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IN THE SUPREME COURT OF THE STATE OF IDAHO

Docket No. 40101

FARMERS NATIONAL BANK,

 Plaintiff-Counterdefendant-Appellant,

v.

GREEN RIVER DAIRY, LLC;

HERCULANO J. ALVES and FRANCES M.

ALVES, husband and wife, dba GREEN

RIVER DAIRY,

 Defendants-Cross Defendants-

 Respondents,

and

ERNEST DANIEL CARTER dba CARTER

HAY AND LIVESTOCK; LEWIS BECKER;

JACK MC CALL,

 Defendants-Counterclaimants-

 Cross Claimants-Respondents,

and 

HULL FARMS, INC.; TIM THORNTON,

 Defendants-Respondents.

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Twin Falls, November 2013 Term

2014 Opinion No. 2

Filed: January 24, 2014

Stephen Kenyon, Clerk

Appeal from the District Court of the Fifth Judicial District of the State of Idaho, 

Twin Falls County. Hon. G. Richard Bevan, District Judge.

The district court’s declaratory judgment is vacated.

Coleman, Ritchie & Cluff, Twin Falls, for appellant. John Stephen Ritchie 

argued.

Gery W. Edson, P.A., Boise, for respondent Hull Farms, Inc. Gery Edson argued.

Wright Brothers Law Office, PLLC, Twin Falls, for respondents Ernest Daniel 

Carter and Jack McCall. Andrew Benjamin Wright argued.
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White Peterson Gigray Rossman Nye & Nichols, P.A., Nampa, for respondent 

Lewis Becker.

Hollifield Law Office, Twin Falls, for respondent Tim Thornton.

 _______________________________________________

HORTON, Justice.

This is an appeal from the district court’s grant of declaratory judgment in favor of Green 

River Dairy, LLC, and four commodities dealers: Ernest Carter, Lewis Becker, Jack McCall, and 

Hull Farms (collectively “Sellers”). Appellant, Farmers National Bank (FNB), argues that the 

district court misinterpreted I.C. § 45-1802, a statutory lien provision, and, as a result, erred in 

granting Sellers a priority lien on collateral securing a loan previously made by FNB. We agree 

with FNB and vacate the district court’s grant of declaratory judgment in favor of Sellers. 

I. FACTUAL AND PROCEDURAL BACKGROUND

FNB made ten loans to Green River in 2008 and 2009 to support Green River’s dairy 

operations.1 In connection with the loans, Green River granted FNB a security interest in its 

dairy cows. After executing a security agreement, FNB properly filed a UCC-1F, farm products 

financing statement, with the Idaho Secretary of State on May 12, 2008. All parties agree that 

FNB properly attached its interest in the collateral and properly perfected its interest through the 

filing of a financing statement. 

Sellers sold commodities to Green River on credit, which included hay and/or wheat 

products, as feed for Green River’s dairy cows. In conjunction with the sale of commodities to 

Green River, each seller filed lien notices with the Idaho Secretary of State pursuant to I.C. § 45-

1804.

Green River defaulted on its loan repayment obligations to FNB. Accordingly, FNB took 

possession of Green River’s dairy cows that secured FNB’s loans. FNB sold the dairy cows at an 

auction held by Producers Livestock Marketing Association, the proceeds of which totaled 

$211,957.58. Despite FNB’s perfected security interest in Green River’s dairy cows, Sellers also 

 1 The loans made to Green River were personally backed by Herculano and Frances Alves. The Respondent’s brief 

of Green River and the Alveses was due on December 24, 2012; however, it was never filed. Accordingly, the 

Court, on January 11, 2013, ordered that the appeal proceed solely on the briefing filed by Sellers. 
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claimed an interest in the dairy cows and the proceeds of the auction because the dairy cows had 

consumed liened agricultural products sold by Sellers to Green River.

FNB initiated this case on November 22, 2011, when it filed its Complaint for 

Declaratory Judgment. FNB asserted that Green River owed the bank $2,627,526.42. The 

amount claimed by FNB exceeded the total proceeds from the sale of the collateral. Further, 

FNB’s complaint stated that pursuant to I.C. § 28-9-101, the bank had a senior perfected security 

interest in all dairy cows owned by Green River and the proceeds from the sale of those dairy 

cows. FNB’s complaint asked the district court for: (1) a declaration of the respective priority 

rights of the parties in the proceeds of sale pursuant to I.C. § 28-9-101 and I.C. § 45-1801; (2) a 

declaration that FNB’s UCC-1F interest in the collateral was properly perfected and a first 

priority encumbrance on Green River’s dairy cows; and (3) a declaration that liens created 

pursuant to I.C. § 45-1802 in commodity sales do not extend to the dairy cows that consume the 

agricultural products subject to the lien. Each defendant named in FNB’s complaint individually 

filed an answer.

On March 5, 2012, FNB filed a motion for summary judgment and a memorandum in 

support. On May 8, 2012, the district court issued its Memorandum Decision Re: Plaintiff’s 

Motion for Summary Judgment. The district court framed the issue before it as “whether an 

agricultural commodity producer’s lien created under I.C. § 45-1802 continues to exist upon the 

livestock that consume the agricultural product.” Ultimately, the district court held that 

commodity liens created pursuant to I.C. § 45-1802 on agricultural products did extend to 

livestock that consumed the liened agricultural products. Accordingly, the district court denied 

FNB’s motion for summary judgment and granted declaratory judgment in favor of Sellers. The 

district court issued its final judgment on May 30, 2012. FNB timely appealed.

II. STANDARD OF REVIEW

When reviewing a grant of summary judgment, this Court employs the same standard as 

the district court. Cnty. of Boise v. Idaho Cntys. Risk Mgmt. Program, Underwriters, 151 Idaho 

901, 904, 265 P.3d 514, 517 (2011). Summary judgment is proper when “the pleadings, 

depositions, and admissions on file, together with the affidavits, if any, show that there is no 

genuine issue as to any material fact and that the moving party is entitled to a judgment as a

matter of law.” I.R.C.P. 56(c). A “district court may grant summary judgment to a non-moving 

party even if the party has not filed its own motion with the court.” Aardema v. U.S. Dairy Sys., 
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Inc., 147 Idaho 785, 793, 215 P.3d 505, 513 (2009) (quoting Harwood v. Talbert, 136 Idaho 672, 

677, 39 P.3d 612, 617 (2001)). Additionally, “[t]his Court freely reviews the interpretation of a 

statute and its application to the facts.” St. Luke’s Reg’l Med. Ctr., Ltd. v. Bd. of Comm’rs of Ada 

Cnty., 146 Idaho 753, 755, 203 P.3d 683, 685 (2009).

