Farnow v. Las Vegas Aerie No. 1213, Fraternal Order of Eagles Ex Rel. Cravens

I dissent. For the following reasons I think the judgment and order should be affirmed:

This action was instituted by respondent for the restitution of a two-story building belonging to it in the business district of the City of Las Vegas, Clark County, Nevada, and to recover rental for the use and occupancy of the ground floor by defendant, since January 1, 1946. Issues were joined and the case was tried on the merits in the court below, sitting without a jury. Judgment was entered in the court below awarding plaintiff restitution of its entire premises, including the ground floor, and awarding the plaintiff judgment for $500 per month rental for the use and occupancy of the ground floor by defendant, which sum the court below found to be the reasonable value of the use by defendant of the ground floor of the premises.

The complaint in the action is in the usual form in an action for forcible entry and detainer under the chapter of the Civil Practice Act relating thereto, the same being sections 9132-9152, N.C.L. 1929.

The appellant in his opening brief specifies twenty-two assignments of error; subdivision 1 of assignment of error No. 6 seeks to question the jurisdiction of this court and will therefore be determined first. It is as follows: "That there is no real person, natural or artificial, as party plaintiff in this action and that said action should be dismissed." Appellant tendered the same in the court below as his proposed additional conclusion of law No. 1, and the trial court refused to adopt the same. In support of said assignment and of appellant's proposed additional conclusion of law No. 1, he relies in his brief chiefly upon the decision of this court in the case of Proprietors of Mexican Mill v. Yellow Jacket Silver Min. Co.,4 Nev. 40, 97 Am.Dec. 510. I do not think the case is in point. The complaint in this case specifically alleges that the trustees named therein and in the caption are the duly constituted Board of Trustees of the Las Vegas Aerie No. 1213, Fraternal Order of Eagles, and that said trustees hold in trust the premises involved in this litigation. These allegations were adopted by the trial court as findings of fact Nos. 1 and 3. The evidence to support the said findings is uncontradicted in this record, and in addition thereto the trial court found as a fact in finding No. 19, which, it may be noted, was proposed by appellant: "That plaintiff is an unincorporated, voluntary association formed for the purpose of uniting fraternally for mutual benefit, protection, improvement, and association generally, male members of the Caucasian race of sound body and health, of good moral character, who believe in a Supreme Being, and who are not less than eighteen nor more than fifty years of age."

This court held, in the case of Branson v. Industrial Workers of the World, 30 Nev. 270, 95 P. 354, that an action may be instituted by or against a voluntary or unincorporated organization, where the members comprising the same are numerous, by simply joining as defendants a few natural persons, members of the organization, sufficient to represent and protect the interests of the entire membership, and the few may be made plaintiffs or defendants for all.

I may also cite Liederkranz Singing Soc. of Lancaster v. Germania Turn Verein of Lancaster, 163 Pa. 265, 29 A. 918, 43 Am. St. Rep. 798. I am of the opinion that the complaint clearly shows with sufficient certainty the real capacity of the party plaintiff. Owens et al. v. Dudley, Mayor, et al., 162 Cal. 422,122 P. 1087. Section 8634, N.C.L. 1929, expressly provides, among other things, that a plaintiff suing in a "representative" capacity need not state the facts constituting such capacity or relation, but may aver the same generally or as a legal conclusion. Moreover, I may note that in the purported lease set forth by the defendant in his answer, and under which he claims the right to the possession of the premises involved, the contracting parties are referred to in the following manner: "This lease, made and entered into this 28th day of November, 1945, by and between Las Vegas Aerie No. 1213, Fraternal Order of Eagles, acting by and through its duly constituted Board of Trustees, party of the first part, and Harry D. Farnow, hereinafter called the party of the second part." As I view the matter, the action was properly instituted by the trustees for the use and benefit of the local Aerie.

