This is an action in conversion brought by plaintiff John Deere Company against defendants Jeff DeWitt Auction Company, Inc., and Roger Gamble, to enforce its purchase-money security interest in a John
Capsulated, the background facts are that on January 22, 1980, Green Line Equipment, Inc., of Columbus, Mississippi, sold a model 4840 John Deere tractor to one William Maloney. Maloney lived in or near Maben, in Oktibbeha County, Mississippi. Green Line extended credit to Maloney so he could purchase the tractor. The combination retail installment contract and security agreement executed at the time of sale was assigned for value to plaintiff John Deere Company. Thereafter plaintiff perfected its security interest by filing the combined retail credit installment agreement and financing statement in the office of the Chancery Clerk in Starkville, Oktibbeha County, Mississippi, and with the Mississippi Secretary of State at Jackson. See Mississippi Code 1972 § 75-9-401(1)(a) and (c), as amended. Plaintiff later perfected its security interest in Arkansas and in Missouri but in this court, the defendants do not contest the existence of plaintiff's perfected security interest at all times relevant to the dispute in litigation.
On March 12, 1980, defendant Gamble purchased three tractors from Maloney. The purchase was made in Oktibbeha County, Mississippi. One of these tractors was the tractor Maloney had purchased from Green Line. Gamble took that tractor back to Black Oak, Arkansas, and "cleaned it up." On March 17, Gamble hauled the tractor to Sikeston, Missouri, for sale by the defendant auction company. The tractor was sold at auction that day for $34,100 to Des Arc Equipment Company of Des Arc, Arkansas. Plaintiff then commenced this action against the defendants. Because the proceeds of the auction sale are, in this case, identifiable the plaintiff's choice of remedy was proper, even though the collateral has been sold. See ITT Industrial Credit Co. v. H & K Machine Service, 525 F.Supp. 170, 172-173 (E.D.Mo. 1981); Commercial Credit Corporation v. Joplin Automobile Auction Co., 430 S.W.2d 440, 443-444[3, 4][5, 6] (Mo.App. 1968).
The case is before us on appeal from the trial court's order granting defendants a summary judgment, and we do not undertake to resolve the cause on its merits. To be entitled to summary judgment a party litigant must show "by unassailable proof to be entitled thereto as a matter of law." Rule 74.04(h). On appeal, the record must be taken in the light most favorable to the party against whom the judgment was rendered. Elliott v. Harris, 423 S.W.2d 831, 835 (Mo. banc 1968); Bell v. Garcia, 639 S.W.2d 185, 190 (Mo.App. 1982). So viewed, the record shows that Maloney was a farmer who also dealt in tractors. Therefore the ultimate and narrow question before the trial court was whether the tractor was "inventory" or "equipment" in Maloney's hands at the time it was sold to Gamble. We conclude it was not shown by unassailable proof whether the tractor was inventory or equipment at the time Gamble bought it and therefore we reverse and remand.
Broadly stated, the legal question presented for trial in this case is one of priority between a secured creditor and a purchaser of goods under Article 9 of the U.C.C. In our view, the provisions of § 9-201, 9-306(2) and subsection 1 of § 9-307 establish the starting point for an analysis of the priorities involved. The so called "Golden Rule" of Article 9 is stated in § 9-201 and is reiterated in § 9-306(2), which are codified in Missouri as § 400.9201
An exception for the protection of buyers of goods in the ordinary course of business is provided by § 9-307(1) of the U.C.C. Our version of that subsection reads as follows:
It is this exception upon which the defendants rely. Some attention must be given to the Official Comment upon this section and to the Code definitions of "equipment," "inventory" and "buyer in ordinary course of business," because in construing uniform and model acts enacted by the General Assembly, we must assume it did so with the intention of adopting the accompanying interpretations placed thereon by the drafters of the model or uniform act. State v. Anderson, 515 S.W.2d 534, 539 (Mo. banc 1974); cf. State ex rel. Newport v. Wiesman, 627 S.W.2d 874, 877 (Mo. banc 1982).
