Opinion ID: 2112763
Heading Depth: 1
Heading Rank: 8

Heading: Existence of a Lien

Text: The existence of the lien is evidenced by the signed financing statement and security agreement dated April 19, 1985. Neb.U.C.C. § 9-203 (Reissue 1980) provides three basic prerequisites to the existence of a security interest: agreement, value, and collateral. In addition, the agreement must be in writing. The Barelmanns admitted that the signatures on the April 1985 financing statement and security agreement were theirs. Therefore, the requirement of a written agreement is satisfied. They do not claim that they did not own the property given as collateral for the security agreement. Therefore, the only remaining issue is whether value was given for the security agreement. The definition for value is found in Neb.U.C.C. § 1-201(44) (Reissue 1980): Except as otherwise provided with respect to negotiable instruments and bank collections... a person gives `value' for rights if he acquires them ... (d) generally, in return for any consideration sufficient to support a simple contract. The determination that there was valid consideration to support the questioned promissory notes necessarily means that the bank gave value for the security agreement. Neb.U.C.C. § 9-402 (Reissue 1980) provides, in relevant part: A financing statement is sufficient if it gives the names of the debtor and the secured party, is signed by the debtor, gives an address of the secured party ... gives a mailing address of the debtor and contains a statement indicating the types, or describing the items, of collateral. The Barelmanns do not plead any facts refuting the existence of any of these requirements. However, Russell Barelmann questions the adequacy of the financing statement, claiming that it does not include, by attachment or otherwise, a list of the equipment and machinery pledged. This position overlooks that the financing statement creates a security interest in the following collateral, whether now owned or hereafter acquired: all equipment, all farm products, including but not limited to crops, livestock, supplies used or produced in farming operations, all contract rights and accounts, and in additions, accessions, substitutions thereto, and all products and proceeds thereof, including but not limited to those used in or arising from farming and ranching and dairy operation. In addition, the financing statement, as required by § 9-402, describes the real estate on which the crops were to be grown. Neb.U.C.C. § 9-110 (Reissue 1980) provides: For the purposes of this article any description of personal property or real estate is sufficient whether or not it is specific if it reasonably identifies what is described. In addition, § 9-402(8) provides: A financing statement substantially complying with the requirements of this section is effective even though it contains minor errors which are not seriously misleading. In North Platte State Bank v. Production Credit Assn., 189 Neb. 44, 55-56, 200 N.W.2d 1, 8 (1972), this court stated: The fundamental purpose of Art. 9 of the code is to make the process of perfecting a security interest easy, simple, and certain.... The code very simply and briefly provides for a notice-filing procedure with a minimum of information required to be publicized in a filed financing statement. All that is required is a minimal description, and it may be by type or kind. The statement need not necessarily contain detail as to collateral, nor any statement of quantity, size, description or specifications.... Thus, the financing statement adequately describes the collateral which is the subject of the security interest. The description is such as to put a reasonably prudent person on notice as to which property was covered by a security agreement, thereby fulfilling the purpose of supplying in the financing statement a description of the collateral. Therefore, the assertion in Russell Barelmann's affidavit that no itemized list of the collateral was attached to the financing statement is of no relevance. The district court therefore correctly determined that the bank possessed a valid lien on the property the Barelmanns pledged as collateral for money they obtained from the bank. As we have seen from the analysis of the nature of a replevin action, once it was determined that the Barelmanns were indebted to the bank and that the bank possessed a valid lien on the property it sought to replevy, there was nothing left to try. That being so, the district court could not have committed prejudicial error by directing a verdict in favor of the bank at the close of the Barelmanns' evidence, nor could it have committed prejudicial error by any of its evidential rulings at that trial.