III. ANALYSIS

A. Statutory background for agricultural commodity dealer liens.

The primary issue presented in this appeal is whether an agricultural commodity lien that 

encumbers an agricultural product extends to livestock that consume the liened agricultural 

product. This hinges on the interpretation of I.C. § 45-1802, which provides:

An agricultural commodity producer or an agricultural commodity dealer 

who sells, or delivers under contract or bailment, an agricultural product has a lien 

on the agricultural product or the proceeds of the sale of the agricultural product 

as provided in section 45-1804, Idaho Code. The lien created in this chapter may 

attach regardless of whether the purchaser uses the agricultural product purchased 

to increase the value of his livestock or whether he uses the agricultural product 

purchased to maintain the value, health or status of his livestock without actually 

increasing the value of his agricultural product.

The Legislature enacted what would become I.C. § 45-1802 in 1983; as originally enacted the 

statute consisted of only the first sentence. 1983 Idaho Sess. L. ch. 202, § 1, p. 550. However, in 

1989 the Legislature amended I.C. § 45-1802 by adding the second sentence. 1989 Idaho Sess. L. 

ch. 299, § 1, p. 746–47.

“Agricultural product” is defined as:

[W]heat, corn, oats, barley, rye, lentils, soybeans, grain sorghum, dry beans and 

peas, beans, safflower, sunflower seeds, tame mustards, rapeseed, flaxseed, 

leguminous seed or other small seed, or any other agricultural commodity, 

including any of the foregoing, whether cleaned, processed, treated, reconditioned 

or whether mixed, rolled or combined in any fashion or by any means to create a 

product used as animal, poultry or fish feed.

I.C. § 45-1801(1). Notably, livestock are not included in the definition of “agricultural product.” 

B. Statutory liens on agricultural products created under I.C. § 45-1802 do not continue in 

livestock that consume the liened agricultural products.

The district court concluded that I.C. § 45-1802 was unambiguous and provided that liens 

created by I.C. § 45-1802 continued in livestock that consumed liened agricultural products. The 

district court relied heavily on the term “uses” from the second sentence and referred to it as a 

“triggering verb” which, when read in context, created a lien in livestock that consume the liened

agricultural product.
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“The objective of statutory interpretation is to give effect to legislative intent.” State v. 

Yzaguirre, 144 Idaho 471, 475, 163 P.3d 1183, 1187 (2007). “Such intent should be derived from 

a reading of the whole act at issue.” St. Luke’s Reg’l Med. Ctr., Ltd., 146 Idaho at 755, 203 P.3d 

at 685. “Statutory interpretation begins with ‘the literal words of the statute, and this language 

should be given its plain, obvious, and rational meaning.’” Seward v. Pac. Hide & Fur Depot, 

138 Idaho 509, 511, 65 P.3d 531, 533 (2003) (quoting Jen–Rath Co. v. Kit Mfg. Co., 137 Idaho 

330, 335, 48 P.3d 659, 664 (2002)). “If the statutory language is unambiguous, ‘the clearly 

expressed intent of the legislative body must be given effect, and there is no occasion for a court 

to consider rules of statutory construction.’” St. Luke’s Reg’l Med. Ctr., Ltd., 146 Idaho at 755, 

203 P.3d at 685 (quoting Payette River Prop. Owners Ass’n v. Bd. of Comm’rs of Valley Cnty.,

132 Idaho 551, 557, 976 P.2d 477, 483 (1999)). This is because “[t]he asserted purpose for 

enacting the legislation cannot modify its plain meaning.” Verska v. Saint Alphonsus Reg’l Med. 

Ctr., 151 Idaho 889, 892–93, 265 P.3d 502, 505–06 (2011). A statute is ambiguous where:

[T]he meaning is so doubtful or obscure that reasonable minds might be uncertain

or disagree as to its meaning. However, ambiguity is not established merely 

because different possible interpretations are presented to a court. If this were the 

case then all statutes that are the subject of litigation could be considered 

ambiguous .... [A] statute is not ambiguous merely because an astute mind can 

devise more than one interpretation of it. 

BHA Investments, Inc. v. City of Boise, 138 Idaho 356, 358, 63 P.3d 482, 484 (2003) (internal 

citations and quotations omitted).

On appeal, neither Sellers nor FNB argue that the second sentence of I.C. § 45-1802 is 

ambiguous. Rather, each party adheres to different interpretations of what the statute means.

FNB argues that I.C. § 45-1802 does not extend an agricultural lien on an agricultural product to 

livestock that consume the liened agricultural product. Conversely, Sellers argue that the statute 

unambiguously extends an agricultural lien in an agricultural product to livestock that consume 

the liened agricultural product.

As we stated in BHA Investments, Inc., the fact that two different interpretations of a 

statute are presented does not alone make a statute ambiguous. 138 Idaho at 358, 63 P.3d at 484.

Rather, the statute’s meaning must be so doubtful or obscure that reasonable minds would be 

uncertain or doubtful as to the statute’s meaning. Such doubt and obscurity is not present in I.C. 

§ 45-1802. Accordingly, we conclude that I.C. § 45-1802 is not ambiguous and use only the 
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plain language of Chapter 18, Title 45 in order to give effect to the legislative intent behind I.C. 

§ 45-1802.2

The majority of the parties’ textual arguments, as well as the district court’s discussion 

below, focused on the second sentence of I.C. § 45-1802. Accordingly, little attention is paid to 

the first sentence of the statute in the parties’ briefing. However, the first sentence is instrumental 

in interpreting the second sentence, and, Chapter 18, Title 45 as a whole, because it delineates 

the scope of what can be the subject of an agricultural lien. The import of the first sentence of 

I.C. § 45-1802 is clear, it states “[a]n agricultural commodity producer or an agricultural 

commodity dealer who sells, or delivers under contract or bailment, an agricultural product has a 

lien on the agricultural product or the proceeds of the sale of the agricultural product as provided 

in [I.C. §] 45-1804.”

Based on the plain language, the first sentence creates a lien in favor of a commodity 

producer or dealer in an “agricultural product” and/or in the “proceeds of the sale of the 

agricultural product.” As noted above, “agricultural product” is a defined term within Title 45.

An agricultural product is:

[W]heat, corn, oats, barley, rye, lentils, soybeans, grain sorghum, dry beans and 

peas, beans, safflower, sunflower seeds, tame mustards, rapeseed, flaxseed, 

leguminous seed or other small seed, or any other agricultural commodity, 

including any of the foregoing, whether cleaned, processed, treated, reconditioned 

or whether mixed, rolled or combined in any fashion or by any means to create a 

product used as animal, poultry or fish feed.

