No. 86-62 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1986 

PEARL F. WAGNER, 

Plaintiff and Appellant, 

GLASGOW LIVESTOCK SALES CO., 

a Montana corporation, and 

TREASURE STATE BANK, a Montana 

corporation, 

Defendants and Respondents. 

APPEAL FROM: District Court of the Seventeenth Judicial District, 

In and for the County of Valley, 

The Honorable B. W. Thomas, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

David L. Nielsen, Glasgow, Montana 

For Respondent: 

Matthew W. Knierim, Glasgow, Montana 

Filed: 

Submitted on Briefs: May 15, 1986 

Decided: July 30, 1986 

Clerk 
Mr. Justice William E. Hunt, Sr., delivered the Opinion of 

the Court. 

This is an appeal from an order granting summary 

judgment. Pearl Wagner brought an action against the 

Glasgow Livestock Sales Company and Treasure State Bank to 

decide: (1) Whether the security agreement between Wagner 

and the Treasure State Bank created a valid security interest 

in the collateral described; (2) Whether an advance made on 

November 3, 1980 to Wagner's husband and their ranch was 

secured by the security agreement; and, (3) Whether Glasgow 

Livestock Sales Company was liable to Wagner for proceeds of 

the sale of her cattle which were paid directly to Treasure 

State Bank rather than to Wagner herself. 

The District Court granted summary judgment to the 

respondents, Treasure State Bank and Glasgow Livestock Sales, 

Co. and we affirm. 

The issue before us is whether the summary judgment 

should have been granted. 

Early in February of 1980, Pearl and Richard Wagner 

entered into an agreement with Treasure State Bank in which 

all their farm equipment, livestock, products and proceeds 

thereof were listed as security for "the payment and 

performance of each and every debt, liability and obligation 

of every type and description" the Wagners owed or at any 

time thereafter would owe to Treasure State Bank. The 

provisions of this agreement will be cited as needed. At the 

time this agreement was entered the Wagners owed the bank 

S86,OOO.OO. 

On March 24, 1980, the Wagners both signed a promissory 

note in the amount of $120,000.00 which represented their 
operating line of credit for that year. The language of this 

note indicated it was secured by a security agreement dated 

March 24, 1980. During the following period the bank made 

many advances on this line of credit and the Wagners 

deposited funds to be credited against this line of credit. 

Richard Wagner, individually, and for the ranch, signed an 

additional promissory note on November 3, 1980 in the amount 

of $170,000.00. 

On January 12, 1981, Pearl Wagner wrote to the president 

of the Treasure State Bank informing him that she and Richard 

had separated in December of the preceding year. She 

emphasized that as of the date of her letter she would no 

longer be responsible for any debts Richard Wagner might 

incur. Pearl and Richard Wagner have since divorced. 

Thereafter Pearl Wagner made a number of sales of 

cattle. The proceeds of three of these sales are the subject 

of this suit. In January of 1981 she sold cattle through the 

Glasgow Livestock Sales Company for the sum of $3,244.07. In 

March of 1981 she again sold cattle through Glasgow 

Livestock, this time for $120,515.78. In both instances the 

livestock company made the checks out to Pearl Wagner and 

Treasure State Bank. The second and larger check included 

Richard Wagner as payee. When she presented these checks 

Pearl was told that payment on them had been stopped. In 

each instance these sums were then directed from the 

livestock company to the bank, where they were credited 

against the balance of the March and December 1980 notes. 

The final cattle sale concerned three bulls Pearl Wagner 

bought from another rancher and consigned the same day to the 

livestock company for sale. After the bulls were sold, the 

livestock company paid the proceeds directly to the Treasure 
State Bank. The bank applied the proceeds against the 

balance due on the two notes. Pearl Wagner brought this suit 

against Treasure State Bank and Glasgow Livestock Sales 

Company alleging that because she was not personally liable 

on the November 1980 note, and because the security agreement 

of February 24, 1980 did not cover the November note, the 

bank and livestock company are liable to her for the proceeds 

of those sales. 

