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Washoe Co. Bank v. Campbell

December 31, 1917


Appeal from Second Judicial District Court, Washoe County; John S. Orr, Judge.

Cheney, Downer, Price & Hawkins, for Appellant.

Boyd & Salisbury, for Respondents.

By the Court, McCarran, C. J.:

The respondents were the lessees of Mrs. L. E. Alexander Shannon. The premises leased were known as the Alexander Ranch, situated in Washoe County. Some time after the making of the lease, the lessor made an assignment to the Washoe County Bank, appellant here, which assignment is as follows:

“Know all men by these presents, that I, L. E. A. Shannon, the party of the first part in that certain lease hereinafter described, for and in consideration of the sum of ten dollars to me in hand paid by Washoe County Bank, the receipt whereof is hereby acknowledged, and for other valuable considerations moving to me from said Washoe County Bank, do by these presents assign, set over and transfer to said Washoe County Bank all rents due and to become due under that lease made on the 3d day of March, 1908, between me, the party of the first part therein, and W. C. Campbell, N. L. Watton, and T. A. Bechtol, the parties of the second part therein, wherein I leased to the parties of the second part the Alexander Ranch for the term of

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five years next ensuing the date thereof at a monthly rental of $66.75, payable in advance on the first day of each and every month. And I hereby authorize and direct said Washoe County Bank to collect said rentals and to take such action, legal or otherwise, as may be necessary for the collection thereof; and I further direct that upon the collection of said rents, or any portion thereof, the same shall be applied by said Washoe County Bank upon the indebtedness due from me to said bank.”

It is alleged in appellant's complaint that the defendants here, the lessees of Mrs. Shannon, were notified of the assignment of the rentals, and in this respect it is averred that pursuant to said notice the respondents paid the rental to plaintiff to and including the month of August, 1909. This action was commenced by the appellant bank to recover from the respondents the rental of the premises from the 1st day of September, 1909, to the 1st day of September, 1910, and in their complaint they allege:

“That on or about the 24th day of June, 1909, said L. E. Alexander Shannon, for a valuable consideration, and by an instrument in writing, assigned and set over to Washoe County Bank, the plaintiff herein, all the rents due and to thereafter become due under and by virtue of said lease, and by the terms of said instrument in writing authorized and directed the said Washoe County Bank to collect said rentals and to take such action, legal or otherwise, as might be necessary for the collection thereof. That said instrument in writing was filed for record in the office of the county recorder in Washoe County, Nevada, on the 25th day of June, 1909, where the same is of record in Book C. of Leases at page 409.”

By their answer the respondents deny ever having received notice, either actual or constructive, of the execution of this assignment. It appears from the record that the assignment, being acknowledged before a notary public, was recorded in the office of the county recorder of Washoe County. In the court below appellant sought

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to establish notice to respondents, both actual and constructive. They sought to support their claim of actual notice by the testimony of the witness, Fred Stadtmuller, assistant cashier of the appellant corporation; and they contend here, as in the court below, that the recorded assignment constituted constructive notice to respondents. It will suffice to say here with reference to the testimony of the witness Fred Stadtmuller that the same was most unsatisfactory. The most that could be maintained for the testimony of this witness is that he believed that notice had been mailed to respondents, basing his belief upon the custom of the bank in such matters. he was unable to produce a copy of the notice, and refused to positively state that he had sent the same through the mails, or that the same had been in any wise delivered to respondents or either of them.

The trial court found, and in our judgment properly so, that the respondents had never received notice, either actual or constructive, of the execution of the assignment. In support of their contention that respondents were chargeable with constructive notice as to the assignment, appellants refer us to the sections of our code, as follows:

“No estate, or interest in lands, other than for leases for a term not exceeding one year, nor any trust or power over or concerning lands, or in any manner relating thereto, shall hereafter be created, granted, assigned, surrendered, or declared, unless by act or operation of law, or by deed or conveyance, in writing, subscribed by the party creating, granting, assigning, surrendering, or declaring the same, or by his lawful agent thereunto authorized in writing.” (Section 1069, Revised Laws, 1912.)

Section 1038, Revised Laws, provides:

“Every conveyance of real estate, and every instrument of writing setting forth an agreement to convey any real estate, or whereby any real estate may be affected, proved, acknowledged, and certified in the manner prescribed in this act, to operate as notice to

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third persons, shall be recorded in the office of the recorder of the county in which such real estate is situated, but shall be valid and binding between the parties thereto without such record.”

Section 1039, Revised Laws, provides:

“Every such conveyance or instrument of writing, acknowledged or proved and certified, and recorded in the manner prescribed in this act, shall, from the time of filing the same with the recorder for record, impart notice to all persons of the contents thereof; and subsequent purchasers and mortgagees shall be deemed to purchase and take with notice.”

