Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Glenshaw Glass Co. v. Ontario Grape Growers' Marketing Bd.

September 29, 1995

GLENSHAW GLASS COMPANY, A PENNSYLVANIA CORPORATION

v.

ONTARIO GRAPE GROWERS' MARKETING BOARD; AGRICULTURAL PRODUCTS BOARD OF AGRICULTURE CANADA, APPELLANTS



ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA (D.C. Civil No. 91-00941)

Before: NYGAARD and McKEE, Circuit Judges and FULLAM, District Judge *fn*

NYGAARD, Circuit Judge.

Argued July 28, 1995

(Opinion Filed September 29, 1995)

OPINION OF THE COURT

This case arises from the Chapter 11 bankruptcy of Keystone Foods, Inc. of North East, Pennsylvania. The Ontario Grape Growers' Marketing Board and the Agricultural Products Board of Agriculture Canada appeal from the district court's order awarding Glenshaw Glass Corporation the sale proceeds of certain grape products processed and stored by Keystone on behalf of appellants. We will reverse.

I.

A. The Parties

Keystone was a farm cooperative that processed and sold food products, including grapes, for its member farmers. Keystone had three main divisions: 1) an industrial sales division, which processed and sold bulk fruit juice; 2) a retail sales division, which bottled and packaged fruit juice, provided either by its members or purchased on the open market; and, 3) a division that processed, such as pressing grapes and concentrating the juice, and packed them for third parties. Pursuant to packing and processing agreements, food products on Keystone's premises were not included in Keystone's inventory unless and until Keystone actually purchased them.

For several years, Keystone had borrowed money from the Baltimore Bank for Cooperatives, now called the National Bank of Cooperatives. The Bank held a perfected first priority security interest in Keystone's present and future accounts, inventory, equipment, contract rights, goods, general intangibles and other property, and a first mortgage on Keystone's real property. It is undisputed that the Bank had first priority with respect to these items.

Glenshaw, the plaintiff below, sold glass containers to Keystone for use in bottling juice. After the Bank perfected its security interest, Glenshaw obtained and perfected a similar all-encompassing security interest in Keystone's present and future assets, including its inventory.

The defendant/appellants, whom we shall collectively call the Grape Growers, are Ontario Grape Growers' Marketing Board, which acts as an agent for co-appellant/co-defendant Agricultural Products Board of Agriculture Canada, which purchases, processes, stores, ships and sells surplus Canadian agricultural products, including surplus Canadian-grown grapes. Each annual grape harvest represents an individual "Surplus Grape Program."

B. The Contracts Between Keystone and the Grape Growers

On September 15, 1988, the Grape Growers and Keystone entered into two agreements important to this litigation. At the time, Keystone owed the Grape Growers more than $450,000 for Keystone's purchases pursuant to the 1987 Canadian Surplus Grape Program. When the Grape Growers needed processing and storage services for the 1988 Surplus Grape Program, it allowed Keystone to work off its debt by processing 1988 surplus grapes and storing the juice and concentrate.

The primary contract was the "Processing and Storage Agreement," under which the Grape Growers shipped grapes to Keystone for custom processing, juice concentrating and storage. Keystone agreed ultimately "to return to the Board juice or concentrate" resulting from the processing. As for grapes in processing or storage at Keystone's facilities, the agreement clearly stated:

Title to all grapes processed by Keystone under this Agreement, and to all juice or concentrate resulting from such processing, shall be in the Board [i.e. the Grape Growers], and nothing contained herein, and no act of Keystone or the Board, shall cause Board title to vest in Keystone, except by a bill of sale or other title of transfer instrument being executed by the Board.

Nothing in the Agreement gave Keystone authority to use or sell the appellants' grapes or grape product.

The second agreement, executed on the same day, was the "Purchase Agreement." This contract gave Keystone an option, until October 1989, to purchase certain amounts of the grapes delivered to it for processing and storage by the Grape Growers. Keystone agreed "[n]ot to use or sell any of the grapes, juice or concentrate without receiving the ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.