We are first asked to determine whether, under the facts 

of this case, summary judgment was proper. The law favors 

full litigation of all issues brought before a court. The 

narrow exception of summary judgment exists for reasons of 

judicial economy. Hence summary judgment is proper only when 

there is no genuine issue of material fact and the moving 

party is entitled to judgment as a matter of law. Cereck v. 

Albertson's, Inc. (Mont. 1981), 637 P.2d 509, 38 St.Rep. 

1986. The burden of establishing the absence of any genuine 

issue of material fact falls upon the moving party. Once 

established in the record that no issue of fact exists, the 

burden shifts to the party opposing the motion to demonstrate 

such issues do exist. Rumph v. Dale Edwards, Inc. (1979), 

183 Mont. 359, 600 P.2d 163. If the opposing party cannot 

display material fact issues to the court or that the law 

requires the issue to be determined against the moving party, 

summary judgment must be granted. Larry C. Iverson, Inc. v. 

Bouma (Mont. 1981), 639 P.2d 47, 38 St.Rep. 1911. 

In the case before us, Wagner has failed to establish 

any differences concerning the material facts of the case. 

While the circumstances surrounding the making of the 

security agreement and the promissory notes, the crediting 

and debiting Wagner's line of credit, and the sales of cattle 
and payment of proceeds from those sales may be factually 

complicated, Wagner has not produced evidence of any material 

issue concerning these facts. Merely conclusory or 

speculative statements asserting issues of fact are not 

sufficient to resist the motion. Kronen v. Richter (Mont. 

1984), 683 P.2d 1315, 41 St.Rep. 1312. The party opposing 

the motion has an affirmative duty to respond by affidavits 

or sworn testimony with specific facts to show there is a 

genuine issue suitable for trial. Martin v. State of Montana 

(Mont. 1985), 698 P.2d 399, 42 St.Rep. 272. 

Close examination of the record, including the affidavit 

of Pearl Wagner, convinces us that the trial court properly 

found that no issue of material fact existed. Wagner 

contends that she didn't intend at the time of signing the 

security agreement that it would cover any separate note 

signed by her husband only. It is true that summary judgment 

is usually inappropriate where intent of the parties is an 

important consideration. Twite v. First Bank (Mont. 1984), 

692 P.2d 421, 41 St.Rep. 2518. However, in this case the 

security agreement as we explain below, was a valid 

agreement, not ambiguous, and clearly covering future 

indebtedness, whether joint or several, and clearly pledging 

Pearl Wagner's separate property (cattle with her brand) for 

the whole indebtedness. Therefore evidence of Pearl Wagner's 

subjective intent is not a material issue. The four corners 

of the security agreement clearly show the obligations and 

rights arising from the agreement. 

The only other issue of fact raised by the record 

concerns the problem that the March 24, 1980 promissory note 

refers to a security agreement dated the same day. Pearl 

Wagner has not alleged the existence of any agreement signed 
that day and admits she signed the February agreement which 

the bank contends secures that March note. The District 

Court found that the March 24 date for the referenced 

security agreement was a typing error. This finding was 

proper considering Pearl Wagner has not raised any fact 

tending to show the existence of any security agreement other 

than the February agreement. 

Holding, as we do, that there is no material issue of 

fact, we turn now to whether the respondents were entitled to 

summary judgment as a matter of law. 

The first question raised by Wagner concerns the 

enforceability of the security agreement. A security 

interest is enforceable if it is in writing and sets forth a 

description of the collateral and the debtor rights in the 

collateral. It must be signed, and consideration must be 

given by the secured party for the interest. Section 

30-9-203, MCA. All these requirements have been met by the 

security agreement concerned. It is in writing, describes 

the property as all equipment, cattle branded C7-R.H. C7-L.H. 

and R.H. and all proceeds thereof. There is no 

contention that Pearl Wagner was not the owner of these 

properties. The agreement is signed by Pearl Wagner. 

