Fordyce Bank & Trust Co. v. Bean Timberland, Inc.

Bean Timberland (defendant) borrowed from Fordyce Bank (plaintiff) to buy timber, giving Fordyce a security interest that it perfected by filing a financing statement. Bean resold the timber to two lumber mills (defendants) using the industry's customary practice of delivering to the mills' front gate for weighing and measuring, without either side conducting a lien search, and then defaulted on the Fordyce loan. Fordyce sued the mills, arguing they were negligent for failing to search for liens before buying; the trial court found the mills were buyers in the ordinary course of business with no lien-search duty, so they took the timber free of Fordyce's security interest, and Fordyce appealed.