(concurring in part, concurring in result in part, and dissenting in part).
In appeal # 15041, I concur in the result based on the last proposition only. In appeal # 15042, I concur in the result as to Issue I, dissent as to Issue IV, and concur in Issues II, III, V and VI. In appeal # 15043, I concur.
I take issue with the holding that commercial cattle herds raised for sale at public livestock markets are collateral “of a type customarily sold on a recognized market” for purposes of SDCL 57A-9-504(3), hereafter 9-504(3). The reasoning by which the author arrives at that conclusion is convoluted and internally inconsistent.
The author misapplies Judge Porter’s decision in Arcoren v. Peters, 627 F.Supp. 1513 (D.S.D.1986). The dispute in that case was whether two FmHA officials enjoyed qualified immunity from suit for damages for selling cattle repossessed under a se-*722eurity agreement without complying with the notice requirements of 9-504(3). The issue was whether they had violated plaintiff’s “clearly established” statutory rights so as to deprive them of immunity. The decision simply held that only two cases, State Bank of Towner v. Hansen, 302 N.W.2d 760 (N.D.1981) and Wippert v. Blackfeet Tribe, 695 P.2d 461 (Mont.1985), having been decided after the Arcoren sale, did not clearly establish applicable law at the time of the sale. The author relies on a conclusory statement taken out of context, while glossing over the true holding in the decision. Judge Porter nowhere suggested that the two decisions were wrong, nor did he cite a single case or secondary authority to the contrary. Ar-coren may be persuasive with respect to the issue that was before Judge Porter, but it is not applicable in the context of this ease.
Rule 9-504(3) exempts collateral "of a type customarily sold on a recognized market” from the notice requirement. White and Summers define a recognized market as
arenas of pure competition in the classical sense of the term. The forces of supply and demand determine price and the valuation of goods and such market places are relatively free from human connivance and manipulation.... Any transaction which involves haggling over price or competitive bidding should not be considered as one conducted on a recognized market, and the secured party is properly relieved of his obligation to give notice of resale only when neutral market forces rather than negotiations between buyer and seller determine price.
J. White & R. Summers, Uniform Commercial Code § 26-10, at 1111 (2d ed.1980) (emphasis added).
There can be no valid argument that under the foregoing text a livestock auction market can possibly qualify as a recognized market. But the majority goes on to compare livestock auction markets to commodities futures markets trading in cattle. I will concede that they both deal in cattle, but the livestock auction markets deal in cattle on the hoof while the commodities futures markets deal in contracts for future delivery. They are paper transactions. “[Ljess than 3% of all futures contracts culminate in delivery.... Neither the speculative investor nor the person using the futures market as a hedge for his position in the market for the actual commodity generally desires delivery.” Leist v. Simplot, 638 F.2d 283, 286 n. 2 (2d Cir.1980), aff'd sub nom. Merrill Lynch, Pierce, Fenner & Smith v. Curran, 456 U.S. 353, 102 S.Ct. 1825, 72 L.Ed.2d 182 (1982). The argument appears to be that because there are commodities futures markets for cattle, all cattle sales are exempt from the notice requirement. This is a novel theory, but the logical extension of it is that Bank could have just as well gone out and sold the cattle at private sale with impunity. Nor does the majority cite any cases to support it.
The majority goes on to argue that “under such a marketing system there is no room for bidding on individual cattle,” which assertion is absolutely inapplicable to livestock auction markets. I suggest that the majority’s problem arises from focusing attention on the commodity aspect of the collateral, instead of the marketing system used in the particular sale.
The two cases that the majority rejects are the only cases directly on point dealing with the issue of “recognized markets” in cattle sales. In my view, these two cases correctly state the law with regard to 9-504(3) of the UCC. In addition to White and Summers, many courts and commentators are in accord, and have distinguished sales involving competitive bidding from the “recognized market” called for in 9-504(3). See, e.g., Norton v. National Bank of Commerce of Pine Bluff, 240 Ark. 143, 398 S.W.2d 538 (1966); 1st Charter Lease Co. v. McAl, Inc., — Colo.App. —, 679 P.2d 114 (1984); Turk v. St. Petersburg Bank & Trust Co., 281 So.2d 534 (Fla.Dist.Ct.App.1973); Ocean National Bank of Kennebunk v. Odell, 444 A.2d 422 *723(Me.1982); Wippert v. Blackfeet Tribe, 695 P.2d 461 (Mont.1985); State Bank of Towner v. Hansen, 302 N.W.2d 760 (N.D.1981); M.P. Crum Co. v. First Southwest Sav. & Loan, 704 S.W.2d 925 (Tex.Civ.App.1986); 9 R. Anderson, Uniform Commercial Code § 9-504:28-29 (3d ed. 1985); B. Clark, The Law of Secured Transactions Under the Uniform Commercial Code; IT 4.8[7][f] (1980).
