Bayou Pierre Farms v. Bat Farms Partners, III

676 So. 2d 643, 95 La.App. 3 Cir. 1669, 1996 La. App. LEXIS 1028, 1996 WL 281331
CourtLouisiana Court of Appeal
DecidedMay 29, 1996
Docket95-1669
StatusPublished
Cited by2 cases

This text of 676 So. 2d 643 (Bayou Pierre Farms v. Bat Farms Partners, III) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bayou Pierre Farms v. Bat Farms Partners, III, 676 So. 2d 643, 95 La.App. 3 Cir. 1669, 1996 La. App. LEXIS 1028, 1996 WL 281331 (La. Ct. App. 1996).

Opinion

676 So.2d 643 (1996)

BAYOU PIERRE FARMS, Plaintiff-Appellee,
v.
BAT FARMS PARTNERS, III, et al., Defendants-Appellants.

No. 95-1669.

Court of Appeal of Louisiana, Third Circuit.

May 29, 1996.

*644 C. Calvin Adams Jr., Tallulah, for Bayou Pierre Farms.

Ted David Hernandez, Natchitoches, for Bat Farms Ptnrs., III et al.

Stephen Paul Strohschein, Baton Rouge, for Ag Services of America, Inc.

William Shands Carter Jr., Ruston, Kenneth D. McCoy Jr., Gregory D. Friedman, Natchitoches, for T.L. James & Co. & Melrose Planting Co. Inc.

*645 Margaret Shook Gravolet, New Orleans, for Dept. of Agriculture and Forestry.

Charles Raymond Whitehead III, Natchitoches, for Louisiana Gin Company, Inc. et al.

Eugene Allen, Columbia, for Caldwell Bank & Trust Company.

Before YELVERTON, KNOLL and COOKS, JJ.

YELVERTON, Judge.

This case involves the ranking of security interests in the proceeds from the sale of a cotton crop. There are four competing parties. They are two lessors, the crop lender, and the cotton picker. The proceeds of the cotton were insufficient to satisfy the claims of the creditors. The proceeds were deposited into the registry of the court. The trial court rendered money judgments for the rent in favor of the two lessors and for services in favor of the cotton picker. (In oral reasons the judge promised to do the same for the crop lender as soon as appropriate pleadings were filed, but there is no judgment in the record in favor of the crop lender.) The trial court then rendered judgment ranking the security interests held by the parties in the following order: No. 1— the cotton picker; No. 2—the two lessors; and No. 3—the crop lender. The two lessors and the crop lender appeal this judgment. We modify the judgments, re-ranking as follows:

No. 1—the first lessor (T.L. James Company, Inc.)
No. 2—the crop lender (Ag Services of America, Inc.)
No. 3—the cotton picker (Bayou Pierre Farms)
No. 4—the second lessor (Melrose Planting Company, Inc.)

BACKGROUND FACTS

On April 5, 1993, Bat Farms Partners leased land in Natchitoches Parish from T.L. James Company, Inc. (T.L. James) at a rental of $55,000, to grow cotton and corn. The parties executed an agricultural security agreement on the crops. The parties filed a UCC-1F form (financing statement) on April 13, 1993, pursuant to La.R.S. 3:3651 et seq. and La.R.S. 10:9-101 et seq. to secure the land lease. T.L. James also leased farm equipment to S & E Planting Co., one of the partners of Bat Farms, for $5,000.

Bat Farms subsequently arranged a crop loan from Ag Services of America, Inc. (Ag Services) for $190,000. The loan was secured by an agricultural security agreement listing as collateral the crops on the land leased by T.L. James as well as crops on other leased lands. A UCC-1F form was filed on May 3, 1993. The financing statement was filed under both La.R.S. 3:3651 et seq. and La.R.S. 10:9-101 et seq.

Then, T.L. James sold the land subject to Bat Farms' lease to Melrose Planting Company, Inc. (Melrose). The sale was subject to the Bat Farm's land lease and equipment lease. T.L. James and Melrose agreed between themselves to a pro rata distribution of the rents due under the lease. Melrose filed a UCC-1F form on July 12, 1993.

