When filing a UCC financing statement on Idaho farm products, do you need a full legal description of the land, or is the county name enough?

Subject

Opinion 86-17: To perfect security interest in farm products, designation of county alone is sufficient legal description of real estate.

Plain-English summary

Secretary of State Pete Cenarrusa asked whether, on a UCC-1 financing statement covering farm products, naming only the county where the farm products were located was a sufficient description of the real estate. Some Idaho practitioners had read § 28-9-110, the general "sufficiency of description" rule, to require a full metes-and-bounds or recorded-subdivision description. Others read § 28-9-402(9)(f), enacted by the 1986 legislature for farm products financing statements, to allow just the county name. Attorney General Jim Jones concluded that the county-name approach was correct.

The opinion turned on three rules of statutory construction. First, a specific statute trumps a general one: § 28-9-402(9)(f) is specific to farm products, while § 28-9-110 covers any description of real property under the UCC's secured transactions chapter. Second, the more recent statute prevails: § 28-9-402(9)(f) was added by 1986 amendment, while § 28-9-110 had stood unamended since 1967. Third, statutes should be read to carry out legislative intent, and the bill's history showed that the legislature deliberately amended the section to track the federal Food Security Act's central filing requirements (P.L. 99-198, § 1324), which themselves required only a county-level description.

Beyond resolving the conflict, the opinion gave two reasons to read § 28-9-402(9)(f) as treating county designation alone as sufficient. The Secretary of State's IDAPA rule (34.U.01.c.viii) required only county designation, and Idaho courts give weight to the construction adopted by an agency tasked with administering a statute. And the federal regulation (9 C.F.R. § 205.103(a)(3)) implementing the Food Security Act required only county-level identification, so the state rule did "no more nor less than" the federal floor. The USDA had certified the Idaho central filing system, which depended on the state matching the federal description standard.

Currency note

This opinion was issued in 1986. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Idaho's UCC Article 9 has been substantially revised in line with the 1998 revisions to the Uniform Commercial Code, and the section numbers cited here have been renumbered or replaced. The federal Food Security Act central filing framework also has been amended. Anyone perfecting a current security interest in Idaho farm products should consult the present Idaho Code Title 28, Chapter 9, and the current effective filing rules of the Idaho Secretary of State, not the 1986 framing here.

What the opinion meant for filers in 1986

For agricultural lenders, the opinion was a green light to use county-only descriptions on farm products financing statements without worrying that an under-described filing would later be unenforceable. The bankruptcy court in Wood v. Pillsbury Co., 38 Bankr. 375, had reached the opposite conclusion under the old version of the statute, but the 1986 amendment was designed precisely to displace that result. After this opinion, an Idaho UCC-1 covering farm products that named the county where the products were located met the perfection standard.

For the Secretary of State's office, the opinion endorsed the IDAPA rule that had already been put in place to administer the Idaho central filing system. The state's rule matched the federal regulation's county-level standard, and the AG's office confirmed that this was the correct reading.

For farm product buyers, who under the federal Food Security Act could be cut off from "good faith purchaser" protection if they bought in a state with a certified central filing system, the opinion confirmed that an Idaho filing showing the right county was operative against them, even without a more granular description of the farm.

Common questions

Did the AG say a full legal description was wrong, or just unnecessary?
Just unnecessary. The opinion confirmed that under § 28-9-402(9)(f), "[t]his provision may be satisfied by a legal description, but a legal description is not required." A filer was free to include a more detailed description, and could not be penalized for over-describing. The point was that under-describing to the county-name level was also acceptable.

What about the "(including county)" wording in § 28-9-402(9)(f)? Did the parenthetical imply more was needed?
No. The opinion read the parenthetical as the legislature mirroring the federal statute (P.L. 99-198, § 1324, which required "a reasonable description of the property, including county"). The Idaho legislature wrote the section before the federal regulation was published, so it tracked the federal floor in case the federal regulation later required something more. The federal regulation, when it came, ended up at the same county-only standard, and so did Idaho's IDAPA rule.

What had the bankruptcy court decided in Wood v. Pillsbury Co.?
Wood (38 Bankr. 375), decided in 1983, had read § 28-9-110 to require a full legal description on a farm products financing statement. The 1986 amendments to § 28-9-402, including the new subsection (9)(f) and the deletion of the cross-reference to § 28-9-110 from the statutory form, were designed to override that result. The opinion did not say Wood was wrong on its facts at the time; it said the law had since been changed.

