Lawrence v. Farm Credit System Capital Corp.

LAWRENCE, C.K. also known as Charles Lawrence; Dorothy Lawrence;

K. D. Pat E.

James W. Lawrence and Law-

rence, wife; husband and Dan B. Law-

rence, (Defendants), Appellants Co., Inc.; Ranch

Clear Creek Charles K. Inc.; Buying Company, Order

Lawrence Inc.; Company, Land Linda Love, formerly

Ann Linda Ann Law-

rence, also known as Linda Lawrence

Love; Lawrence; John D. Charles F. (Defendants),

FARM CREDIT SYSTEM CAPITAL

CORPORATION and Production Credit Midlands, formerly

Association of the

Wyoming Production Credit Associa- (Plaintiffs).

tion, Appellees

FARM CREDIT SYSTEM CAPITAL

CORPORATION and Production Credit Midlands, formerly

Association of the

Wyoming Production Credit Associa-

tion, (Plaintiffs), Appellants CO., INC.;

CLEAR CREEK RANCH

Charles K. Lawrence Order Inc.; Lawrence Land Com- Inc.; Lawrence; pany, James Dan W. Lawrence; Love,

B. Linda Ann former- ly Linda Ann also known as (De- Love, Appellees

Linda Lawrence

fendants),

C.K. also known as Charles Lawrence; Dorothy Lawrence; D. (Defendants). Pat E. 87-167,

Nos. 87-168.

Supreme Wyoming. Court of

Aug. 1988.*

Appellants Rehearing Petition for Sept. 20,

Denied 1988.

Appellee’s Motion to Dismiss Denied

Sept. 1-15-88; assigned opinion

*Case circulated for comment 4-12-88.

lants in appellees Case No. 87-168 and for in Case No. 87-167. BROWN, C.J., THOMAS,