On July 28, 1993, by a written contract, Bat Farms hired Bayou Pierre Farms (Bayou Pierre) to pick the cotton in Natchitoches Parish. By an act of crop pledge Bat Farms granted Bayou Pierre a security interest in the cotton and the proceeds of the cotton. Bayou Pierre perfected its security interest by filing a UCC-1F form on July 29, 1993.

The cotton crop was raised, picked, moduled, ginned, baled, and sold. When it was discovered that the proceeds were insufficient to pay all claims of the creditors of Bat Farms, Bayou Pierre was the first to file suit. Bayou Pierre asked for a writ of sequestration on the warehouse receipts or proceeds from the sale of the cotton and prayed that there be judgment recognizing its entitlement to $47,700 of the proceeds and attorney's fees.

Melrose, T.L. James, and Ag Services each answered the suit and filed a reconventional demand against Bayou Pierre. A proliferation of cross-claims, third-party demands, and oblique actions followed.

After the proceeds from the sale of the cotton, $124,412.05, were deposited into the registry of the court, T.L. James, Melrose, *646 and Bayou Pierre all filed motions for summary judgment and rules to rank the liens.

By stipulation, the parties agreed to consolidate the motions for summary judgment and rules regarding the security interests and their ranking. They stipulated what the evidence was and consented that the court could render a final judgment on the evidence in the summary proceedings.

The trial court granted the motions of T.L. James and Melrose for summary judgment awarding them rent for the land of $55,000, plus interest and attorney's fees. It also awarded them $5,000 plus interest against S & E Planting Co. and others for rent under the equipment lease. The trial court granted Bayou Pierre's motion for summary judgment awarding it $39,264.50, with interest and attorney's fees, representing the harvest of the cotton in Natchitoches Parish.

A final judgment was signed ranking the priority of the liens in accordance with La. R.S. 9:4521. Bayou Pierre was ranked first, T.L. James and Melrose together were ranked second, and Ag Services was ranked third.

T.L. James, Melrose, and Ag Services appeal the judgment. For the reasons which follow we affirm the money judgments, and modify the ranking judgment.

Ranking of Security Interests

The only common assignment of error asserted by T.L. James, Melrose, and Ag Services is that Bayou Pierre as a cotton picker should not have been ranked in the first category of La.R.S. 9:4521. Ag Services additionally argues that James and Melrose do not have lessor's privileges and that La. R.S. 9:4521 is not applicable in the present case.

La.R.S. 9:4521 provides:

As a specific exception to R.S. 9:4770 and R.S. 10:9-201, the following statutory privileges and perfected security interests as affecting unharvested crops shall be ranked in the following order of preference, provided that such privileges and security interests have been properly filed and maintained in accordance with the central registry provisions of R.S. 3:3651 et seq.:
(1) Privilege of the laborer, the thresherman, combineman, grain drier, and the overseer.
(2) Privilege of the lessor.
(3) Perfected security interests under Chapter 9 of the Louisiana Commercial Laws in the order of filing, as provided by R.S. 3:3651 et seq.
(4) Privilege of the furnisher of supplies and of money, of the furnisher of water, and of the physician.

The Louisiana Supreme Court has said that all privileges, both possessory and nonpossessory, are subordinate to perfected Chapter 9 security interests in the same property, unless privileges fall within one of the limited exceptions giving them priority. First Nat. Bank v. Beckwith Machinery, 94-2065 (La. 2/20/95); 650 So.2d 1148. La.R.S. 9:4521 is one of those exceptions. Id.

Application of La.R.S. 9:4521 to the Present Case

Ag Services makes the argument that La. R.S. 9:4521 applies only to unharvested crops, not to the proceeds of harvested crops.

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Related

Meyhoeffer v. Wallace
792 So. 2d 851 (Louisiana Court of Appeal, 2001)
Bayou Pierre Farms v. Bat Farms Partners
693 So. 2d 1158 (Supreme Court of Louisiana, 1997)

Cite This Page — Counsel Stack

Bluebook (online)
676 So. 2d 643, 95 La.App. 3 Cir. 1669, 1996 La. App. LEXIS 1028, 1996 WL 281331, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bayou-pierre-farms-v-bat-farms-partners-iii-lactapp-1996.