Searcy Farm Supply, L.L.C. v. Merchants & Planters Bank
Arkansas Supreme Court
256 S.W.3d 496 (2007)
- Written by John Reeves, JD
Facts
Lee Vaughn Clark and Wilma Clark (defendants) took out two loans in the form of promissory notes with Merchants & Planters Bank (the bank) (plaintiff) to finance their farming operations. The bank obtained purchase-money security interests for the two promissory notes in, among other things, the farm’s crops, and the bank perfected the two security interests in 2001. In 2002 the Clarks purchased seed and other farming materials from Searcy Farm Supply, L.L.C. (Searcy) and Billy Tripp (defendants). Searcy secured the purchase by taking a purchase-money security interest in the 2002 crops. Searcy perfected the security interest in 2002. However, the Clarks’ farm did not do well. The Clarks defaulted on both of the bank’s promissory notes, and they failed to pay back to Searcy a total of $112,000 on the 2002 transaction. The bank brought suit against the Clarks, Searcy, and Tripp. The trial court found that the bank’s security interests in the farm’s crops took priority over Searcy’s security interest in the crops because the bank had perfected its security interests first. Searcy and Tripp appealed to the Arkansas Supreme Court.
Rule of Law
Issue
Holding and Reasoning (Gunter, J.)
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