I.C. § 45-1801(1). Thus, the plain language of the first sentence of I.C. § 45-1802 allows a 

commodity producer or dealer to obtain a lien on any of the agricultural products listed in I.C. § 

45-1801(1) or in the proceeds from the sale of any of the agricultural products listed in I.C. § 45-

1801(1). Livestock, including dairy cows, are not an agricultural product that may be the subject 

of an agricultural lien. Accordingly, the plain language of the first sentence of I.C. § 45-1802 

does not provide any basis for a commodity producer or dealer to maintain a lien right in 

livestock because the lien rights extend only to agricultural products and the proceeds of the sale 

of agricultural products.

 2 The United States Bankruptcy Court for the District of Idaho faced the precise issue before this Court in this case 

in In Re Goedhart & Goedhart, 03.3 IBCR 167 (2003). In that case, the bankruptcy court concluded that I.C. § 45-

1802 was unambiguous and that the plain language of the statute did not extend agricultural liens to livestock that 

consumed liened agricultural products. Id. at 170. 
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Like the first sentence of I.C. § 45-1802, the second sentence is also clear and 

unambiguous on its face. It states that “[t]he lien created in this chapter may attach regardless of 

whether the purchaser uses the agricultural product purchased to increase the value of his 

livestock or whether he uses the agricultural product purchased to maintain the value, health or 

status of his livestock without actually increasing the value of his agricultural product.” I.C. § 

45-1802. The plain language of the second sentence in no way expands the scope of the 

agricultural lien created by the first sentence. Instead, the second sentence references “the lien 

created in this chapter,” which is a lien on an “agricultural product or the proceeds of the sale of 

the agricultural product” and clarifies that the lien will attach regardless of whether the purchaser 

uses the agricultural product to increase the value of his livestock or simply maintain their value. 

Because the lien created by I.C. § 45-1802 only extends to “agricultural products” and 

“the proceeds of the sale of the agricultural product,” the district court erred in concluding that 

Sellers had an agricultural products lien on Green River’s livestock because livestock are not 

agricultural products. 

In addition to the plain language of I.C. § 45-1802 supporting FNB’s interpretation, 

Chapter 45, Title 18, when read in its entirety, indicates that the agricultural lien created in I.C. § 

45-1802 does not extend to livestock that consume liened agricultural products. We consider 

these additional provisions that comprise Chapter 45, Title 18, because legislative “intent should 

be derived from a reading of the whole act at issue.” St. Luke’s Reg’l Med. Ctr., Ltd., 146 Idaho 

at 755, 203 P.3d at 685. Specifically, I.C. §§ 45-1803 and 1805 support FNB’s interpretation that 

the lien created by I.C. § 45-1802 does not extend to livestock. 

Idaho Code § 45-1803 states that “[t]he lien created by section 45-1802, Idaho Code, 

attaches to the agricultural product and to the proceeds of the subsequent sale of the agricultural 

product on the date the agricultural product is physically delivered to the purchaser or on the date 

any final payment is due, and unpaid.” This provision reinforces FNB’s interpretation by 

reiterating what products or proceeds a commodity lien may attach to. The terms of I.C. § 45-

1803 only allow for the attachment of a lien to an “agricultural product” or the “proceeds of the 

subsequent sale of the agricultural product,” not livestock. Thus, I.C. § 45-1803 echoes I.C. § 45-

1802 and provides that an agriculture commodity lien can only attach to agricultural products or 

the proceeds of the sale of those products. 

Next, I.C. § 45-1805 states:
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The lien created by section 45-1802, Idaho Code, is preferred to a lien or 

security interest in favor of a creditor of the purchaser, regardless of whether the 

creditor’s lien or security interest attaches to the agricultural product or proceeds 

of the sale of the agricultural product before or after the date on which the lien 

created by section 45-1802, Idaho Code, attaches.

Like I.C. § 45-1803, I.C. § 45-1805 also reinforces FNB’s interpretation of I.C. § 45-1802. Idaho 

Code § 45-1805 supports FNB’s interpretation because it only gives agricultural liens priority 

over prior liens or security interests where the prior lien or security interest was in an 

“agricultural product” or “proceeds of the sale of the agricultural product,” not livestock. Thus, 

I.C. § 45-1805 supports our conclusion that I.C. § 45-1802 does not create a lien on livestock, 

only in “agricultural products” and the “proceeds of the sale of the agricultural product.”3

The statutory framework of Chapter 45, Title 18, as a whole, reflects clear legislative 

intent that agricultural commodity liens only extend to “agricultural products” and to the 

“proceeds of the sale of agricultural products.” Had the Legislature wished to include livestock 

in the definition of “agricultural product” it easily could have. However, it did not. Based on the 

plain language of I.C. § 45-1802, and Chapter 45, Title 18 as a whole, we hold that the district 

court erred in concluding that Sellers had a lien on Green River’s dairy cows that was senior to 

FNB’s security interest.

Because I.C. § 45-1802 is not ambiguous, this Court has not and will not resort to 

methods of statutory construction in order to derive the legislative intent behind the statute. 

Accordingly, the parties’ arguments relating to various canons of construction and legislative 

history are irrelevant to this Court’s determination in this case. 

C. Attorney fees.

Sellers separately request attorney fees under the following statutory theories. Thornton, 

without any argument, requests attorney fees pursuant to I.C. §§ 45-1809 and 12-120(3). Carter 

and McCall request attorney fees pursuant to I.C. §§ 45-1809 and 12-120(3). Becker requests 

attorney fees pursuant to I.C. § 45-1809. Hull Farms requests attorney fees pursuant to I.C. §§ 

45-1809 and 12-120(3). Also, FNB requests attorney fees pursuant to I.C. § 45-1809.

 3 In addition, the plain language of I.C. § 45-1805 reveals a serious flaw in the district court’s analysis of the parties’ 

competing priority rights. Even if the second sentence of I.C. § 45-1802 were somehow construed to extend lien 

rights to livestock that consume liened agricultural products, such a lien would not have priority over a prior 

perfected security interest in the livestock because the plain language of I.C. § 45-1805 only gives priority to 

commodity liens in agricultural products or their proceeds, not livestock. 
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Attorney fees pursuant I.C. § 12-120(3) are not awardable in this case because there was 

no commercial transaction between the parties. See Carrillo v. Boise Tire Co., Inc., 152 Idaho 

741, 756, 274 P.3d 1256, 1271 (2012). Rather, they simply have made claims to identical 

collateral. Accordingly, all requests for attorney fees pursuant to I.C. § 12-120(3) are without 

merit. No party is entitled to attorney fees under I.C. § 45-1809. FNB is not entitled to an award 

of attorney fees under I.C. § 45-1809 because it has not claimed an agricultural commodity lien. 

