American Indian Agr. Credit Consortium, Inc. v. Fort Pierre Livestock, Inc., 14874

• Decision Date: 09 September 1985
• Docket Number: No. 14874,14874
• Citation: 42 UCCRep.Serv. 1443,379 N.W.2d 318
• Parties: 42 UCC Rep.Serv. 1443 AMERICAN INDIAN AGRICULTURAL CREDIT CONSORTIUM, INC., Plaintiff and Appellee, v. FORT PIERRE LIVESTOCK, INC., Defendant and Appellant. . Considered on Briefs
• Court: South Dakota Supreme Court

Page 318

379 N.W.2d 318

42 UCC Rep.Serv. 1443

AMERICAN INDIAN AGRICULTURAL CREDIT CONSORTIUM, INC. Plaintiff and Appellee, v. FORT PIERRE LIVESTOCK, INC., Defendant and Appellant.

No. 14874.

Supreme Court of South Dakota.

Considered on Briefs Sept. 9, 1985.

Decided Dec. 31, 1985.

Michael Carter, of Maher, Carter & Bode, Pierre, for plaintiff and appellee.

Charles M. Thompson, of May, Adam, Gerdes & Thompson, Pierre, for defendant and appellant.

FOSHEIM, Chief Justice (on reassignment).

This is an appeal from a grant of summary judgment in a conversion action. We affirm.

On August 4, 1976, American Indian Agricultural Credit Consortium, Inc. (Ag Credit), loaned $19,000.00 to Kenneth H. West (West) of Eagle Butte, South Dakota. To secure the debt, West executed a note and security agreement granting Ag Credit a first lien upon cattle owned by West which were branded or to be branded "KW on right ribs, with an orange ear tag right ear." A financing statement containing the same language was filed with the Dewey County, South Dakota, Register of Deeds on August 13, 1976, and subsequently continued on August 17, 1981.

On October 8, 1981, Ag Credit mailed to numerous livestock markets, including Ft. Pierre Livestock, a form letter which stated, inter alia, "by virtue of a financing statement filed with the Register of Deeds in each respective county, [we] hold a FIRST mortgage on all livestock owned or claimed by individuals listed below." Specifically, the letter stated that Ag Credit held a first mortgage on all livestock owned or claimed by "West, Kenneth H., Box 956, Eagle Butte, S.D. 57625, Cattle Branded KW right rib." During depositions taken pursuant to this litigation, Ft. Pierre Livestock acknowledged: receipt of the letter; that said letter was in their Rolodex file; and, that Ft. Pierre Livestock employees regularly and routinely referred to the file prior to issuing checks to individuals.

Prior to November 5, 1982, payments on the debt were made by West, totaling approximately $11,400.00. On that date, however, West consigned 123 head of cattle to Ft. Pierre Livestock for sale. These cattle were branded KW but had no orange ear tags. Initially, Ft. Pierre Livestock issued a check made jointly to Kenneth H. West and Ag Credit because Ag Credit had notified Ft. Pierre Livestock of its security interest in West's cattle. When West was presented with the check, however, he refused to accept it, explaining that he was not Kenneth H. West, but Kenny West and that the check should be made out to him alone. Ft. Pierre Livestock relied on West's representations and reissued a check to West only in the amount of $41,755.42. Subsequently, this conversion action was commenced by Ag Credit to recover from Ft. Pierre Livestock the balance due on West's note.

Ft. Pierre Livestock answered, denying the cattle sold were those covered under the security agreement. Motions for summary judgment were filed by both parties. In a letter dated January 2, 1985, the trial court ruled on the motions and found as a matter of law that, although the cattle did not have the orange ear tags referred to in the security agreement and financing statement, once a proper filing was made and once actual notice was received by Ft. Pierre Livestock, the sale barn had a duty to issue the check jointly to West and Ag Credit.

On appeal, Ft. Pierre Livestock contends that the cattle sold were not those secured under the security agreement. They do not dispute that West owned the cattle sold, but do argue that Ag Credit did not have a security interest in those "particular" cattle sufficient to maintain a conversion action. The trial court's letter granting summary judgment states:

The only fact that may remain in some dispute is whether the cattle had orange ear tags or not when they went through the sale ring. The defendant, Ft. Pierre Livestock, Inc., maintains they had the brand on them indicated in the security agreement, but that they did not have the ear tag when they went through. Plaintiff has no knowledge of whether they had the orange ear tags or not, nor at this time do they have any witnesses that could testify that they did. The defendant claims that his witnesses could establish at trial they did not have the orange ear tags on. For the purposes of this summary judgment, this Court is assuming as a fact that they did not have the orange ear tag on them. Having made this assumption, the Court gives summary judgment to the plaintiff for the amount left due and owing on the note plus interest thereon.

Under SDCL 15-6-56(c), summary judgment is properly awarded "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." "Since a summary judgment presupposes there is no genuine issue of fact, findings of fact and conclusions of law are unnecessary." Wilson v. Great Northern Railway Company, 83 S.D. 207, 212, 157 N.W.2d 19, 21 (1968). When addressing a motion for summary judgment, however, it is to be remembered that: (1) the evidence presented must be viewed most favorably to the nonmoving party; (2) the movant has the burden of proof to clearly show that there is no genuine issue of material fact and that he is entitled to judgment as a matter of law; (3) summary judgment was never intended to be used as a substitute for a court trial where any genuine issue of material fact exists; (4) a belief that the nonmoving party will not prevail at trial is not an appropriate basis for granting the motion on issues...