Citizens National Bank v. Mid-States Development Co.

This appeal requires us to resolve the conflict that arises when a bank exercises a right of set-off against funds in a depositor’s account that represent proceeds of accounts receivable and inventory in which a secured party has a perfected interest under the Uniform Commercial Code. The trial court, sitting without a jury, determined that the secured party was entitled to these funds so that the bank’s set-off amounted to a wrongful conversion of the property. We affirm the trial court’s decision and hold that, on these facts, the Uniform Commercial Code requires that the bank, as an…