Noah v. Metzker
Noah v. Metzker
Opinion of the Court
By the Court,
Billie Jane Noah, a lessor of commercial real property in Reno, commenced suit against several defendants including J. K. Metzker and John Dermody, two of the three original lessees thereof.
The relevant facts are these: On April 1, 1960 Noah, as lessor, entered into a lease indenture with C. W. Baker, Metzker and Dermody, as lessees. Article 6 provided that the lessor would subordinate her interest in the property to a contemplated encumbrance to be placed thereon as security for funds to be advanced by a responsible lender to finance the construction of a building. It also provided that the lessees would assume personal liability for repayment of the secured loan.
Article 15 allowed the lessees to assign their interest in the
On September 13, 1960 Metzker assigned his interest in the lease to Sterling Builders, Inc., and on November 14, 1961 Dermody assigned his interest to the same corporation. On the dates of those assignments the lessees were not in default in any of their obligations under the lease. On October 21, 1963 counsel for Metzker and Dermody mailed executed originals of their assignments to counsel for lessor, and one day later the Metzker and Dermody assignments were recorded.
On November 4, 1963 Noah, lessor, and Court Corporation, then the lessee, executed a deed of trust as trustors to Land Title Insurance Agency, Inc., trustee, in favor of First National Bank of Nevada, beneficiary, as security for a construction loan of $793,000 advanced by the bank. The lessor subordinated her interest in the property to the lien of the deed of trust. Thereafter, the lessee defaulted upon its lease obligations to lessor and upon its promissory note to the bank. The bank subsequently foreclosed on the deed of trust and purchased the property at the trustee’s sale.
1. It is the lessor’s contention that the lease assignments by Metzker and Dermody are void since executed originals were not delivered to her personally, and payment of the ad valorem tax was in default-at the time of recordation of the assignments. The contention is not sound. Executed originals of the assignments were mailed to the lessor’s attorney and received by him in the regular course of mail. Notice to the
2. Since the assignments were effective, Metzker and Dermody were relieved from all further liability under the lease by the express provision of Article 15. Such a provision is valid and operates to defeat the general rule that the original lessees shall remain liable on the lease covenants. Bornel, Inc. v. City Products Corporation, 432 P.2d 489 (Wyo. 1967); Rose v. Love, 368 S.W.2d 889 (Tex.Civ.App. 1963); cf. S. S. Kresge Co. v. Sears, 87 F.2d 135 (1 Cir. 1936).
Affirmed.
Billie Jane Noah died pending this appeal and the executor of her estate was substituted as the appellant.
Other assignments (Sterling Builders, Inc. to C. W. Baker, and C. W. Baker to Court Corporation) also were mailed to counsel for lessor.
That proviso: “. . . at the date of such . . . assignment the said lessees . . . shall have paid all . . . taxes . . . which shall have accrued under this lease at the date of any such . . . assignment. . . .”
Case-law data current through December 31, 2025. Source: CourtListener bulk data.