## Facts

- A farm debtor owned 5,026 acres in Jackson County, Wisconsin, including land developed for cranberry production.
- The Federal Land Bank loaned the debtor $1,991,000, secured by a real estate mortgage on the acreage; the mortgage was recorded May 4, 1982 and included standard “tenements, hereditaments and appurtenances” language.
- First Wisconsin later loaned the debtor $500,000 used to purchase cranberry vines for 50 acres; it took (1) a real estate mortgage recorded May 26, 1982 and (2) a farm security agreement covering “all cranberry vines, growing vines and cranberry produce and proceeds,” perfected by financing statements filed in late May 1982.
- The Land Bank filed a state foreclosure action in 1983 and named First Wisconsin as a defendant.
- In the debtor’s bankruptcy, the real estate and cranberry vines were sold under 11 U.S.C. § 363, and the dispute became which lender had priority to the portion of sale proceeds attributable to the cranberry vines.
- The bankruptcy court held the vines were fixtures and awarded priority in the vine-related proceeds to the Land Bank; the district court affirmed.

## Issues

1. Whether cranberry vines planted in a bog were fixtures under Wisconsin law or personal property subject to a perfected UCC security interest.
2. If fixtures, whether generic mortgage language (“tenements, hereditaments and appurtenances”) encompassed the vines.
3. Whether the earlier-recorded mortgage had priority to the vine-related sale proceeds over the later security interest.

## Decision

- The Seventh Circuit affirmed.
- The court held cranberry vines planted in the bog were fixtures under Wisconsin law.
- The Land Bank’s mortgage language was broad enough to include fixtures such as the cranberry vines.
- Because the Land Bank recorded first, it had priority to the portion of the § 363 sale proceeds allocable to the vines.

## Legal Principles

- Under Wisconsin law, fixture status turns on (1) annexation to the realty, (2) adaptation to the realty’s use, and (3) objective intent that the item be a permanent accession.
- Perennial agricultural plantings with roots embedded in soil and used as part of the land’s established agricultural function may constitute fixtures rather than removable personalty.
- A real estate mortgage covering land with its “tenements, hereditaments and appurtenances” generally includes fixtures without item-specific descriptions.
- If collateral is a fixture, priority is governed primarily by real property mortgage recording rules; an earlier-recorded mortgage covering fixtures can defeat a later-perfected UCC security interest premised on the collateral being personal property.

## Conclusion

The court treated cranberry vines as fixtures integrated with the mortgaged land, held that standard mortgage language covered them, and enforced first-in-time mortgage priority by awarding the earlier mortgagee the proceeds attributable to the vines from the bankruptcy sale.


First Wis. Nat’l Bank of Milwaukee v. Fed. Land Bank of St. Paul, 849 F.2d 284 (7th Cir. 1988)