First Bank & Trust of Jonesboro v. State

Banke, Judge. This is an action by the state to condemn an aircraft which was seized while being used to transport marijuana. See generally Code Ann. § 79A-828. The appellant, First Bank and Trust of Jonesboro, Arkansas, claimed a security interest in the aircraft based on a security agreement executed by the purported owner, Edd Conn Aircraft Sales, Inc., in connection with a loan made to the corporation by the bank. See generally Code Ann. § 79A-828 (a) (4) (iii). Following a hearing, the trial court determined that the bank had no bona fide security interest in the plane at the time of its seizure and that it "knew or had constructive knowledge of the intended use or the actual use of the aircraft.” Accordingly, the court rejected the bank’s claim, giving rise to this appeal. Held: 1. The burden of proof was on the bank to prove its claim to the aircraft. See Code Ann. § 79A-829 (a). It appears from the transcript that Edd Conn Aircraft Sales, Inc., was not in existence on the date that the security agreement was executed due to the prior revocation of its charter by the Governor of Arkansas, and there is nothing in the record to indicate who acquired title to the corporation’s property when its existence was terminated. Thus, the purported security agreement could not have transferred any interest in the aircraft to the bank, and the judgment of the trial court must be affirmed. 2. In view of the foregoing, it is unnecessary to consider the appellant’s remaining enumerations of error. Judgment affirmed. McMurray, P. J., and Underwood, J., concur. Dwight H. May, Assistant District Attorney, for appellee.