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Dwyer v. Cooksville Grain Co.

OPINION FILED SEPTEMBER 8, 1983.

EDWARD DWYER ET AL., EX'RS OF THE ESTATE OF JOHN J. DWYER, DECEASED, PLAINTIFFS-APPELLEES,

v.

COOKSVILLE GRAIN COMPANY ET AL., DEFENDANTS — (MCLEAN COUNTY BANK, DEFENDANT-APPELLANT). — EDWARD DWYER ET AL., EX'RS OF THE ESTATE OF JOHN J. DWYER, DECEASED, PLAINTIFFS-APPELLEES,

v.

COOKSVILLE GRAIN COMPANY, DEFENDANT-APPELLANT — (MCLEAN COUNTY BANK ET AL., DEFENDANTS).



Appeal from the Circuit Court of McLean County; the Hon. James A. Knecht, Judge, presiding.

JUSTICE MILLS DELIVERED THE OPINION OF THE COURT:

Landlord's crop lien versus bank's security interest.

Which comes first?

We will not presume to overrule 110 years of our supreme court's settled law!

The crop lien takes precedence.

THE FACTS

In February of 1981, Edward Dwyer leased 300 acres of farm property to Robert Morefield for $60,000. One week later, Morefield borrowed $24,000 from the McLean County Bank in order to purchase a new combine to farm the rented property. To secure the loan, Morefield entered into a security agreement with the bank, giving the bank a security interest in the crops grown on the property. In accordance with article 9 of the Uniform Commercial Code (Ill. Rev. Stat. 1981, ch. 26, par. 9-101 et seq.), the bank perfected its security interest in the crops by filing a financing statement with the recorder of McLean County.

In mid-June, Morefield began planting the crop on the Dwyer farm and in late fall he delivered the harvested crops to the Cooksville Grain Company. As payment for the crops, Cooksville delivered a check to Morefield in the amount of $72,155.16, payable jointly to Morefield and the bank. Morefield delivered the check to the bank, the bank deducted $29,655.16 to apply to Morefield's obligation, and then credited Morefield's checking account with the balance of $42,500.

After learning that the crops had been sold and realizing that the proceeds had not been used to pay the $60,000 in rent due, Dwyer filed a complaint against Morefield, the bank, and Cooksville. Count I of the complaint alleged that Cooksville had wrongfully converted the crops; count II alleged that the bank had wrongfully converted the proceeds from the sale of the crops; and count III alleged that Morefield and the bank had conspired to deprive Dwyer of the rent and to convert the crops.

After a great deal of procedural maneuvering by all of the parties, the trial judge entered an order granting a motion by Dwyer for summary judgment on counts I and II and granting a motion by the bank for summary judgment on count III. Judge Knecht then awarded Dwyer a $60,000 judgment against Cooksville and a judgment for $29,655.16 against the bank. The bank filed a motion for clarification, noting that Dwyer was damaged in the amount of $60,000 and asking the court to apportion the ultimate responsibility for payment of the $60,000 judgment between Cooksville and the bank. Judge Knecht granted the bank's motion for clarification and ruled that he would apportion the responsibility for the payment of the total $60,000 judgment at a later date. Before that apportionment took place, however, both the bank and Cooksville appealed Judge Knecht's order granting Dwyer's motion for summary judgment.

We affirm and remand the cause to the circuit court for apportionment of the liability for the total $60,000 judgment between Cooksville and the bank.

The central issue in this appeal is whether a landlord's statutory crop lien for rent has priority over an article 9 security interest in proceeds from the sale of crops grown on the rented land. It does.

THE LANDLORD'S CROP LIEN

• 1, 2 The landlord's crop lien for rent arises from section 9-316 of the Code of Civil Procedure (Ill. Rev. Stat. 1981, ...


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