Clovis National Bank v. Thomas

Clovis National Bank (plaintiff) held a security interest in cattle owned by borrower Bunch, with loan terms requiring Clovis's consent before any sale, but Clovis had a general custom of letting Bunch sell cattle without seeking that consent and trusted him to apply the proceeds to his debt. After a later sale where Bunch didn't apply the proceeds to the debt, Bunch consigned cattle under his son's brand to Thomas (defendant) for sale; Clovis told Thomas of its interest hoping for a joint payment, but Thomas paid Bunch's son directly when demanded. Clovis sued Thomas for conversion, and the trial court found Clovis had waived its interest through its course of dealing; Clovis appealed.