Opinion ID: 1298626
Heading Depth: 4
Heading Rank: 2

Heading: Based on Other Evidence in the Record

Text: Mallard maintains that NC's credit manager, Tom Kleinschmidt, both knew of and consented to the sale, and introduces Kleinschmidt's deposition testimony as evidence: Q: How do you know that [Cobb] was attempting to sell things from his construction and mining business? A: Because he told me he was. .... A: [T]he main thing he discussed was that he wanted to sell either construction or mining equipment to reduce his debt level. Q: When you say construction or mining equipment, does that include the D8K and the 966 [loader]? A: Yes. ... . Q: And did NC expect that if he sold the 966 or the D8 that he would take that money and pay NC? A: I specifically said that to him and he agreed that is what he would do. Q: This was in December of '85 or January of '86? A: Yes. Q: Did he put anything in writing about agreeing to pay NC the proceeds of the sale? A: No, he didn't put anything in writing, no. Q: Did you put anything in writing about requiring him to give NC the proceeds of the sale? A: No, I didn't put anything in writing but he verbally agreed that he would do that. Q: And of course NC had no objection to the sale as long as he paid the money to NC; is that right? A: Yes, that is right. Q: Did you tell Cobb that? A: Yes, I did. This testimony shows that NC knew of Cobb's plan to sell the loader and authorized him to do so. This authorization, however, was conditional. NC in effect authorized the sale, as long as Cobb agreed to pay the proceeds to NC. Under these circumstances we conclude that NC did not authorize the sale within the meaning of AS 45.09.306(b). No authorization exists where the debtor fails to satisfy the conditions of the creditor's conditional consent. North Cent. Kansas Prod. Credit Ass'n v. Washington Sales Co., Inc., 223 Kan. 689, 577 P.2d 35, 39 (1978). We see no reason to depart from this general rule where the condition was that the debtor remit the proceeds of sale to the creditor. [5] As the Oregon Supreme Court has noted, in this situation the purchaser can easily protect itself by checking the records for any security interests in the item, requiring proof of consent, and making payment directly to the creditor. Baker Prod. Credit Ass'n v. Long Creek Meat Co., Inc., 266 Or. 643, 513 P.2d 1129, 1134 (1973). See also Southwest Washington Prod. Credit Ass'n v. Seattle-First Nat'l Bank, 92 Wash.2d 30, 593 P.2d 167, 169 (1979). NC's security interest in the loader therefore was not extinguished by AS 45.09.306(b).