Why did the federal Food Security Act matter to a state UCC question?
Because the federal Act preempted certain "buyer in ordinary course" rules unless a state had a certified central filing system that matched federal standards. The county-only description was part of the federal standard. By adopting the same standard, Idaho qualified for USDA certification, which preserved the priority that filed lenders could assert against farm product buyers who took without a search.

Could a court still reject a county-only description as not "reasonable"?
The opinion did not contemplate that. It treated county-only as the standard endorsed by the Idaho legislature, the Secretary of State's administrative rule, the federal statute, and the federal regulation. Each piece supported the others, leaving no obvious gap for a court to hold that more was required.

Background and statutory framework

Idaho's UCC Article 9 conflict in 1986 was a textbook case of two statutes pulling in opposite directions. Idaho Code § 28-9-110 stated that "any description of real property [must] be a legal description, that is, a description setting forth a United States government subdivision, the lot and block of a private subdivision, or metes and bounds of the premises affected." It had been adopted in 1967 as part of Idaho's enactment of the Uniform Commercial Code and never amended.

Idaho Code § 28-9-402(9)(f), as amended in 1986, said a financing statement for farm products was sufficient if it contained "a reasonable description of the real estate (including county)" and that this could be satisfied by a legal description but did not require one. Subsection (3) of the same statute was amended in 1986 to delete the model financing statement form's cross-reference to § 28-9-110 for farm products, while keeping it for other collateral types like timber, minerals, and fixtures. Subsection (1) was also amended to make the formal-requisites rules apply "[e]xcept as provided in subsection (9)" for farm products.

Three established rules of statutory construction supplied the conclusion: specific over general (State v. Wilson, Packard v. Joint School Dist. No. 171); later over earlier (Mickelsen v. City of Rexburg); and intent over literalism (Leliefeld v. Johnson). Under all three, the new specific subsection prevailed.

The administrative-deference principle in Hopp v. State, 100 Idaho 160 (1979), was that "an agency charged with the duty of administering an act is impliedly clothed with power to construe it as a necessary precedent to administrative action." The Secretary of State's IDAPA 34.U.01.c.viii rule, requiring only the designation of the county, was entitled to "great weight" under this principle.

The federal context was the Food Security Act of 1985, which created a central filing alternative to common-law buyer protection for farm products. Section 1324(c)(4)(D)(iv) of the Act required a "reasonable description of the property, including county," and 9 C.F.R. § 205.103(a)(3) implemented that with a county-level standard. Idaho's central filing system, certified by USDA, matched both.

Citations

• Idaho Code § 28-9-110 (1967 general description rule)
• Idaho Code § 28-9-402(1) (formal requisites of financing statements, as amended 1986)
• Idaho Code § 28-9-402(9)(f) (farm products description rule, added 1986)
• Public Law 99-198, § 1324 (federal Food Security Act central filing)
• 9 C.F.R. § 205.103(a)(3) (federal county-level description rule)
• IDAPA 34.U.01.c.viii (Idaho Secretary of State rule)
• Wood v. Pillsbury Co., 38 Bankr. 375
• State v. Wilson, 107 Idaho 506, 690 P.2d 1338 (1984)
• Packard v. Joint School Dist. No. 171, 104 Idaho 604, 661 P.2d 770 (Ct.App. 1983)
• Mickelsen v. City of Rexburg, 101 Idaho 305, 612 P.2d 542 (1980)
• Leliefeld v. Johnson, 104 Idaho 357, 659 P.2d 111 (1983)
• Hopp v. State, 100 Idaho 160, 595 P.2d 309 (1979)

Source

• Landing page: https://www.ag.idaho.gov/office-resources/opinions/
• Original PDF: https://ag.idaho.gov/content/uploads/2018/04/OP86-17.pdf

Original opinion text

STATE OF IDAHO
OFFICE OF THE ATTORNEY GENERAL

JIM JONES
ATTORNEY GENERAL

BOISE 83720

TELEPHONE
(208) 334-2400

ATTORNEY GENERAL OPINION NO. 86-17

TO: Pete T. Cenarrusa
Secretary of State
Statehouse
Boise, ID 83720
STATEHOUSE MAIL

Per Request for Attorney General's Opinion

QUESTION PRESENTED:

Is a designation of the county on a farm product financing statement a reasonable and legally sufficient description of the real estate where farm products are produced or located?

