Beatrice Nat. Bank and Trust Co. v. Southeast Nebraska Co-op Co.

• Court: Nebraska Supreme Court
• Writing for the Court: HASTINGS; GRANT
• Citation: Beatrice Nat. Bank and Trust Co. v. Southeast Nebraska Co-op Co., 432 N.W.2d 842, 230 Neb. 671 (Neb. 1988)
• Decision Date: 23 December 1988
• Docket Number: No. 87-081,87-081
• Parties: , 7 UCC Rep.Serv.2d 1262 BEATRICE NATIONAL BANK AND TRUST COMPANY, a National Banking Corporation, Appellee, v. SOUTHEAST NEBRASKA COOPERATIVE CO., a Nebraska Corporation, Appellant.

Page 842

432 N.W.2d 842

230 Neb. 671, 7 UCC Rep.Serv.2d 1262

BEATRICE NATIONAL BANK AND TRUST COMPANY, a National Banking Corporation, Appellee, v. SOUTHEAST NEBRASKA COOPERATIVE CO., a Nebraska Corporation, Appellant.

No. 87-081.

Supreme Court of Nebraska.

Dec. 23, 1988.

Syllabus by the Court

1. Declaratory Judgments: Appeal and Error. Determinations of factual issues in a declaratory judgment action will not be disturbed on appeal unless they are clearly wrong.

2. Proof: Words and Phrases. The burden of establishing a fact means the burden of persuading the trier of fact that the existence of the fact is more probable than its nonexistence.

Robert C. Guenzel of Crosby, Guenzel, Davis, Kessner & Kuester, Lincoln, for appellant.

James G. Sharp of Everson, Wullschleger, Sutter, Sharp, Korslund & Willet, Beatrice, for appellee.

HASTINGS, C.J., and BOSLAUGH, WHITE, CAPORALE, SHANAHAN, GRANT, and FAHRNBRUCH, JJ.

GRANT, Justice.

This is an appeal from a declaratory judgment entered by the Gage County District Court. Plaintiff-appellee, Beatrice National Bank and Trust Company (Bank), filed a petition for a declaratory judgment against defendant-appellant, Southeast Nebraska Cooperative Co. (Co-op). In its petition, the Bank prayed for a judgment fixing the rights of the parties to the proceeds of the sale of certain livestock owned by John D. and Robert D. Claassen, doing business as Claassen's Linc-Side Farms (Claassens). The Bank claims an interest in these proceeds pursuant to a perfected security interest in the livestock. The Co-op, in its answer, alleged that it had an interest in the proceeds pursuant to a purchase money security interest in certain feed sold by the Co-op to the Claassens and allegedly fed to the livestock.

Trial was held before the Gage County District Court. The court entered judgment for the Bank. The Co-op timely appealed to this court, alleging that the trial court erred "in its failure to allow the purchase money security interest of Appellant Cooperative to follow its feed into the product of the dairy herd, milk, and the product of the pig operation, hogs sold." We affirm.

The record shows that sometime in 1979 the Bank arranged to provide farm financing to the Claassens. Pursuant to this arrangement, the Claassens executed a security agreement and financing statement on March 22, 1979. The collateral was described as "[a]ll equipment, and trators [sic], all farm products including but not limited to crops, livestock, supplies used or produced in farming operations, contract rights and accounts, now owned or after acquired." This financing statement was filed with the Gage County clerk on March 27, 1979.

On April 6, 1981, the Claassens executed and delivered to the Bank an installment note for $355,000. On November 16, 1983, the effective period of the 1979 financing statement was extended by the filing of a continuation statement. In 1986, the Claassens executed two additional notes, totaling over $59,000.

Between June 7 and December 28, 1985, the Co-op sold, on account, animal feed and related products to the Claassen farm operation. These products had an approximate value of $20,000. The Co-op took as security a purchase money interest in these products and their proceeds. Between June 27, 1985, and January 3, 1986, six financing statements were filed with the Gage County clerk as notice of Co-op's purchase money interest.

Sometime in 1986, the Claassens failed to make payments on the obligations to both the Bank and the Co-op. Pursuant to the security agreement the Bank had with the Claassens, the Linc-Side Farms' swine and dairy herds were liquidated. The proceeds of these sales totaled $21,601.51.

On May 12, 1986, the Bank filed this action seeking an order determining the rights of the Bank and the Co-op to these proceeds. In a judgment entered on December 31, 1986, the Gage County District Court...