In Re Miguel

MEMORANDUM OPINION AND DECISION

At the regularly scheduled trial date for this adversary proceeding the parties agreed to submit this matter on a stipulated set of facts and joint exhibits. The circumstances from which this dispute arose began in 1981 when the Miguels were unable to obtain the necessary financing of management costs for their 1981 crop. As a means of obtaining the financing, the Miguels entered into a transaction with Agricultural Exports, Inc. (hereinafter Ag-Ex), whereby the realty on which the crops were growing was conveyed by grant deed to Ag-Ex in exchange for a note and deed of trust on the subject property. This transaction occurred on May 22,1981. On the same date Ag-Ex entered into a farm management agreement with Horizon Farms, a corporation (hereinafter Horizon), whereby Horizon agreed to perform the necessary farm management services for the 1981 crop. On August 18, 1981, Ag-Ex granted Horizon a security interest in “all almond and/or prune crops now growing or to be grown” on the property that was the subject of the May 22, 1981, grant deed. This interest was to secure the amounts due for services rendered under the farm management agreement. A…