McCormack, J.
This appeal arises out of proceedings initiated by the Nebraska Public Service Commission (PSC) following the insolvency of Pierce Elevator, Inc. (PEI), to determine claims under the Grain Warehouse Act
PEI operated licensed grain warehouses in Pierce, Randolph, and Foster, Nebraska. Brian Bargstadt was PEI's president and one-third owner.
PEI maintained a banking relationship with Citizens State Bank (the Bank) and obtained operating loans from the Bank. PEI borrowed funds from the Bank on a line of credit to facilitate the purchase of grain from its producers.
PEI's accountant testified that PEI was "in trouble" by the end of 2012 and that PEI needed to raise capital to address the negative owner's equity. At the end of 2012, PEI had a working capital deficiency in excess of $2.2 million.
On August 30, 2013, PEI's line of credit matured and the Bank permitted the line of credit to go past due until September 19. On that date, the Bank and PEI entered into a new contract extending the due date until October 31. The Bank agreed to continue to extend the maturity of PEI's line of credit on a monthly basis while PEI, its accountant, and the Bank addressed the working capital deficiency. Bargstadt testified that he requested the monthly extensions of the line of credit "[t]o satisfy John Fecht [the director of the PSC's grain warehouse department]" because "he wanted to know if we had money in our account to pay our bills and pay the grain."
During this time, the PSC became concerned about PEI's ability to pay producers. The PSC intensified its scrutiny of PEI because PEI's grain warehouse and dealer's licenses were set to expire at the end of September 2013. The PSC's grain
The PSC then began to require PEI to submit bank account and loan balances to the PSC every 3 days.
In the months ensuing, PEI attempted to work out a solution to its impending insolvency. On March 3, 2014, Fecht sent an e-mail to the Bank, stating:
The Bank officials met on March 3, 2014, and decided to terminate the loan relationship with PEI. The Bank informed Bargstadt the afternoon of March 3 that the Bank would not renew the line of credit. The PSC learned of the Bank's decision not to renew the line of credit and to no longer honor PEI's checks via an e-mail sent the evening of March 3.
PEI voluntarily surrendered its grain warehouse license on March 4, 2014, and on March 5, the PSC entered an order closing PEI's warehouse locations and taking title to all grain in storage in trust for distribution to all valid owners, depositors, or storers of grain pursuant to the Grain Warehouse Act. The PSC also was required to determine valid claims against PEI's grain dealer bond pursuant to the Grain Dealer Act.
The PSC examined PEI's records and compiled possible claims, and then mailed claim forms to potential warehouse and dealer claimants. After receiving returned claim forms, the PSC held a hearing on July 8, 2014, to take evidence to determine valid claimants under the Grain Warehouse Act and the Grain Dealer Act.
The PSC ultimately approved warehouse claims totaling $4,620,184.02. This amount was satisfied in full by proceeds from the sale of grain in storage.
The PSC also approved dealer claims totaling $3,342,793.54. Under the Grain Dealer Act, the only monetary relief available for satisfaction of these claims was PEI's required statutory bond in the amount of $300,000.
In mid-January 2014, PEI was in need of money to make payments to producers. Bargstadt called an official at the Bank and requested an advance to cover out-standing checks, but the official refused.
The PSC determined that Uecker was entitled to an approved grain dealer claim on the remaining amount of $600,000. Uecker is not an appellant or a cross-appellant in this appeal, but the PSC's determination of his claim as a dealer claim is disputed by some of the cross-appellants. These cross-appellants argue that the $600,000 was a secured loan and should not be classified as a dealer claim and prioritized against the dealer bond.