Before CARDINE, MACY, URBIGKIT and JJ. MACY, Justice. appeals

These consolidated cases involve from judgment entered on a directed verdict in of Production .Asso- favor Credit (Production Credit) ciation of the Midlands and System Capital Corpora- Farm Credit (Farm Credit) against tion and James W. Lawrence, Lawrence, Pat E. Charles K. Lawrence, and Dorothy D. Lawrence on separate promissory per the thereafter at rate of $215.1780 Pro- collapse Wyoming financial day, and that the lien on the real and Credit Association and Produc- duction personal property in favor of Production tion Credit. Credit and Farm Credit be foreclosed filing of This with the action commenced being property judg- sold reduce original complaint on October an complaint ment. The further asked that on was amended two occasions.1 proceeds from sale be awarded alleged Credit and Farm Production Credit Credit and Farm Credit. Production Sep- complaint filed in the last on amended complaint alleged also that James W. 18,1986, Compa- Buying that Order tember Lawrence, in Pat consid- Lawrence and E. Lawrence, ny, Company, K. Land Charles loan, or renewal eration for an extension Lawrence, Dorothy D. Linda Lawrence note promissory delivered a executed and Love, Lawrence, in consider- James W. $49,000 payable for on before December loan, or renewal exe- ation of extension 15, 1984, security agree- a and executed Wyoming Produc- cuted and delivered to Wyoming Production pledging ment Association, Production tion Credit now Credit, Association, now Production Credit principal Credit, promissory a note existing and future livestock interest, $950,000, payable plus amount alleged complaint that for the loan. 15,1984. The com- on or before December paid was not such note that, payment plaint alleged to secure also $34,- judgment of prayed for a due and $955,000 of a note day per plus of $8.5240 350.22 interest transaction, Company of that same Land 14, 1986, plus July attor- from and after mortgage approximately a executed prayed for an ney’s and costs. It also fees 6,841 agricultural land.2 It was acres of authority sell the se- giving order them Lawrence, alleged K. further that Charles giving judgment and curity reduce the Lawrence, Lawrence, D. W. Dorothy James proceeds from the ownership of the them Love, doing business and Linda Lawrence X7. branded sale of Creek, security agree- a as Clear executed response to Production Credit’s livestock, proceeds pledging ment livestock complaint, last amended all Farm Credit’s product, crops, equipment, and feed Creek, Company, Land security for the Clear Order after-acquired property as 549,000 prom- except case Wyoming in this Association was volved Production Credit security agreement plaintiff executed original issory The record in this action. that, ac- E. indicates after commencement Pat Lawrence. W. Lawrence and James tion, Wyoming Association Production Credit Thus, party plaintiff was added as Farm Credit to Production Credit. transferred all its assets complaint. amended in the second therefore, desig- complaint, The first amended Credit, formerly plaintiff nated as Production mortgage was used as later 2. This Wyoming Credit Association. Production $950,000 promissory note. Thereafter, purchased partici- Farm Credit security in- pating loans and interest Lawrence, Dorothy Charles drawn therefrom. Whether or not the Lawrence, Lawrence, D. Pat E. evidence so viewed is sufficient to create Lawrence, Love, Linda Lawrence John D. an issue for jury solely question Lawrence, F. Charles Dan of law be answered the trial court. (defendants) B. Lawrence filed an answer That court must determine whether or and counterclaim on October 1986. In evidence is such without answer, alleged their the defendants weighing credibility of the witness- Dan B. Lawrence was the owner of the considering the es[ ] otherwise[ ] sheep branded X7 and that he legally evidence, weight of the there is but one proceeds. entitled to those Their counter- conclusion as to verdict which men [the] alleged claim Dan B. James of reason could reach. W. Pat E. Robert S. Shaw, Town Jackson v. 569 P.2d Love, ap- and Linda Lawrence had Love (citations (Wyo.1977) and footnote plied for loans from the Farmers Home omitted). Administration and the Small Business Ad- determining “In whether a verdict ministration but ar- Credit directed, have appellate should been bitrarily, capriciously, maliciously re- applies the same standard as does sign fused to agreements nondisturbance passing the trial court in on the motion humiliate, to damage, with the intent * * * originally. Whether a verdict them; embarrass that Production Credit question should be directed is a of law damaged and Farm defendants questions litigants those are enti- objecting securing to their a loan with the by appellate tled to full review the Board; State of Wyoming Farm Loan and special without deference the views of that Production Credit and Farm Credit Wright Miller, the trial court.” 9 and brought had their action in faith. It bad Procedure, Civil, Federal Practice and alleged also that Production Credit and 2536, 595, 2524, p. pp. harassed, Farm 541-542. intentionally § Credit had § embarrassed, denied James Law- W. Jackson, Carey v. (Wyo. 603 P.2d 877 rence, Lawrence, Dan B. and Linda Law- 1979). opportunity rence Love an them- avail deprives a directed verdict [S]ince selves of in young federal assistance a parties of a determination of the facts beginning program; ranchers and that jury, a such motion be cautiously should persons each of the signing individual sparingly granted. promissory guaran- had done part: Co., Inc., Land exe- Lawrence 15, December val- On or before Mortgagor payable and to by the cuted I, promise received, or either of us we ue Mortgagee, any of the and the order of Wyoming PRO- pay to order of to the thereof, all renewals or extensions and ASSOCIATION, at DUCTION CREDIT thereon, at such together interest with of city Casper, of State office in the its therein, specified may be rate or rates Fifty Hundred Thousand Wyoming, Nine exceeding further amount not and such * * $950,000.00 Dollars, *. and NO/100 $1,045,000.00 may be advanced 1984, Mortgagee to the Mort- 23, by the the future January note of advanced, to be advanced gagor, $49,000 signed by James but amount of the if 15, 1990, making the December prior to Pat Lawrence uses the and E. W. Lawrence secured ultimate amount aggregate and language. promisso- applicable That same $2,000,000.00, of and hereby the sum provides part: ry note pay- and due amount become whole 15,1985 for February value or before On 15, 1990, December on or before able received, I, promise of or either us according to interest as aforesaid Wyoming PRODUC- order of pay to the or to be exe- (10th Cir.1953); Valley Aroostook Rail separate promissory rence on the two authorized shoulder, is not otherwise the left Debtor or on the left dispose sell, or exchange, otherwise particularly described and more shoulder fur- The hereto collateral. ewes[,] the 2,389 as: bucks[.] indicating W. Law- either James proceeds that at trial that the determined 3. The trial court was involved Pat E. Lawrence sheep rence or the branded the wool and from the sale of thus, sheep; ownership purchase of these applied Charles to the debt of were to be X7 by W. security James Law- Although agreement executed Dorothy D. Lawrence. smaller on their ownership and Pat E. Lawrence rence promissory interest had an James W. Lawrence sheep. brand, not reach these note could was no evidence elicited there in the X7 agree: Agreement Security agreement, wit, ther this “all livestock now ... includes all live stock now owned or Debtor, owned acquired or hereafter by Debtor, acquired by whether together increases, replace- with all hereafter by increase, purchase, natural or other- ments, substitutions, and additions there- during wise the continuance this to,” reasonably hogs identified the either * * Agreement *. by the owned farmers at the time the thereafter, acquired loans were made or added.) (Emphasis purchase, trade, by either procreation, or (U.C.C. 9-204) W.S. 34-21-923 estab- § otherwise. validity after-acquired proper- lishes Mississippi United States Southeast ty security agreements. clauses in That Association, Livestock Farmers F.2d provides pertinent part: section (5th Cir.1980). Similarly, in R. (a) Except provided in subsection Anderson, Code, Uniform Commercial su- (b) section, agreement of this security pra at “[ajfter- author states that may provide any obligations or all acquired property is sufficiently described by security agreement covered are to by phrase ‘all livestock ac- hereafter by secured after-acquired collateral. ” quired.’ (b) security No interest attaches under after-acquired Landen property clause to con- Credit Associ Midlands, goods (W.S. (Wyo. sumer other ation than accessions P.2d 1325 (9-314)) 1987), given specific 34-21-943 typewritten as addi- we said that de- security acquires tional unless the by par- debtor of collateral inserted s (10) rights days them within security ten after agreement ties in a control over party gives secured general value. description in printed the standard form. In this case we perceive any do not sufficiency of description The a collateral is inconsistency between the two after-ac- (U.C.C. governed by W.S. 34-21-910 quired provisions. property Even if we 9-110), which states: § solely typewritten look at the provisions purposes For the any of this article however, by parties, inserted it clear description personal property or real after-acquired collateral clause is sufficient estate whether not it is sheep sufficient to reach the X7. branded specific if it reasonably identifies what describe, provisions initially These inserted described. brand, by existing sheep number necessity, the description property Of agree- that are cattle covered after-acquired property in an clause will be after-acquired ment. property provi- The by type, specific description gen- as a more sion, separate paragraph, pro- in a then erally possible. Anderson, is not 8 R. See any previously vides that additions to the Uniform Commercial Code 9-110:20 § described livestock are to be covered (1985). Summers, In J. White and R. U.C. agreement, including “any livestock to be (1980), HB C.2d 23-16 at 963 the authors § purchased.” after-acquired clause is state: because, specific less in the nature of the [Njearly permit descrip- all courts broad business, dif- it must be. The fact that a respect shifting tions with and after- placed pur- ferent brand was on the later collateral, acquired applaud and we sheep if chased does not affect the result permissiveness. floating lien with sheep fact owned the debt- after-acquired property its re- clause otherwise, to hold debt- or. Were we quires descriptions. broad subject or/rancher to a similar The Fifth Circuit Appeals, Court of avoid the could creditor's securi- involving livestock, ease chang- ty simply by interest in his livestock said: replacements the brand all livestock hold We description We additions. hold that farmers' reasonably swine the FmHA branded identified X7 that, If the K. Lawrence testified with the loan security agreement in this case.4 the funds, purchased purchased sheep or owned and cattle sheep were indeed he “indi- proceeds from Compa- the rectly” through K. the Order Charles sheep subject to the such sheep the sale of were including the X7. ny, branded security of Production Credit and interest K. further testified that Charles Lawrence Farm Credit. exclusively X7 on the the brand was used sheep the Small Business purchased with testimony other The evidence loan funds.5 Charles K. Administration purchased and actually who regarding additionally although Lawrence stated sheep complicated X7 is branded owned the sheep through purchased the his Order he conflicting. We initial and somewhat they Buying Company although however, record discloses that ly, that the purchased the with funds he received from B. and James W. Dan Lawrence loan, he Lawrence, Small Business Administration Charles K. sons of who both sheep. these never owned of the X7 brand. Pursuant were co-owners 11-20-108, evidence of a brand is to W.S. Dan B. Conversely, Lawrence testified legal proceedings in ownership of livestock purchased sheep branded X7 that he involving to the livestock. title he from the First with funds borrowed April in reveals that a The record (First Buffalo Inter- Interstate Bank of major live- spring blizzard caused severe state). sense, and as a result a a As Creek Ranch. losses at Clear stock transactions, testimony of series result, Dorothy a K. Lawrence Charles K. Dan B. Law- both Charles Lawrence and applied for and received a D. Lawrence supported by the record. The rence is $253,- loan in the amount disaster ranch B. ini- reveals Dan Lawrence record Administra- from the Small Business attempted First tially to obtain loan from (the ranch In- separate family tion. A sheep purchase Interstate for the Ranch) chauspe pledged as collateral was money security giving purchase the bank purposes for the specific this loan. The Interstate, sheep. in First interest agreement as in the loan loan were stated however, approve with- not the loan would being: Consequently, out additional collateral. $116,600 replace Approximately A. B. K. Lawrence and Dan Lawrence Charles sheep. loan, K. jointly applied for the and Charles $132,900 replace Approximately B. collateral, pledged, as additional Lawrence cattle. in the amount of deposit a certificate $3,500 repair fenc- Approximately C. $100,000. deposit was This certificate ing. received from with funds obtained funds was made of the loan Disbursement First loan. Business Administration Small Doro- sending K. Charles Lawrence loans to approved two Interstate then $120,- totaling D. two checks thy Lawrence B. K. and Dan Law- Lawrence Charles and one check 000 December rence, $133,000 for and the other one $133,000 on March $100,000. and Dan Charles signed B. Lawrence both application testimony regarding the $133,000 evidencing the loans. conflicting. purchase loan was secured money way, those X7 over sheep Bar were sheep X7, interest in the branded sheep replace used to lost, other animals $100,000 and the loan was secured such, and as come within the security deposit. certificate of after-acquired as sheep, and proceeds depos- from the loans those funds were will be set over to the [Pro- ited in an account with First Interstate held duction Credit]. Lawrence, either Charles K. Dan B. agree We do not with the trial court’s Lawrence, Dorothy D. joint- resolution of this issue. In conformance ly, byor Dan B. individually. A with our standards of review of a directed discrepancy as appears to this fact in the verdict as set previously, forth arewe testimony. sheep branded X7 were say able to on the basis of the evi- purchased with a check written on the Or- dence in the giving record and considera- Buying der Company account Dan B. tion to the evidence appellants favorable to Lawrence, who was a signatory on that without considering the credibility of the Thereafter, account. Dan B. Lawrence witnesses, there is but one conclusion equivalent wrote an check to the Order which men of reason could reach as to the Buying Company out of the account hold- ownership sheep of the branded XT. This ing the First proceeds. Interstate loan question fact, is a and the conflicting Upon purchase sheep X7, branded evidence of ownership should have been Dan B. Lawrence told inspector the brand submitted to jury. Consequently, we to enter the name of Charles K. Lawrence aspect reverse this the trial owner on the court’s deci- ownership certificate of sion prepared by and remand inspector. jury the brand The bills consideration the sheep question sale for the designate branded X7 whether Charles K. Lawrence Charles K. purchaser. Lawrence as purchased sheep owned the branded X7. jury Should the find that Charles K. Law- In directing a verdict for Production purchased rence sheep owned the brand- Credit and Farm Credit on the issue of XT, then, ed law, as a matter of sheep they whether proceeds entitled to the proceeds branded XT and therefrom from the sale of sheep XT, branded said, collateral falling trial court within the reference to the above- coverage security agreement. elaborated evidence: I believe testimony is clear in We now decide whether the trial this case I don’t think reasonable court erred when it ruled Buy that Order differ, men could but that those ing Company, Company, Creek, Land Clear bought with disaster funds. Mr. James W. and Linda Lawrence Lawrence even testified really Love makers, were not liable guaran what They was used. channeled those tors, through co-signers funds 19, 1984, First on the January Interstate Bank so the loan promissory went to Dan I note. promissory but am That going afraid I am not buy Any- signed it. following manner: It is clear that Order Company, Gennings v. First National Bank at Creek, Land Clear Thermopolis, (Wyo.1982), 654 P.2d 154 Lawrence, and Linda Lawrence Love each case similar facts to those signed disputed case, present note. recognized a maker note, arbitrarily, capriciously, de- and ma- absent a valid Credit had

