The Rural Voice, 1992-07, Page 18High -Volume Belt Conveying/Feeding
• Convey and feed with one machine.
• Single -motor drive.
• 16 -inch concave beh conveys up to
90 cu. h. (or 1,600 pounds) of teed per
minute.
(Forages @ 370 FPM).
• 12 -inch beh: 56 cu. ft. or 1,000 pounds
per minute (forages @ 400 FPM).
• Can add teed to conveyor section at
several locations with open-end hoppers.
Ask about the full line of
Patz Conveyors and Feeders.
Progressive
Farming
R. R. 2, Wellesley 656-2709
Rannoch 229-6700
Patz
SAFE/'
cL1n.con.
MEM
HAY
FEEDERS
Round Bale Hay Feeder
7' or 8' diameter available.
Available in square tubing —
1 ", 1 1/4" or 1 1/2"
Collapsible Hay Saver
• fits inside most round hay feeders
• fodder stays inside feeder instead
of being trampled underfoot
A division of Steve's Welding
R. R. 1, Newton, Ont. NOK 1R0
519-595-8737
14 THE RURAL VOICE
Agrilaw
Business is business —family or no!
tractor. Son uses the funds to pur-
chase the tractor. The loan is not evi-
denced in writing, nor is any security
taken by the father as against the
tractor in support of the loan. There-
after, the son obtains an operating
line of credit for the farm operation
from the bank, which is secured by a
General Security Agreement. The
bank registers the General Security
Agreement, pursuant to the
appropriate registration system.
Ultimately, son runs into financial
difficulties and is unable to meet his
payments to the bank. The bank im-
mediately takes realization proceed-
ings on all of son's assets. Father,
who lent son the money for the trac-
tor, prior to the bank making its loan,
claims that he is entitled to payment
of his funds (used to purchase the
tractor) before the bank is entitled to
realize on any of the assets in satis-
faction of its claim against the son.
As a result of the father not having
evidenced the loan in writing, he now
has an uphill battle to demonstrate to
a court that, in fact, funds were
loaned. Even if father is successful in
convincing a court that funds were
lent, (which in fact they were), as a
result of the bank taking and register-
ing security, and the farmer -lender
not having done so, the bank's claim
takes priority over that of the father,
despite the fact that the father lent
money prior to the advancement of
the bank's loan. The end result is
that the bank is able to realize on all
of the son's assets including the trac-
tor and the father only recovers his
debt in the event that there are
remaining assets after the bank's
claim has been fully paid.
Had the father taken security in
support of his loan, perhaps a chattel
mortgage, and registered same under
the appropriate registration system,
then, as the bank took its security and
registered same after registration of
the father, the father would have first
claim, in priority to the bank, to the
tractor or its proceeds on sale. As a
result of having first claim to that
equipment, the father could then
either sell the tractor and receive the
proceeds of sale as repayment of his
loan. Alternately, he may wish to not
The farmer next door has just
been advised by his accountant that
he has a cash-flow problem and that
he needs to borrow money.
He immediately goes to the bank.
When all is
said and done,
the farmer ob-
tains a loan from
the bank. As a
precondition for
the loan, the
farmer had to
sign various bank
documents which
create a security
interest in favour
of the bank in his
assets.
As well as
going to the
bank, the farmer
also approaches you for a loan. You
lend him money. However, unlike
the bank, you do not take security in
support of the loan; in fact, you do
not even evidence the loan in writing.
Why not?
There is no good reason.
There is no good reason why a
farmer, lending money to friends or
family, should not protect his or her
interest in the same manner as would
a bank.
Traditionally, when lending to
family or friends, farmers have been
reluctant to even evidence the making
of the loan in writing, let alone taking
some form of security from the
borrower. The reasons for this reluc-
tance are typically that the lender
believes that family members can be
trusted and relied upon to pay back
their debts or that it would be
unseemly to take security from a
friend in need. However, by not
taking some form of security from
the borrower or, at the very least,
evidencing the making of the loan in
writing, the farmer -lender is not only
jeopardizing his own investment, but
may also, unwittingly, be doing a
disservice to the borrower.
For example, farmer and son de-
cide that it is time for son to start his
own farm operation. In order to as-
sist son in doing so, farmer provides
son with a loan for the purchase of a