Sellers are not entitled to an award of attorney fees under I.C. § 45-1809 because they have not 

prevailed. 

IV. CONCLUSION

We vacate the district court’s declaratory judgment in favor of Sellers and find that 

between FNB and Sellers, FNB’s security interest in Green River’s dairy cows is superior to that 

of Sellers. No attorney fees are awarded on appeal. Costs on appeal to FNB.

Justice EISMANN and Justices Pro Tem KIDWELL and SCHROEDER, CONCUR.

J. JONES, Justice, dissenting.

I dissent from the Court’s opinion because, although the Court has articulated a sound 

technical basis for its conclusion, I believe the legislative history of I.C. § 45-1802 dictates a 

different outcome. Perhaps my view of the Legislature’s action is somewhat influenced by 

having grown up in the cattle-feeding business. From that vantage point, the arguments advanced 

by the Respondents with respect to the legislative process are understandable, as they apparently 

were for the district judge, who presides in farm country. I would affirm his decision, which 

continued the Respondents’ feed liens into the cattle that consumed the liened feed. 

It must be acknowledged that the language employed in I.C. § 45-1802 is not ideal from 

the standpoint of either side. It obviously would have been better from the standpoint of the 

Respondents had the Legislature specifically stated that the feed liens continued into the animals 

that consumed the feed. Based on the legislative history, it clearly appears that this was the 

understanding and intent of the proponents of the legislation. Viewed from the standpoint of the 

Appellant, it is hard to determine what the second sentence would mean absent an intention to 

preserve the secured status of the feed producer or dealer. Although both sides contend in the 

first instance that the statute is unambiguous, it is practically impossible to read it in that fashion.

In Pioneer Irrigation Dist. v. City of Caldwell, 153 Idaho 593, 597, 288 P.3d 810, 814 

(2012), this Court stated:
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If a statute is ambiguous because more than one reasonable interpretation exists, 

we look to rules of statutory construction for guidance. Payette River Prop. 

Owners Ass’n v. Bd. of Comm’rs of Valley Cnty., 132 Idaho 551, 557, 976 P.2d 

477, 483 (1999). In the event that this Court is required to engage in statutory 

construction, we may ascertain legislative intent from the statute’s context, the 

public policy in support of the statute, and the statute’s legislative history. State v. 

Rhode, 133 Idaho 459, 462, 988 P.2d 685, 688 (1999). 

Our goal in interpreting a statute is “to give effect to the purpose of the statute and the legislative 

intent in enacting it, which may be implied from the language used or inferred on grounds of 

policy or reasonableness.” The Senator, Inc. v. Ada Cnty. Bd. of Equalization, 138 Idaho 566, 

570, 67 P.3d 45, 49 (2003). 

Each word used in a statute is important and must be considered:

It is well established that we are required to give effect to every word, clause and 

sentence of a statute . . . and the construction of a statute should be adopted which 

does not deprive provisions of the statute of their meaning. 

George W. Watkins Family v. Messenger, 118 Idaho 537, 540, 797 P.2d 1385, 1388 (1990). 

Furthermore:

[T]his Court “will not construe a statute in a way which makes mere surplusage 

of provisions included therein.” Bradbury v. Idaho Judicial Council, 149 Idaho 

107, 116, 233 P.2d 38, 47 (2009) (quoting Sweitzer v. Dean, 118 Idaho 568, 

571−72, 798 P.2d 27, 30−31 (1990)); See also Twin Lakes Canal Co. v. Choules, 

151 Idaho 214, 218, 254 P.3d 1210, 1214 (2011) (holding that courts may not 

interpret a statute in a manner that would “render it a nullity”). 

Roesch v. Klemann, 155 Idaho 175, 177−78, 307 P.3d 192, 194−95 (2013). “It is assumed that 

when the legislature enacts or amends a statute it has full knowledge of the existing judicial 

decisions and case law of the state.” Watkins, 118 Idaho at 540, 797 P.2d at 1388. As with other 

types of statutory liens, the Court should liberally construe I.C. § 45-1802 so as to effect its 

objects and promote justice. See Metropolitan Life Ins. Co. v. First Sec. Bank of Idaho, 94 Idaho 

489, 493, 491 P.2d 1261, 1265 (1971). 

A review of the Legislature’s action in amending I.C. § 45-1802 in 1989 is instructive. 

The sponsor of the legislation, former Representative Bruce Newcomb, proposed in RS 22816 to 

add a second sentence to the one-sentence statute. The RS read:

45-1802. LIEN CREATED – WHO MAY HAVE. An agricultural commodity 

producer or an agricultural commodity dealer who sells an agricultural product 

has a lien on the agricultural product or the proceeds of the sale of the agricultural 

product until payment is made in full. The lien created in this chapter may attach 

regardless of whether the purchaser uses the agricultural product purchased to 
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increase the value of his agricultural product or whether he uses the agricultural 

product purchased to maintain the value, health or status of his agricultural 

product without actually increasing the value of his agricultural product. 

Thus, Rep. Newcomb proposed to add the underlined language to the existing statute. He 

described his intention in the Statement of Purpose4: “This Legislation defines feed and lien so 

that when a feed lien is filed on domestic livestock the lien would be valid even though the feed 

just maintained the livestock rather than added value.” (emphasis added). Thus, we know the 

purpose of the statute and may consider it in attempting to determine the intent of the 

Legislature. The Senator, 138 Idaho at 570, 67 P.3d at 49.

The legislation was designated H.B. 314 and, when it was considered in the House 

Agricultural Affairs Committee, the bill sponsor’s presentation was recorded as follows:

Rep. Newcomb said that in the past it has been understood in the feed industry 

that when feed was sold to consumer, that the feed lien would attach to the animal 

which was being fed―it had to add value. This legislation says that even if it does 

not add value, it is still valid. In other words, if it just maintained the livestock 

rather than adding value, a lien filed on the livestock would be a valid lien.

An attorney representing the Idaho Bankers Association spoke in opposition:

Pat Collins, Idaho Bankers Association, spoke in opposition to this legislation. He 

feels it is poor language and the definitions bad. He stated that the language will 

not do what it says it will do. He said the definitions stretch the meanings to 

include a lot of products. He feels the term “agricultural product” is a bad term.

The bill was reported to the House floor and approved. 