On December 24, 2013, Daniel Gansebom contracted to sell 75,000 bushels of corn to PEI with delivery to be completed by March 2014. The contract provided that title to the grain passed to PEI upon delivery, stating "[t]itle to, all rights of ownership and risk of loss of the grain shall remain in Seller until physical delivery to Buyer's designated
Between October 31, 2013, and January 27, 2014, 84,442.33 bushels of corn were picked up from Gansebom by PEI and delivered to Elkhorn Valley Ethanol, L.L.C.; Husker AG, LLC; and Agrex Inc. (third-party grain terminals). None of the corn was delivered directly to PEI. Of those bushels, 75,000 were in satisfaction of Gansebom's obligation under the December 2013 contract, and the additional 9,402.51 bushels were applied to Gansebom's obligation under the November 2013 contract.
PEI prepared check No. 43157 in the amount of $321,350.25 as payment under the December 2013 contract. Gansebom avers that Bargstadt told him that this check was dated March 3, 2014, and stored in PEI's safe at that time. The check was delivered to Gansebom on July 8. However, the funds in PEI's accounts were insufficient to pay the check and Gansebom has not been paid for any of the 84,442.33 bushels of corn picked up by PEI.
At the proceedings before the PSC, Gansebom claimed the 84,442.33 bushels were stored grain, arguing he sold the grain to PEI only as a result of PEI's fraudulent inducement. Additionally, Gansebom claimed he should be treated as a qualified check holder with regard to his claims related to check No. 43157.
The PSC classified Gansebom's claims as dealer claims and denied recovery because the "loads were not delivered within the thirty-day coverage period of the bond." Further, the PSC found that Gansebom agreed to direct deliver 135,000 bushels of corn. The PSC found that the grain was direct delivered in partial satisfaction of a contract and that the remainder of the contract was voided by Gansebom and PEI and, therefore, could not constitute a claim against the dealer bond.
Donnelly Trust, with the assistance of its contracted farm manager, owns and operates a farm in northeast Nebraska. During the fall of 2013, the trust harvested and delivered corn and soybeans to PEI's facilities in Pierce and Randolph for storage. The trust received scale tickets evidencing that the corn and soybeans were delivered to Pierce and Randolph and held there by PEI in open storage.
Donnelly Trust's farm manager testified that it was his standard practice to call PEI and ask PEI to sell the trust's grain in storage at a point in time when he felt
On February 24, 2014, Donnelly Trust decided to sell certain amounts of corn and soybeans from open storage to PEI. Also on February 24, PEI executed checks Nos. 43095, 43081, and 43080, which were made payable to the trust. The checks were in the total aggregate amount of $136,010.51.
However, PEI did not deliver the checks to Donnelly Trust prior to the PSC takeover on March 5, 2014. Upon learning that the PSC held the checks executed by PEI, the trust made demand for delivery of the checks. The PSC did not deliver the checks.
Donnelly Trust made a claim in the proceeding before the PSC for treatment as a qualified check holder. However, with regard to portions of checks Nos. 43095, 43081, and 43080, the PSC denied the trust's qualified check holder claims, specifically stating that title to the grain passed to PEI when the agreement to sell from open storage was reached. More generally, the PSC found that the language of § 88-530 is susceptible to differing reasonable interpretations. In looking at the context of the Grain Warehouse Act as a whole, the PSC stated that "[p]roducers have a responsibility to be prudent and reasonable businesspeople and seek payment for sold grain in a timely fashion" and that the act is "clearly intended to encourage timely demand for payment by producers and timely payment by warehousem[e]n."
Donnelly Trust's grain dealer claims were also denied because the deliveries were completed outside the 30-day coverage period of the grain dealer bond.
TTK Investments, Inc. (TTK), owns and operates a farm in northeast Nebraska. During the fall of 2013, TTK harvested and delivered corn to PEI's facilities in Pierce and Randolph for storage. TTK received scale tickets evidencing that the corn was delivered to Pierce and Randolph and held by PEI in open storage.
On February 24, 2014, TTK sold 5,615.61 bushels of corn from open storage to PEI. The contract was executed, and PEI prepared check No. 43083 as payment for the corn sold by TTK. The check was for the total amount of $22,003.50 and was dated February 24, 2014. PEI did not deliver the check prior to the PSC takeover of PEI on March 5.