CONCLUSION:

The designation of the county alone is a reasonable and legally sufficient description of the real estate on which farm products are grown or located, for the purpose of perfecting a security interest in farm products by filing a farm products financing statement.

ANALYSIS:

Necessity of Legal Description

Your question deals with farm products financing statements and, in particular, the amount of detail needed to describe the real estate on which farm products are grown or located. It has been suggested by one attorney that a full legal description of the real estate is required or is the preferred method of compliance. Others have contended that mere designation of the county is legally sufficient to describe the real estate where farm products are produced or located.

This dispute stems from a conflict between Idaho Code §§ 28-9-110 and 28-9-402(9)(f). The former statute, governing "sufficiency of description" matters in general, states:

[A]ny description of real property [must] be a legal description, that is, a description setting forth a United States government subdivision, the lot and block of a private subdivision, or metes and bounds of the premises affected by the security interest . . .

Thus, if Idaho Code § 28-9-110 governs, it would appear that a full legal description is necessary. Such was the conclusion reached by the Idaho Bankruptcy Court in 1983 in the case of Wood v. Pillsbury Co., 38 Bankr. 375.

On the other hand, Idaho Code § 28-9-402(9)(f), as amended in 1986, describes the "formal requisites of financing statements" as follows:

A financing statement for farm products is sufficient if it contains the following information:

. . .

(f) A reasonable description of the real estate (including county) where the farm products are located. This provision may be satisfied by a legal description, but a legal description is not required.

Clearly, the two statutes conflict. Idaho Code § 28-9-110 applies to all of Chapter 9 of the Uniform Commercial Code (U.C.C.) and requires that "any description of real property be a legal description." (Emphasis added.) By contrast, § 28-9-402(9)(f) states that "a legal description is not required" in the case of farm products financing statements.

Three rules of statutory construction are relevant in determining the priority of such conflicting statutes. The first rule of construction is that a specific statute will prevail over a general statute. State v. Wilson, 107 Idaho 506, 508, 690 P.2d 1338, 1340 (1984); Packard v. Joint School Dist. No. 171, 104 Idaho 604, 610, 661 P.2d 770, 776 (Id. App. 1983). Idaho Code § 28-9-402(9)(f) relates to only one very specific type of document (farm products financing statements) among the many that are addressed in Chapter 9 of the U.C.C. By contrast, Idaho Code § 28-9-110 is a general section applicable to the whole chapter. Thus, under the first rule of statutory construction, § 28-9-402(9)(f) must prevail.

The same result follows under the second applicable rule, namely, that "to the extent of a conflict between the earlier and later statute . . . , the more recent expression of legislative intent prevails." Mickelsen v. City of Rexburg, 101 Idaho 305, 307, 612 P.2d 542, 544 (1980). Section 28-9-110, the general provision governing real estate description, was adopted as a part of the complete Uniform Commercial Code in 1967, and has never been amended. Section 28-9-402 was amended in part by the addition of subsection (9) in 1986. As the later expression of legislative intent, it prevails over § 28-9-110 to the extent of any conflict.

The third relevant rule of construction is that a statute should be construed to implement the intent of the legislature as revealed in the history and purposes of the act. Leliefeld v. Johnson, 104 Idaho 357, 367, 659 P.2d 111, 121 (1983). The language in § 28-9-402(9)(f), stating that a legal description is not required, was added by senate amendment to Senate Bill No. 1391, and finally signed into law as Senate Bill No. 1490. The addition of this amendment is a clear indication of a specific legislative intent not to require a legal description. Further, the whole purpose of the legislation was to adopt a central filing system to comply with section 1324 of P.L. 99-198, which does not require a legal description.

It is clear from application of the judicially acknowledged rules of construction that a legal description of the real estate on which farm products are produced or located is not required on a farm products financing statement.

Sufficiency of County Designation

We next address the contention that more than designation of the county is required as a description of the real estate where farm products are grown or located. This argument is based on the language in § 28-9-402(9)(f), requiring "a reasonable description of the real estate (including county) . . . ." It has been argued that the use of the parenthetical "(including county)" implies that more is required.

