Associated Poultry, Inc. v. Wake Farmers Coop., Inc.

195 S.E.2d 325 (1973)

17 N.C. App. 722

ASSOCIATED POULTRY, INC. v. WAKE FARMERS COOPERATIVE, INC. (Carl Holleman, Permanent Receiver).

No. 7315SC125.

Court of Appeals of North Carolina.

March 28, 1973.

*326 Vaughan S. Winborne, Raleigh, for plaintiff-appellant.

VAUGHN, Judge.

The evidence presented before Judge Cooper tended to show that J. H. and Margaret C. Muster executed a financing statement in favor of F.H.A. covering the proceeds and products of their crops, livestock, supplies, other farm products, farm equipment and inventory as collateral for a loan. A copy of this financing statement was filed with the Register of Deeds of Wake County on 11 December 1967. F.H.A. requested and received from J. H. Muster a "Consent to Payment of Proceeds from Sale of Farm Products" which gave notice that the F.H.A. held a perfected security interest in the eggs and proceeds from the eggs of J. H. Muster and directed Wake to pay the purchase price of such products sold to, by or through Wake directly to F.H.A. The "effective date" of the consent was stated to be 16 February 1971, but the receipt acknowledgement and agreement to pay as the consent document directed was not signed by a representative of Wake until 22 April 1971.

Appellants challenge the denial of their claim to a priority position among the creditors of Wake and the classification of their claim "as a general claim." Appellants assert that Wake acted as a trustee holding the purchase price of the eggs in trust for F.H.A. Appellants' claim to a priority status in the distribution of Wake's assets in receivership is based upon that premise. Their argument is without merit. An examination of the evidence concerning all the circumstances of the transactions between the Musters, F.H.A. and Wake discloses that the parties treated the transfer of the Musters' eggs to Wake as a sale, with an assignment of the purchase price running to F.H.A. Upon delivery *327 of the Musters' eggs to Wake, they were graded and a record of the amount owed the Musters was kept. The eggs were then commingled with eggs of other farmers and, after marketing, the proceeds were deposited into a general account from which payment was to be made based upon the previously established value. The "Consent to Payment . . ." form, offered as an exhibit by appellants, characterizes Wake as a "Purchaser" and seeks to have "100 per cent of the purchase price" of the eggs paid directly to F.H.A. by virtue of F.H.A.'s security interest and the consent of J. H. Muster. Appellants have failed to establish anything beyond a debtor and creditor relationship between them and Wake. The court did not err in failing to find that appellants are entitled to preferential status as to the assets of Wake.

Affirmed.

BRITT and MORRIS, JJ., concur.