TTK made a claim to the PSC as a qualified check holder. The PSC denied TTK's qualified check holder claim, specifically stating that title to the grain passed to PEI when the agreement to sell from open storage was reached. On appeal, TTK challenges the PSC's finding. TTK also appeals the PSC's classification of Uecker's claim as an approved dealer claim.
Curt Raabe is a farmer in Pierce County, Nebraska, and was a customer of PEI from approximately 2004 until its closure on March 5, 2014. During the fall of 2013, Raabe harvested 7,192.99 bushels of soybeans. In September and October 2013, PEI picked up the soybeans from Raabe's farm and transported the soybeans to PEI's open storage facility in Pierce. Raabe received scale tickets evidencing
On February 5, 2014, Raabe executed a contract, selling his soybeans in open storage to PEI. Thereafter, Raabe did not receive payment on account of the sale, and on February 25, Raabe contacted Bargstadt regarding the missing payment. Bargstadt informed Raabe that a check had been written. Raabe demanded immediate payment. On February 28, Raabe received check No. 42900 in the amount of $88,510.54, which was the amount due on the sale of the soybeans from open storage. On March 3, Raabe deposited the check, and on March 6, it was returned for insufficient funds.
Raabe filed a claim seeking to participate in the distribution of the proceeds from the sale of grain in the warehouse as a qualified check holder. The PSC found that Raabe was not a qualified check holder because he was not an owner of grain stored in the warehouse within 5 business days prior to the closure of the warehouse.
Raabe challenges this finding on appeal. He also argues that Uecker's claim should not have been classified as a dealer claim.
James Herian and Diane Herian are corn farmers in Pierce County. The Herians were customers of PEI, and their practice was to store some of their corn in on-farm storage bins and store any excess corn in storage at PEI's warehouse. In accordance with this practice, during the 2013 corn harvest, the Herians delivered 37,543.78 bushels of corn into PEI's warehouse. At that time, the Herians did not sell the grain to PEI, but instead directed that their corn be placed in open storage at PEI's warehouse. Despite the Herians' understanding that their grain would be stored at PEI, the Herians' bushels were instead taken directly to third-party grain terminals.
In January 2014, the Herians decided to sell 9,801.428 bushels of their corn that they believed to be in storage at PEI to PEI. The Herians were paid for this January 2014 sale.
After the January 2014 sale, the Herians were still uncompensated for the 27,742.05 remaining bushels of corn that they believed they held in open storage at PEI. James stated he did not learn that the remaining bushels had been direct delivered in the fall of 2013 to other locations instead of the PEI facility until after the PSC closed PEI. The Herians never agreed, orally or by written contract, to sell the remaining bushels to PEI or to any other third party. The Herians were never paid for the remaining bushels. James avowed that Bargstadt told him he owed the Herians money as a result of mishandling the remaining bushels and that Bargstadt indicated he would give the Herians cattle to make up for the mishandling.
When the PSC took control of PEI, the Herians obtained a grain settlement sheet, in which their bushels were listed under "Open Storage." The location code of the bushels is listed as "010." The deputy director of the PSC's grain warehouse department explained that a location code of 10 is used to identify grain delivered to other locations. He also testified that PEI's computer software used a default setting of "open storage" on all transactions.
When the PSC prepared claim forms for the Herians, the PSC indicated that their claim was a grain "dealer" claim. And the PSC denied the Herians' claim. The PSC
The Herians appeal, arguing the PSC should have found that the Herians were owners of the 27,742.05 remaining bushels of corn in open storage at PEI's warehouse at the time of PEI's closure and that therefore, the Herians' claim should have been classified as a warehouse claim and not as a dealer claim. In the alternative, the Herians argue that the PSC should have placed a constructive trust upon their bushels of corn by reason of PEI's fraudulent conduct.
