Farm Credit Bank of St. Paul v. F & A Dairy
Wisconsin Court of Appeals
477 N.W.2d 357 (1991)
Farm Credit Bank (the Bank) (plaintiff) held a perfected security interest in milk proceeds from the Bonneprises' dairy farm, which had been paying the Bank $4,333 monthly through an assignment with its usual milk buyer. The Bonneprises switched to selling milk to F & A Dairy (the Dairy) (defendant) without a new assignment; once the Bank learned of the switch, it sent the Dairy written notice of its security interest and demanded the same $4,333 monthly payment. The Dairy nonetheless paid all the proceeds directly to the Bonneprises from August through November, and the Bank sued the Dairy for conversion; the trial court ruled for the Bank on all four months' proceeds.
Whether a buyer of farm products takes the products subject to a secured party's security interest for a sale that occurred before the buyer received the statutorily required written notice of that interest.