The legislation encountered some difficulty when considered by the Senate Agricultural 

Affairs Committee. The minutes reflect the following:

Rep. Newcomb spoke to the legislation which amends the lien chapter of the 

Idaho code to provide that a lien has validity or may attach even if the feed fed to 

an animal does not add value to the animal but just maintains it. Rep. Newcomb 

referred to a court case that had refuted this concept.

 4 Although the statement of purpose that accompanies a piece of legislation may not always be the best source for 

determining legislative intent, this Court has often looked to the statement of purpose for guidance. In KGF 

Development, LLC v. City of Ketchum, 149 Idaho 524, 236 P.3d 1284 (2010), we looked to the statement of purpose 

accompanying a bill to determine the Legislature’s intent behind a statute, as well as a city’s statement of purpose 

for an ordinance to determine the intent behind the ordinance. Id. at 528−29, 236 P.3d at 1288−89. Likewise, in 

Stuart v. State, 149 Idaho 35, 44, 46, 232 P.3d 813, 822, 824 (2010), we placed reliance on a legislative statement of 

purpose in determining legislative intent. Here, the Statement of Purpose is consistent with statements made before 

legislative committees by the bill’s sponsor, a respected member of the Legislature. While opposition statements 

focus on the efficacy of the language in the bill to accomplish the stated intent, there is no dispute as to the intended 

purpose of the bill. 
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Senator Smyser pointed out the difficulty of understanding either the intent or the 

language contained in the bill, and suggested that clarification of the words 

“agricultural product” was needed on line 15 and line 17.

Berne Jensen, Idaho Bankers Association, stated that his organization could 

neither support nor oppose the legislation since they were unable to understand 

what the intent of the bill is. He suggested the bill needs redrafting for 

clarification.

Pat Collins, attorney for the Idaho Bankers Association, informed the committee 

members that the drafter of the bill was faced with two problems (1) the language 

of the existing chapter, and (2) the court case referred to by Rep. Newcomb. The 

court assumed that the lien on the feed continued into the cattle; in order to avoid 

that result the court ruled it didn’t increase the value of the cattle; therefore, there 

is no lien in the cattle. Mr. Collins stated that he does not believe that the lien 

continues in the cattle that eats the feed; the language that has been added 

assumes that this lien does continue. It is his opinion that the bill is responding to 

an ill-advised court decision and does not accomplish what he thinks the sponsor 

seeks to accomplish.

The bill was reported to the Senate floor for amendment. The amendment, following the 

suggestion of Senator Smyser, read:

SENATE AMENDMENTS TO H.B. NO. 314

AMENDMENTS TO SECTION 1

On page 1, line 15, of the printed bill, delete: “agricultural product” and 

insert: “livestock”; and in line 17, delete “agricultural product” and insert: 

“livestock”. 

CORRECTIONS TO TITLE

On page 1, line 5 of the printed bill, delete “AGRICULTURAL 

PRODUCT” and insert: “LIVESTOCK”; and in line 6, delete 

“AGRICULTURAL PRODUCT” and insert: “LIVESTOCK”.

With that amendment, H.B. 314 passed the Senate and was enacted into law. The title and text of 

the legislation are as follows:

AN ACT

RELATING TO AGRICULTURAL COMMODITY DEALER OR PRODUCER

LIENS; AMENDING SECTION 45-1802, IDAHO CODE, TO PROVIDE 

THAT A LIEN MAY ATTACH WHETHER THE PURCHASER OF 

THE AGRICULTURAL PRODUCT USES IT TO INCREASE THE 

VALUE OF HIS LIVESTOCK OR WHETHER HE USES IT TO 

MAINTAIN THE CURRENT STATUS, HEALTH, OR VALUE OF HIS 

LIVESTOCK.

Be It Enacted by the Legislature of the State of Idaho:

SECTION 1. That Section 45-1802, Idaho Code, be, and the same is 

hereby amended to read as follows:
13

45-1802. LIEN CREATED―WHO MAY HAVE. An agricultural 

commodity producer or an agricultural commodity dealer who sells an 

agricultural product has a lien on the agricultural product or the proceeds of the 

sale of the agricultural product until payment is made in full. The lien created in 

this chapter may attach regardless of whether the purchaser uses the agricultural 

product purchased to increase the value of his livestock or whether he uses the 

agricultural product purchased to maintain the value, health or status of his 

livestock without actually increasing the value of his agricultural product.

1989 Idaho Sess. Laws, ch. 299, § 1, pp. 46−47.

As Pioneer Irrigation instructs, we may ascertain legislative intent from a statute’s 

context. 153 Idaho at 597, 288 P.3d at 814. In his testimony to legislators, Rep. Newcomb stated 

the understanding in the feed industry to be that “the feed lien would attach to the animal which 

was being fed.” Both Rep. Newcomb and the Idaho Bankers Association attorney, Pat Collins, 

referenced a court decision that “assumed that the lien on the feed continued into the cattle,” but 

only when the feed increased the value of the cattle. Absent an increase in the value of the cattle, 

the feed lien did not continue. Unfortunately, neither party identified the court decision. 

In any event, the stated purpose of the legislation was to amend I.C. § 45-1802 “so that 

when a feed lien is filed on domestic livestock, the lien would be valid even though the feed just 

maintained the livestock rather than added value.” Having been raised in the livestock industry, it 

is not difficult to understand the context of this legislation. Those in the industry obviously 

understood that a feed lien is of little value if it is extinguished at the moment the feed is ingested 

by the animal. Those in the industry appear to have understood that the feed was ingested by the 

animal, incorporated into the animal’s body, and added value over and above the price of the 

animal. While feed does not obviously convert to fat, muscle and bone on a one-to-one ratio, 

some of the feed undeniably converts to bodily substance and enhances the value of the 

livestock. Of interest is the fact that at the same time H.B. 314 was making its way through the 

legislative process, I.C. § 45-1801(1) was in the process of being amended by H.B. 191 to 

specifically include “a product used as animal . . . feed” within the definition of “agricultural 

product.” 1989 Idaho Sess. Laws, ch. 265, § 1, pp. 644−45. H.B. 191 received final legislative 

approval on April 3, 1989, and H.B. No. 314 received final legislative approval the following 

day. 

