Battle Creek State Bank v. Preusker

This appeal presents two principal issues: (1) Whom does 7 U.S.C. § 1631 (1994) of the federal Food Security Act (FSA) protect? (2) What effect does the FSA have, if any, on security interests under the Uniform Commercial Code (U.C.C.)? The appellants, Mart Preusker and Phyllis Preusker, as creditors of their daughter and son-in-law, received proceeds from the sale of fluid milk to a dairy cooperative to pay part of an existing debt. The milk was subject to a perfected security interest of the appellee, Battle Creek State Bank, pursuant to Neb. U.C.C. § 9-307(1) (Reissue 1992). However, the…