Repp v. Sabre Farms, Inc. (In Re Sabre Farms, Inc.)

27 B.R. 532, 39 U.C.C. Rep. Serv. (West) 1031, 1982 Bankr. LEXIS 3428
CourtUnited States Bankruptcy Court, D. Oregon
DecidedAugust 31, 1982
Docket19-30099
StatusPublished
Cited by4 cases

This text of 27 B.R. 532 (Repp v. Sabre Farms, Inc. (In Re Sabre Farms, Inc.)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, D. Oregon primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Repp v. Sabre Farms, Inc. (In Re Sabre Farms, Inc.), 27 B.R. 532, 39 U.C.C. Rep. Serv. (West) 1031, 1982 Bankr. LEXIS 3428 (Or. 1982).

Opinion

MEMORANDUM OPINION

. HENRY L. HESS, Jr., Bankruptcy Judge.

This adversary proceeding concerns the rights of plaintiff Dennis A. Repp dba R. Land Company, (“Repp”) and Third-Party defendant First Interstate Bank of Oregon, N.A., (“Bank”) to the rents collected by defendant Marvin Leonard, (“Leonard”) from various sub-lessees of real property leased by Repp to debtor, defendant, Sabre Farms, Inc., (“Sabre”). The real property involved will be referred to as Parcel A.

Repp asserts an interest in the rents of Parcel A as the original lessor, since Sabre is in default under its lease.

Bank asserts an interest in the rents by reason of its rights as a secured creditor of Sabre.

Sabre did not take part in the trial.

Leonard asserts that any liability he may have for the payment of the rental monies to Repp or Bank should be reduced by certain actual and pro-rated charges to the property. Leonard further asserts that any entitlement of Repp for rent should be in the subject bankruptcy as a general unsecured creditor for the period to May 4,1981, and as an administrative claim for the period May 5, 1981 to August 31, 1981.

Repp was and now is the owner of the real property located in Umatilla, County, Oregon, hereinafter referred to as Parcel A.

Bank, formerly known as First National Bank of Oregon, is a national banking association authorized to transact business in Oregon.

Leonard was appointed in January of 1981 as receiver of certain property of debt- or Sabre Farms.

Sabre was and now is a Montana corporation and is the debtor in Bankruptcy Case No. 381-01950, a Chapter 11 proceeding filed on May 15, 1981 in the United States Bankruptcy Court for the District of Oregon.

On July 30,1976, Repp leased Parcel A to Sabre. The lease provides:

“1. Lessee will pay to lessor annually the following amounts each year, due and payable on or before the indicated dates:

August 25, 1977 — $275,000
August 25, 1978 — $275,000
August 25, 1980 — $297,600
*535 August 25, 1980 — $297,600
August 25, 1981 — $297,600”

The lease also contains provisions with regard to the maintenance and cost of the irrigation system and provides:

“3. Lessee, during the term of this lease, covenants and agrees with lessor: * * * (b) To keep and maintain all irrigation equipment, fences and other appurtenances on said property in as good repair and condition as they are when it takes possession, ordinary wear and tear excepted.

U * * *

“(5) The cost of delivering the necessary irrigation water from the pumping stations located in Section 14 shall be borne exclusively by the lessor during the term of this lease. The costs shall include electricity charges and repairs to the irrigation system.”

The lease term was “for a term of five (5) years from and after the first day of September, 1976, and to the end of the 31st day of August, 1981. * * *.”

The lease also provided that “ * * * growing crops on the land at the time this lease expires shall remain the property of the lessee and it shall have the right to enter on the premises and remove the crops after the term of the léase has expired. Any perennial crops planted by lessee shall become the property of lessor subject to lessee’s right to remove the foliage therefrom growing in the year 1981.”

Bank loaned money to Sabre for farming operations from time to time. The unpaid balance due Bank by Sabre exceeds $12,-000,000. As part of these loan transactions, Bank obtained a security agreement and filed financing statements.

The security agreement taken by Bank dated February 8, 1980, was executed by Walter J. Reed, then President of Sabre. By the security agreement, Sabre granted to the Bank a security interest in, among other things, all crops on lands owned or being purchased by Sabre (Section 3.1), all crops on lands occupied by Sabre as lessee (Section 3.2), all leasehold interests in lands describe in Section 3.2 (Section 3.11), all rentals payable pursuant to any lease or sublease of any of the lands described in Section 3.1 or 3.2 (Section 3.12), all Sabre’s contract rights, accounts, and general intangibles, now or hereafter arising (Section 3.10), and all proceeds of or relating to any of the collateral (Section 3.8).

Section 3.1 describes property which does not include Parcel A. Section 3.2 includes all of Parcel A with the exception of that part of Parcel A lying in Section 27, Township 3 North, Range 26 E.W.M.

On January 15, 1976 the bank filed a financing statement with the county filing officer of Morrow County, Oregon. This financing statement refers to an Exhibit A for the description of the property upon which the crops were to be grown. The copy of the financing statement which was' introduced in evidence (Bank Ex. 6) does not attach a copy of Exhibit A. The court therefore does not know if the original attached Exhibit A or, if it did, whether Exhibit A described any part of Parcel A. In rendering this opinion the court will assume that the financing statement which was filed did attach an Exhibit A and that such exhibit failed to describe any part of Parcel A as was the case of the Exhibit A attached to the financing statement filed with the Secretary of State.

The financing statements filed with the Secretary of State and the county filing officer describe the collateral as:

“All of the following now owned or hereafter acquired or arising: Debtors equipment, inventory, accounts, contract rights, general intangibles and farm products including but not limited to crops and supplies. The crops as to which the secured party claims a security interest are growing or to be grown or stored on the property described in Exhibit A attached hereto and by this reference made a part hereof.”

Exhibit A attached to this financing statement does not describe any of Parcel A.

In the spring of 1980, Sabre entered into an agreement with Sunriver Farms, Inc., *536 for the sale of all of Sabre’s property. In the agreement Sabre agreed to sublease Parcel A to Sunriver Farms, Inc., an Oregon corporation (“Sunriver”).

In November of 1980, Sabre declared its contract of sale with Sunriver in default and gave notice to Sunriver of its intent to take possession of Parcel A. Sunriver filed a Chapter 11 proceeding in the United States Bankruptcy Court for the District of Oregon, No. 380-03279 on December 18, 1980.

On January 12,1981 Sabre filed an adversary proceeding in the United States Bankruptcy Court for the District of Oregon, No. 81-0019, in the Sunriver Bankruptcy seeking to foreclose on the collateral which Sun-river had granted to Sabre. In that proceeding, on January 21,1981, nunc pro tunc January 12,1981, the court appointed Leonard as receiver of the collateral. After his appointment, Leonard assumed control of all of the collateral, real and personal, which Sunriver had granted to Sabre.

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Bluebook (online)
27 B.R. 532, 39 U.C.C. Rep. Serv. (West) 1031, 1982 Bankr. LEXIS 3428, Counsel Stack Legal Research, https://law.counselstack.com/opinion/repp-v-sabre-farms-inc-in-re-sabre-farms-inc-orb-1982.