Clovis National Bank (Clovis) (plaintiff) made loans to W.D. Bunch. Bunch gave Clovis a security interest in cattle branded “W D Bar.” The loan agreements stipulated that Bunch could not sell the cattle without Clovis’s consent, but Bunch sold a portion of the cattle and Clovis did not object, as was Clovis’s custom. Bunch then sold a portion of the cattle but did not apply the proceeds toward the debt. Bunch consigned the cattle under the brand of his son, William D. Bunch, Jr., to Thomas’s (defendant) business for sale. Clovis told Thomas about its interest in the hope that the check would be payable to Clovis and Bunch. Bunch, Jr. demanded that Thomas pay him, which he did. Clovis sued Bunch and Bunch, Jr. Clovis also filed this lawsuit against Thomas for conversion. The trial court ruled in favor of Thomas, because Clovis consented to previous sales and waived its interest in Bunch’s cattle and had no security interest in the Swastika K cattle. Clovis appealed to the New Mexico Supreme Court.