FARMERS STATE BK. v. Production Cred. Ass'n of St. Cloud

The opinion of the court was delivered by

Herd, J.:

Production Credit Association (PCA) of St. Cloud, Minnesota, appeals the district court’s orders in a case involving the recovery of proceeds from the sale of cattle pledged as security to Farmers State Bank (Farmers) of Blue Mound, Kansas, for loans made to rancher Virgil Girtz.

Virgil Girtz conducted a commercial and purebred South Devon cattle operation in Minnesota. The operation was financed by PCA, which held a security interest in the cattle. Most of Girtz’s contacts with PCA were through loan officer Don Muller.

In 1983, without…