The agricultural industry was not alone in holding the understanding that a feed lien 

continued into the livestock that consumed the feed. As the Honorable Jim D. Pappas, then the 

District of Idaho’s Chief U.S. Bankruptcy Judge, observed in a case cited by both parties:
14

Evans Grain [a commodity dealer] also argues that deference should be given to 

the Idaho Secretary of State’s interpretation of Idaho Code § 45-1802. The 

Secretary of State published the form to be used by agricultural commodity 

dealers and producers to assert and perfect a lien. That form allows the lien 

claimant to designate both livestock and milk among the kinds of property in 

which the lien is asserted.5

In Re Goedhart & Goedhart, 03.3 IBCR 167, 171 (Bankr. D. Idaho 2003). While Judge Pappas 

declined to give any legal weight to the Secretary of State’s interpretation of I.C. § 45-1802, the 

obvious belief of Idaho’s grand old stockman and most prominent sheepherder―that a feed lien 

continued into the animal to which it was fed―demonstrates the truth and reliability of the 

industry understanding stated by Rep. Newcomb, as well as the ambiguous nature of the statute. 

When H.B. 314 was considered in the Senate Committee, Senator Smyser pointed out the 

difficulty of understanding the intent of the new second sentence based on the “agricultural 

product” language. The Idaho Bankers Association witnesses agreed. H.B. 314 was then 

amended to substitute “livestock” for “agricultural product” in two places. The legislation then 

provided that a lien “may attach” regardless of whether the buyer of the feed “uses” it to increase 

the value of his livestock or whether he “uses” it to maintain the value, health or status of his 

livestock. In the cattle context, this would cover both feeder cattle, the weight and value of which 

are increased by consumption of the feed, and dairy cattle, whose value, health and status are 

maintained by eating the feed. The language used in the second sentence of H.B. 314, as 

amended, is certainly not ideal to accomplish the stated purpose but it is adequate. The statute 

says that a lien may “attach” if the feed buyer “uses” the product to increase the value of his 

livestock or to maintain their value. It does not say “if the feed is intended to be used” for either 

purpose, indicating a forward-looking usage. Rather, it employs the present tense. Similarly, the 

contemporaneously amended definition of “agricultural product” specifically included a product 

“used” as animal feed. Again, not “to be used” but, the past tense “used.” The statutory title of 

 5 Judge Pappas was likely referring to the Secretary of State’s then-current Form C-1, a copy of which was placed in 

the record by Appellant. A July 2001 version of that form, designed to provide notice of agricultural product liens 

pursuant to I.C. § 45-1802, includes a wide variety of animals covered as “proceeds” under an agricultural 

commodity lien. Appellant notes that the Form C-1 was revised in March of 2004 to delete the proceeds listings. It is 

likely that the Secretary of State devised the July 2001 version of the form in response to I.C. § 45-1808, which was 

amended in the Legislature’s 2000 session to require the Secretary of State to prescribe the form for filing of an 

agricultural commodity lien. 2000 Idaho Sess. Laws, ch. 339, § 4, p. 1134. Previously, such liens had been filed with 

the county recorder. There is no evidence in the record to indicate what information was required in filings with the 

county recorder prior to 2001. Nor does the record show what prompted the Secretary of State to adopt the March 

2004 version of Form C-1. It might be observed, however, that the Goedhart decision came out in 2003 and the 

Form C-1 was amended shortly thereafter. 
15

the enacted bill continues this theme, indicating that I.C. § 45-1802 was designed “to provide 

that a lien may attach whether the purchaser of the agricultural product uses it to increase the 

value of his livestock or whether he uses it to maintain the current status, health, or value of his 

livestock.”

It is difficult to determine what the purpose of the second sentence of I.C. § 45-1802 

would be, if not to continue the lien into the consuming livestock, as the district court 

determined. No convincing argument has been made that it clarifies anything or otherwise has 

any meaningful purpose, if not read as Respondents contend. The Appellant’s position would 

render the second sentence of I.C. § 45-1802 essentially meaningless―a nullity―contrary to the 

statutory construction principles articulated in Roesch. Id. at 177−78, 107 P.3d at 194−95. As the 

district court points out, the Appellant’s interpretation of the second sentence of the statute “adds 

nothing, and clarifies nothing,” and is “the very definition of being superfluous.” 

On the other hand, the district court did find the Respondent’s interpretation of the 

second sentence to be convincing:

The most convincing factor to this court is how the second sentence implements 

the word, “uses.” As identified above, “uses” is the triggering verb in the second 

sentence; however, once the agricultural product is “used” to increase or maintain 

the value of livestock, the agricultural product is no longer in a state of livestock 

feed―it has been ingested and is not distinguishable from the livestock that 

ingested it. The second sentence indicates that the agricultural lien attaches even 

when this triggering event occurs. To the court, this means that the agricultural 

lien attaches to the feed, and continues if commingled with livestock through the 

livestock’s use―or consumption―regardless of whether the agricultural product 

increased the livestock’s value, or maintained its value. 

As noted above, the definition of agricultural product was contemporaneously amended in 1989 

to specifically include “a product used as animal . . . feed.” The second sentence of I.C. § 45-

1802 was intended to expand the lien provided in the first sentence to attach to animals that used 

the feed.

The same conclusion was reached in another district court decision placed in the record 

by counsel for one of the Respondents. A Bingham County decision, also from farm country, 

written by the Honorable Jon Shindurling, is well reasoned and therefore worthy of quoting:

The ambiguous second sentence of § 45-1802 provides for attachment in the lien 

even if the agricultural product is “used”, which in the case of livestock feed 

would mean it attaches even if the feed is “eaten”. I.C. § 45-1803 provides that 

the “lien created by § 45-1802, Idaho Code, attaches to the agricultural product 

. . . on the date the agricultural product is physically delivered to the purchaser or 
16

on the date any final payment is due, and unpaid . . . whichever occurs last.”

(Emphasis added.) If the lien were to attach when the final payment is due and 

unpaid, then to be consistent with I.C. § 45-1802 which allows the lien to attach 

regardless of whether the product is “eaten,” there exists a very likely possibility 

that a portion if not all of the feed would already have been consumed by the 

livestock when the lien attaches.

Common sense dictates that the legislature would not extend a lien in feed if the 

lien rights would literally disappear into the belly of the cow before they could 

attach to the feed. This would be a ridiculous result and such a construction would 

strip the sentence of any meaning whatsoever. In interpreting a statute, the Court 

is to “seek a sensible construction that will avoid an absurd result.” Gavica v. 

Hanson, 101 Idaho 58, 60, 608 P.2d 861, 863 (1980) (overruled on other grounds 

by Sterling v. Bloom, 111 Idaho 211, 723 P.2d 755 (1986)).6

Stander Farms, Inc. v. Todd Feld, Bingham County District Court Case No. CV-02-1506 

(December 31, 2002). 

Judge Shindurling goes on to make another good point:

This conclusion is strengthened by analogy to another statutorily created 

agricultural lien. Idaho’s “agister lien” statute provides that “persons pasturing 

livestock of any kind, have a lien . . . for their compensation in . . . feeding [or 

pasturing] such livestock. If the liens as herein provided are not paid . . . the 

person in whose favor such special lien is created may proceed to sell the property 

at a licensed public livestock auction market. . .” I.C. § 45-805(b).

