Northwest South Dakota Production Credit Ass'n v. Dale, s. 14198

• Citation: 361 N.W.2d 275
• Decision Date: 22 October 1984
• Docket Number: 14222,Nos. 14198,s. 14198
• Parties: NORTHWEST SOUTH DAKOTA PRODUCTION CREDIT ASSOCIATION, Plaintiff and Appellee, v. Byron DALE, a/k/a Byron C. Dale and Judie Dale, a/k/a Judith C. Dale, Defendants and Appellants, and Bradley R. Dale, a/k/a Brad Dale, a/k/a Bradley Dale; Louis L. Kellar, a/k/a Louie L. Kellar; the Federal Land Bank of Omaha; United States of America Acting Through the Farmers Home Administration of the United States Department of Agriculture; Edward Bader; Raymond Bader; Louis Bader; Promised Land Industries and Corson County, South Dakota, Defendants. . Considered on Briefs
• Court: Supreme Court of South Dakota

Page 275

361 N.W.2d 275

NORTHWEST SOUTH DAKOTA PRODUCTION CREDIT ASSOCIATION, Plaintiff and Appellee, v. Byron DALE, a/k/a Byron C. Dale and Judie Dale, a/k/a Judith

C. Dale, Defendants and Appellants,

and

Bradley R. Dale, a/k/a Brad Dale, a/k/a Bradley Dale; Louis

L. Kellar, a/k/a Louie L. Kellar; the Federal Land Bank of

Omaha; United States of America Acting Through the Farmers

Home Administration of the United States Department of

Agriculture; Edward Bader; Raymond Bader; Louis Bader;

Promised Land Industries and Corson County, South Dakota,

Defendants.

Nos. 14198, 14222.

Supreme Court of South Dakota.

Considered on Briefs Oct. 22, 1984.

Decided Jan. 16, 1985.

Ronald R. Johnson of Johnson & Kelley, Lemmon, for plaintiff and appellee.

John N. Gridley III, Sioux Falls, and Rauleigh D. Robinson of Vogel Law Firm, Mandan, N.D., for defendants and appellants.

HENDERSON, Justice.

ACTION

This is an appeal from a partial final summary judgment entered March 17, 1983, granting appellee Northwest South Dakota Production Credit Association (PCA) judgment for the balance due on appellants' Byron C. Dale's and Judith C. Dale's (Dales) loan and directing sale of the personal property security; and, also, an order entered ex parte on March 18, 1983, directing the previously appointed receiver to take physical possession of the personal property security as well as the sale of the livestock security. We affirm.

FACTS/PROCEDURAL HISTORY

Dales financed their cattle production operation with PCA. PCA had a security interest in the cattle and any offspring. As part of the agreement, Dales were to account to PCA for the original herd, livestock purchased and the increase, with all proceeds going to PCA. Further, as part of the agreement, PCA had the right to enter Dales' premises at a reasonable time, to inspect its collateral. Specifically, inspection of collateral was not to be considered a trespass.

Dales obtained a new brand, without informing PCA, and proceeded to brand PCA-secured livestock with the undisclosed marking. The new brand was then transferred to a son, Brad, with a view of enabling Brad to sell the livestock free of the PCA lien.

In 1982, Byron Dale began studying the monetary system and arrived at a few solutions of his own. On October 5, 1982, Byron attempted to pay off the PCA loan with a note payable in hay and silage. Byron concluded that the value of hay was $1,980/ton when the market value at the time was $40/ton.

PCA rejected the purported payment and attempted to exercise its right to inspect the livestock. Notwithstanding an express provision to the contrary, entry was refused. Byron told PCA that before anyone took possession of the livestock, his blood would run on the place. It was later determined that son, Brad, had sold some of the livestock under the new brand. Further, it appears Byron had conveyed other cattle to a neighbor in payment of a silage cutting bill.

On October 18, 1982, PCA brought suit to enforce the right of inspection with an alternate cause for possession of the livestock should the inspection disclose an event of default as described in the agreement. An Order to Show Cause and Temporary Restraining Order were issued and on October 22, 1982, all process was served on Dales. At the scheduled hearing, the tendered defense by Dales was payment of the debt with the hay note. Inspection was thereupon ordered by the trial court.