Matthew Christensen is a farmer in Pierce County. Christensen delivered 38,628.05 bushels of corn to PEI for which he holds scale tickets proving receipt of the corn by PEI and delivery of the corn into open storage under his name. As a matter of practice, Christensen never sold his grain using unpriced or priced-later (delayed-price) contracts, but limited any cash-forward contract sales of grain to set price contracts at current or near term delivery dates.
On February 7, 2014, an employee of PEI called Christensen at the request of Bargstadt. Christensen testified that the employee asked him to come to the offices of PEI to sign a form requested of PEI by the PSC. When Christensen arrived at PEI, the employee gave him a form entitled "Delayed Price Contract #9133" and was told that the form needed to be executed by Christensen and faxed to the PSC before the close of business that day. Christensen averred that he "reviewed Contract #9133" and "noted that there was no set price, there was no basis month, basis or price fix date identified even though the contract language purported to require that information."
Christensen testified that he signed the contract solely for the reason that he believed the PEI employee's representation to him that the PSC required PEI to obtain the signed document from him and that the document merely verified the number of bushels of corn that he had in storage at PEI at the time. Christensen testified that he believed the contract to be a "form" requested by the PSC which reported and verified the number of bushels Christensen stored at PEI. Christensen testified that he did not believe it was a document that would transfer title of Christensen's stored corn. Christensen also averred that his "course of dealing" with PEI had never included entering into a delayed-price contract. The PEI employee testified that she knew the document was a contract, but that she did not recall her conversation with Christensen or whether she mentioned that the PSC was involved in the document.
Bargstadt also testified that he did not consider a delayed-price contract to be a sale of corn which transferred title. Bargstadt stated "delayed price is not a sale." Instead, Bargstadt described the intent of PEI with this contract as "Christensen still has [a] say about [the] bushels because he hasn't sold them. They're — they're his until they're sold...." With respect to priced-later grain, Bargstadt testified that "the day [the PSC] closed us down, all the grain that's in delayed pricing or priced later, this [grain is] all in the elevators and everybody deserves to have that grain back."
Christensen filed a claim asserting that he was an owner, depositor, or storer of corn in PEI as of the date of its closure by the PSC and that the contract was void or voidable by reason of fraud. The PSC denied Christensen's claim, finding that ultimately, Christensen was not an owner, depositor, or storer of grain and that "the relief sought by ... Christensen on the basis of his allegations of fraud must be sought in the scope of a private action against the appropriate parties and not within the scope of this claims hearing."
Christensen appeals, arguing that the PSC erred in finding the contract effectively transferred title to his grain and in failing to assert jurisdiction over his fraudulent inducement claim.
Cross-appellants Donnelly Trust, Raabe, and TTK appeal the PSC's classification of their claims as dealer claims and not as qualified check holder claims.
Cross-appellant Gansebom appeals the classification of his claim as a dealer claim rather than as a warehouse claim and the refusal of the PSC to classify Gansebom as a "storer of grain with regard to the 84,442.33 bushels of corn which were delivered as a result of PEI's fraud."
Cross-appellants the Herians appeal the PSC's classification of their claim as a dealer claim rather than as a warehouse claim. The Herians also argue that the PSC should have imposed a constructive trust upon the Herians' claimed bushels due to PEI's fraudulent conduct.
Appellant Christensen appeals the PSC's finding that the delayed-price contract he signed was enforceable, despite his lack of intent to enter into a contract transferring title to his grain. Alternatively, Christensen argues that he was fraudulently induced to execute the contract and that the PSC should have exercised its jurisdiction to adjudicate the fraudulent inducement claim as a part of the July 2014 proceedings.
Cross-appellants Donnelly Trust, Raabe, TTK, and Gansebom appeal the PSC's grant of Uecker's dealer claim in the amount of $600,000, instead of classifying it as a secured loan.
Determinations of the PSC are reviewed de novo on the record.