The district judge supports this parallel comparison by citation to Killeen v. Vernon, 121 Idaho 

94, 97, 822 P.2d 991, 994 (1991) where we said, “when a statute contains ambiguous language, 

we look to the other statutes in the title or act relating to the same subject matter and read them in

para materia in an effort to determine what the legislature intended.” Both I.C. §§ 45-805 and 

45-1802 are contained within the same title of the Idaho Code and both deal with statutory liens. 

An agister, who obtains a lien by feeding livestock does not have a lien in the feed but, rather, in 

the livestock that consumes/uses the feed.7 It is reasonable to conclude that the Legislature 

intended a similar result with I.C. § 45-1802.

The Legislature obviously intended that a producer or dealer who sold feed to a stockman 

would retain a lien even if the stockman were to sell the feed to another party. Idaho Code § 45-

 6 The Gavica quote reads in full: “In effectuating the legislative intent behind an ambiguous statute, the Court 

should, if possible, avoid indulging in a statutory construction which would cause absurd or unduly harsh results.” 

Gavica, 101 Idaho at 60, 608 P.2d at 863. This principle of statutory construction was reiterated in Pfau v. Comair 

Holdings, Inc., 135 Idaho 152, 157, 15 P.3d 1160, 1165 (2000). 7 Similarly, a materialman does not lose his lien under I.C. § 45-501, another Title 45 statutory lien, simply because 

some of his materials are incorporated into a house or other building. The materialman’s lien attaches to the building 

upon incorporation of the liened material. 
17

1802 specifically grants a lien in and to the proceeds. Counsel for Respondent Hull Farms 

vigorously asserted this means the lien follows the feed into the animal and the animal is the 

“proceeds” to which the lien attaches. However, little explanation of this contention was 

provided either in briefing or oral argument. In his decision in the Stander Farms case, Judge 

Shindurling performed a rather more convincing analysis of the proceeds theory. He first noted 

that I.C. § 28-9-109 provides for application of Article 9 of the UCC to agricultural liens. I.C. § 

28-9-109(a)(2). He indicates that an I.C. § 45-1802 lien fits the definition of “agricultural lien” in 

I.C. § 28-9-102―an interest in “farm products,” which term is defined as “livestock, born or 

unborn,” or “products of crops or livestock in their unmanufactured states.” I.C. § 28-9-

102(a)(34)(B) and (D). Judge Shindurling then concludes that under these provisions “an 

agricultural lien is a type of security interest created by statute (I.C. § 45-1802 in this case) in 

favor of the feed supplier and can be an interest in the debtor’s livestock and milk (as a livestock 

product in an un-manufactured state.)” 

At the time, Judge Shindurling did not have the benefit of our decision in Karle v. Visser, 

141 Idaho 804, 118 P.3d 136 (2005), in which the Court gave a broad reading to the UCC 

definition of “proceeds” in I.C. § 28-9-102(a)(64). We noted this to be “an expanded definition 

of proceeds” and held that proceeds of a security interest in a promissory note included the right 

to collect on the note and to file a suit for collection. 141 Idaho at 806, 808, 118 P.3d at 139, 141. 

When Judge Shindurling’s analysis is considered in light of the rather expansive holding in 

Karle, it is somewhat more convincing―if the proceeds of a promissory note extend to the right 

of collecting and suing on the note, it is not such a stretch to characterize the livestock that 

consume feed to be the proceeds of a feed lien. 

Whether one accepts the theory that the livestock should be considered the proceeds of 

the feed, or the theory that the lien continues in and attaches to the animal that consumes the 

feed, an early decision of this Court, Hoebel v. Raymond, 46 Idaho 55, 266 P. 433 (1928), tips 

the balance in favor of the Respondents. This pre-UCC case involved a promissory note given by 

the lessee of farm land to his attorney, secured by a chattel mortgage on a crop of hay growing 

on the leased property. 46 Idaho at 58, 266 P. at 434. Thereafter, a court-appointed receiver took 

over the possession and management of the leased property, including almost 400 tons of hay 

that was subject to the attorney’s mortgage. Id. The attorney notified the receiver that he would 

not be permitted to feed the hay to livestock in his possession without providing an accounting to 
18

the attorney. Id. The receiver promised to account for the hay, which thereafter was consumed by 

the livestock. Id. at 59, 266 P. at 434. The receiver contended that the attorney had waived his 

mortgage security by allowing the hay to be fed to the livestock and that the attorney was not 

entitled to payment from funds held by the receiver. The funds had been realized from sale of the 

cattle that consumed the hay. Id. The district court held that the attorney had a preferred lien in 

the funds held by the receiver, after deducting certain amounts for labor liens outstanding against 

the hay crop. Id. The Supreme Court affirmed the judgment. According to the Court:

It was shown and found that the hay was honestly fed, that the [debtor’s] live 

stock were preserved and improved thereby, and that the fund [realized from the 

livestock] was the direct result of such improvement. That property was in all 

conscience answerable for the debt and impressed with a lien or trust running to 

the mortgagee. . . . In the instant case, the proceeds of the hay were by the 

receiver converted into beef and horseflesh, and were . . . subject to the trust 

undertaken. Id. at 61−62, 266 P. 435. 

Thus, the attorney’s lien against the hay continued into the livestock that consumed the hay and, 

further, into the proceeds of the sale of the livestock. The same result should obtain here, 

regardless of whether one adopts the proceeds theory asserted by Hull Farms or the theory that 

the feed lien continued into the livestock that consumed the feed.

Further, the fact that the lien continues into the proceeds upon sale of the feed would 

support the conclusion that the Legislature intended that the feed, when consumed by the animal 

and some of it incorporated into the bodily structure, was still subject to the lien. What possible 

reason could the Legislature have had for continuing the lien if the feed is sold, but terminating it 

if the feed is consumed? Use/consumption of feed is its intended purpose, not resale. It obviously 

assumed that the lien would continue into the animal that ate the feed. Otherwise, an exceedingly 

harsh result would obtain, contrary to the principle that “[a] construction [of an ambiguous 

statute] that leads to an absurd or unreasonably harsh result is disfavored.” State v. Hickman, 146 

Idaho 178, 184, 191 P.3d 1098, 1104 (2008). 

