Utica National Bank & Trust Company v. Happy Wheat Growers, Inc., Lawrence Systems, Inc.

GODBOLD, Circuit Judge:

This case involves a dispute between a warehouseman and a secured party over who shall bear the loss for 238 head of warehoused cattle. The warehouseman delivered the cattle to a third party authorized by the owner-debtor to sell them. They were sold for the account of the debtor, and the secured party never received the proceeds.

Cattle belonging to Three S Cattle Company (“3S”) were placed in a field warehouse in Texas. A field warehouse is a security device that antedates the Uniform Commercial Code. Under a typical field warehouse arrangement, a borrower “leases”…