Idaho Bank & Trust Company v. Cargill

Idaho Bank & Trust Co. made a series of loans to Floyd Idle, a grain dealer at Rupert, Idaho. Some of the loans had not been repaid when Idle declared bankruptcy in 1977. The bank sought payment of the unpaid loans from Cargill, Inc., under the theory that Cargill was an account debtor who had wrongfully made several payments to Idle on grain contracts, the proceeds of which Idle had assigned to the bank as security. When Cargill refused to accept liability for the bank's losses, the bank brought this suit. Following trial, the district court held that the bank did not have a security interest in the disputed contracts and entered judgment for Cargill. We affirm. Broadly phrased, the issue is whether Cargill, having paid Idle on certain grain contracts, should be compelled to pay again -- this time to the bank -- for failing to honor the assignment. The answer to this question depends on whether Cargill was an account debtor with respect to the disputed contracts. To decide this question, we must address two legal issues. Did Idle and the bank have a written security agreement meeting the minimum requirements of I.C.