Off the record, Dales agreed that the inspection would take place on Friday, October 29, 1982. An Order Granting Preliminary Injunction and Restraining Order and including specific reference to "all increase of such cattle" was served October 28,

1982, on Byron Dale. That same day, Byron called PCA and told them not to come out on Friday, October 29th as previously scheduled and agreed to inspection on November 3, 1982. On October 30, 1982, Byron called his neighbor, Louie Keller, and told him to get the calves off the place by November 2, 1982

Inspection was completed, nevertheless, in the absence of Dales. There was a considerable shortage of livestock. Dales never disclosed disposition of the missing animals in any of their affidavits. An Amended and Supplemental Complaint then changed the action substantively to one for judgment for the debt and foreclosure sale of all security. An Order to Show Cause and Temporary Restraining Order served on November 9, 1982, specifically enjoined disposition of any calves branded with the new brand.

Pursuant to Order to Show Cause, a hearing was held December 8, 1982. At this hearing, Byron continued to take the position that he did not have to protect or account for the calves, that Brad could sell the calves, and that the order did not apply to the calves. Deeming it necessary under the circumstances, the court granted an application for appointment of a receiver.

There was an additional motion hearing on the tendered defense pertaining to the monetary system on January 6, 1983. On January 31, 1983, PCA moved for summary judgment and furnished detailed documentation in support of the application. On February 17, 1983, notice for instructions to receiver was issued. The sole response was based upon the monetary system with no denial of the basic facts.

On March 7, 1983, the court issued a Memorandum Opinion granting PCA summary judgment. On March 15, 1983, a threat from Posse Comitatus referring to the trial court's ruling was mailed directly to the trial court.

On March 13, 1983, the first Sunday following receipt by Dales of the Memorandum Opinion, the calves were ostensibly "rustled" from the Dale place. The Order for Partial Final Summary Judgment in favor of PCA, Dismissal of Counterclaim and Denial of Motion for Summary Judgment by Dales, together with Partial Final Summary Judgment entered March 17, 1983, were mailed to Dales prior to the disappearance of the calves. On March 16, 1983, the disappearance of the calves was reported to the trial court by the receiver on a regular motion day at McIntosh, South Dakota. An in-chambers discussion followed.

The court noted that Byron had caused widespread publicity of his positions in the suit and particularly noted the published news reports that he would fight foreclosure with his life. Further, the court noted that he publicly expressed he would carry his mini-14 with him and that the first son of a bitch who laid a hand on him would die. The state was directed to protect the receiver as an officer of the court in legal possession of the property.

Thereupon, the Corson County State's Attorney contacted the law enforcement people of the State of South Dakota. As a result, the Attorney General, on behalf of the State of South Dakota, and the Corson County State's Attorney, on behalf of that county, reported to the court that they were unable to protect the receiver's custodial interests in the property on the Dale ranch. As a result of advice by law enforcement officers of the county and state and premised upon the entire record, the trial court entered its order March 18, 1983, directing the receiver to take physical possession of the property which had been in his legal possession, and providing for sale of the cattle without waiting for a regular execution sale.

ISSUES

I.

DALES CONTEND THE ISSUANCE OF AN EX PARTE ORDER FOR PHYSICAL POSSESSION OF THEIR SECURED PROPERTY WAS UNCONSTITUTIONALLY ENTERED. WE DO NOT AGREE.

II

DALES CONTEND THAT THEIR RIGHTS WERE SO SUBSTANTIALLY VIOLATED BY THE ENTRY OF THE SAME EX PARTE ORDER THAT THE JUDICIAL PRONOUNCEMENTS ENTERED PRIOR THERETO ARE VITIATED. WE HOLD OTHERWISE.

DECISION

The due process clause requires, at a minimum, that deprivation of life, liberty, or property by adjudication be preceded by notice and opportunity for hearing appropriate to the nature of the case. Boddie v. Connecticut, 401...