Appellant Christensen argues that the PSC erred in failing to find that he was fraudulently induced into executing the delayed-price contract and that the PSC erred in determining that it lacked jurisdiction to adjudicate this fraud claim. Cross-appellants the Herians and Gansebom argue that the PSC failed to find that a constructive trust should have been imposed upon grain in storage by reason of PEI's fraudulent conduct. They also ask that their contracts be voided or rescinded due to PEI's fraudulent conduct. They reason that in the scope of its limited proceedings the PSC did not have jurisdiction to address such equitable claims. We agree.
The PSC's authority to regulate public grain warehouses is purely statutory, in contrast to its plenary authority to regulate common carriers under Neb. Const. art. IV, § 20.
Neb. Const. art. V, § 9, confers equity jurisdiction upon the district courts.
In contrast, as a general rule, administrative agencies have no general judicial powers, such as equitable powers, notwithstanding that they may perform some quasi-judicial duties.
By statute, the PSC is given jurisdiction over, among other things, "Grain pursuant to the Grain Dealer Act and the Grain Warehouse Act and sections 89-1,104 to 89-1,108."
Under the Grain Dealer Act, the PSC explicitly is given the power to "demand that such dealer's security be forfeited and may place the proceeds of the security in an interest-bearing trust until it fully determines each claim on the security. The [PSC] shall disburse the security according to each claim determined."
Statutes which effect a change in the common law or take away a common-law right should be strictly construed, and a construction which restricts or removes a common-law right should not be adopted unless the plain words of the statute compel it.
Fraud and misrepresentation give rise to the remedy of rescission of a contract.
The sole duty of the PSC in these proceedings is to determine who has a claim under the Grain Warehouse Act and the Grain Dealer Act at the time of the closure of the warehouse. The determination of these claims is a limited proceeding.
The acts do not address the common-law theories of fraud, nor do they confer equitable jurisdiction on the PSC. Theories which ask for rescission of a contract or imposition of a constructive trust are equitable in nature. Therefore, the PSC was correct in limiting its jurisdiction in these proceedings and declining to exercise jurisdiction to determine the fraud claims. In its order determining claims in this case, the PSC properly recognized the limits
It very well may be true that all of these claimants are entitled to some form of relief against PEI based on claims of fraud or other wrongdoing. However, the Grain Warehouse Act and the Grain Dealer Act simply do not allow all forms of relief through its terms. The limited scope of those acts does not allow the PSC to determine all claims of wrongdoing against PEI.
Appellant Christensen argues that he should have been classified as an owner of grain in storage, rather than as a dealer, because the delayed-price contract he signed was not an enforceable contract for the sale of grain and that therefore, he never transferred title to his grain in storage. The PSC found that the contract was enforceable and, thus, denied Christensen's warehouse claim.
Cross-appellants the Herians argue that their claim was improperly classified as a dealer claim rather than as a warehouse claim and that it was improper to deny their claim as a whole. The Herians base their argument on the fact that they retained ownership in grain in storage by way of an in-store transfer. The PSC found that because the Herians did not show an official in-store transfer notice, the Herians had not satisfied their burden of proving that an in-store transfer occurred.
Cross-appellants Donnelly Trust, TTK, and Gansebom argue that they should have received treatment as qualified check holders under the Grain Warehouse Act, because PEI executed checks to each in satisfaction of an oral contract.
Cross-appellant Raabe also argues that he should have received treatment as a qualified check holder, because he held a check executed by PEI but it was returned for insufficient funds after PEI closed. The PSC denied Raabe recovery as a qualified check holder.
As the PSC stated, "[t]he Grain Warehouse Act and the Grain Dealer Act ... cover very distinct activity." Those who are licensed as grain warehouses can buy, sell, and store grain.
Upon the closure of a licensed grain warehouseman under the Grain Warehouse Act, the PSC takes title to and may sell all of the grain in storage to satisfy, pro rata, those entitled to payment under the Grain Warehouse Act.
