Greene v. Reed

486 P.2d 222, 15 Ariz. App. 110, 1971 Ariz. App. LEXIS 689
CourtCourt of Appeals of Arizona
DecidedJune 21, 1971
Docket1 CA-CIV 1539
StatusPublished
Cited by7 cases

This text of 486 P.2d 222 (Greene v. Reed) is published on Counsel Stack Legal Research, covering Court of Appeals of Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Greene v. Reed, 486 P.2d 222, 15 Ariz. App. 110, 1971 Ariz. App. LEXIS 689 (Ark. Ct. App. 1971).

Opinion

HATHAWAY, Judge.

Appellant, plaintiff below, sued appellees, defendants below, for the sum of $5,000 allegedly owing to him by virtue of an assignment of a $5,000 security deposit which had been posted for a bail bond written by the bonding company. (The parties hereinafter shall be referred to as they appeared below.) The case was tried to the court, sitting without a jury, and resulted in a judgment in favor of the defendants from which this appeal was taken.

The plaintiff introduced into evidence the following document:

ASSIGNMENT OF FUNDS

April 28, 1968

In consideration of past legal services, and amounts owed therefor, I hereby assign and transfer unto Robert D. Greene the Five Thousand Dollars ($5,000.00) that I posted with Reed Bail Bond, 150 W. Washington St., Phoenix, Arizona on April 7, 1968. Said Five Thousand Dollars ($5,000.00) was deposited in Trust with Reed Bail Bond for the Federal Bond that Reed posted in Tucson, Arizona for Mr. Willoughby. This Assignment is ir-revocable with out the written approval of Robert D. Greene.

s/ Larry Fassler

The above assignment is hereby accepted This 2 day of May, 1968.

Reed Bail Bond By s/ Fred Q. Reed

Subject to Exoneration of $10,000 Bond Posted in behalf of Willoughby in Federal Court of Tucson [hand-written]

s/ Fred Q. Reed s/ Robert D. Greene

The plaintiff also proved that on January 6, 1969, the Willoughby bond had been exonerated and that on February 10, 1969, he had made formal written demand ■ for payment of the $5,000.

The defendants admitted receipt of notice of the assignment, their acceptance of it subject to the exoneration of the Willoughby bond, and that the bond had been exonerated. Their defense to the plaintiff’s claim was that there was no consideration given to the assignor for the assignment; that on December 20, 1968, they had posted a $5,000 bond for one Oldright at the request of the assignor which was forfeited on January 30, 1969, and in accordance with the assignor’s instructions, the $5,000 from the Willoughby bond had been used in payment of the forfeiture of the Oldright bond; and that the plaintiff had no title or interest in the $5,000 since the assignment was executed by the assignor solely to facilitate the handling of the money for the purpose of posting bonds.

At the conclusion of the trial, the trial court made extensive findings of fact and concluded that the defendants were entitled to judgment as a matter of law. It found, *112 inter alia, that at the time of the execution of the assignment, no consideration passed from the plaintiff to the assignor, that the assignor’s purpose in executing the assignment was to transfer the ownership of the money in order to protect it against a tax line because the assignor did not want the money to be subject to a tax lien against him, that at the time the assignor executed the assignment, he did not intend to transfer the complete ownership of the money to the plaintiff but was only putting it in the plaintiff’s name to protect it against a developing tax lien, and that by reason of the fact that the assignment was executed by the assignor to protect the money against a tax lien, it was against public policy, void and of no legal force or effect whatsoever. After judgment was entered, the defendants filed a motion to amend that pleading to conform to the evidence by the addition of a paragraph asserting that the assignment was executed to protect the $5,000 against a tax lien, and was an attempted fraudulent conveyance of the funds, contrary to public policy and therefore void. This motion, over plaintiff’s objection, was granted. The plaintiff, in his opposition to the motion, argued (1) that the evidence did not support the proposed amendment and (2) that even if such issue was tried, it was tried without the _.plaintiff’s consent.

■ ■! • Gn appeal, the plaintiff contends that the , defendants were precluded from raising Í¡.questions as to the consideration for and ■the legality of the assignments and that : parol evidence was improperly admitted as :ito the nature of the transaction. He fur- • ither attacks the trial court’s allowance of ■the post-trial amendment of the pleadings.

We agree with plaintiff that when notice of an assignment is given to and received by the debtor, he then becomes liable .to pay the assignee whether he accepts the assignment or not. General Factors, Inc. v. Beck, 99 Ariz. 337, 409 P.2d 40 (1965); Bank of Yuma v. Arrow Construction Co., 106 Ariz. 582, 480 P.2d 338 (1971); Van Waters & Rogers, Inc. v. Interchange Resources, Inc., 14 Ariz.App. 414, 484 P.2d 26 (1971). However, the courts of this state, as a matter of public policy, will not enforce illegal contracts where both parties are equally at fault. Graham v. Shooke, Ariz., 482 P.2d 446 (1971); Brand v. Elledge, 89 Ariz. 200, 360 P.2d 213 (1961).

A debtor may assert against an assignee all equities or defenses existing against the assignor prior to notice of the assignment and any matters rendering the assignment absolutely invalid or ineffective. 6 C.J.S. Assignments § 132 (1937). As a general rule the question of want of consideration is not available as between the assignee and the debtor. Zurich Insurance Co. v. Grain Dealers Mutual Ins. Co., 169 So.2d 6 (La.App.1964) ; 4 A. Corbin, Contracts § 909 (1951) ; 6 Am.Jur.2d Assignments § 90 (1963). However, the issue of consideration may properly be raised when the validity of the assignment is challenged. Harvey v. Whyte, 158 Cal.App.2d 685, 323 P.2d 162 (1958).

The defendants, both in the trial court and on appeal, took the position that the written assignment had no legal efficacy and was a mere sham. The trial court permitted them to introduce extrinsic evidence to show that the assignment was different from what it purported to be on its face. As between a third party and one of the parties to the contract, parol evidence is properly admitted for this purpose. Collins v. Collins, 46 Ariz. 485, 52 P.2d 1169 (1935). See also Arizona Cotton Ginning Co. v. Nichols, 9 Ariz.App. 493, 454 P.2d 163 (1969) ; Annot, 71 A.L.R.2d 382 § 3 (1960).

We have reviewed the evidence in a light most favorable to support the trial court’s findings and have concluded that the requisite evidentiary support is disclosed by the record. The assignor, Larry Fassler, testified that he gave a blanket assignment to protect the funds. He explained:

“The reason for the assignment was that I was in Mexico. My status in this country was precarious and I wanted that money protected if something happened to me. I didn’t want anything to happen

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Bluebook (online)
486 P.2d 222, 15 Ariz. App. 110, 1971 Ariz. App. LEXIS 689, Counsel Stack Legal Research, https://law.counselstack.com/opinion/greene-v-reed-arizctapp-1971.