 68 S.Ct. 79, 92 L.Ed. 353 (1947) [same facts as in Ellingson v. DeVries, supra,]. See also, First Nat. Bank v. Siman, 67 S.D. 118, 289 N.W. 416 (1939), and Citizens State Bank v. Farmers Union Livestock Co-op Co., 165 Kan. 96,193 P.2d 636 (1948).
The only federal case contrary to the above body of case law appears to be Sullivan & Co. v. Wells, 89 F.Supp. 317 (D.Neb.1950), decided prior to the Ell-ingson cases, Adams v. Greeson, and the decision of this circuit in John Clay & Co., and relying upon what was recognized to be a minority view originating from state courts in Missouri and Kentucky.
While tangential to the case before us, which does not directly relate to powers of the Secretary of Agriculture, a body of case law points out that certain efforts of the Secretary to act with regard to matters governed by the commercial law of the states are beyond the jurisdiction conferred upon him by the Act. In Guenther v. Morehead, 272 F.Supp. 721 (S.D.Iowa, 1967), Banks falsely represented to plaintiff that he had purchased 64 head of cattle for plaintiff at Milan Livestock Auction, and plaintiff gave Banks a check payable to Milan *567bearing the notation “for 64 head of cattle.” Instead of applying the check to any account of plaintiff, Banks gave it to -Milan in part payment for hogs he had previously bought. Plaintiff complained to the Secretary of Agriculture who, under 7 U.S.C. § 210(e), ordered Milan to repay plaintiff. Milan refused to pay and plaintiff sued to enforce. The court considered 7 U.S.C. §§ 206, 208, 212 and 213, and concluded that Milan’s wrongful negotiation of plaintiff’s check for a purpose other than that noted on its face was a matter outside the Secretary’s jurisdiction. 272 F.Supp. at 721. In McClure v. E. A. Blackshere Co., 231 F.Supp. 678 (D.Md. 1964), the Secretary of Agriculture had entered an order awarding damages, pursuant to 7 U.S.C. § 210(e), directing a dealer to pay sellers for cattle sold. The defendant refused to comply and the sellers sued on the order under § 210(f). The District Court found that the Secretary had no jurisdiction to enter the order. It considered 7 U.S.C.A. §§ 201-203, 205-207, 211-217 and rejected their applicability. The Secretary had based his order on the theory that an unjustified failure to pay for livestock purchased was a violation of § 208, requiring market agencies to establish and observe just and reasonable practices in respect to the furnishing of stockyard services and forbidding contrary practices. The court found that this was the only section of even arguable application, and, after considering a mass of legislative history and finding it uninformative, at page 682 footnote 3 of 231 F.Supp., found that the section did not relate to ordinary debtor-creditor relationships.6
The language of Regulation 201.99 does not specifically make the packer a trustee of either cattle purchased or of the proceeds. It imposes upon the packer duties to make known to the seller the details of the purchase contract, to identifiably maintain the livestock and the carcasses therefrom, to transmit a written account of the purchase, and to maintain sufficient records.7
Samuels was a packer, one who buys livestock for slaughter, manufactures and prepares the meat and stock for sale or shipment in commerce, and markets the meat in commerce. 7 U.S.C. § 191. The deleterious acts of packers at which the Act was directed consisted of monopolistic and discriminatory market practices. See Armour & Co. v. United States, 402 F.2d 712 (CA7, 1968); Swift & Co. v. United States, 393 F.2d 247 (CA7, 1968); Swift & Co. v. United States, 317 F.2d 53 (CA7, 1963). The packer’s role in the industry is different from that of market agencies and dealers, and the Act and the regulations recognize this and treat him differently. The financial abuses at which the Act was directed were those of market agencies and dealers and stockyards. A market agency buys and sells cattle on a commission basis or furnishes stockyard services, 7 U.S.C. § 201(c), and a dealer buys and sells cattle, 7 U.S.C. § 201(d). Market agencies and dealers must register, 9 CFR 201.10, and must be bonded to secure their financial obligations. 7 U.S.C. § 204, 9 CFR 201.27-34. As early as 1923 the Secretary promulgated a regulation which prohibited market agencies from using funds of owners or consignors of livestock or mingling such funds with its own, a regulation which *568made the market agency a fiduciary in relation to the proceeds of sales of livestock handled by it for customers. United States v. Donahue Bros., 59 F.2d 1019 (CA8, 1932). The present regulations continue the fiduciary relationship, forbid the market agency from using customers’ fund for its own purposes either directly or through the “float” in the agency’s bank account, and specifically require maintenance of a separate custodial bank account for these funds held as fiduciary. 9 CFR 201.40, 201.-42; Bowman v. United States Dept. of Agriculture, 363 F.2d 81 (CA5, 1966). The financial practices of packers are not regulated in the same manner, they are not bonded to secure their financial obligations, and they need not segregate funds. The cases which the majority .cite as imposing a fiduciary duty on Samuels involved regulatory violations and financial abuses by stockyard owners, market agencies, and dealers, not by packers. Bowman v. United States, supra; Glover Livestock Commission v. Hardin, 454 F.2d 109 (CA8, 1972); United States v. Donahue Bros., Inc., supra,,8 The Act gives a private cause of action against stockyards, market agencies and dealers, 7 U.S.C. § 209, but none against packers, who are subject to administrative charges at the hands of the Secretary. 7 U.S.C. §§ 191-95.