Other cases dealing with auction sales of automobiles lend further support to this notion. It is universally held that an automobile auction is not a “recognized market” under 9-504(3). For citations to over thirty supporting cases, see 9 TJ.C.C. Case Digest ¶ 9-504.31 (1983, 1986 Cum.Supp.).
That, however, is not the end of the inquiry whether Bank should be denied a deficiency judgment because of the failure to give the notice. Answers to that question vary according to jurisdiction. I will briefly review these varying views.
The provision governing failure to comply with the U.C.C. notice requirements is found at SDCL 57A-9-507(l), hereafter 9-507(1), wherein it states in pertinent part: “If the disposition has occurred the debtor ... has a right to recover from the secured party any loss caused by a failure to comply with the provisions of this part.”
One view of this section is that since it does not mention deficiencies, they are not precluded. White and Summers state: “The creditor can surely argue that, since 9-507 is a comprehensive codification of a debtor’s remedies, and since that section is silent as to denial of a deficiency judgment, such a denial is not a permissible remedy.” J. White & R. Summers, supra, at 1127. (Emphasis added.) They suggest that under 9-201 the creditor has all the rights that his agreement with the debtor gives him, except when the code specifically provides otherwise. Id. Some courts have held that 9-507(1) prescribes the sole penalty for creditor’s failure to heed the notice requirements and does not shield the debt- or from a deficiency judgment. See Lincoln Rochester Trust Co. v. Howard, 75 Misc.2d 181, 347 N.Y.S.2d 306 (City Ct. 1973); Commercial Credit Corp. v. Wollgast, 11 Wash.App. 117, 521 P.2d 1191 (1974); Grant County Tractor Co. v. Nuss, 6 Wash.App. 866, 496 P.2d 966 (1972).
The anti-deficiency view, on the other hand, is expressed as follows:
[T]o permit recovery by the security holder of a loss in disposing of collateral when no notice has been given, permits a continuation of the evil which the Commercial Code sought to correct. The owner should have an opportunity to bid at the sale.... A security holder who disposes of collateral without notice denies to the debtor his right of redemption which is provided him in Section 9-506. In my view, it must be held that a security holder who sells without notice may not look to the debtor for any loss.
Skeels v. Universal C.I.T. Credit Corp., 222 F.Supp. 696, 702 (W.D.Pa.1963) vacated on other grounds, 335 F.2d 846 (3d Cir.1964). See also Braswell v. American National Bank, 117 Ga.App. 699, 161 S.E.2d 420 (1968). Another line of anti-deficiency cases hold that strict compliance with the notice requirement is a condition precedent to a claim for a deficiency. See Leasco Data Process. Equip. Corp. v. Atlas Shirt Co., 66 Misc.2d 1089, 323 N.Y.S.2d 13, 9 U.C.C.Rep.Serv. 161 (N.Y.Civ.Ct.1971).
Lastly, there is an intermediate view, holding that 9-507(1) is not an exclusive remedy, but that 1-103 incorporates prior principles of law and equity which remain effective. This view, termed the Arkansas Rule, indulges a rebuttable presumption that the collateral was worth at least the amount of the debt, thereby shifting to the creditor the burden of proving the amount that would reasonably have been obtained through a sale conducted according to law. Norton v. National Bank of Commerce of Pine Bluff, 240 Ark. 143, 398 S.W.2d 538 (1966). For a recent case following Norton, see Farmers & Merchants Bank v. Barnes, 17 Ark.App. 139, 705 S.W.2d 450 (1986). See also 1st Charter Lease Co., supra. Accord Weiner v. American Pe*724trofina Marketing, Inc., 482 So.2d 1362 (Fla.1986). In Leasing Associates, Inc. v. Slaughter & Son, Inc., 450 F.2d 174 (8th Cir.1971), the Eighth Circuit Court of Appeals, in reaffirming the Arkansas Rule, stated it thusly:
The sanction which makes the [section 9-504(3) notice] requirement viable is a rebuttable presumption that the value of any collateral sold without notice is equal to the debt. Therefore, as a prerequisite to the recovery of a deficiency judgment in Arkansas, the secured party has the burden of proving either the actual value of the collateral at the time of its sale after repossession, or proving that reasonable notice was sent....
