Court Opinion

ID: 9583233
Source: CourtListenerOpinion
Date Created: 2023-08-21 22:36:19.115137+00
Date Added: 2024-06-11T13:38:53.728697
License: Public Domain

MILLER, Justice
(concurring in result).
I can only concur in the result of the majority decision.
Initially, I disagree that the “main issue” is “whether the livestock sales company is liable for conversion as a matter of law.” The real issue, as framed by appellant, is whether the trial court erred in determining that our statute, SDCL 57A-9-307, as interpreted by Comment 4 to U.C.C. § 9-109, exonerates Magness from liability to a secured party having a perfected security interest.
In granting summary judgment on the sole ground raised by Magness, the trial court held that under SDCL 57A-9-109 and Comment 4 to U.C.C. § 9-109, the Vetter livestock lost its status as “farm products” and became “inventory” while in the possession of Magness, thereby extinguishing the security interest claimed by Bank.
A recitation of additional facts is necessary to give a better understanding of the case. Vetter had executed several promissory notes to Bank along with security agreements creating a lien upon his livestock, both presently owned or after acquired. On three occasions in 1984 after the lien was properly perfected, Vetter, without Bank’s consent, sold sheep to third parties through Magness.
SDCL 57A-9-307 is clear that a lender’s security interest continues in farm products * regardless of its sale. In salient part, SDCL 57A-9-307 provides:
(1) A buyer in the ordinary course of business (subsection (9) of § 57A-1-201) other than a person buying farm products from a person engaged in farming operations takes free of a security interest created by his seller even though the security interest is perfected and even though the buyer knows of its existence.
In statutory construction, we assume statutes mean what they say and we will not enlarge a statute beyond its face where the statutory terms are clear and unambiguous. American Rim & Brake, Inc. v. Zoellner, 382 N.W.2d 421 (S.D.1986); Simpson v. Tobin, 367 N.W.2d 757 (S.D.1985); Petition of Famous Brands, Inc., 347 N.W.2d 882 (S.D.1984); Crescent Elec. Supply Co. v. Nerison, 89 S.D. 203, 232 N.W.2d 76 (1975).
Appellee and the trial court apparently got sidetracked through a misinterpretation of Comment 4, supra, which although referred to in the majority opinion, is not quoted. The paragraph relied upon by ap-pellee and the trial court reads as follows:
When crops or livestock or their products come into the possession of a person not engaged in farming operations they cease to be ‘farm products.’ If they come into the possession of a marketing agency for sale or distribution or of a manufacturer or processor as raw materials, they become inventory.
Initially, it should be observed that the official comments were not adopted by the South Dakota Legislature when the UCC was adopted. 1966 S.D.Sess.L. ch. 150. These comments are not the law in this state although we may look to them for guidance. Appeal of Copeland, 531 F.2d 1195 (3d Cir.1976); Johnson v. John Deere Co., 306 N.W.2d 231 (S.D.1981); Drier v. *569Perfection, Inc., 259 N.W.2d 496 (S.D.1977); Sherman v. Upton, Inc., 90 S.D. 467, 242 N.W.2d 666 (1976).
More importantly, however, for the reasons stated in the majority opinion, the trial court misinterpreted the above-quoted language in Comment 4. Additionally the trial court (and apparently the Eighth Circuit Court of Appeals in the Progressive case) disregarded other language appearing later in Comment 4 reading:
Note that the buyer in ordinary course who under Section 9-307 takes free of a security interest in goods held for sale does not include one who buys farm products from a person engaged in farming operations.
I specifically agree with the rationale of the majority opinion in adopting the Kansas reasoning.

 Livestock are clearly farm products under the definition at SDCL 57A-9-109(3).