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Farm Credit Bank of St. Paul v. F & A Dairy

Wisconsin Court of Appeals
477 N.W.2d 357 (1991)


Facts

Farm Credit Bank of St. Paul (the Bank) (plaintiff) had a perfected security interest in the milk and proceeds from John and Barbara Bonneprise’s dairy farm. The Bonneprises and their customer, Land O’ Lakes Dairy (Lakes), entered an assignment with the Bank, and Lakes paid $4,333 of the proceeds directly to the Bank monthly. The Bonneprises began selling their milk to F & A Dairy (the Dairy) (defendant) instead of Lakes in August. The Bank discovered the change, but the Bonneprises would not enter a new assignment. On August 22, the Bank demanded payment from the Dairy and provided the evidence of its perfected security interest. The Dairy paid all proceeds to Bonneprise from August through November. The Bank sued the Dairy for conversion, and the trial court found in its favor, holding that the Dairy bought the milk subject to the Bank’s security interest. The trial court awarded the Bank damages for the converted proceeds of milk sales for August through November. The Dairy appealed to the Wisconsin Court of Appeals.

Rule of Law

Issue

Holding and Reasoning (Cane, J.)

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