In contrast, upon the closure of a licensed grain dealer, those who have a dealer claim have only the dealer bond from which to recover.
In order to qualify for the first priority lien under the Grain Warehouse Act, one must qualify as a valid owner, depositor, or storer of grain or as a qualified check holder.
As the PSC stated in its order, the Grain Warehouse Act applies and covers "those who store their grain in a warehouse, but still own the grain." "Grain in storage" is defined as "any grain which has been received at any warehouse and to which title has not been transferred to the warehouseman by signed contract or priced scale ticket."
We discussed the determination of an entity's status as owner, depositor, or storer of grain in In re Claims Against Atlanta Elev., Inc.
In addition to a temporal requirement, we found that the statute also contains a physical requirement.
Thus, it is significant to our analysis to determine the status of each individual or entity at the time the PSC took title to the grain on March 5, 2014.
A claimant may also qualify as an owner of grain in storage if an in-store transfer has been completed in satisfaction of a direct delivery obligation.
The warehouse licensee may incur a "[d]irect delivery obligation" upon delivery of direct delivery grain.
Also statutorily entitled to protection under the Grain Warehouse Act are those "qualified check holders" who hold "a check for purchase of grain stored in such warehouse which was issued by the warehouse licensee not more than five business days prior to the cutoff date of operation of the warehouse, which shall be the date the [PSC] officially closes the warehouse."
The PSC interpreted all check holder claims under one rationale. The PSC stated that "[g]enerally, the [Grain] Warehouse Act is intended to provide protection for producers storing grain at the warehouse." However, the PSC went on to discuss grain storers' responsibility to act as "prudent and reasonable businesspeople and seek payment for sold grain in a timely fashion." The PSC then ruled that "[t]hose claimants who sold stored grain prior to [the 5 days prior to PEI's official closing] are not valid owners, depositors, or storers of grain or qualified check holders" and that thus, they were not valid claimants under the Grain Warehouse Act. (Emphasis supplied.)
However, the PSC's interpretation of § 88-530 is incorrect. The plain language of the statute says that the check must have been "issued by the warehouse licensee not more than five business days prior to the cutoff date of operation of the warehouse."
Black's Law Dictionary defines "issue" as "[t]o be put forth officially" or "[t]o send out or distribute officially."
Accordingly, issuance of a check does not occur when the sale of grain occurs. Nor should the issuance of a check be defined as the date the check was written. Instead, issuance is the date that a check
A claimant who can qualify for recovery under the Grain Dealer Act must (1) be a producer or owner within Nebraska who has "a valid claim arising from a sale to or purchase from a grain dealer" and (2) takes action to recover payment for grain "within thirty days" of shipment, issuance of negotiable instrument, or any apparent loss to be covered under the terms of the grain dealer's security.
Cross-appellants Donnelly Trust, Raabe, TTK, and Gansebom were classified as grain dealers by the PSC and denied recovery because their grain was not delivered within 30 days prior to the closure of the warehouse. These four cross-appellants assigned as error the denial of their recovery in general, but they did not specifically argue that they were erroneously denied recovery under the Grain Dealer Act, but instead merely argued that they were erroneously denied recovery under the Grain Warehouse Act. To be considered by an appellate court, an error must be both specifically assigned and specifically argued in the brief of the party asserting the error.
Appellant Christensen argues that the contract he signed was never validly formed because it lacked the requisite "meeting of the minds" or mutual intent, and the price term was not fixed in the contract. The PSC found the plain terms of the contract stated that title to Christensen's grain in storage had transferred to PEI upon the signing of the contract.
The parol evidence rule renders ineffective proof of a prior or contemporaneous oral agreement that alters, varies, or contradicts the terms of a written agreement.
Further, an argument that the claimant did not read or understand the document he or she was signing is no defense to the formation of a contract.