The Official Comment to § 9-307 notes:
Section 9-109 defines various categories of goods for the purposes of Article 9. Section 9-109(2) provides that goods are "equipment":
Subsection (4) of § 9-109 provides that goods are:
The relevant additional facts to which these principles must be applied may be stated briefly. The existence of plaintiff's perfected security interest is not denied. Further, we set the parties' elaborate arguments concerning "good faith" to one side. We have the tentative view that the "good faith" required of defendant Gamble in the factual situation presented is that order of bona fides required of a "merchant" by § 2-103(1)(b) of the U.C.C., which is "honesty in fact and the observance of reasonable commercial standards of fair dealing in the trade." We emphasize this conclusion is not necessary to the result in this case.
The trial court had a good deal of proof, of varying degrees of probative value, before it for consideration. Defendant Gamble testified by deposition that his seller, Maloney, lived in Maben, Mississippi, about 200 or 250 miles from Batesville, Arkansas. Gamble had bought tractors from Maloney for several years; "[j]ust all kinds" but mostly John Deere tractors. In particular, the following question and answer appear in defendant Gamble's deposition: "Q. Mr. Gamble, at the—in March when you bought this [tractor] from Bill Maloney, was he an implement dealer, to your knowledge? Or was he just a farmer? A. He was farming and buying and selling farm equipment through the winter." Further, Mr. Gamble testified: "Q. Do you know whether he sold to—whether he had a lot where he sold to other farmers? A. No, he didn't, I don't think. I think he'd just dig it up here and there, you know, buy off a dealer when he found something."
One of the affidavits filed on defendants' behalf was executed by one William W. Gates. The substance of the affidavit was that William Gates was personally well acquainted with Maloney; that Maloney regularly sold tractors from the lot of an enterprise operated in the name Farm Service Center, Inc., in Clarksdale, Mississippi, and that during the fall of 1979 and the spring of 1980, Maloney was reportedly still farming near Lexington, Mississippi.
This recitation of the evidence is sufficient to illustrate the legal question we have at hand: was the particular tractor covered by the plaintiff's security agreement "inventory" or "equipment" in Maloney's hands? Upon the record and facts before the trial court, that question cannot be answered as a matter of law. Maloney was a farmer; he also sold tractors. However, the Official Comment to subsection (1) of § 9-307 of the U.C.C., which we have quoted, makes it clear that that subsection was meant to apply to inventory, and Official Comment 3 to § 9-109 makes it clear that a sale incidental to the principal business does not make the seller a person in the business of selling goods of that kind.
According to some authority, the nature of the collateral, whether equipment or inventory, is to be determined by the use
So, and to reiterate, one cannot say with absolute certainty whether the collateral was "equipment" or "inventory." Maloney was a farmer; the tractor was certainly susceptible of being used as farm equipment. In ITT Industrial Credit Co. v. H & K Machine Service, 525 F.Supp. at 172, the court reached the conclusion "that a seller may not shift a good from equipment to inventory status and then terminate the effective security interest enjoyed by a secured party by selling that good." We do not adjudicate the status of the tractor as "inventory" or "equipment" in Maloney's hands. We do conclude that defendant Gamble did not show by unassailable proof and as a matter of law that the tractor was "inventory," therefore Maloney's status as "one in the business of selling goods of that kind" was not shown by the same order of proof and summary judgment in Gamble's favor and against the plaintiff was not authorized.
As to defendant Jeff DeWitt Auction Company, Inc., its legal relation to Gamble in conducting the sale to Des Arc is not sufficiently established to state with certainty whether it took free of the security interest created by Gamble's seller. Gamble insisted that he and DeWitt "partnered" the transaction, but the proofs before the trial court are insufficient to show unassailably and as a matter of law whether Gamble and DeWitt were principal and agent, joint venturers, or in some other legal relation. It follows that a summary judgment against plaintiff and in favor of defendant DeWitt was also unauthorized.
For the reasons stated, the judgment is reversed and the cause is remanded.
CROW, P.J., and MAUS and TITUS, JJ., concur.