Cleveland v. McNabb

The Clevelands (plaintiffs) leased farmland to McNabb (defendant), who grew cotton there under a lease that gave the Clevelands a landlord's lien for unpaid rent. McNabb obtained negotiable warehouse receipts for the cotton — receipts that referenced cotton-gin tickets identifying the land as the Clevelands' — and used those receipts to secure a USDA loan program advance from the Commodity Credit Corporation (CCC) (defendant), falsely telling the USDA clerk the cotton was lien-free, even though a copy of McNabb's lease was on file at the local USDA office. When McNabb defaulted, the cotton became CCC property, and the Clevelands sued to enforce their landlord's lien against it.