of a individually responsible liciously sign to fense, refused nondisturbance becomes agreements an instru- other- with other lenders and repayment its otherwise, person opportunities a specify them to avail ment does not wise denied another, signed promis- financing; a who, along with themselves additional right on lines lower corner Farm sory note that Production Credit and Credit though makers, signatures brought damaging even this action bad faith party, was signing respective reputations as an accommodation credit each their Although positions.6 a maker. Order liable as and financial Review Creek, absolutely Clear Company, Land record shows that there is no Lawrence, suggests and Linda James W. Lawrence that Production evidence which manipulated case is not improperly each contend that contract Love Credit improperly applies Ar- it applicable provisions because to its benefit and the Law- Wyoming 3, Chapter Title 34 of the ticle rences’ detriment. fact that the Law- Paper,” we entitled “Commercial rences Production Credit would statutes believed inapplica- applicability promissory notes when conclude not foreclose dispositive. not We they section is bility of that became due and the fact that groundless mer- argument industry hold such economics of the ranch or farm itless, why rules gradually see no reason had caused the Lawrences applied Gennings position should not be possess as stated a weakened financial enough to an issue material here. not create by jury a fact sufficient for determination position for their justification The sole respect to their claims of bad faith in with mak they should not be held liable as faith in tort. contract or bad prom promissory note is that the ers of adequate issory lacked consideration. by Production Credit refusal record, $950,000 were As evidenced agreements to provide nondisturbance Doro K. Lawrence and received Charles they get could addi so that Lawrences Pro Wyoming thy D. Lawrence financing does not in and of itself tional The fact duction Credit Association. acted bad show that Production Credit moneys actually those they alone received obligated was not faith. Production Credit signed the apart from the others who agree sign any of the nondisturbance not It is promissory note immaterial. giving determined that simply ments. It move the consideration essential in its finan agreements was not best such a recover on the makers in order to each of creditor of the Lawrences. cial interest promise parties. several Gen made reasoning refutes the claims of The same generally See also 654 P.2d 154. nings, regard to assertions the Lawrences 196, 115 Wyo. Thompson, 57 Houghton v. improperly refused Credit that Production Mahnken, (1941); and Barrett P.2d 654 moneys. personally loan them additional (1897). We hold that Wyo. 48 P. 202 that Pro Nothing in the record discloses those erred when it found the trial court unjustly Farm Credit duction Credit makers, guaran parties not liable the Lawrences’ sale of caused the January tors, signers products. Production livestock or livestock note, and we reverse that were entitled to Farm Credit Credit and court’s decision. the trial respective on the foreclose notes, mortgage. security agreements, and determine whether We will also time the Law- after that Actions taken it directed verdict erred when trial court attempt any of their to meet B. rences in an of Dan dismissing the counterclaims obligations to Production Credit Lawrence, E. Lawrence, and Pat debt James W. freely by taken the Law Farm Credit alleged that Production Lawrence rence, they Love because or Linda propriety of trial 6. We do not discuss dismissing appeal the counter- such issue. verdict failed to court’s directed Law- John D. of Charles F. claims judgment rences in improperly their own best and can- when it directed verdict dis- compelled by missing be said to have been counterclaims Dan B. Law- rence, Farm Production Credit or Credit. James W. and Pat E. Lawrence. parties We hold that those and Farm failed proof placed to meet the burden join improperly Credit did not or continue upon them to show that actionable cause to include Dan B. against existed Production Credit and and Pat E. Lawrence as Farm Credit. to this suit. Pat E. Lawrence and James signatories W. Lawrence respectively Finally, we will decide whether or on one and both of the notes in not the trial in refusing court erred to hear Additionally, this case. Dan relating B. Lawrence evidence problems the to financial and James W. Wyoming Lawrence co-owners in of the Production Credit Associa brand, the proceeds X7 from the sale tion and Production Credit. the case of of directly livestock with that brand were State, Jahnke v. (Wyo. 682 P.2d dispute in here Dan B. 1984), because we our long standing summarized he proceeds claimed was entitled such regarding standard of review the admissi rather than Credit or Farm bility of evidence: Credit. As in stated in W.S. 11-20- applied rule this court has 108: respect rulings admissibility as to brand shall be received as evidence of [A] of evidence is articulated in Taylor v. ownership legal proceedings in all involv- State, Wyo., (1982), 642 P.2d ing title to the animal. as follows: signifies Given that a ownership brand in “It generally has been held and, therefore, livestock arguably owner- admission of evidence is within the ship in proceeds livestock, the from such sound the discretion of trial court and we hold that Production Credit and Farm absent a of clear abuse discretion will Credit had sufficient cause to file suit general not be disturbed. It is also the against them ownership because their foundation, relevance, rule that interest in the Dan B. brand. Lawrence’s competency, materiality, and remote- paid claim because he off his loan ness are within the sound discretion of Credit, with Production it relieved him as a upheld trial court and will be party groundless. to this suit is The loan appeal absent a clear abuse of discre- paid by him to Production Credit was a (Footnotes omitted.) tion.” separate having distinct and loan no con- establishing The burden of the clear nection those whatsoever with loans in this abuse of discretion must be assumed case. party ruling who attacks the An examination of record further trial party court. That must establish discloses that E. Pat Lawrence failed to ruling of the trial court was appear any at trial or other means to did affect erroneous and that it substan- personally establish counterclaims she rights party. tial trial court alleged against Production Credit and in the exercise of discretion ex- its can Farm testimony credit. as the Insofar clude even evidence when there relevant husband, her may be countervailing considerations such as claims, said to support her we substantially is probative “if its value unconvincing testimony such for the danger outweighed prej- by the unfair reasons previously enumerated. issues, udice, or mislead- confusion of jury, considerations of un- give though party against Even we pre- delay, due waste of time needless granted whom a has directed verdict been evidence.” sentation of Rule cumulative every recog- favorable consideration and 403, W.R.E. difficulty sustaining nize the a directed review, this court has es- verdict because of standards of The definition that our discretion is poused found say cannot the trial court acted of an abuse State, action, Wyo., 611 P.2d this rivative we fail see how Martinez (1980), subject it is stated as follows: evidence is matter where relevant to “ * * * involved this case. Production Credit has An abuse of discretion and Farm Credit were entitled to foreclose of law to mean an error been said notes, respective on the securi- the cir- by the court under committed * * ”* agreements, mortgage ty when each cumstances. ****** the promissory notes became due. Produc- duty no tion Credit and Farm had Credit rulings at evidentiary “In the context moneys lend to the additional Lawrenc- trial, long has adhered to this court and Farm es. Production Credit proof offer of doctrine that a sufficient right operate have the their businesses may necessary this be ade- so that court they proper themselves deem apprised of the nature of quately their best business interest within their testimony. purpose The dual excluded officers, corporate hierarchy of di- own requirement the trial enable rectors, employees, and shareholders. See fully in the exercise to be advised generally Wyoming Corpora- Business regarding admission discretion its Act, through W.S. 17-1-101 17-1-1102. tion evidence, reviewing to and enable the properly court acted We hold the trial if error prejudicial to determine court regarding the when it excluded evidence prof- from the exclusion resulted problems Wyo- apparent financial State, Garcia testimony.” fered ming Credit Association and Production (1983). Wyo., 667 P.2d Credit. Production Sims, (citations Quoted in 751 P.2d at 362 plight We are sensitive to omitted). are family American farm ranch and Lawrences, case, through an In this like fully nationwide individuals aware that proof appellate offer at trial their losing the Lawrences are their each of brief, relating to the assert that evidence land, homes, personal property, their their Wyoming problems of Produc- financial and, general, way of life. hold in their We Association and Production tion Credit and Farm Credit that Production Credit restructuring of those causing the Credit dealings throughout properly their acted such was relevant because associations regards. these with the Lawrences within changes unjust in foreclosure resulted in assets numerous loans order to collect part, in part, in reversed Affirmed up” farm credit money to “shore ac- proceedings in remanded for further rea- system in other areas. Lawrences opinion. with this cordance that, in the farm credit son order save of cred- system, loan standards areas J., URBIGKIT, opinion an filed refinancing changed, it criteria and dissenting concurring in in in faith foreclosure resulted the bad part. by Production Credit of numerous loans concurring URBIGKIT, Justice, in Credit, including their own. and/or Farm dissenting part. part and capital further assert that The Lawrences in bad offices was transferred other only to reverse I in the result concur causing Wyoming faith wool, relating to of the trial court decision mon- Association have insufficient priority rights proceeds and sale patrons in its own area. eys to loan to its respectfully dissent sheep X7 and branded affirm any to otherwise decision recognize we that such evidence While verdict.1 de- directed may appropriate for a shareholder’s the au- the thesis of to accommodate modified By I would circulated June dissent as now with- special concurrence thor of original opinion on the have with the concurred drawn. pro- subject priority claims opinion, time, delayed publication of the special To avoid Since that concurrence ceeds. qualify in concern circulated, conclusion opinion I was would after which the court, court, This as did the trial pleaded achieves first proven and then in trial evi evidentiary conclusion based conflict- dence. ignores The court now singular justify evidence to a directed verdict as volume of developing cases of lender de adverse to the borrower to favor the lend- faults agreements of oral course er. At issue was the contention of an arrangements. business This is done ongoing agreement for the lender pro- applying a interpretation strained pro operational capital vide to the borrowers. tect the defaulting lender who demands the epidemic general lending As is but more impossible feigns surprise when it does tragically agriculture, precipitous de- not occur. A more realistic and commer lender, capital by particular- nial of cially application reasonable banking ly so at a time after a destructive storm principles and responsibilities mutual be loss, resulting heavy presaged livestock tween borrower and lender is found in Sa inevitably probable the foreclosure and hadi v. Continental Illinois Nat. Bank agriculturalist. bankruptcy of the Trust Chicago, Co. 706 F.2d (7th Cir.1983), summary judg where To the jury extent of denied resolution ment in favor of the lender was reversed clearly issues of fact to be discerned in appellate the federal recog presented the record pa- as within broad nized: clearly rameters defined of a lender’s culti- expediency vated of asserted and anticipa- upon “The limitations the use of summa- funding, approval ted I dissent ry judgment from the stringent, may legal moralistic and default the lend- not affirm the district court’s order un- Differing er. premier from the decision on less the record reveals the absence of liability, lender State Nat. Bank El any genuine Paso issue of material fact. Fed. Co., Inc., Mfg. v. Farah Tex.App., 678 56(c). R.Civ.P. agree We cannot with the (1984), S.W.2d 661 this court substitutes its district law, court that under Illinois ex- disputes conclusions within factual “for pressly applicable made agree- jury.” those of the here, presents ments this record no is- sues of material province requiring “It is not within fact of the court a full outstanding trial. While jury’s to interfere issues of with the resolution of mate- may rial fact conflicts in well exist also in pass the evidence or to relation to on the weight the Sahadis’ credibility ‘good of waiver and breach the witness’ testi- claims, mony. faith’ we need not reach those Where there [Citations omitted.] evidence, conflicting questions is jury’s here and so analy- verdict confine our on generally regarded purposes such matters is sis for the appeal as of this to the conclusive. issues of ‘material’ [Citations omitted.]” Id. at breach.” continuing: With that court further My review of the entire record complete would “The need for a inquiry factual provide jury a conviction that underlying a case was into the circumstances and simplistic appellees’ rights applicable a by ownership legal determination of may ap tion rules that be purchase trial, may plied upon specifically, at be over-inclusive whether the precedent rights within the exhaustive solely for after-ac- to the are determinable quired through dragnet applica- assets a ownership concepts. drag clause one time bland is, example, recognized tion. this case it net-anaconda interest characteristics indeed, purchase complex fact that the funds for the came as witnessed First Na Bank, acquire against Bank, from other lenders to the asset tional v. First Interstate Riv Cortez erton, attempt appellees priority (1988), Wyo., which security to attach a 758 P.2d 1026 for which priority provisions rehearing granted claim. The was so that the case will be 34-21-941, implicated again orally argued. § W.S.1977 could be de- Even with the UCC statu circumstances, pending specific tory approval, documenta- contested claims to avoiding property security many tion and events. Other characteristics interest can be found in generic subject may may hotly litigative included within the scores of contested controversies spe- presenting not result from a confined attention to the defenses on at least a half a dozen may jury cific circumstances as be apply found in different bases. Whether or none here, presently verdict. cannot be determined on the date, delayed publication briefing In order to avoid a record and which has resulted from prior presented concurrence is restricted on the issue to directed verdict now in this only way implies predisposi appeal.

