Farmers National Bank v. Green River Dairy, LLC (2014)

Citation: 155 Idaho 853, 318 P.3d 622 · Court: Supreme Court of Idaho, Docket No. 40101 · Decided: January 24, 2014 · Opinion: Horton, J.; J. Jones, J., dissenting primary source

Source note (2026-10-18):

• Links on this page to https://static.case.law/idaho/155/cases/0853-01.json are an (unofficial Caselaw Access Project copy, retrieved before 2026-10-18; host disallows automated access); no official or otherwise permitted full-text copy was located on 2026-10-18.

Opinion text retrieved 2026-10-17 from the Caselaw Access Project’s static copy of the Idaho Reports (static.case.law), an unofficial host. primary source

Facts

Farmers National Bank (FNB) made ten loans to Green River Dairy in 2008–2009, took a security interest in the dairy cows, and perfected it with a UCC-1F farm-products financing statement filed with the Idaho Secretary of State. Four feed sellers sold hay and wheat products to the dairy on credit and filed agricultural commodity lien notices under Idaho Code § 45-1804. After default, FNB repossessed the cows and sold them at auction through a livestock marketing association for about USD 212,000. The feed sellers claimed the cows and the auction proceeds because the cows had eaten their liened feed. The district court ruled for the sellers.

Holding

Vacated. An agricultural commodity lien under Idaho Code § 45-1802 attaches only to the “agricultural product” sold and to the “proceeds of the sale of the agricultural product.” It does not follow the feed into the livestock that consume it. FNB’s perfected security interest in the cows was superior to the feed sellers’ claims to the cows and the auction proceeds.

Reasoning

• The statutory definition of “agricultural product” (§ 45-1801(1)) lists grains, seeds and feed, not livestock, and the lien attaches to the product and its sale proceeds (§§ 45-1802, 45-1803).
• The priority section (§ 45-1805) prefers the commodity lien over a purchaser’s creditors only as to the agricultural product or its proceeds, confirming the lien’s reach.
• The statute is unambiguous, so canons of construction and legislative history were not considered. The Court noted the federal bankruptcy court in In re Goedhart (2003) reached the same reading.
• Justice J. Jones dissented: he read § 45-1802’s second sentence and its legislative history as continuing feed liens into the cattle that ate the feed, and would have affirmed.

Complete disposition and limits

The majority additionally explains that even an assumed extension to livestock would not give cattle priority under § 45-1805, which speaks only to product/proceeds interests. No appellate fees were awarded: no commercial transaction existed between the competing claimants; the bank had not asserted a commodity lien, and the sellers did not prevail under § 45-1809. Costs went to the bank. Justice J. Jones’s dissent relied on the 1989 amendment, consumed feed and legislative purpose; that view is not the majority rule. primary source

Practical impact

• Buyers of livestock at a lender’s Article 9 auction take from the secured party’s disposition; unpaid feed suppliers’ § 45-1802 liens do not attach to the animals.
• Feed sellers must look to the feed itself, its sale proceeds, or a separate security interest; filing a § 45-1804 notice does not reach the herd.
• Lien searches: the Secretary of State’s agricultural-lien database (§ 45-1804(3)) matters for buyers of grain and feed, not of the animals fed with it.

Good-law status

The full reporter opinion was retrieved and its holdings, disposition, dissent where present and operative statutory changes were checked on 2026-10-17. The prior draft records a through-2017 CAP archive scan; that historical statement is not a newly rerun archive/citator search. Current targeted name/reporter/statute searches did not locate a contrary holding on the precise forced-sale point, but this is not a comprehensive negative-treatment certificate. Full text: primary source

Applies in →

idaho · ucc-article-9-dispositions · equipment-and-machinery

Legal information, not legal advice. This case summary is limited to the retrieved decision and stated verification boundaries.