However, examination of the history of that language dispels any such reading. At the time the legislation was under consideration by the 1986 session of the legislature, the parallel federal regulation had not yet been published. The Idaho legislature therefore had to accommodate the provisions of § 1324 of P.L. 99-198 and yet retain the flexibility to meet the requirements of a federal regulation yet to be promulgated. It was known that § 1324(c)(4)(D)(iv) of P.L. 99-198 required "a reasonable description of the property, including county . . . ." It was not known what the federal regulation would require beyond the county designation, if anything. So the language closely tracked the language of the federal law. There is, therefore, no inference that more than a county designation is required by Idaho Code § 28-9-402(9)(f).

This reading is bolstered by the other amendments made to § 28-9-402 by the Idaho Legislature in 1986. Subsection 3 was amended to delete the example of a form for farm products financing statements, which had previously stated:

(If the collateral is crops) The above described crops are growing or are to be grown on:

(Describe Real Estate) . . . . . . . . . . . . . . . . . .

Thus, the cross reference that would trigger the general real estate description requirements of § 28-9-110 was eliminated as to farm products, while being retained for other collateral such as timber, minerals and the like (including oil and gas) and fixtures. The clear contrast between farm products and other collateral is further highlighted by the amendment to § 28-9-402(1), which spells out "formal requisites of financing statements" in a uniform manner for all forms of collateral "[e]xcept as provided in subsection (9) of this section," namely, the section governing farm products financing statements.

The final question remains: whether a county designation constitutes a "reasonable description of the real estate . . . ," with nothing more. We take some guidance from the fact that the state administrative rule, at IDAPA 34.U.01.c.viii, requires only the designation of the county. As a general rule, "an agency charged with the duty of administering an act is impliedly clothed with power to construe it as a necessary precedent to administrative action." Hopp v. State, 100 Idaho 160, 163, 595 P.2d 309, 312 (1979). In his adoption of the administrative rule, that is precisely what the Secretary of State did. Further,

The construction given a statute by the executive . . . officers of the State is entitled to great weight and will be followed . . . unless there are cogent reasons for holding otherwise. Id.

The administrative rule is, therefore, presumptively valid in requiring no more than a county designation.

There is, however, more support for the validity of the administrative rule. Unlike the legislature, the Secretary of State had the benefit of a federal regulation by the time he drafted the rule. The federal regulation requires only the designation of the county to satisfy the federal law's requirement for a reasonable description of the property where farm products are produced. 9 C.F.R., § 205.103(a)(3). Thus, the state administrative rule does no more nor less than the federal regulation.

Finally, the state administrative rule was part of a very detailed application for certification by the United States Department of Agriculture (USDA). After thorough review, USDA certified the Idaho system. Since the statutory standard under both the federal and state statutes is "a reasonable description," the state administrative rule's requirement for only the designation of the county must be presumed valid.

AUTHORITIES CONSIDERED:

Idaho Statutes
Idaho Code § 28-9-110
Idaho Code § 28-9-402(9)(f)
Idaho Code § 28-9-402(1)

Cases
Wood v. Pillsbury Co., 38 Bankr. 375
State v. Wilson, 107 Idaho 506, 508, 690 P.2d 1338, 1340 (1984)
Packard v. Joint School Dist. No. 171, 104 Idaho 604, 610, 661 P.2d 770, 776 (Id. App. 1983)
Mickelsen v. City of Rexburg, 101 Idaho 305, 307, 612 P.2d 542, 544 (1980)
Leliefeld v. Johnson, 104 Idaho 357, 367, 659 P.2d 111, 121 (1983)
Hopp v. State, 100 Idaho 160, 163, 595 P.2d 309, 312 (1979)

Idaho Administrative Rules and Regulations
IDAPA 34.U.01.c.viii

Federal Statutes
P.L. 99-198, § 1324

Federal Administrative Rules and Regulations
9 C.F.R. § 205.103(a)(3)

DATED this 23rd day of December, 1986.

Attorney General
State of Idaho

Analysis by:
JOHN J. MCMAHON
Chief Deputy Attorney General

cc:
Idaho Supreme Court
Supreme Court Library
Idaho State Library