Farmers Cooperative Elevator Co. v. Union State Bank

409 N.W.2d 178 (1987)

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Nature of the Case

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Facts

Cockrum operated a farm and hog confinement operation. In February 1981, D loaned Cockrum a large sum of money and took a security agreement covering all equipment and fixtures, including but not limited to sheds and storage facilities, used or acquired for use in farming operations, whether now or hereafter existing or acquired; all farm products including but not limited to, livestock, and supplies used or produced in farming operations whether now or hereafter existing or acquired. In December 1983 and January 1984, Cockrum entered into several PMSI agreements with P for livestock feed. P filed a financing statement with the Secretary of State for each transaction. Each one stated: This is a purchase money security interest which covers Collateral described as all feed sold to Debtors by Secured Party and all of Debtors' feeder hogs now owned or hereafter acquired including . . . additions, replacements, and substitutions of such livestock, including all issues presently or hereafter conceived and born, the products thereof, and the proceeds of any of the described Collateral. Cockrum defaulted on both agreements. P commenced an action seeking possession of the collateral. D filed a statement of indebtedness and requested that its security interests be established as a first security lien. The district court ruled that D's security interest in the hogs was prior and superior. P appealed.