Court Opinion

ID: 5158189
Source: CourtListenerOpinion
Date Created: 2022-01-02 02:28:01.703476+00
Date Added: 2024-06-11T08:25:29.687078
License: Public Domain

WATT, J.,
with whom COLBERT, V.C.J. and REIF, J. join, dissenting.:
T 1 The majority correctly parrots the Uniform Commercial Code's statements on security interests and their priorities. Thereafter, with two sentences at the end of the opinion, reaches a result that invades the province of the fact finder about what duty is owed to the livestock company. The issue, as framed, is whether the Bank owed any duty to a third party. The opinion goes on to hold that, under these "contested facts," it does not. Admittedly, this is the general rule under the Uniform Commercial Code. Because I would return this cause to the trier of fact for resolution, I dissent.
T2 The majority sets forth the Code's definition of "good faith" dealing as "honesty in fact and the observance of reasonable commercial standards of fair dealing." 1 It does not provide the added input found in the Uniform Commercial Comments to the same section where the definition of good faith is found. It provides in pertinent part:
[The definition of 'good faith' in this seetion requires not only honesty in fact but also 'observance of reasonable commercial standards of fair dealing.! Although 'fair dealing is a broad term that must be defined in context, it is clear that it is concerned with the fairness of conduct rather than the care with which an act is performed. ... [Emphasis provided.]
Oklahoma Comments to the 2001 version of the same section providing that " 'good faith was honesty in fact in the conduct or transac*1095tion concerned" 2 are even more instructive. They provide in pertinent part:
(19) 25 OkLSt.Ann $ 9 provides: "Good faith consists in an honest intention to abstain from taking unconscientious advantage of another, even through the forms or technicalities of law, together with an absence of all information or belief of facts which would render the transaction unconscientious." The term was also used, but not defined, in the Negotiable Instruments Law [48 OkL.St.Ann. §§ 122(8), 126 now repealed.] The Commercial Code definition is briefer, but the spirit of the two definitions are the same. [Emphasis provided.]
1 3 Most certainly, under either of the two definitions of "good faith," supra, there are material issues of fact which remain unresolved. Here, even the uncontested facts leave a reasonable person to ponder whether: the secured creditor (the Bank), is in bed with the debtor (2nd party), through knowledge of their poor financial condition and that they are selling cattle out of trust. With this knowledge, they honor numerous overdraft checks written to the livestock company (8rd party). Once the Bank realizes that the debtor really is "going belly up" and still has in its possession some 800 plus cattle does it dishonor checks to the livestock company in an attempt to increase its own collateral and financial position.
T4 If the Bank did act in the way described, they owe a duty to the 3rd party. Under these facts, most certainly, reasonable people could conclude that the Bank "hid behind the log" to improve its position and abandoned its duty of good faith in the commercial setting. We cannot assume, as does the majority, that the facts are as either party presents them. The livestock company should have the opportunity to prove that the Bank abandoned its position of priority by acting in bad faith.
15 I cannot concur in an opinion which makes assumptions resulting in the reward of devious behavior by the Bank while ignoring the rights of the innocent 3rd party. Admittedly, the livestock company was sloppy in not filing a financing statement. Nevertheless, I would prefer to reward the careless rather than the devious. Therefore, I dissent.

. Title 12A 0.S.2011 § 1-201(19).

. Title 12A 0.$.2001 § 1-201(19).