Id. at 177. For a good discussion of the varying views see Beneficial Finance Co. of Black Hawk County v. Reed, 212 N.W.2d 454, 459-61 (Iowa 1973).
I consider the case before us to be a very good argument against the strict anti-deficiency decisions. Kehn signed a written consent to a sale, therefore we can safely assume that they were not deprived of any opportunity to redeem, which some of the “anti” courts stress. Furthermore, it is strikingly obvious that the large deficiency was created by the disappearance of approximately two-thirds of the collateral pri- or to Bank’s repossession and not due to the sale of the remaining collateral. To preclude a deficiency under such circumstances would be a gross miscarriage of justice, there being little if any relationship between the size of the deficiency and the manner of sale.
Nor am I taken with the proposal that 9-507(1) is the debtor’s exclusive remedy and he has the burden of establishing, after the fact, what the value of the collateral would have been if the sale had been properly noticed and conducted.
I would opt for the Arkansas Rule. First, there should be a presumption that the value of the collateral equaled the amount due on the principal and interest on the obligation. (This could leave a deficiency for costs of care and preparation and sale expenses, but that would presumably be a minor amount.) Then the burden should rest on the creditor to establish either that he gave reasonable notice or that fair market value was realized from the sale.
Applying the Arkansas Rule to the facts of this sale, I would affirm Bank’s right to a deficiency. Kehns made no complaint about the manner of sale, nor do they suggest any improprieties other than the failure to give notice. Bank used regular livestock auction sales to dispose of the collateral. Lacking any specific objections to this manner of sale, I would hold that the evidence showed that Bank realized fair market value for the collateral sold. I would affirm the deficiency judgment.
I dissent from the majority’s treatment of Issue IV of case # 15042 dealing with prejudgment interest. Furthermore, I disagree with Chief Justice Wuest’s concurring analysis. In my opinion, Bank is entitled to the interest as computed by the trial court.
The case was submitted to the jury on two causes of action; a contract action on the promissory note, and a tort action for fraud. The trial court instructed the jury on damages in the contract action thusly:
No. 123
If you find Kehn Ranch, Inc. is liable to First Bank on the five promissory notes received into evidence, First Bank’s damages, for the purposes of your consideration, are equal to the unpaid principal on the notes in the amount of $7,222,-530.00. In this event, the Court will make the calculation of interest based on your answers to questions on the verdict form and/or the applicable law.
No. 124
If you find Clark Kehn, Bonnie Kehn and Ed Kehn liable to First Bank on their individual guarantees of the promissory notes, First Bank’s damages are equal to the unpaid principal on the notes in the amount of $7,222,530.00. In this event, the Court will make the calculation of interest based on your answers to ques*725tions on the verdict form and/or the applicable law.
On the fraud action, the court instructed the jury to calculate damages as follows:
No. 128
If you find for any party on a fraud or negligence claim, your determination of damages must not be based on speculation or guess. Consequently, the party seeking the damages must prove the amount of the damages suffered as a result of the other party’s wrongful conduct. However, the burden on any party seeking to recover damages does not require that person to prove with mathematical precision the exact sum of its damages, but only that it furnish evidence of such facts and circumstances to permit an intelligible and probable estimate of its damages.
The verdict form contained the following interrogatories, which were answered as follows:
A. PROMISSORY NOTES AND PERSONAL GUARANTY CLAIMS.
We the jury find:
1. Kehn Ranch, Inc., is liable to the Bank on the unpaid promissory notes.
(Answer Yes or No) Yes
2. Clark Kehn is liable to the Bank on his personal guaranty of the unpaid notes.
(Answer Yes or No) Yes
3. Bonnie L. Kehn is liable to the Bank on her personal guaranty of the unpaid notes.
(Answer Yes or No) Yes
4. Edwin C. Kehn is liable to the Bank on his personal guaranty of the unpaid notes.
(Answer Yes or No) Yes
The verdict also contained interrogatories on the fraud claim as follows:
B. FRAUD CLAIM
We the jury find:
Kehn Ranch, Inc.
