Conflicts between Secured Creditors and Buyers of Farm Products Collateral under the U.C.C. - Farmers State Bank v. Farmland Foods, Inc.
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Authors
Wilson, Douglas S.
Issue Date
1988
Volume
21
Issue
Type
Journal Article
Language
Keywords
Alternative Title
Abstract
FIRST PARAGRAPH(S)|For many years, Nebraska agricultural lenders have relied on case law interpreting the section of the Uniform Commercial Code which allowed their security interest to remain in collateral that was sold without authorization. The exception for farm products created by section 9-307(1) of the Nebraska Statutes only applies if the sale of the collateral is not authorized by the creditor. Prior to Farmers State Bank v. Farmland Foods, Inc., Nebraska courts, as well as most other jurisdictions, did not interpret as an implied authorization a creditor's non-enforcement of a requirement in its security agreements that a debtor first receive written permission before selling collateral. If the courts had so interpreted, then the creditor's security interest in the collateral would have been severed. Farmland Foods, has effectively negated this long-standing rule of law in Nebraska. Additionally, the opinion has made a hollow shell of the farm products exception of the Nebraska Uniform Commercial Code...
Description
Citation
21 Creighton L. Rev. 737 (1987-1988)
Publisher
Creighton University School of Law