Opinion ID: 1953123
Heading Depth: 1
Heading Rank: 2

Heading: facts

Text: On February 5,1988, Harry Grams and his son Leroy Grams opened checking account No. 59-820-1 with the bank in the name of D & C Cattle. Both of them were authorized to draw checks on the account, and the father indicated to the loan officer that he and Leroy Grams wanted to purchase cattle through D & C Cattle. Five days later, on February 10, 1988, the father signed a note in the amount of $2,500 in the name of D & C Cattle. He also signed a financing statement in the name of D & C Cattle which was secured by all of D & C Cattle's livestock. The proceeds of that loan were placed in the newly opened checking account. Additional loans were made to D & C Cattle on a need basis, whether daily or when checks were being charged to the account. When new loans were needed, the loan officer would contact either the father or Leroy Grams. In every instance but one, the father signed the notes. The proceeds of the new loans would always be placed in checking account No. 59-820-1. On April 3, 1992, the notes were refinanced and rolled into one note, and on February 10, 1993, the financing statement was continued. None of the checks written on the account were signed by the father; there was only one checkbook, and it was in Leroy Grams' possession. The first few checks in Leroy Grams' possession were not printed with his name and address, although three of them had D & C Cattle Co. typed in the upper left-hand corner. On one occasion, Leroy Grams wrote D/C Cattle Co in the upper left-hand corner of a check written to purchase cattle. After these checks had been written, Leroy Grams began using checks he had ordered through the bank, bearing the name Fantasy Acre Ranch in the upper left-hand corner. However, the checking account number remained 59-820-1. Fantasy Acre Ranch was the trade name Leroy Grams began using in February 1988. Twentythree checks were written to purchase cattle between February 6, 1988, and August 14, 1992. The signature card on file with the bank authorizing both the father and Leroy Grams was never changed, but beginning in October 1988, bank statements on the account were sent to Fantasy Acre Ranch, c/o Leroy Grams. No notes were ever signed by Fantasy Acre Ranch; all loan proceeds placed in checking account No. 59-820-1 were from notes signed on behalf of D & C Cattle. In addition to the loan proceeds, funds from a variety of sources were deposited into the account. Items other than cattle were purchased with checks drawn on the account. On May 1, 1991, the bank obtained D & C Cattle's financial statement signed by both the father and Leroy Grams which listed as assets of D & C Cattle 63 stock cows, 19 heifers, 6 bulls, and 59 calves. On April 3, 1992, the bank obtained another D & C Cattle financial statement; it also was signed by both the father and Leroy Grams and listed as assets of D & C Cattle 65 stock cows, 30 heifers, 4 bulls, and 30 calves. On March 10, 1993, the bank obtained a document entitled Review of Credit signed by Leroy Grams and listing as assets of D & C Cattle 71 stock cows, 13 calves, 40 feeders, and 3 bulls. On March 30, 1993, the father died. His other son, Robert Grams, is his successor in interest as trustee of a trust created by the father before his death. After the father's death, the D & C Cattle note went into default and was accelerated. Leroy Grams failed to honor the bank's demanded payment, and this suit followed.