1. Kehn Ranch, Inc. committed a fraud upon the Bank.
(Answer Yes or No) Yes
2. The fraud of Kehn Ranch, Inc., caused damage to the Bank.
(Answer Yes or No) Yes
3. If your answers to (i) and (2) are “Yes”, what sum of money, if any, will fairly compensate the bank for the damages caused by the fraud of Kehn Ranch, Inc.? $7,222,630.00
The same questions were asked regarding the defendants Clark and Bonnie and the jury responded in the same manner. Finally, under a third part of the verdict the jury found that, of the defendants Kehn Ranch, Inc., Clark and Bonnie, Bank was entitled to punitive damages from only Clark and assessed the amount at $100,000.
To begin with, Bank concedes that they cannot collect the $7 million plus dollars verdict more than once. It is obvious, however, that the jury did return a verdict for Bank on the promissory note in accordance with instructions 123 and 124 quoted above. These instructions are the law of the case since they were not challenged on appeal. Bank is therefore entitled to judgment in the sum of $7 million plus dollars, together with interest per the instructions.
Where the majority errs dangerously is in the following reasoning:
[T]he jury awarded $300,000 to Kehn Ranch because Bank failed to liquidate the collateral in a commercially reasonable manner. The trial court ordered the amount due the Bank to be offset by any damages due the Kehns. Consequently, the Bank’s damages were not certain or capable of being made certain until the jury returned its verdict. Therefore, the Bank was not entitled to recover prejudgment interest, and the trial court erred in awarding prejudgment interest.
The majority cites us to Hepper v. Triple U Enterprises, Inc., 388 N.W.2d 525, 531 (S.D.1986), as authority for this holding. Although Justice Fosheim also authored Hepper, he fails to note a distinct difference in the posture of the two cases. In Hepper, suit was commenced against Triple U for breach of warranty and an unliq-uidated damage award was made for roughly $286,000. Triple U counterclaimed for the unpaid balance on the contract for sale and was awarded approximately $202,-000, which would be liquidated damages. Heppers thus had a balance of $84,000 after the offset. On appeal, Triple U claimed that the trial court should have allowed prejudgment interest on its liqui*726dated damages before the offset. In response, we concluded that since the trial court offset the sums due Triple U by the damages due Heppers, Triple U’s damages arising from Heppers’ breach of contract were not certain or capable of being made certain until the jury returned its verdict and, therefore, prejudgment interest was properly denied.
There are four different rules that govern the award of prejudgment interest when an offset is also awarded. For an excellent discussion of these four competing rules, see Socony Mobil Oil Co. v. Klapal, 205 F.Supp. 388 (D.Neb.1962). The Hepper decision apparently follows the “Conversion of Liquidated Claim” Rule: “ '[I]n some eases, where a liquidated demand is subject to reduction by virtue of an unliquidated claim, the balance due is deemed to be an unliquidated sum on which interest is not recoverable.’ ” Socony Mobil Oil, 205 F.Supp. at 390 (citing 47 C.J.S., Interest § 19, at 32 (1946)). I am unaware of any cases other than Hepper that support that rule. Quite to the contrary, the bulk of authority indicates just the opposite.* In Hepper, the author never made reference to the rule per se, nor did he distinguish the liquidated from the unliqui-dated damages.
I think that we should abandon the “Conversion of Liquidated Claim” Rule and this case is a prime example why it is totally unsupportable. By virtue of the Hepper reasoning, the $300,000 offset given the Kehns barred accrued prejudgment interest of over twenty times that amount. Theoretically, under that rationale, a one-dollar offset awarded to Kehn Ranch would likewise preclude the $6.2 million prejudgment interest award to Bank.