results and in no a

655 loan); and Pecos Const. especially budgeted Co. acute custom commercial Paso, Mortgage v. Inv. Co. El 80 where, here, purportedly breach- N.M. as 680, (business (1969) compul- P.2d 459 not of that time was 842 party claims * * * actionable). sion as economic duress is See contract. essence ****** Kaye, likewise Bank Fairbanks v. 16 (9th Cir.1955) (the F.2d Alaska 227 566 ques- “Although need not reach the we accept arrangement bank should not a new summary judgment may tion of whether intending comply if not with its basic plaintiffs’ asser- applied be properly promise further assurance novation faith,’ ‘good hold waiver and tion of third-party payment promise inappropri- procedure that such right abrogates any denied to immediate resolving necessarily ate short-cut in Bank, Stirling v. Chemical foreclosure); fact-bound, complex ‘materi- question of (S.D.N.Y.1974), F.Supp. 382 1153 197, 200. Id. at al’ breach.” (2nd Cir.1975) (common aff'd 516 F.2d 1396 loan commitment cases Current violated representations law false fraud from jury issues and outstanding with claimed factual not loans would be called and resolution include Federal made); trial First Nat. bench further loans be would Gibbs, v. Mont., Libby Twombly, Land Bank Omaha v. 809 F.2d Bank in 689 (8th Cir.1987) (remanded to (1984) (jury state court 493 P.2d 1226 issue of breach of commitment, faith); statutory conflict reso- obligations good for loan factual to act Huff, Betterton v. First Interstate Bank Nevada Nat. Bank v. lution); 94 Nev. Arizona, (8th Cir.1986) (1978) (course P.2d 800 F.2d 732 364 conduct impose (UCC jury issue to duty good faith as contractual between lender). Co., Northwestern duty Irving Inc. v. Trust Compare remedy); K.M.C. Nat. Bank Great Falls Weaver-Max (6th Cir.1985) F.2d well, Inc., Mont., (1986) 1258, 1262 729 P.2d (good implied every contract and faith (where verdict, jury appel on reversal of ques- financing agreement; this includes did trial late court said that the by jury resolved tions of fact should be finding jury, fact to the as it should leave Alaskan Reclamation decision); Native determinations of na- leave factual Control, Inc. Bank and Pest v. United jury). ture of the Also to Alaska, Alaska, (1984); P.2d Corp. compared Rigby v. Boatmen’s Fairco, Alaska, Alaska Statebank Co., Mo.App., 713 S.W.2d and Trust Bank (1983) (course dealing P.2d 288 of between 517, (1986) (in good discussion of faith 527 parties, rights un- established altered commercial of from reasonable standards Clinton Fed- agreements); pre-existing der to characterization as the trade involved eral & Loan v. Iowa-Des Sav. Ass’n Griffin, fact). in honesty See Ebke and Bank, Nat. App., Moines Iowa 391 N.W.2d Liability to Debtors: Toward Lender (conflict (1986) factually 719 between Framework, 40 Conceptual L.J. 775 Sw. participant on an over- lead and lenders (1986) provides compre- as an article that dispute regard- testimony lined loan where thoughtful review. hensive banking community practice generally specifically the lead lender Reardon, jour- of P. in law Timothy current material); Consolidated Comment, is Lenders relevant Wisconsin analysis, nal Miss., Covington, Am. Ins. v. Striking Co. 297 Borrowers are Back Beware: Life (1974) (the Liability, Marq.L.Rev. 896 trial court was Lender So.2d 71 376 With failing in direct verdict in (1988), analyzes not in error to as common law theories of lender); Shaughnessy v. Mark misrepresen- favor of fraudulent liability of lender Bank, Mo.App., tation, enterprise as Twain State 715 S.W.2d and tortious duress Bank El Paso v. (1986); Production Credit found from State Nat. Yankton 944 of Co., Inc., supra, Larsen, Mfg. 678 S.W.2d Ass’n v. Farah 365 N.W.2d Neb. implemented re- (1985) directly (genuine the more issues of material dealing as good and fair good quirement of faith fact as to whether PCA acted and ac- including funds refusal advance of faith when it loan amount refused es; maturity. Applicability (2) agreement celeration of and line of credit as relationship present litigants operational of these relationship par- between the pleading predating self-evident and evidence. ties periods annual renewal debt instruments total mechanism, court now creates a This dollars, only two million of which Wyoming legislature has refused which $1,045,000 was advanced with concurrent provide, that will invalidate substantive by breach lender of this line of credit provide credit contracts effectuated agreement when additional advances agreement justified oral and memori (3) provided; the fund would not be course through a course of alized business rela business, procedure custom and between Additionally, tionships. ignores the court operational financing, good the UCC covenant faith which is 1960’s, early had existed since the 34-21-122, encompassed W.S. within § payment breached lender in demanded 1977; 34-21-120(a)(xix), W.S.1977; § consequent foreclosure; (4) harass- Co., 34-21-127, W.S.1977. See K.M.C. § lender, separate ment of a First Interstate Irving Trust Inc. v. supra Buffalo, Bank of with intent to “interfere (which may premier considered as a case damage [appellants’] with and banking Corp. Rigby v. persuasive authority); lender; (5) relationship” with the other al- Co., supra; Boatmen’s Bank and Trust secured, though completely lender institut- Libby Twombly, First Nat. Bank in reasonable, ed foreclosure which was “not supra; Yankton Production Credit Ass’n tortious, capricious, irresponsible, but Larsen, supra; Summers, The Gen malicious, and an intentional in- effort Duty Recognition eral Faith — Its Good jure damage Defendants;” (6) these Conceptionalization, 67 Cornell denied credit (1982). resources which should have L.Rev. 810 “young beginning been available for approval the directed verdict pursuant ranchers” to C.F.R. 614.4165 § borrower, against agriculturalist as (1-1-85 edition); (7) cooperation denied accepts posture really that what Wyoming with the State Farm Loan Board happened unimportant specifically unless consequently vetoing acquisition of an as a explicit agreement, refined in written emergency replacement lost livestock loan law, matter avoidance of a factual provided operational cap- which would have issue resolution the constitutional fact livestock; (8) coopera- ital and denied finding jury. Consequently, the court con tion with the Farmers Home Administra- reality verts what was in an issue of fact tion and Small Business Administration Gosar, 6 of Cordova v. (Stage review rejection of a nondisturbance (1986)) Wyo., 719 P.2d into a decision vetoing funding which “could have dis- regard as a matter of law without for the charged Wyoming all of the debt of the materiality conflicting evidence. Production Credit Association.” County Shauers v. Board Com’rs County, Wyo., Sweetwater 746 P.2d 444 volume, Any appraisal realistic of this 12 Brick (1987); Intermountain Co. v. Val exhaustively reveals exhibited record little Bank, ley (1987); Atlas Wyo., 427 746 P.2d denials, rejections the lender doubt that Slater, Wyo., Const. Co. v. 746 P.2d 352 deliberately intentionally and vetoes Stassinos, Yene v. (1987); Wyo., 730 P.2d presented came with occurred. The issue (1986). 791 concept to the contract and tort defensive phase legal justification. of the lender’s In amended answer and counterclaim of comprehen- clear factual issues were Since pages paragraphs 24 with 38 for answer developed sively within the extended counterclaim, appellants, and 22 for as bor- record, supports the this court now direct- rowers, allege recovery theories of or de- supplies justification by (1) ed verdict and agree- fense which included: breach of parol application rule. That is the evidence ment of lender when borrowers obtained a alleged totally misplaced in the contours of separate application loan for debt the lending encompassing breaches tortious with concurrent that of the re- $219,000, $100,000 cases are of paid and contract violations. These would be avail- events are restocking purchas- for a nature where the facts and able livestock