The record in this case does not reveal that the point was raised in the court below in any manner other than by demurrer interposed by appellant, ground 2 of which alleges: "That the plaintiff does not have legal capacity to sue in that it does not appear that plaintiff is a natural or artificial entity." It was pointed out by this court in the case of Proprietors of Mexican Mill v. Yellow Jacket Silver Mining Company, supra; a demurrer for "defect of parties plaintiff" or "that plaintiff has not legal capacity to sue" will not reach the defect contended for by appellant.

Appellant states in his opening brief "the first four assignments of error come under the same heading and will be discussed together." I likewise so consider and dispose of same.

The question so presented involved chiefly the admissibility of the oral testimony of certain witnesses at the trial of this action, and whether or not the testimony so offered and received was within the scope of the pleadings. The written decision of the learned trial judge who admitted the testimony and who had the benefit of presiding at the trial and hearing the testimony at first hand, and then decided this case adversely to appellant, was incorporated in the bill of exceptions, and therefore we have the benefit of his reasoning and views expressed in said written decision and I believe it states the facts of this litigation clearly and succinctly and states the substance of appellant's first four assignments of error and decides the same adversely to appellant, and I think correctly so. I quote the written decision:

"This action is brought by Las Vegas Aerie No. 1213, Fraternal Order of Eagles, by its trustees, against Harry D. Farnow, for the restitution of its two-story building and for rentals. The plaintiff is a voluntary, unincorporated association. Of the status of such associations, it is stated in 38 Am.Jur., p. 448, section 7, that they are not partnerships for they do not hold themselves out as such, their obligations standing on the ground of principal and agent.

"The plaintiff's complaint alleges that on January 7th, 1941, the ground floor of the premises was leased to one George M. Crone and Boulder Drug Company, a corporation, for a term of five years, and that Crone and the company, on or about September 1, 1943, with plaintiff's consent, assigned the lease to defendant; That paragraph 18 of the lease embodies an option to the lessees to hold and enjoy the premises for an additional term of five years, at a monthly rental to be agreed upon, upon the giving of notice of the exercise of such option; that the defendant has never given such notice, but held over under the terms of the lease; that on February 28th, 1946, plaintiff served defendant with notice of termination of the lease and demand for possession; that article 33, section 3, of the constitution for subordinate aeries of the Fraternal Order of Eagles requires that said lease be submitted to the Grand Worthy President of the order for his approval, and that it has never been so submitted. The defendant alleges that he gave due notice of the exercise of the option and that subsequently he and the plaintiff reached an agreement as to the monthly rental for such additional term as set forth in a new lease, dated November 28th, 1945, copy being attached to the Answer; and that he and his predecessors paid all rentals required by the original lease, and that he had paid or tendered all rentals required by the extension of said lease. Defendant also alleges an estoppel on the part of the plaintiff to deny the due execution of the original lease and the extension thereof.

"The plaintiff, in its pleadings, does not deny the authority of its trustees to negotiate for and execute on its behalf the original lease and the extension thereof, subject to the approval of the Grand Worthy President; but it contends that neither the original nor the extension ever became effective because neither has ever been approved by the Grand Worthy President, and that, in the absence of such approval, the acts of the trustees in the execution of the lease and the extension are a nullity.

"The complaint, paragraph V, alleges that plaintiff demised and let the ground floor to Crone and the Drug Company, but alleges that the option was not exercised, and, further, that the lease was never approved by the Grand Worthy President. The defendant, in his Answer, Paragraph 3, alleges that the plaintiff and defendant ``reached an agreement as to the monthly rental for said additional term, all as set forth in that certain lease dated November 28, 1945, a copy of which is hereto attached, marked Exhibit 1, and made a part hereof.' In its reply, paragraph 11, the plaintiff alleges that ``plaintiff and defendant entered into an agreement, defendant's Exhibit 1,' and further that the Grand President has not approved the new lease. At the trial, plaintiff urged that there was a lack of authority on the part of the trustees to bind the local lodge, and that, especially as to the new lease, no such authority had been given, and that the local lodge has disapproved of the new lease. Upon the state of the pleadings as above described, no issue is presented as to the authority of the trustees to act for the local lodge in negotiating, signing and delivery of the new lease and extension, subject to the approval of the Grand Worthy President.

