An article of collateral consisting of livestock, born or unborn, including aquatic goods produced in aquacultural operations.
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6
Cattle as Farm Products Collateral
Lars Lindstrom operates a dairy ranch and borrows from Liberty Trust to purchase additional breeding stock. The loan agreement lists the cattle, including calves expected later that year, as collateral. Liberty Trust perfects its interest by filing a financing statement that describes the livestock. When Lindstrom defaults, the bank may enforce its security interest against both the born and unborn animals under the definition of livestock.
PMSI Priority Exclusion for Livestock
Lumen Capital finances Logan Lane's purchase of new breeding bulls and perfects its purchase-money security interest within twenty days of delivery. A prior lender holds a perfected security interest in all of Lane's farm assets. Because the collateral consists of livestock rather than ordinary goods, Lumen Capital cannot rely on the twenty-day grace period for priority and must instead satisfy the notification requirements specific to livestock.
Luke Latham owns a herd of cattle on land he purchased after emancipation. A neighboring landowner claims the cattle as part of an old servitude restricting use of the property. The court treats the cattle as personal property separate from the real estate, allowing Latham to remove them despite the servitude claim.
Jones v. Alfred H. Mayer Co.392 U.S. 409 (1968)
In September 1965 Joseph Lee Jones and his wife, who are Negroes, sought to purchase a home in the Paddock Woods subdivision of St. Louis County, Missouri, from the Alfred H. Mayer Company and one of its officers. The company refused to sell them a house solely because the Joneses are Negroes.
Subsequently, on September 2, 1965, the Joneses filed a complaint in the United States District Court for the Eastern District of Missouri. The complaint alleged the refusal to sell and sought injunctive relief together with damages under 42 U.S.C. § 1982. The District Court dismissed the complaint for failure to state a cause of action, and the Court of Appeals for the Eighth Circuit affirmed the dismissal.
The Supreme Court granted certiorari to consider the questions presented. While the case was pending, Congress enacted the Civil Rights Act of 1968 containing a Fair Housing Title, but that statute did not cover the respondents' development until January 1, 1969, and had no effect on the pending litigation. The provision invoked by the petitioners originated as section 1 of the Civil Rights Act of 1866 and was re-enacted in 1870.
Lucas Lee steals several head of cattle from a neighboring ranch. State law classifies theft of livestock as grand larceny regardless of value. Lee is convicted of the felony and sentenced under the enhanced penalty provision that applies specifically because the property taken was livestock.
Solem v. Helm463 U.S. 277, 279, 103 S.Ct. 3001, 77 L.Ed.2d 637 (1983)
In 1964, 1966, and 1969 Jerry Helm was convicted in South Dakota of third-degree burglary. In 1972 he was convicted of obtaining money under false pretenses, in 1973 of grand larceny, and in 1975 of third-offense driving while intoxicated. All six offenses were nonviolent and alcohol contributed to each.
In 1979 Helm was charged with uttering a no-account check for $100. He told the trial court he had been drinking in Sioux Falls, ended up in Rapid City with more money than he started with, and did not remember the incident, then pleaded guilty. Because he had three prior felony convictions in addition to the principal felony, the South Dakota Circuit Court sentenced him to life imprisonment without possibility of parole under the recidivist statute.
The South Dakota Supreme Court affirmed the sentence in a 3-2 decision. After Helm served two years, he asked the Governor to commute the sentence so he could become eligible for parole after serving three-fourths of a fixed term; the Governor denied the request in May 1981.
Helm filed a habeas corpus petition in the United States District Court for the District of South Dakota, which denied relief. The United States Court of Appeals for the Eighth Circuit reversed. The Supreme Court granted certiorari to consider the Eighth Amendment question.
Loyal Insurance contributes to a state program that assesses fees on cattle sales to fund promotional campaigns. Ranchers challenge the assessments as compelled speech. The court upholds the program because the government controls the message and the fees support speech by the government itself rather than private parties.
Johanns v. Livestock Marketing Association544 U.S. 550 (2005)
The Beef Promotion and Research Act of 1985 directed the Secretary of Agriculture to issue a beef promotion order that established a Cattlemen's Beef Promotion and Research Board with members appointed by the Secretary from nominations by the cattle industry.
The Act also required the creation of an Operating Committee with ten Board members and ten representatives from a federation of state beef councils. It authorized a one-dollar-per-head assessment on cattle sales and imports to fund promotion, research, and consumer information projects.
