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Farm Credit Bank of St. Paul v. F & A Dairy
Citation:
477 N.W.2d 357 (1991)Facts
John and Barbara Bonneprise operated a dairy farm and borrowed $300,000 from Farm Credit Bank of St. Paul, granting the bank a perfected security interest in their milk and all accounts arising from milk sales. The Bonneprises initially sold milk to Land O’Lakes Dairy under an assignment whereby Land O’Lakes paid the bank $4,333 monthly from milk proceeds. In August 1988, the Bonneprises switched to F&A Dairy without informing the bank. After discovering the switch when August payment was not received, the bank sent letters and documents to F&A Dairy on August 22 and August 26, 1988, notifying the dairy of its security interest, enclosing copies of the security agreement and financing statement, and demanding monthly payments of $4,333. F&A Dairy refused to make any payments to the bank for milk sales during August, September, October, and November, claiming there was no assignment and that John Bonneprise directed payment to him instead.
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