At the end of their opinion the majority refer to 9 CFR 201.43 which requires a packer to promptly pay sellers, as a custom and usage of the trade binding on Samuels and CIT. The U.C.C. itself provides for consideration of industry usages and practices, which may constitute part of the agreement made by parties, §§ 1 — 201 and 1 — 205, but the effect of incorporation of usage and practice into the agreement is also governed by the U.C.C. § 1 — 102(c). Delivery of goods with a duty on the recipient to promptly pay does not, under U.C.C., alter the consequence that title passes upon delivery with the seller having only a seller’s security interest, § 2 — 401, which in the circumstances of this case (no financing statement having been filed and no notice given to CIT, § 9 — 312(c)) is junior to the lien of a secured creditor, or having a right to reclaim under § 2 — 507 and 2 — 702 (in this instance, not timely asserted). Thus custom and usage are employed by the majority to override the specific provisions of state law which provide both for giving effect to custom and usage and the consequence of doing so, and to produce an ultimate result the reverse of that commanded by state law.
Of course, there are areas of state commercial laws which are modified or supplanted by federal regulatory measures. The Miller Act, 40 U.S.C. § 270a et seq., and bonds furnished under it, present matters for application of federal law, Indemnity Insurance Co. v. Browning-Ferris Mach. Co., 227 F.2d 804 (CA5, 1955), as do surety bonds required of market agencies and dealers under the Packers & Stockyards Act, USF&G v. Quinn Bros., 384 F.2d 241 (CA5, 1967). But these spring from specific statutory provisions — in the case of the market agency or dealer, 7 U.S.C. § 204 authorizes the Secretary to require the bond under rules and regulations which he may, and has, prescribed, 9 CFR § 201.27, et seq. — or by implication in circumstances different from those here present. The history and the language of the Act, the language of Regulation 201.99, the pattern of regulations making fiduciaries of others in the industry, and the case law all are inconsistent with overriding state law by implication in this instance.
. Neither the District Court nor this court is bound by the clearly erroneous rule in reviewing conclusions of law made by a district court in its review of a referee’s order. International Minerals & Chemicals Corp. v. Moore, 361 F.2d 849 (CA5, 1966). I perceive no factual problems in this appeal. The District Judge adopted the referee’s findings of fact as not clearly erroneous and the majority, under the same standard of reviewing the underlying facts pursuant to the plainly erroneous rule, Bazemore v. Stehling, 396 F.2d 701 (CA5, 1968), consider the facts as not in material dispute. I do not disagree with that conclusion.
. The majority opinion refers at one point to the fact that in purported payment for the cattle the packer has issued checks not honored by the bank, as being a factor in triggering the imposition of a trust. This would seem to be a breach of trust rather than an incident giving rise to its existence.
. Some cases are pre-U.C.C., others post-U.C.C., which is of no moment, since the issue is whether the Act supplants or modifies state laws of commercial transactions, statutory or non-statutory.
. Some of the history behind Sig Ellingson & Co. v. DeVries is of interest. The court relied in part on Birmingham v. Rice Bros., 238 Iowa 410, 26 N.W.2d 39, 2 A.L.R.2d 1108; 332 U.S. 768, 68 S.Ct. 79, 92 L.Ed. 353 (1947). That case had, in turn, referred to Mason City ’Prod. Credit Ass’n v. Sig EHingson & Co., 205 Minn. 537, 286 N.W. 713, cert. denied, 308 U.S. 599, 60 S.Ct. 130, 84 L.Ed. 501 (1939), which had held the act did not free market agencies of liability under state law for selling mortgaged cattle. According to the court in Birmingham, the Solicitor General of the United States appeared in the Supreme Court in Mason City to oppose the petition for a writ of certiorari, which was refused.
. Sebastopol Meat Co. v. Secretary of Agriculture, 440 F.2d 983 (CA9, 1971) is not contrary to the above case law. The Secretary issued a cease and desist order against a corporation which was a packer, and an individual who was its alter ego but not a packer, for failure to pay for livestock, in violation of 9 C.F.R. § 201.43(b), thereby violating 7 U.S.C. § 192(b) which authorizes cease and desist orders against packers. The only issue on appeal was whether state law limitations on the alter ego doctrine prevented the cease and desist order from running against the individual. The court held that a remedial order, which the Secretary was empowered by a federal regulatory statute to' issue, and which unquestionably reached the corporation, could not be thwarted by state limitations on the alter ego doctrine which was usually invoked in private litigation.
. Branscome v. Schoneweis, 361 F.2d 717 (CA7, 1966), sustained an order of the Secretary awarding damages for a bad check given by a market agency. Issues of jurisdiction and authority were not referred to and presumably were not raised.
. On the record before us it is not shown that Samuels breached any of these duties. All say that it is impossible to trace the carcasses of the livestock sold by plaintiffs into identifiable monetary proceeds, but the reason for this is not shown to be any default by Samuels of its obligations, which do not extend to keeping records that will record the path of specific cattle into identifiable cuts of meat or hamburger or identifiable sales. Samuels’ breach of obligations was by giving a check which the bank would not honor, a matter not governed by this regulation, and, as previously discussed, rejected by several courts as the basis for jurisdiction under the Act.
. Bruhn’s Freezer Meats v. U. S. D. A., 438 F.2d 1332 (CA8, 1971), refers to the Act’s permitting the Secretary to exercise as broad a control of packers as the Constitution permits. The statement must be considered in the context of the case, which concerned whether a chain of meat freezer plants was a packer and whether its misrepresentations and similar sales tactics were deceptive practices under 7 U.S.C. § 192(a), both of these matters being inquiries plainly within the scope of the Act.