Court Opinion

ID: 8043183
Source: CourtListenerOpinion
Date Created: 2022-09-09 03:43:51.919089+00
Date Added: 2024-06-11T16:37:23.847098
License: Public Domain

McNamee, J.,
concurring:
I concur in the result.
Appellants recovered judgment against Hillman and another. To satisfy said judgment they levied upon land in Ormsby County purportedly owned by Hillman. At the execution sale of said land it was announced in the presence of respondent Autrand by Hillman that he did not own the land and it otherwise came to the attention of the bidders that there was some doubt as to the title thereto. Nevertheless, Autrand made the highest bid therefor in the sum of $1,200 and the sheriff announced that the land was sold to him for said sum. The sheriff accepted at that time from respondents their check in the sum of $1,200 which he endorsed in blank and mailed to appellants in partial satisfaction of their judgment. The check was dishonored upon presentation for payment, because respondents had stopped payment, and this suit on the check was thereupon commenced against respondents.
In their answer to the complaint respondents denied that there was any consideration for the check and alleged fraud as an affirmative defense.
*454The only affirmative allegations of respondents pertaining to their defenses of lack of consideration and fraud consist of the averments that the check was given by them in payment of their bid at an execution sale of certain real property which, at the time of the sale, was encumbered by a deed of trust and in which property the judgment debtor had no interest subject to sale, and that therefore when they made the highest bid and gave their check to the sheriff in the amount thereof they could receive no interest in the property by a subsequent delivery of a certificate of sale or sheriff’s deed. The fraud consists of allegations that appellants by fraudulent representations induced respondents to make the highest bid.
The evidence presented by appellants consisted of the testimony of the sheriff who identified the check and related that he received it from Autrand and endorsed and delivered it to appellants in connection with the sale of the property in question. Appellant Stewart testified that he received the check and that it was not paid upon presentment; that he knew the check was given by respondent Autrand to the sheriff at the time of the sale of the property to Autrand; that at the sale both he and Autrand were bidding; that the county assessor had told him that Cloy C. Hillman, the judgment debtor, was the owner, but that he had not otherwise checked the title of the property prior to the sale; that he heard a man named Kolb state to the general crowd at the time of the sale that “I hold a trust deed to this property,” that Hillman stated at that time, “I don’t even own the property,” to which Stewart replied, “Well, we’ll see”; that thereupon the bidding took place and after several bids the property was sold to Autrand; and that Stewart left immediately after the sale and did not see the delivery of the check to the sheriff.
Upon such evidence, the appellants rested, and the lower court granted respondents’ motion for an involuntary dismissal of the action. The record discloses that the order of dismissal was not based upon the defenses of either fraud or lack of consideration as *455specifically alleged. Indeed it could not have been, because the evidence to no extent supported said specific allegations. The court based its decision upon the ground that the sheriff in accepting a check in lieu of cash contrary to law, which check was later dishonored, had as his sole remedy that provided by NRS 21.160, to wit, a proceeding against Autrand to recover any loss which might result from a resale of the property; that appellants took the check with knowledge of the sheriff’s sole remedy and that, therefore, they were not entitled to recover on the check in an action against respondents, the makers thereof. It is to be noted that the lower court, in deciding that NRS 21.160 provides the sole remedy available to the sheriff when a purchaser refuses to pay the amount of his bid, is silent as to the rights, if any, of the judgment creditor under such circumstances, as distinguished from the sheriff, and particularly of a judgment creditor in the position of the appellants who have received from the highest bidder, through the sheriff as intermediary, a negotiable instrument for the amount bid. Whether the provisions of NRS 21.160 would constitute a defense to the check if properly pleaded is a question which, because of the present state of the record, should not now concern this court.
The action of the lower court in dismissing the complaint based upon a defense outside the pleadings was erroneous even though it resulted from respondents’ motion to dismiss, because appellants being holders of a negotiable instrument valid on its face are deemed prima facie to be holders in due course. NRS 92.066. If in fact they are holders in due course, they would be entitled to recover on the instrument. Respondents have not yet had the opportunity to present evidence in support of their defenses of fraud and lack of consideration as alleged which they are entitled to do in order to attempt to rebut said presumption contained in NRS 92.066. A new trial, therefore, must be ordered. Respondents thereupon would be afforded an opportunity to amend their answer, if they so desire, so as to plead any further defense which might be available to them under NRS 21.160.