Wyoming State Farm Loan Board v. Farm Credit System Capital Corp.

James and Sharon Rumery operated a farm. In 1969, the Rumerys borrowed money from Wyoming Production Credit Association (WPCA) and gave WPCA a security interest in their then-owned and after-acquired machinery and equipment. WPCA perfected its interest by filing a financing statement and appropriately filed continuation statements. In 1978, the Rumerys borrowed money from Wyoming Farm Loan Board (the Board) (plaintiff) to purchase and install an irrigation system, which included a gated pipe (the pipe). The pipe was portable. The irrigation system required the pipe; however, any farmer or rancher with a riser pipe connection could attach the pipe and irrigate their field. The Rumerys stored the pipe on a trailer during winter. The pipe itself was worth approximately $11,310. The Rumerys borrowed more money from the Board in 1982. Both times, the Board secured the loan by taking a mortgage in the Rumery’s real property. The Board filed its mortgages in the county property records but never filed financing statements pursuant to the Uniform Commercial Code (UCC). In 1985, the Rumerys borrowed more money from WPCA. Though WPCA never filed another financing statement, the Rumerys executed a security agreement listing specific farm and ranch equipment as collateral, including the pipe. WPCA transferred its interests to Farm Credit System Capital Corporation (FCSCC) (defendant). The Rumerys defaulted on the two WPCA loans. Therefore, FCSCC sued to foreclose on its interests. The Board claimed a superior lien in the pipe because the pipe was a fixture on the land covered by its real estate mortgages and neither WPCA nor FCSCC filed a proper fixture filing. FCSCC moved for partial summary judgment as to the pipe. The trial court ruled for FCSCC. The Board appealed.