657 years of busi earlier the have normally from course borrower would derived understanding ness, agreements financing found an source of in oral alternative parties long have been associ constancy danger who between order minimize the of financing. See discus history in a of “pulled lending agree- ated The plug.” from a Fa Annotation, Prima justification, sion of parties ment between these was derived Tort, (1967). 1191 cie 16 A.L.R.3d understanding express from in statements arising through years of the mutual busi- high “may,” as permissive The ascribed ness association as lender borrower. opinion, my in con- weight by majority is analysis terribly a jury Denial of trial is currently developing lender liabili- cept and in unjustified. dispute, With the facts “the by the subject to definition ty precedent language meaning given used and the to be understanding parties the between actual it, questions jury.” of fact the conflicting pre- clearly was in factual which Adams, v. 605, Coston 203 Okl. 224 P.2d in the direct- trial evidence before sentation (1950). 955, 961 of the granted. subject ed verdict was disparity of information combination of evidentiary factual conflict basic Commer- in misplaced trust as considered disagreement mu- on the central concern of Peoria De- Nat. Bank v. Federal cial of understanding line tual for a of credit 977, 87 Corp., posit Ins. Ill.App.3d 131 sidestepped by ignoring only substantive 107, (1985), equal- N.E.2d Ill.Dec. oral evidence and valid inferences to be jury I find a involved here. would also ly the from nature of conduct of derived justified the circum- reliance under issue substitute, enterprise. v. Amer- stance. Sanchez-Corea Bank of wrongly applies limiting stricture ica, Cal.Rptr. Cal.3d applied evidence to a of the parol (1985). P.2d 826 record, from clearly, which evidence case In this effectuated entirety snow blizzard under- does not include the spring storm of loss of standing and facts of the basic the business replacement axio- failure of credit for was transaction. mort- loan matic successive default unexpected rejection The obdurate and My principal objection gage foreclosure. financing responsibility by the continued decision it confines court’s Credit Association Wyoming Production status of the business course business exasperated shown the record was relationship, years, occurred over cooperate even with the borrower failure to particularized terms the annualized might acquired. that substitute credit so doc- documents. Those loan port be a lender was not to This uments were the result the transactional abyss rather an turbulence storm but not arrangement encountered.2 ongoing long-term intended to create the article, journal law In conclusion of their understanding parties. Obvi- between Griffin surmised: Ebke Wy- if had ously, known borrower think, lesson, great that can be “The oming Association would Production Credit case growing body drawn ship availability capital jump liability is a modern version disaster, many of lender law event of a then weather counterclaim, clearly Libby Twombly, supra, 689 P.2d 1226 with Appellants, rather 2. Arizona, Bank Betterton First Interstate pleaded a cause of within tort claim action Rigby Corp. supra, v. Boat- 800 F.2d 732 and emergency perspective prima facie tort. Co., supra, S.W.2d Bank Trust Tort, men's Annotation, Prima Facie 16 A.L.R.3d Griffin, supra, at 799: Ebke narrowly specific supra as a restricted “rather theory prima a lawful facie tort remedy, "Under involving otherwise lawful conduct tort, unjustifiably performed with an intent act giving rise other to an action some the ac- makes maliciously complainant harm another is unlawful to harm the intended damages. A cause of action liable for damage, justifica- tor causing 'special' without theory may prima not be tort good facie under brought, UCC tion.” Breach of the covenant however, actionable if the conduct is prima tort are facie faith reciprocal execution of ac- existing, cause well-defined in One contract remedies. .under theory prima function- tort facie rationally tion. the same other tort that result from distinguishable theoretically ally and Compare Nat. Bank character conduct. First (balance), Greek ideal of the ancient [as] lender’s interest

balance between

assuring repayment and the debtor’s in- interfer- in freedom from undue

terest Where to draw the by the creditor. ence course,

line, stated in terms cannot be principle.” Ebke rule or

of an abstract Griffin, supra, at 816. however, here, trial court and

Clearly the line without cur- this court draws

now justification

rently precedential available theory complete unfairness

and with damaged and dev-

conflicting fact to the

astated borrower. re-

Consequently, I dissent would judgment of foreclosure and

verse appellants’ claims and

directed verdict requested jury for the

remand the case

trial. of the ESTATE OF

In the Matter FULMER, Harry B. Deceased. BURGESS, Acting

Henry Trustee un- A. and Testament of der the Last Will (Petition- Fulmer,

Harry Appellant B.

er), SHERIDAN, BANK,

FIRST WYOMING Corporate Co-Trustee Successor Sheridan, Wyo- Bank of

First National Deposit

ming, Federal Insurance Appellees (Respondents).