In In re Claims Against Atlanta Elev., Inc.,
Also, Neb.Rev.Stat. U.C.C. § 2-204(3) (Reissue 2001) provides that "[e]ven though one or more terms are left open a contract for sale does not fail for indefiniteness...." With regard to an open price term, Neb.Rev.Stat. U.C.C. § 2-305(1) (Reissue 2001) provides that parties "can conclude a contract for sale even though the price is not settled. In such a case the price is a reasonable price at the time for delivery if ... (a) nothing is said as to price." Again, in In re Claims Against Atlanta Elev., Inc., we found that even though the contracts did not contain a price term, the contracts were still enforceable, and that thus, title to the claimants' grain in storage passed and they could no longer make claims under the Grain Warehouse Act.
The delayed-price contract Christensen signed is not ambiguous. The language plainly and clearly states that title transfers to PEI at the time the document is executed. The contract was signed and executed by both Christensen and PEI. Because we look only at evidence of the parties' intent when the contract is otherwise ambiguous — and this contract is unambiguous — we must follow the plain terms of the contract. Testimony as to the intent of both parties is inadmissible in
We affirm the determination of the PSC that Christensen did not hold title to grain in storage at the time of the closure of the warehouse.
The PSC found that an in-store transfer was not executed in favor of the Herians. The PSC stated that "only upon the execution of an in-store transfer will an ownership interest in grain stored in a warehouse arise for a producer that direct delivered grain. Absent such a document, direct delivered grain will never result in an ownership position in grain stored in the elevator." The Herians argue that a document providing formal notice of an in-store transfer is merely prima facie evidence of an in-store transfer, but not determinative of whether an in-store transfer occurred. We agree.
In this case, there is no question that the Herians' grain was direct delivered to other licensed public grain warehouses. When PEI took possession of the Herians' grain and delivered it to third-party grain terminals rather than PEI's warehouse, the Herians' grain became direct delivery grain. According to § 88-526(3), this direct delivery should have created a "direct delivery obligation" on the part of PEI. This obligation is treated as a dealer obligation (and thus as a dealer claim) until such time as it is satisfied by an in-store transfer. Therefore, if the obligation was satisfied by an in-store transfer, then the Herians can be considered owners of grain in storage at the time PEI closed.
PEI did not issue a formal notice of an in-store transfer. The PSC treated the nonexistence of a formal and executed in-store transfer notice as determinative of whether an in-store transfer occurred. The PSC said that "[a]bsent such a document, direct delivered grain will never result in an ownership position in grain stored in the elevator." This is incorrect.
Though notice of an in-store transfer is considered prima facie evidence that an in-store transfer occurred, it is not the only evidence that can establish the occurrence of an in-store transfer. Prima facie proof is evidence sufficient to submit an issue to the fact finder and precludes a directed verdict on the issue.
Title to grain, or "goods" within the meaning of the Uniform Commercial Code, passes in any manner agreed to by the parties.
We find significant the fact that when the Herians chose to sell grain from "open storage" in January 2014, they were allowed to do so. Had PEI not completed an in-store transfer of the grain delivered in 2013, and given the Herians a postdirect delivery storage position, it is inexplicable why the Herians would not have been able to sell grain from open storage in January 2014. Though a representative of PEI explained that an indication of "open storage" on a settlement sheet is the default setting on all transactions, there is no reason why PEI would allow the Herians to "sell" 9,801.428 bushels, pay the Herians for such sale, and show in the records 27,742.05 remaining bushels in the Herians' name. There is also no explanation by PEI of this particular transaction or whether the "open storage" indication on the settlement sheet was indicative of the Herians' grain's position in this particular case.
As further support for its finding that no in-store transfer occurred, the PSC reiterated evidence that the Herians' grain was direct delivered to third-party terminals. The direct delivery of grain to third-party terminals does not defeat the claim of an in-store transfer. In fact, a direct delivery is the very thing that gives rise to an in-store transfer under § 88-526(7).