Finally, value given by the bank, is represented by the prior 

$84,000 indebtedness and by the promissory notes issued in 

March and December. Once all these requirements are met, the 

security agreement "attaches" and is enforceable against the 

debtor. Section 30-9-203, MCA. Hence we hold the agreement 

entered by Pearl Wagner on February 6, 1980 created an 

enforceable security interest held by the Treasure State 

Bank. 
The terms of the security agreement clearly indicate the 

collateral would secure joint and single liability of Pearl 

and Richard Wagner. The agreement states: "To secure the 

payment and performance of each and every debt . . . whether 

it is or may be . . . joint, several, [or] joint and 

several . . . .'I 

Pearl Wagner did not notify the bank until January 12, 

1981, that she no longer considered herself or her property 

liable for her husband's debts. She has raised no issue of 

fact or legal basis on which the District Court could deny 

summary judgment on the issue of her cattle's status as 

security for the note Richard signed November 2, 1980. She 

may not be personally liable on the underlying debt. Section 

40-2-301 and 302, MCA. However, her property remains as 

collateral for that debt under the security agreement which 

she signed. 

Finally, appellant Wagner contends that the Glasgow 

Livestock Sales Company was legally obligated to pay the 

proceeds of the sale of her cattle to her and the Treasure 

State Bank rather than directly to the bank. Originally the 

first two checks were made out jointly but payment on those 

checks was stopped and the proceeds paid directly to the 

bank. Payment from the final sale was made directly to the 

bank. 

The terms of the security agreement and the applicable 

statutes allow the livestock company to pay the bank 

directly. First, the security agreement contains this 

provision: 

A Secured Party, may, at anytime (both before and 

after the occurrence of an Event of Default) notify 

any account debtor or any other person obligated to 

pay any amount due, that such . . . right to 

payment has been assigned or transferred to Secured 
Party for security and shall be paid to Secured 

Party. 

The provision further provides that the debtor will notify 

the obligor of the assignment and the secured party could 

then demand payment. This kind of provision is expressly 

provided for in security agreements. Section 39-9-502, MCA. 

Furthermore the facts indicate Richard Wagner, himself, put 

the stop payment on the second check and brought in the 

payment to be applied directly on the outstanding debt. 

The bank did not perfect by filing a financing statement 

concerning the security interest until March 2, 1981. The 

first sale where proceeds were sent directly to the bank 

occurred prior to the perfection of that security interest. 

Even that payment, however was proper. Independent of the 

terms of the agreement or the rules of Montana's commercial 

code, some of the provisions of the Livestock code apply and 

even control the other applicable statutes. - See 5 

30-9-203 (4), MCA. Section 81-8-301 (I), MCA, one of the 

controlling statutes, provides: 

A livestock market to which livestock is shipped 

may not be held liable to any secured party for the 

proceeds of livestock sold through the livestock 

market by the debtor unless notice of the security 

agreement is filed and a copy is transferred as 

hereinbefore provided. 

The inverse implication of this section is that the 

livestock market would be liable if the notice had been filed 

and the proceeds were paid to the debtor. The proceeds of 

the first sale were paid before the Treasure State Bank had 

filed such a notice. However, the District Court found from 

the deposition of Robert Fjeldheim, President and General 

Manager of Glasgow Livestock Sales, Co., that the Wagners 

themselves informed the sales company that the bank had a 

security interest in their cattle. Prior to the second sale 
the bank filed a notice concerning the security interest 

created in Wagner's cattle and the Glasgow Livestock Sales 

Company had received a copy. Therefore the market was 

obligated to pay the bank for the second sale. 

The situation is complicated somewhat by the fact that 

the security interest enforced in the last sale was one 

created in cattle owned by another debtor of the Treasure 

State Bank. These cattle were bought by Pearl Wagner and 

consigned to Glasgow Livestock Sales Company on the same day. 

There is no evidence in the record that this security 

agreement did not contain the exact provision which allowed 

the bank to demand payment. Furthermore a notice of the 

security interest in these cattle was also on file with the 

livestock company. Therefore S 81-8-301(1), MCA, required 

the livestock company to pay the bank the proceeds. 

We conclude that there is no issue of material fact or 

interpretation of law which precludes the summary judgment 

granted by the District Court. The judgment and order of the 

District Court are affirmed. 

We Concur: * 

H. /-* 

Chief Justice /Y