Raasch v. Tri-County Trust Co.

712 S.W.2d 5, 2 U.C.C. Rep. Serv. 2d (West) 294, 1986 Mo. App. LEXIS 4041
CourtMissouri Court of Appeals
DecidedApril 29, 1986
DocketNo. WD 37402
StatusPublished
Cited by2 cases

This text of 712 S.W.2d 5 (Raasch v. Tri-County Trust Co.) is published on Counsel Stack Legal Research, covering Missouri Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Raasch v. Tri-County Trust Co., 712 S.W.2d 5, 2 U.C.C. Rep. Serv. 2d (West) 294, 1986 Mo. App. LEXIS 4041 (Mo. Ct. App. 1986).

Opinion

TURNAGE, Judge.

E.W. Raasch, Jr. brought suit against Tri-County Trust Company for conversion of hogs. The court entered judgment on the jury verdict in favor of Raasch for $15,000 actual damages on Count I, $10,000 in actual damages on Count II, and $12,000 in punitive damages. Tri-County contends the judgments are not supported by the evidence. Affirmed in part and reversed in part.

On September 19, 1977 Raasch sold to Rudy Heyen 66 registered Spotted and registered Yorkshire sows and five registered boars. To finance the sale Heyen gave Raasch a combination promissory note and security agreement dated January 16,1978. A financing statement was filed March 14, 1978 in the Howard County recorder of deeds office, the county of Heyen’s residence. The statement listed the hogs as collateral and described them by the number of hogs covered and by breed.

Tri-County had made a previous loan to Heyen and in the fall of 1979, in connection with the renewal of that loan, sought additional security. To comply Heyen pledged as collateral farm equipment and livestock, including 150 sows. The security agreement noted that Heyen owed Raasch on 75 of the sows. The theory of Tri-County was that its security interest was in the remaining 75 sows.

On March 17,1980, Raasch sold to Heyen 33 registered gilts and 3 registered boars. Heyen gave Raasch a combination promissory note and security agreement covering these hogs. The financing statement was filed on May 7, 1980.

Pursuant to a court order entered in a replevin suit filed by Tri-County against Heyen, the Sheriff of Howard County seized 75 hogs from Heyen on April 30 and May 1, 1980. When it developed that five of the hogs seized were boars, Tri-County offered to have them returned to Heyen, but he refused. The boars were thereafter sold and Heyen was given the proceeds.

Raasch introduced evidence that there is a system for marking hogs by which the individual animal may be identified. The system involves a series of notches made in the ears and from this the hogs can be identified by the litter from which they came and the number in that particular litter. Raasch introduced evidence that by using the ear marks which he had placed on the hogs prior to selling them to Heyen he was able to identify among those seized [7]*7about 66 hogs which he had sold Heyen in 1977 and 1980. It was Raasch’s theory that he had a security interest in all of the hogs owned by Heyen and that Tri-County had no legal right to seize such hogs.

Tri-County introduced evidence that there was no generally recognized marking system for hogs and that Tri-County had no knowledge of any particular marking system. Tri-County’s evidence was that the sheriff seized the hogs pursuant to the court order and the sheriff testified that he had no way of telling one hog from another when he seized the 75.

It is undisputed that no financing statement or security agreement described the hogs in any manner except by the number of hogs covered and by their breed.

Count I of Raasch’s petition alleged that Tri-County seized hogs Raasch had sold to Heyen in September of 1977 and which were covered by Raasch’s 1978 security agreement. Tri-County contends Raasch did not have a perfected security interest in those hogs because the financing statement did not list Raasch’s address as required by § 400.9-4021 and did not contain an adequate description of the collateral as required by § 400.9-110. TriCounty admitted that when it took its security interest it had actual knowledge of the 1978 security agreement which gave to Raasch a security interest in 66 sows and 5 boars sold to Heyen in 1977. Tri-County also admitted its security interest was in the remaining 75 sows. Tri-County became a lien creditor when the court entered judgment in its favor in the replevin suit, § 400.9-301(3), and at that time Tri-County had actual knowledge of Raasch’s security interest. Tri-County thus became a lien creditor with knowledge of Raasch’s security interest and as such, Tri-County did not obtain any priority over Raasch and in fact, the Raasch security interest was superior. Section 400.9-301(l)(b); Bank of Drexel v. Kyser, Inc., 685 S.W.2d 230, 233[3] (Mo.App.1984). This obviates any defect in the document failing to give the address of Raasch.

Tri-County states that § 400.9-110 requires the description of personal property in the financing statement to reasonably identify what is described. Tri-County contends the description of the hogs in the Raasch financing statement was insufficient so that it prevented Raasch from perfecting his security interest and prevented Tri-County from having notice of Raasch’s security interest. Tri-County acknowledged in its security agreement ivith Heyen that Heyen owed Raasch for 75 of the 150 sows. Tri-County thus had actual knowledge of Raasch’s security interest and cannot now claim it had no notice. As held above, when Tri-County became a lien creditor, it had actual knowledge of Raasch’s security interest and under § 400.9-301(l)(b) did not obtain any priority over Raasch. Bank of Drexel v. Kyser, Inc., 685 S.W.2d 230, 233[3] (Mo.App.1984). This obviates any failure as to the description in the financing statement, as Raasch has priority regardless of whether he properly filed.2 The adequacy of the description in the financing statement is thus immaterial in the determination of Raasch’s priority. However that description is identical to the description of collateral in the security agreement. The question thus remains whether the description meets the requirements of § 400.9-110 so that the security agreement complies with § 400.9-203(l)(b) and Raasch has a valid security interest.

In United States v. Mid-States Sales Co., 336 F.Supp. 1099, 1102[2] (D.Neb.1971), the court held that the Uniform Commercial Code in § 9-110 provides [8]*8a description of personal property is sufficient if it reasonably identifies what is described. The court held that the description of cows by merely stating the number and breed was not so inexact as to render the security instrument defective, but that it was sufficiently uncertain, where other cattle of the same breed were owned by the debtor, to cast a substantial burden upon the party claiming a right in such cattle to be able to clearly identify the cattle in order to obtain a priority. Under the facts of this case, the description of hogs by number and by breed is likewise uncertain as Heyen owned other hogs of the same breed. However, Raasch carried the substantial burden to sufficiently identify the hogs when he examined the hogs the sheriff had seized and identified by ear marks about 66 hogs which he claimed were covered by the two security agreements.

As to Count I the evidence was sufficient to support a judgment for conversion by Tri-County of hogs Raasch had a security interest in and which Raasch was entitled to possess because Heyen was in default on his obligation to Raasch. No question is raised as to the amount of damages assessed for the hogs covered by the 1978 security interest.

Tri-County claims that it had a superior security interest in the hogs purchased by Heyen in 1980 and for that reason Raasch did not have a valid claim for the conversion of hogs purchased in 1980.

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Bluebook (online)
712 S.W.2d 5, 2 U.C.C. Rep. Serv. 2d (West) 294, 1986 Mo. App. LEXIS 4041, Counsel Stack Legal Research, https://law.counselstack.com/opinion/raasch-v-tri-county-trust-co-moctapp-1986.