Corporation, No. 86-324. Burgess and Robert James Henry A. Wyoming. Supreme Court Sheridan, Davis, ap- Burgess Wyatt, & pellant. Sept. Palmerlee, Pal- Omohundro &

David F. Buffalo, Wyo- First merlee, appellee, Bank, ming Sheridan. dealing, merely duty good faith and fair duty good implied faith and fair

actionable dealing duty in a philosophical to state all tort law sounds in tort while effort in that it ‘a single dealing good sounds in con- and fair effort to state a faith rather than an sentence however, are, The theories tract and tort. meaningful principle.’[Footnotes omitted.] application. indistinguishable Both theo- collection comparable tort of unreasonable See men- require finder to assess the ries the fact damage jury resulting verdict efforts with clearly absence of of the actor in the tal state Bell, award, Tex.Civ. North America Bank of unacceptable conduct. defined standards (1973). App., S.W.2d theory, prima tort as well as facie two notes allow- and personal foreclosure and sale of property real used as for those notes, including promissory after-acquired addition, property. judgment found Buying K. Charles Lawrence Order (Order Company, Buying Company), Inc. (Land Company, Lawrence Land Inc. Com- Lawrence, pany), James W. Law- Linda makers, rence Love were not liable as guarantors, co-signers promisso- on one Co., ry note and that Clear Creek Ranch (Clear Creek) Inc. was not liable as mak- er, guarantor, co-signer prom- on either issory judgment note. also dismissed Lawrence, the counterclaims of Dan B. Lawrence, Lawrence, Charles F. D. John Love, Lawrence, Linda W. Lawrence James and Pat E. Lawrence. part, part, We affirm reverse in remand. parties’ appeal issues on are summa- rized as follows: 1. court Whether trial erred judgment it its on entered the directed verdict: awarding a. Production Credit and judgment against Farm Credit James Lawrence, W. Pat E. Henry Burgess A. L. Darlene Reiter Dorothy Charles D. Davis, Sheridan, Burgess appel- & separate on promis- the two appellees lants in Case No. 87-167 and for allowing sory notes and foreclosure in Case No. 87-168. personal and property real used as se- curity payment promis- for the Murphy Mark J. of Shoumaker Mur- notes; sory phy, Sheridan; Olsen, and Howard P. Jr. of Simmons, Olsen, Raymond, Ediger, awarding Selzer b. Production Credit and Ballew, P.C., Scottsbluff, Neb., appel- pro- & Farm all but from the $100 $950,000 sheep payment promissory note. of the sale of wool ceeds accompanying complaint alleged in- The then the condi- branded X7 and note, mortgage, tions of the payments; centive security agreement were broken and determining that Order c. that Charles K. Lawrence had converted Creek, Company, Land Clear properties. secured It also stated that Lawrence, and Linda Law- James W. proceeds on the cash there was lien makers, not liable as rence Love were branded X7 and other sale co-signers guarantors, or Janu- equipment livestock or note; ary pro- B. that Dan Lawrence claimed these dismissing the counterclaims d. complaint requested ceeds. The B. Dan owing trial find due and the amount Pat E. Lawrence. $686,918.25, which included interest the trial court erred Whether July through plus interest accru- relating refusing to hear evidence to the

Notes

notes so as a Atkins, Cody (Wyo.1983). 658 P.2d 61 tor and Finally, alleged not as a maker. it Corpora- See also Sims v. General Motors that Production Credit had breached tion, P.2d (Wyo.1988). 357 agreement $100,- advance defendants Wyoming 000 from the State Farm Loan rules, Applying these we will decide proceeds; Board loan the trial whether court erred it direct agreement Credit had breached its awarding ed a verdict Production Credit $955,000 each defendant to extend between against judgment Farm James $2,000,000 revolving aas line of credit Lawrence, Lawrence, W. Pat E. Charles K. 15, 1990, by until bringing December the Lawrence, and D. Dorothy Lawrence on lawsuit. separate promissory the two notes and al lowing personal foreclosure on the and real ques- When faced awith directed verdict property security payment used as for the tion, applicable this Court’s standards promissory begin by of those notes. We review are as follows: looking at the documents themselves to reviewing grant of a directed they ambiguous. if determine As stat court, verdict a trial consideration Link, P.2d ed in Farr v. given must be to all evidence favorable (Wyo.1987): against party motion is whom the [the] directed, as well as to all Our rules of contract construction are reasonable legitimate might inferences which be well established. The construction or in- Lawrence, Lawrence, Dorothy D. James question a W. terpretation of contract a security purpose in and Linda Lawrence Love for the court. basic law January 19,1984, prom- construing payment contract is of the interpreting a parties. security If issory the intent note and the to determine writing is in the lan- pledging contract livestock and live- ambiguous, guage is and not signed by clear James W. stock is to secured pay- intention for the Pat E. Lawrence agreement. January 23, 1984, promissory words ment of the * * * unequivocal. are clear and ambiguous is an note An contract in its mean- agreement which obscure discrepancy sole over the arises expres- ing of indefiniteness because meaning language encompassed of certain meaning be- or because of a double sion mortgage which was executed ambiguity exists ing present. Whether $955,000 Company promissory Land question of law. contract is and which was later used as note omitted.) (Citations We have also stated 19, 1984, promissory January note for the unambiguous, this if a contract $950,000. language in the amount of That under rewrite that contract Court will not specifically states: interpretation. Arnold v. guise ALWAYS, PROVIDED, and these Mutual In West Farm Bureau Mountain condition, upon express presents are Inc., 707 P.2d surance Mortgagor if the said shall and does (Wyo.1985). pay paid truly or cause to be well the record indicates the Examination of Mortgagee, said its successors and January 19,1984, in promissory note $955,000.00 assigns, sum accord- $950,000 signed by K. Charles amount to the conditions one Dorothy D. executed January note dated Love, Order Linda Lawrence Lawrence, Dorothy D. Law- K. Charles Company, and Buying Company, Land rence, W. Linda Law- James unambiguous. clear and Creek is Clear Ranch, Love, dba rence Clear Creek applicable provides That Lawrence[,] Order Charles

