The Bank of Dawson Bank extended farming loans to Jason Wiggins, who granted a security interest in his cotton crop to the Bank. Thereafter, the Bank filed a related financing statement to perfect its security interest. Wiggins later sold his cotton crop to Worth Gin Company Gin, which was engaged in the business of purchasing and then ginning farmers’ cotton crops. The Gin deducted from the purchase price an amount for debts Wiggins owed in connection with his farming operation and then gave Wiggins a check for the remainder. The check was made payable to Wiggins and the Bank, jointly. The Bank sued the Gin for the amount it deducted, asserting that it had a security interest in Wiggins’s cotton crop. On cross-motions for summary judgment regarding whether the security interest had been perfected and, alternatively, whether the Gin had actual knowledge of the security interest, the trial court ruled in favor of the Gin. For reasons that follow, we reverse and remand the case for proceedings not inconsistent with this opinion. A trial court properly grants a motion for summary judgment when there is no genuine issue of material fact and the movant demonstrates entitlement to judgment as a matter of law. We review, de novo, a grant of summary judgment, viewing the evidence, and all reasonable conclusions and inferences drawn therefrom, in a light most favorable to the nonmovant.1 The Bank extended farming loans to Wiggins in May 2003. The related security agreement Wiggins executed in favor of the Bank described the underlying collateral to include: “Farm Products and Supplies: All farm products including, but not limited to, . . . all crops, annual or perennial, growing or to be grown, and all products of the crops.” The security agreement further described the collateral as “ASSIGNMENT OF CROPS AS PER ATTACHED EXHIBIT A, CROP PROCEEDS.” Exhibit A was a one-page document with “JASON LANE WIGGINS” in the top margin, and after several blank lines, it provided a description of farm real estate. Later in May, the Bank filed a financing statement in connection with the farming loans to Wiggins and their security agreement. The financing statement named Wiggins as the debtor; identified the Bank as the secured party; and pertinently indicated the collateral covered by the financing statement as follows: “This FINANCING STATEMENT covers the following collateral: ASSIGNMENT OF CROPS AS PER ATTACHED EXHIBIT A, CROP PROCEEDS.” The referenced and attached Exhibit A was the same document attached as “Exhibit A” to the security agreement.
In November and December 2003, the Gin purchased cotton from Wiggins. Before paying Wiggins, however, the Gin’s president deducted and retained from the purchase price an amount to cover debts Wiggins owed the Gin and a separate farming-supply company. The Gin’s president was part owner of both the Gin and the farming-supply company. The Gin’s president handed Wiggins a check for the remainder of the purchase price, payable to Wiggins and the Bank jointly.
