Broken Bow Production Credit Ass'n v. Western Iowa Farms Co. , 232 Neb. 357 ( 1989 )

Boslaugh, J.

This is an action for conversion of cattle sold by the defendant, Western Iowa Farms Co., doing business as Mactier Commission Company and Mactier Bros. Livestock Service Co. The plaintiff, Broken Bow Production Credit Association (PCA), claimed a lien on the cattle under a security agreement executed by Waynard B. and Maxine L. Anderson.

The jury returned a verdict for the plaintiff in the amount of $15,261.90, and the trial court added prejudgment interest in the amount of $4,566.46. The defendant has appealed.

The record shows that on June 10, 1984, Tri- Co. Livestock Marketing Service, Inc. (Tri- Co.), shipped cattle to the Omaha stockyards that were consigned to the defendant, a commission merchant. The Andersons and their son, Daniel, own all of the capital stock in Tri- Co. The cattle which were shipped were branded with the “spear Z,” or “arrow Z,” brand, which is owned by the Andersons. The fact that the cattle sold by the defendant bore the brand owned by the Andersons is the basis for the plaintiff’s contention that the cattle were subject to the lien of the security agreement.

The record further shows that on June 3, 1984, the Andersons had shipped cattle to the Omaha stockyards that were consigned to the defendant, which were sold on June 5, 1984, and the proceeds sent to the Andersons. After the cattle had been sold, the plaintiff telephoned the defendant inquiring about the sale of any cattle owned by the Andersons. The defendant advised the plaintiff that a check had already been sent to the Andersons. The plaintiff requested that the plaintiff’s name be included on checks from future sales of Anderson cattle.

The first question that must be determined is whether there was sufficient evidence for the jury to find that the cattle sold by the defendant on June 11, 1984, were owned by the Andersons. If the cattle were not the property of the Andersons, they were not subject to the lien of the plaintiff’s security agreement.

Waynard Anderson testified by deposition that the cattle shipped to the defendant on June 10,1984, were owned by TriCo., that Tri- Co. cattle were kept separate from his own cattle, and that separate records were maintained for the corporation., Tri- Co. cattle were financed by the Bank of Burwell and not by the plaintiff. Although Tri- Co. owned a brand known as “open box Z,” or “three-quarter box open at the bottom Z,” 99 percent of the cattle were branded with the spear Z brand because it was the clearest brand, it was well-known, and the “boys,” who did 99 percent of the branding, probably were never told what brand to put on the cattle.

The bill of lading for the cattle shipped on June 10,1984, is in evidence and shows “Tri Co. Livestock” as the owner.

When the cattle arrived in Omaha, they were not accompanied by a brand inspection certificate as required by Neb. Rev. Stat. § 54-143 (Reissue 1988). The defendant called the brand inspector in Omaha and asked him “to look very closely at that brand and make sure who owned the brand so we would have something in our records because we had been called by the PCA.” The brand inspector inspected the cattle and issued a certificate showing the cattle had been shipped by “Tri Co. Mark Ser” and that they carried the spear Z brand, which was owned by the Andersons. The certificate also had a notation: “PROCEEDS # HOLD FOR CLARIFICATION OF OWNERSHIP,” which was crossed out. The brand inspector testified that he placed the notation on the certificate because the first brand book he looked at did not have a cross-reference, and he did not know that Waynard and Maxine Anderson were the president and vice president of Tri- Co. He then looked through his “supplemental” and found the cross-reference indicating that “it was one of the same people.”

A certified copy of the original “Brand Inspector’s Local Inspection Certificate” is in evidence. It shows the seller as “Trico Live Stock,” the buyer as “Mac Tier,” and the transaction authorized by “Tri Co Livestock Inc.”

After the cattle had been sold, the defendant made out an account of the sale and placed a notation on it, “CHECK HELD BY BRAND INSP.” After the hold had been released by the brand inspector, the notation was crossed out.

The defendant checked with the Packers and Stockyards Administration and determined that Tri- Co. was or had been a registrant under the act. The defendant then called Waynard Anderson and asked if the cattle were Tri- Co. cattle and if they had anything to do with the PCA. Anderson told the defendant that the PCA had nothing to do with these cattle and that they were financed at the Bank of Burwell. The defendant then added the Bank of Burwell to the check as a payee. The defendant’s check for the proceeds from the sale of the cattle is in evidence and shows the check was deposited in the Bank of Burwell.

The defendant relies on Neb. Rev. Stat. § 54-109 (Reissue 1988), which provides:

In all suits at law or in equity, in any criminal proceedings, or when determining the ownership of estrays as provided in subsection (21) of section 54-101 and sections 54-148, 54-150, 54-407, and 54-415, wherein the title to animals is an issue, the certified copy provided for in section 54-108, and other documentary evidence as provided in section 54-103, shall be prima facie evidence of the ownership of such animals by the person possessing such animals.

When enacted in 1933, § 54-109 provided:

In all suits at law or in equity, or in any criminal proceedings, wherein the title to animals is an issue, the certified copy provided for in [§ 54-108] shall be prima facie evidence of the ownership of such animal by the person whose brand or mark it may be.

In 1971, the Legislature revised the brand law and made significant changes in the language of the statute. Section 54-109 now refers to “the person possessing such animals” instead of the “person whose brand or mark it may be” as it did prior to the 1971 amendment. (Emphasis supplied.)

In Bendfeldt v. Lewis, 149 Neb. 107, 111, 30 N.W.2d 293, 295 (1948), we pointed out that “[t]he statute was enacted for the protection of the owners of the brands” and that “[a] brand on livestock is only prima facie evidence of ownership which may be rebutted.” (Syllabus of the court.)

The effect of § 54-109 is not to create a true presumption of ownership, but to shift the burden of going forward with the evidence. “Prima facie evidence of ownership,” as used in § 54-109, means that in the absence of other evidence, proof of ownership of the brand is sufficient to constitute a prima facie case which will withstand a motion for a directed verdict on that issue; but when evidence to the contrary is introduced, any “presumption” of ownership disappears and ownership becomes a question of fact to be determined by the preponderance of the evidence. See McGowan v. McGowan, 197 Neb. 596, 250 N.W.2d 234 (1977).

In 1971, the Legislature also included a sentence in Neb. Rev. Stat. § 54-101(2) (Reissue 1988) that provides: “A certificate of inspection shall be construed and intended to be documentary evidence of ownership on all cattle covered by such document.”

There is no evidence other than the brand to support a finding that the cattle shipped to the defendant on June 10, 1984, were owned by the Andersons. At best, the brand was but prima facie evidence of ownership “by the persons possessing such animals,” not the persons who owned the brand as the statute formerly provided. All of the other evidence supports a finding that the cattle were owned by Tri- Co. and were not subject to the lien of the plaintiff’s security agreement.

We conclude that the evidence was not sufficient to support a finding that the cattle shipped to the defendant on June 10, 1984, were owned by the Andersons and subject to the plaintiff’s security agreement.

It is unnecessary to consider any of the other assignments of error.

The judgment is reversed and the cause remanded with directions to enter a judgment dismissing the petition.

Reversed and remanded with DIRECTIONS TO DISMISS.