Pursuant to the Act, the Secretary issued the Beef Promotion and Research Order in 1986. Under the Order the assessment is collected mainly by state beef councils that forward the proceeds to the Board for use in developing promotional campaigns subject to the Secretary's approval.
In 1988 beef producers voted in a referendum to make the order permanent. After that vote the program collected more than one billion dollars. In fiscal year 2000 alone the Board collected over forty-eight million dollars in assessments and spent more than twenty-nine million dollars on domestic promotion featuring the slogan Beef. It's What's for Dinner.
Many of the promotional messages bore the attribution Funded by America's Beef Producers along with a Beef Board logo. The Secretary appoints and can remove Board members. He approves all budgets and advertising content. He holds authority to terminate the entire program if it is not in the public interest.
Respondents include two associations whose members pay the assessments and several individual cattle producers who raise and sell cattle subject to the checkoff. They initiated litigation in Federal District Court against the Secretary, the Department of Agriculture, and the Board. They later amended their complaint to assert a First Amendment challenge to the compelled funding of promotional activities after the Supreme Court's decision in United States v. United Foods, Inc.
The District Court held a bench trial and ruled in favor of respondents on the First Amendment claim. It entered a permanent injunction against further collection of the mandatory checkoff.
The Court of Appeals for the Eighth Circuit affirmed the District Court's judgment on the First Amendment issue. The Supreme Court granted certiorari to consider the case.
Linden Logistics donates a monument featuring ranching imagery including livestock to a city park. A religious group seeks to add its own display. The city refuses, asserting control over its own speech in the park. The court holds that the monument constitutes government speech, allowing the city to select which displays to accept.
Pleasant Grove City, Utah v. Summum555 U.S. 460 (2009)
Pioneer Park is a 2.5 acre public park located in the Historic District of Pleasant Grove City, Utah. The park currently contains 15 permanent displays, at least 11 of which were donated by private groups or individuals. These include an historic granary, a wishing well, the City’s first fire station, a September 11 monument, and a Ten Commandments monument donated by the Fraternal Order of Eagles in 1971.
Respondent Summum is a religious organization founded in 1975 and headquartered in Salt Lake City, Utah. On two separate occasions in 2003, Summum’s president wrote a letter to the City’s mayor requesting permission to erect a stone monument containing the Seven Aphorisms of Summum. The monument was to be similar in size and nature to the Ten Commandments monument. The City denied the requests. It explained that its practice was to limit monuments in the Park to those that either directly relate to the history of Pleasant Grove or were donated by groups with longstanding ties to the Pleasant Grove community.
The following year the City passed a resolution putting this policy into writing. The resolution also mentioned other criteria such as safety and esthetics. In May 2005 Summum’s president again wrote to the mayor asking to erect a monument. The letter did not describe the monument, its historical significance, or Summum’s connection to the community. The city council rejected this request.
In 2005 Summum filed this action against the City and local officials. It asserted that they had violated the Free Speech Clause by accepting the Ten Commandments monument but rejecting the proposed Seven Aphorisms monument. Summum sought a preliminary injunction directing the City to permit it to erect its monument in Pioneer Park. After the District Court denied Summum’s preliminary injunction request, a panel of the Tenth Circuit reversed.
The Tenth Circuit denied the City’s petition for rehearing en banc by an equally divided vote. The Supreme Court granted certiorari and now reviews the case.
Does the UCC definition of livestock include unborn animals?
Yes. The definition expressly covers livestock born or unborn, allowing a security interest to attach to animals not yet delivered.
Supporting sources
Why does UCC § 9-324(a) exclude livestock from the general PMSI priority rule?
Livestock receives its own priority rules under subsection (d) that require additional notification to conflicting secured parties within six months before the debtor receives possession.
Supporting sources
How does the definition of livestock affect agricultural liens?
Services such as boarding or feeding livestock can give rise to an agricultural lien when payment is tied to sale proceeds, because the animals qualify as livestock under the UCC definition.
Supporting sources
514 U.S. 549 (1995)
…sow winter wheat in the fall, and after harvesting it in July to sell a portion of the crop, to feed part of it to poultry and livestock on the farm, to use some in making flour for home consumption, and to keep the remainder for seeding future crops. The Secretary of Agriculture assessed a penalty against him under the…