The Legislature clearly intended to protect agricultural commodity producers and dealers 

by providing them a lien that would take priority over security interests of lenders, even where 

the agricultural product was sold by their buyer. It is absurd to think that the Legislature would 

place in the hands of the buyer the ability to unilaterally terminate the lien rights of the producer 

or dealer simply by feeding his livestock. I am aware of no other lien or security interest 

available under the laws of the State of Idaho that can be unilaterally terminated at the sole 
19

instance of the debtor. That simply does not make sense. To adopt the Appellant’s interpretation 

of the statute, the Legislature engaged in a somewhat meaningless act by enacting chapter 18 of 

Title 45 in the first place, except in the instance where the commodity buyer either kept or sold 

the commodity, and the passage of H.B. No. 314 was merely an exercise in futility. 

I read this situation otherwise. Rep. Newcomb introduced his legislation to remedy a 

concern raised by a court decision. As he stated, it had been understood in the industry that a 

feed lien continued into the animal that consumed the feed. This understanding may well have 

been aided by the Hoebel decision, which the Legislature is presumed to have known about when 

I.C. § 45-1802 was initially enacted in 1983. 1983 Idaho Session Laws, ch. 202, § 1, p. 549. A 

judge had apparently held that the lien did not continue into the animal unless the value of the 

animal was enhanced. Rep. Newcomb’s legislation was designed to allow the lien to attach 

regardless of whether the feed enhanced the value of the animal or simply maintained its health 

and value. Based upon his representations, the Legislature had a choice. It could enact the 

legislation to accomplish the purpose represented by Rep. Newcomb or, having learned what the 

understanding in the industry was, could have gone the other way and adopted legislation to the 

contrary. The Legislature approved the legislation. The Legislature has amended I.C. § 45-1802 

two times―once in 2000 (2000 Idaho Sess. Laws, ch. 339, § 1, p. 1133) and once in 2001 (2001 

Idaho Sess. Laws, ch. 363, § 2, pp. 1279−80), both for technical purposes―but on neither 

occasion did the Legislature take the opportunity to change the understanding expressed in 1989 

by Rep. Newcomb. Otherwise, we don’t know how the statute has been applied because, 

unfortunately, none of the parties placed evidence in the record in that regard. 

We do know that the Secretary of State adopted a form in 2001 that confirmed the 

understanding of the legislation’s proponent and that the two district court decisions brought to 

the attention of this Court―one by Judge Shindurling in 2002 and the present one by Judge 

Bevan in 2012―ruled in the same fashion. As Respondents point out, the only plausible 

interpretation of the amendment accomplished by H.B. 314 is that it addresses the issue of 

whether a feed lien needed to increase the value of livestock in order to attach to the livestock. 

They argue that this is based upon “the predicate fact that the feed lien does in fact attach to the 

livestock. If it did not attach to the livestock, why would it matter if the livestock added, 

maintained, or lost weight?” It should be kept in mind that H.B. 191 was in the legislative 

process at the very time H.B. 314 was under consideration. H.B. 191, which had an emergency 
20

clause, was approved by the Legislature on April 3, 1989, and went into effect before H.B. 314. 

It amended the definition of “agricultural product” to specifically include commodities that were 

“mixed, rolled or combined in any fashion or by any means to create a product used as animal, 

poultry or fish feed.” Combining in any fashion can be reasonably interpreted to mean 

combining in the bodily structure of an animal to which the feed was fed. This conclusion is 

supported by the fact that the Legislature defined feed as a product “used,” not “to be used.” 

Feed is used when it is fed to an animal, not before. Then, H.B. 314 utilizes this revised 

definition of agricultural product to state that the lien attaches regardless of how the purchaser 

“uses” the product. Again, the tense of the word is important. When one considers the words 

used in the context of the legislation, the problem it was intended to remedy, the stated purpose, 

and the industry understanding, it is not difficult to read the legislative intent to be as stated by 

Rep. Newcomb and as contended by Respondents. 

Pioneer Irrigation also instructs that legislative intent may be derived from the public 

policy in support of the statute. 153 Idaho at 597, 288 P.3d at 814. As Respondents point out:

If a dairy farm or other livestock operation cannot obtain adequate feed, its 

livestock will not produce livestock products or offspring and will not maintain 

their value. The agricultural commodities producers and dealers “[add] directly to 

the value of the property of another” by providing the materials livestock owners 

need to “maintain” or “increase” the value of their livestock. This also explains 

why the legislature would provide for the statutory lien to take priority over a 

competing security interest in I.C. § 45-1805. If the lien did not take priority over 

a competing security interest, it would be of little value because in the event of a 

default the seller of livestock feed could never get paid unless the bank’s loan was 

paid in full. Granting higher priority to the lien provides an incentive for suppliers 

to provide the inputs necessary for the livestock operation to stay in business. It is 

reasonable to infer that the legislature intended to protect the interests of farmers 

who provide feed to owners of livestock, and that its 1989 amendment was 

intended to ensure that the lien would attach to the livestock or to livestock 

products regardless of how the feed was used. 

In other words, the feed provided by farmers or commodity dealers keeps the animals alive and 

enhances their value to the benefit of both the owner and the secured lender. It is interesting to 

note that the amount Appellant received from the sale of some of the livestock ($211,957.58) 

was slightly more than the Respondents furnished in feed ($185,404.71). Had the Respondents 

not furnished the feed, the livestock may not have survived to sale time. 

Having grown up in the cattle-feeding business, Respondents’ argument certainly rings 

true. My father, Henry Jones, purchased animal feed―wheat, barley, and corn (for silage)―from 
21

hundreds of feed producers. The feed enhanced the value of the cattle well above any monies 

that lending institutions may have advanced to purchase them. An interpretation of I.C. § 45-

1802 that disregards the value of the enhancement of livestock, or even the maintenance of their 

value, shortchanges these feed producers. The Appellant argues, however, that lending to the 

livestock industry will be plagued by uncertainty and instability if some protection is afforded to 

feed producers. However, as Respondents point out, “lending institutions are in a much stronger 

position to protect themselves than feed suppliers, who more often than not, simply run small 

farm operations whose continued existence depends on payment for that year’s crops.” They note 

that “[a] lender can obtain financial information from the borrower prior to making a loan and 

confirm that the money it lends for feed is actually spent on feed.” With a prior perfected 

security interest in the livestock, the lender is entitled to have its name placed on any payment 

check for feed and therefore has some leverage vis-à-vis the feed supplier. And, since the 

livestock industry has apparently been operating in accord with the district court’s holding, it is 

not likely that great instability and uncertainty will be injected into the system if the practice 

continues. 

For the foregoing reasons, I would affirm the district court. However, it would certainly 

be incumbent upon the interested parties to bring this matter back to the Legislature so as to 

obtain absolute certainty as to the status of lenders and feed producers on this issue.