Nor are the cases cited in Hepper particularly supportive of the proposition for which they are cited. Hepper cites three cases: Subsurfco, Inc. v. B-Y Water District, 369 N.W.2d 129 (S.D.1983); Cargill, Inc. v. Elliott Farms, Inc., 363 N.W.2d 212 (S.D.1985); and Barton Masonry, Inc. v. Varilek, 375 N.W.2d 200 (S.D.1985). In Subsurfco, Inc., B-Y Water District received a large jury verdict on its counterclaim. B-Y Water District claimed that it was entitled to prejudgment interest on $291,225 of that large jury verdict. Sub-surfco, Inc. was awarded $775,789.17 on its original claim which represented the unpaid balance on the contract. We held that B-Y Water District was not entitled to prejudgment interest since the award to Subsurfco, Inc. exceeded the portion of B-Y Water District’s award that was entitled to prejudgment interest. While the opinion never discusses whether either claim was for liquidated damages, it is obvious that BY’s damages were treated as such, otherwise, they would not be entitled to prejudgment interest in any event. Subsurfco’s claim for balance due on the contract was clearly liquidated; therefore, we have at best a question of offsetting two claims for liquidated damages, a far different situation than we find in either Hepper or the case at hand.
In Cargill, supra, the issue was prejudgment interest on the verdict for $166,363 given to Elliott on his counterclaim. The trial court disallowed the interest and we affirmed on the basis that Elliott’s damages were not certain or capable of being made certain until the jury rendered its verdict. There was no question of setoff of a counterclaim because Cargill did not receive a verdict on its claim.
*727Likewise, in Barton Masonry, supra, an action on a construction contract, we affirmed allowance of prejudgment interest, but Varilek had no counterclaim for any type of damages.
The second rule, known as the “Interest on the Balance” Rule, is expressed as follows:
‘[W]here the amount of a claim under a contract is certain and liquidated, or is ascertainable, but is reduced by reason of the existence of an unliquidated set-off or counterclaim thereto, interest is properly allowed on the balance found to be due, from the time it became due and was demanded, or suit commenced therefor.’
Socony Mobil Oil, 205 F.Supp. at 390 (quoting Annot., 89 A.L.R. 678 (1934)). See Deerhurst Estates v. Meadow Homes, Inc., 64 N.J.Super. 134, 165 A.2d 543 (1960).
A third rule denominated “Interest on the Entire Claim” provides substantially that the plaintiff is entitled to interest on the entire amount of his claim for liquidated damages when the counterclaim asserted is not directed at the plaintiffs claim. That is, where the unliquidated set-off or counterclaim is not for defective performance of the liquidated claim upon which suit is brought but arises out of a collateral matter the plaintiff is entitled to interest on the entire amount of his liquidated claim and not on the balance only. Socony Mobil Oil, supra. See Mall Tool Co. v. Far West Equipment Co., 45 Wash.2d 158, 273 P.2d 652 (1954).
Finally, I note the fourth rule denominated as “Counterclaim as a Discount”, which appears to have somewhat the same result as the previous rule.
[W]here the plaintiff’s demand is liquidated he is given interest on the full amount by treating the defendant’s un-liquidated demand as a discount and not as a payment. The rule is limited.
‘[This] principle, however, appears to be applicable in cases where the claim for deduction could not be said to be demandable at the time when the original liquidated claim became due, but was rather the proper subject of a counterclaim for damages than of an offset in the nature of a payment.’
Socony Mobil Oil, 205 F.Supp. at 392-93 (quoting Hansen v. Covell, 218 Cal. 622, 24 P.2d 772, 776 (1933)); Annot., 89 A.L.R. 670, 675 (1933).
I think that our case falls under either of the two immediately preceding rules and I would opt to affirm the trial court’s grant of prejudgment interest under either.
"Ordinarily, where the amount of a demand is sufficiently certain to justify the allowance of interest thereon, the existence of a setoff, counterclaim, or cross claim which is unliquidated will not prevent the recovery of interest on the balance of the demand found due from the time it became due, unless plaintiffs liquidated claim is less than the award to defendant on his counterclaim. If the unliquidated set-off or counterclaim is based on a breach unrelated to the sum due under the primary claim, prejudgment interest is allowed on the entire claim and the amount of the counterclaim or set-off as determined at the trial is then deducted from the total."
47 C.J.S. Interest & Usury § 21, at 63 (1982). For a long listing of supporting cases see 47 CJ.S. Interest & Usury § 21, at 63 n. 34. Wyoming is in accord. See Rissler & McMurry Co. v. Atlantic Richfield Co., 559 P.2d 25 (Wyo.1977).