Court Opinion

ID: 9679501
Source: CourtListenerOpinion
Date Created: 2023-08-24 06:54:19.952045+00
Date Added: 2024-06-11T18:17:14.140422
License: Public Domain

JOHNSON, Judge
(dissenting).
I dissent.
I strenuously disagree with the majority’s conclusion that the conduct of the bank is sufficient to place this case outside the statute of frauds or that, even if the statute of frauds applies, its requirements are fully satisfied by the written instrument (plaintiff’s exhibit 22) executed on May 26, 1977.
Focusing on the facts of this case, in light of section 160 of the Restatement (Second) of Contracts, I conclude that the “assignment” from Breitbach to uniBank is a mere transfer of rights without delegation of the lessee’s obligations. First, plaintiff’s exhibit no. 3, entitled Assignment of Lease and Consent and Exercise of Option to Extend Lease, in pertinent part states:
That the lessee, Breitbach Auto and Truck Sales Inc., in consideration of one dollar and other good and valuable consideration does hereby assign said lease to uniBank and Trust Company of Coral-ville, Iowa, together with its rights in and to any extention of said lease, commencing July 1, 1977 for five years. And the Lessee Breitbach Truck and Sales Inc., hereby covenants with UniBank and Trust Company of Coralville Iowa to promptly pay said rent, due under said lease and to fulfill the obligations of said lease as required by the term and conditions there, and hold said UniBank and Trust Company harmless therefrom.
The lessor, Barker Development Company, hereby agrees to said extension of said lease, provided that the lessee or its assign are not on default on the terms and conditions of said lease of July 1, 1977, and it is further agreed by Barker Development Company that at the expiration of the initial term of the said lease, that Paul M. Kennedy Jr., will not be liable under the terms and conditions including the payment of rent during the said extention of said lease, commencing July 1, 1971.
Barker Development Company hereby consents to this assignment of said lease to UniBank and Trust Company.
Although this document’s initial assignment clause — “assign said lease” — is composed of general terms and, consequently, is of the type the Restatement considers both a delegation and assignment, we cannot ignore the pervasive use of restrictive terms throughout the remainder of this document. In the same paragraph Breitbach “assign[s] said lease,” it “covenants” to fulfill the “obligations of said lease” and “hold said uniBank and Trust Company harmless therefrom.” By use of this language, Breit-bach expressly retains and withholds from its “assignment” the obligations it has under the lease agreement. This language indicates that there was a mere transfer of rights without a delegation and assumption of obligations. Moreover, in the third paragraph, the lessor, Barker, expressly consents to the above assignment. Having accepted such a restrictive transfer, as written, Barker cannot now complain.
Second, we are not limited to consideration of a single document evidencing both the assignment and the acceptance.1 For *180purpose of satisfying the statute of frauds, it is not necessary that the entire writing be in one instrument or, if more than one instrument is involved, that they be contemporaneous. Morris Furniture v. Broverman, 210 Iowa 946, 950, 230 N.W. 356, 358 (1930). Lee v. Mahoney, 9 Iowa 344, 348 (1859). Resolution of this case requires our consideration of the above document (exhibit no. 3) in light of the surrounding circumstances. Restatement (Second) of Contracts § 160 (Tent. Draft Nos. 1-7, 1973). Plaintiff’s exhibit no. 4, entitled Loan Agreement, states in pertinent part:
SECTION 4. Security Interest. As security for the payment of any and all liabilities, debtor hereby grants to secured party a security interest in security-
In order to create, preserve, attach, perfect, or validate any security interest granted pursuant hereto or to enable secured party to exercise and enforce its rights hereunder or with respect to such security interest, debtor shall, at any time, on demand by secured party:
A. Deliver and pledge to secured party, indorsed [sic] and accompanied by such instruments of assignment and transfer in such form and substance as secured party may request, any and all instruments, documents, and chattel paper secured party may specify in its demand.
B. Give, execute, deliver, file, and record any notice, statement, instrument, document, agreement, or other paper that secured party may demand or request as necessary or desirable.
C. Keep and stamp or otherwise mark any and all documents and chattel paper and the individual books and records of debtor relating to inventory, accounts, and contract rights in such manner as secured party may require.
D.Permit representatives of secured party at any reasonable time to inspect the inventory of debtor and to inspect and make abstracts from the books and records of debtor that pertain to inventory, accounts, contract rights, chattel paper, instruments, and documents, (emphasis added).
This agreement indicates that the assignment was for security of the loan from uniBank to Breitbach. I believe, as the Restatement clearly indicates, that such an “assignment” should not be considered a transfer of both obligations and rights, but must be singularly interpreted as a mere transfer of rights. This conclusion is not weakened by the broad language used by uniBank in its assignment to Hawkland, which, in pertinent part, states:
WHEREAS, also, on July 28, 1976, Breit-bach assigned its interest as Lessee under said lease agreement to the UniBank and Trust Company, Coralville, Iowa (Uni-Bank) with the written consent of Barker given on that date;
NOW THEREFORE, UniBank does hereby further assign its interest as Lessee under said lease agreement to Hawkland Motors, Inc.
Interpreting the second paragraph consistently with all previous documents, I conclude that it refers to the interests, or rights, the bank received from Breitbach and is not indicative of a previous substitution of the assignee (uniBank) for the assignor (Breitbach).
Thus interpreting this “assignment,” I find no basis for holding uniBank liable for the lease obligations for the entire term of the lease and conclude trial court erred in so doing. I thus would reverse and remand this case to trial court for entry of judgment consistent with this dissent.2

. Assignments, of course, must be accepted; and acceptance may be accomplished either by a writing or by conduct. See Berg v. Ridgway, 258 Iowa 640, 140 N.W.2d 95 (1966); Seebur-ger v. Cohen, 215 Iowa 1088, 247 N.W. 292 (1933); State Bank v. Herrick, 214 Iowa 379, 240 N.W. 242 (1932); Pickier v. Mershon, 212 Iowa 447, 236 N.W. 282 (1981).

. I would make no determination with regard to appellant’s concession to liability for the unpaid real estate taxes attributable to the period of time it occupied the premises for the purpose of protecting its collateral but would leave that determination to trial court upon remand.