It is contended that by this statute is prescribed a rule governing the creation and surrendering of all interests in lands; that by this statute is prescribed a character of evidence which is exclusive when proof is required that a lease of lands for more than one year has been created or extinguished. The facts presented in the case bearing upon the acts and conduct of the parties, and the significant language of the assignment, removes the matter from the operation of this statute.

1. It will be observed from the language of the assignment that it was not one which could be construed as assigning the lease itself. The language of the assignment is plain and unambiguous. It assigns “all rents due and to become due under that lease made on the 3d day of March, 1908.” The assignment of rents due and to become due does not constitute an assignment of the instrument itself. (Ramsey v. Johnson, 8 Wyo. 476, 58 Pac. 755, 80 Am. St. Rep. 948.) The authorities are quite uniform in holding that a mere assignment of moneys due or to become due under a contract is not an assignment of the contract itself. (National Surety Co. v. Maag, 43 Ind. App. 16, 86 N. E. 862; In Re Wright, 157 Fed. 544, 85 C. C. A. 206, 18 L. R. A. n. s. 193; Dickson v. City of St. Paul, 97 Minn. 258, 106 N. W. 1053; Fortunato v. Patten, 147 N. Y. 277, 41 N. E. 572; Butler v. San Francisco Gas & Electric Co., 168 Cal. 32, 141 Pac. 818.)

2. An assignment of the rents due and to become due,

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affecting only the rentals to be collected and not the lease under which such rentals are collected, does not create an estate or interest in lands such as is contemplated by the section of our statute above quoted. Its recordation, therefore, not being contemplated by the statute, constituted no notice to respondents of the assignment made by Mrs. Shannon to the appellant bank. In our judgment the trial court properly concluded that the assignment in question was merely an assignment of a right to collect moneys, and as such did not affect or concern the real estate. Appellants in their brief refer us to the case of Rees v. Lowy, 57 Minn. 381, 59 N. W. 310, wherein the Supreme Court of Minnesota held, among other things, that a leasehold interest in land for more than one year cannot be surrendered any more than it can be created by parol. If this question were before us, the doctrine asserted by that court might be of valuable assistance, but the question is not presented here; nor was the question presented to the Minnesota court under the same conditions as those set forth in the record of this case.

3. As a general proposition of law it may be stated that until the debtor receives notice of an assignment or until he has knowledge of such facts concerning the same as are sufficient to put him on inquiry, he may deal with the assignor as though no assignment had been made. (Hogan v. Black, 66 Cal. 41, 4 Pac. 943; Leahi v. Dugdale, 34 Mo. 99; Deach v. Perry, 53 Hun, 638, 6 N. Y. Supp. 940; Com. v. Sides, 176 Pa. 616, 35 Atl. 136; Merrick v. Hulbert, 15 Ill. App. 606; Laughlin v. District of Columbia, 116 U. S. 485, 6 Sup. Ct. 472, 29 L. Ed. 701; De Baun v. Davis, 1 Ky. Op. 281.)

4. Concluding, therefore, that the record fails to establish notice, either actual or constructive, to respondents, it follows that respondents here were entitled to interpose and establish such defense or defenses as would have been maintainable had the action been brought by the lessor, Mrs. Shannon.

5. In our judgment, the record discloses acts and

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conduct on the part of Mrs. Shannon, the lessor and assignor, as to amply support the finding of the trial court to the effect that she had consented to a release of respondents from their obligations under the lease. The record here discloses many things which go to refute the idea that either the lessor, Mrs. Shannon, or her assignee, the Washoe County Bank, continued to regard respondents as her lessees after the date of the last payment of rent by respondents. Sasselli, who testifies to having taken over the lease and premises from respondents, relates in his testimony of his having gone to the private residence of G. H. Taylor, the cashier of the bank, and there making payment on the rent. He says he complained to Taylor of the amount of the rent and told him he could not pay it. He says he asked for a reduction of the rent and that the cashier replied to the effect that he would take the matter up with Mrs. Shannon. There was no mention made at that time by Taylor as to respondents, the original lessors, nor do they appear to have been referred to or looked to by the cashier on the question of reduction or change of terms.

In a letter addressed to one of the respondents, the lessor declared him as her agent to negotiate with other parties to lease the premises. In another communication to the same party, she spoke of letting the premises to others on terms different from those contained in the original lease to respondents. The testimony of the witness Yori, which is uncontradicted, establishes communication between himself and the lessor relative to his becoming a lessee of the ranch independent of respondents. The testimony of Sasselli and Yori establishes that the former left the premises in question and the latter, after communicating by letter with Mrs. Shannon, went on the premises in May, 1910. During the interim between the departure of Sasselli and the occupancy of ...

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