Opinion ID: 369731
Heading Depth: 1
Heading Rank: 4

Heading: Remaining Defenses.

Text: 50 Appellee Bank has advanced two legal defenses which, it argues, support the trial court's dismissal of this action: (1) pursuant to a security agreement with G. M. Grain Company, the Bank possessed an interest in the checks superior to that of Olsen-Frankman; and (2) appellant's assertion of a setoff in this case would create a voidable preference under the bankruptcy laws. The district court did not reach these issues, having determined that no damages would lie for fraud because a stop payment order by Olsen-Frankman could not relieve it of liability to the holder of its checks. In our view, these unresolved issues should be addressed initially by the district court on remand. 51 Accordingly, we reverse the holding of the district court, vacate its judgment of dismissal, and remand for further proceedings consistent with this opinion. Appellant is entitled to costs on this appeal.