notes ASSOCIATION,at its of- CREDIT TION Mortgagor payable cuted Wyo- city Casper, State fice sum or Mortgagee, which of the order NO/100 ming, Forty-Nine Thousand ** Mortgagor here- money said sums Dollars, *. $49,000.00 * * pay \ by covenants pledging Likewise, added.) Those (Emphasis livestock, equipment, contend brought appeal this family who signed by K. property Charles language obligation that this constituted an regard cation that rule with to this case on the of Production Credit Farm dictates same conclusion. We hold that that, bring- Credit advance credit and Production Credit and Farm Credit were suit, agree- they this breached that mandatory not under a obligation to lend Conversely, ment. Production Credit and any money amount of to the Lawrences document, Farm Credit assert encompassed than other within the through “may,” use of provided the word promissory notes and that mortgage they moneys could advance additional executed as payment they if they desired and not 19, January 1984, promissory note is clear obligation mandatory under to do so. unambiguous on its face. Hammett, In Bethurem P.2d (Wyo.1987), we stated: The Lawrences assert that testimo general rule, aAs courts will ascertain ny presented agreements at trial shows the parties interpret- the intentions of the were meant to be “line of credit loans” ing the language that is used in the simple rather than promissory notes which adding contract and will not resort due owing on December omitting has what been omitted what 15, 1985, February respectively. We has added. If the is in been contract will deviate in case from our rule writing language and the is clear and that, of law unless ambiguity there unambiguous, the intention is to es- clarity contract, lack of in the terms of a tablished from the words the contract beyond this Court will not look the contract by considering the contract as a whole meaning. Bethurem, to ascertain its reading provision light each of all 1128; Samuel Mares Post No. provisions. P.2d other Legion, Department American Wyo (Citations omitted.) We have further stat- ming v. County Board Commissioners ed if a contract free from ambi- Converse, County guity, only plain we need to look at P.2d 1040 meaning of the in our (Wyo.1985). words effort to fer- If the intent of the can EE & parties. ret out intention of the plain unambig be ascertained from the Inc., Mining, Flying Inc. v. “D” Group, language contract, uous such should (Wyo.1986). 718 P.2d 58 be done as a of law matter without refer According Phrases, to 26A Words and ence to extrinsic evidence. Id. According (1953), May, 386 numerous cases ly, properly we hold that the trial court therein, “may” generally cited the word awarding directed a verdict imply discretional, permissive used to judgment against Farm Credit mandatory, obligation. rather than See W. James Pat E. Loose, Corp. also Filtrol 209 F.2d 10 Dorothy Charles D. Law

notes Bangor Company road v. & Aroostook allowing personal and foreclosure on the (Me. Railroad 455 A.2d 431 property security and real used as for the Wieland, Leghorn 1983); 289 So.2d payment promissory of those notes. (Fla.App.1974). 745 see why We no reason approach not be should followed We will now decide whether the tri this Court this While also instance. we pro al court erred it found recognize that some courts adhere to sheep ceeds from the sale of the wool and meaning rule of law that the word accompanying X7 and incen branded “may” must whole be determined from the payments belonged tive less Pro $100 to contract the manifest intention of the pursuant duction Credit and Farm Credit therein, Burgess Min- expressed security agreement executed ing Corp. City Bes- & Construction Lawrence, Dorothy Charles K. D. Law semer, (1975); 294 Ala. 312 So.2d 24 rence, Co., and Linda Law Ramsay Coal Carleno Sales v. Coal (1954), security appli- January 129 Colo. for the P.2d rence Love as $950,000.3 Together with all natural increase and Reso- 1984,promissory note to the above-described live- two-step in- additions requires a issue lution stock, including any pur- livestock to be First, if the must determine quiry. we chased. the secur- clause in after-acquired property with connection ity agreement Together clip, executed with the wool be- note was suffi- January shearing. fore and after support the trial descriptive to ciently Together hay, grain all with feed finding that Production Credit court’s growing acquired. or on hand now to be security interest which had a Farm Credit machinery equip- Together with all proper- these aforementioned would reach debtors, now owned said ment question If answer that ties. we of, consisting limited the fol- but not affirmative, then further deter- we must any machinery lowing, including properly di- trial court whether the mine acquired[.] equipment be in favor of a verdict rected Together production all of the with finding upon its Credit and Farm including all collateral above described was the actual K. Lawrence that Charles sale, dispo- proceeds from the transfer or sheep, of these thus purchaser and owner sition thereof. sheep proceeds and the bringing these provision regarding after- The relevant coverage of the secur- therefrom within acquired found in the third collateral is ity agreement. agree- provides that the paragraph which previously the secur We stated and ad- “all natural increase ment includes unequivocal. ity agreements are clear and livestock, in- ditions the above-described Therefore, solely to the look words will purchased.” cluding any livestock the inten agreement to determine page of securi- Additionally, the second considering the contract parties, tion of this standardized af- ty agreement contains reading provision in each as a whole and ter-acquired property clause: provisions. Inserted light of all other agree: Party Debtor Secured page of the form on the front typewritten permitted extent to the maximum covering January law, any collateral like and all following 19, 1984, note are the herein as that described type or kind as descriptions of the collateral: collateral, or now owned security agreement is intended This by the Debtor shall acquired hereafter secure cattle, branded head of cover 445.5 by this Se- obligations covered all ribs, hip, on the left the left or Party curity Agreement, and Secured or and shoulder on the left ribs or all security interest in such shall have shoulder, on the or left or left ribs agreement, by reason of this collateral shoulder, on the hip or described; left purposes herein shoulder, on the or hip left ordinary course of busi- buyer in left ribs and on the left ribs or (other person buying farm ness than as: 295 described particularly more engaged in person farm- products from a calves[,J cows[,] 125.5 purchase bulls[.] collat- operations) may of this 2,469 free Together head eral herein described provision Except for this latter right hip on the interest. branded Code, the back, of the Uniform Commercial right shoulder

notes Charles loan funds is of these after-acquired Landen, was the fact that decision referenced earlier cite 4. The Lawrences species entirely body opinion, support of their of an different of this livestock was descriptions specif- argument after-ac- that the than an increase or addition rather quired are insufficient collateral clauses ically described livestock. holding X7- The branded reach distinguishable case. from the instant Landen In that that the also testified K. Lawrence 5. Charles case, specifically security agreement Ad- purchased Small Business with the cattle cattle, certain described property branded with funds were loan ministration to the one in provision identical daughter, a brand which owned his brand Landen, held, instant case. We on the Production not listed also was cover horses which did agreement. Critical to that subsequently purchased.

Case Details

Case Name: Lawrence v. Farm Credit System Capital Corp.

Court Name: Wyoming Supreme Court

Date Published: Aug 24, 1988

Citation: 761 P.2d 640

Docket Number: 87-167, 87-168

Court Abbreviation: Wyo.