John and Dorothy Morken granted Sprague National Bank (Sprague) (defendant) a security interest in their inventory. Sprague perfected by filing. Hoxie Feeders, Inc. (Hoxie) (defendant) sold Morken an interest in cattle and reserved a purchase-money security interest (PMSI). Hoxie perfected by taking possession. The Morkens entered Chapter 11 bankruptcy. Hoxie sold the cattle. Bankruptcy trustee Kunkel (plaintiff) sued to determine who had the right to the proceeds. Sprague and Hoxie moved for summary judgment. The bankruptcy court concluded that both had perfected security interests, but that Hoxie had superpriority as a PMSI holder. The bankruptcy court granted Hoxie summary judgment, and Sprague appealed. The district court affirmed, concluding that a PMSI holder who perfects by taking possession need not give notice or, alternately, that Morken did not have sufficient “rights in the collateral” to give a security interest.