Acknowledging that the lack of an in-store transfer notice does not defeat the existence of an in-store transfer, and because the Herians produced other strong indicators that an in-store transfer occurred and that they had a postdirect delivery storage status, we find that the Herians may recover under the Grain Warehouse Act as owners of grain in storage for their remaining bushels.
As an opening matter, the cutoff date according to statute is "five business days" before the PSC officially closes the warehouse.
PEI issued check No. 42900 to Raabe in the amount of $88,510.54 when PEI took the affirmative action of transferring possession of the check to Raabe on February 28, 2014. PEI's purpose in delivering the check was to create rights on the instrument in Raabe.
The closure of PEI's grain warehouse occurred on March 5, 2014. The statute allows recovery to all those holders of checks issued within 5 business days of the closure. When Raabe took delivery of the check on February 28, and became holder of the check on that date, he met the requirement of § 88-530. Thus, Raabe is entitled to recovery under the Grain Warehouse Act as a holder of check No. 42900 in the amount of $88,510.54.
Checks Nos. 43095, 43081, and 43080 to Donnelly Trust, check No. 43083
Because the checks had yet to be delivered, PEI had not yet issued them. The delivery of the checks involves an affirmative action; and in this case, PEI took no action to deliver these checks to anyone. The cross-appellants argue that delivery occurred when PEI surrendered the warehouse to the PSC or when the PSC took control of PEI. However, in surrendering its business license to the PSC, PEI was taking no formal action regarding the checks specifically. The checks that remained in PEI's office or safe were never formally acted on, or delivered, and therefore, the checks that remained in PEI's office at the time of its closure were never issued.
Therefore, checks Nos. 43095, 43081, and 43080 to Donnelly Trust, check No. 43083 to TTK, and check No. 43157 to Gansebom were never issued and Donnelly Trust, TTK, and Gansebom do not qualify as check holders. As such, the PSC was correct to deny these three cross-appellants recovery under the Grain Warehouse Act.
Finally, cross-appellants Donnelly Trust, Raabe, TTK, and Gansebom argue that Uecker's transaction with PEI was a loan, and not a sale or forward contract, and that as such, he is not entitled to any recovery under the Grain Dealer Act. The PSC argues that the cross-appellants do not have standing to contest the classification of the Uecker transaction on appeal. We agree that Donnelly Trust, Raabe, TTK, and Gansebom do not have standing to contest the classification of the Uecker transaction.
A party has standing to invoke a court's jurisdiction if it has a legal or equitable right, title, or interest in the subject matter of the controversy.
Though all of the cross-appellants challenging the classification of Uecker's claim originally made claims as dealers, those claims were denied, and those cross-appellants do not argue on appeal that their grain dealer claim was improperly denied. Since none of the cross-appellants who contest the classification of this transaction
Because these cross-appellants do not argue that the PSC erred in denying their dealer claims, they cannot show any injury or personal stake in that determination that would permit them to contest the allowance of Uecker's grain dealer claim. These cross-appellants thus lack standing to contest the PSC's approval of Uecker's claim under the Grain Dealer Act.
We affirm the finding of the PSC that it did not have jurisdiction to determine the fraud claims of appellant Christensen and of cross-appellants Gansebom and the Herians.
We affirm the finding of the PSC that appellant Christensen and cross-appellants Donnelly Trust, TTK, and Gansebom are not entitled to recovery under the Grain Warehouse Act.
We reverse the finding that cross-appellant Raabe is not a qualified check holder and find that he is entitled to recovery under the Grain Warehouse Act.
We reverse the finding that an in-store transfer did not occur, creating a postdirect delivery storage position in cross-appellants the Herians and find that they are entitled to recovery under the Grain Warehouse Act.
We find that cross-appellants Donnelly Trust, Raabe, TTK, and Gansebom do not have standing to challenge the classification of the Uecker transaction, and dismiss such claims.
AFFIRMED IN PART, AND IN PART REVERSED AND DISMISSED.
Wright and Miller-Lerman, JJ., not participating.