"As to the validity of the original lease, the court doubts if the authority of the local lodge to execute the lease is affected by the terms of the constitution for subordinate lodges, where such terms are unknown to the lessee. But whether known or not, the court takes the view that, on the evidence, both estoppel and ratification apply to and confirm the validity of the original lease and option, notwithstanding the lack of approval. The court concludes that the original lease and option were valid.

"The plaintiff contends that there was no complete and unconditional delivery of the new lease to the defendant. Delivery usually consists of the physical handing over of the document with the intent that it shall become immediately effective as to the rights therein set forth. 17 C.J.S., Contracts, sec. 64 (13 C.J., sec. 131); 26 C.J.S., Deeds, sec. 41 (18 C.J., sec. 95). Relative to the signing, Mr. Farnow testified (deposition, p. 15), ``So we proceeded to sign the document and then we shook hands.' Mr. Blad testified (deposition p. 8), ``Yes, the night we signed the lease I told him, ``now if the Grand Lodge O.K.'s this, it will be all right.' That was after we signed it, yes, sir.' Mr. Ballinger testified (deposition, p. 12), ``Well, when we signed the contract, Brother Blad spoke if the Grand Lodge O.K.'d the lease, it would be O.K. — That's all I know.' He testified at the trial that Blad's statement was made after the lease was signed. Mr. Craven testified (deposition, p. 22) that Mr. Blad said ``of course you understand that this will have to be O.K.'d by the Grand Lodge.' At the trial, he testified, in substance, that just as Blad started to hand him the lease, he spoke of the necessity of approval by the Grand Lodge. The proof shows that the delivery of the signed lease was substantially concurrent with Blad's statement relative to approval. This established a condition precedent to the effectiveness of the new lease. The proofs show that this condition has never been fulfilled. The court therefore concludes that the new lease is ineffectual either for the commencement of a new term of tenancy or as an agreement upon the amount of rental for an extension of the original lease on the ground floor, under the option. Defendant exercised his option by giving due notice thereof to the plaintiff. He met with the trustees for the purpose of negotiating as to the amount of rental for the extended term, but they were diverted from that subject and took up the negotiating of terms for the leasing of the entire building. No agreement was ever arrived at between them as to the amount of rental for the ground floor, the only part of the building covered by the option.

"If the option is still in force, does it give to the defendant a present right of possession of the ground floor of the premises. Paragraph 9 of the original lease provides as follows:

"``9. As soon as said option is exercised, the said parties hereto shall, if they cannot agree upon the rental for said extended term within five (5) days after notice is given of the exercise of said option, immediately appoint said board of arbitrators, who shall agree upon and fix the rental for such extended term prior to the commencement of such extended term, or else said extended term shall operate.

"``Time shall be of the essence of this agreement, and each and every part thereof.'

"The court can find nothing in the foregoing language, or in paragraph 18 of the lease, from which it can be inferred that the term of the lease is extended pending the settlement of the amount of rental under the terms of the option.

"The plaintiff is entitled to judgment for the restitution of the premises and for rental measured by the reasonable value of the use. From the proofs presented, the court takes the view that $500.00 per month is the reasonable value of the use of the ground floor of the premises. The plaintiff is entitled to judgment for rental at the rate of $500.00 per month for the period from January 1, 1946, to the date of judgment; and for costs of suit. Our Supreme Court has held that the law does not justify the awarding of treble rent. Regan v. King, 39 Nev. 216,217, 156 P. 688."

I may also note from the record a portion of the testimony of the appellant at the trial of this case in the court below, in answer to questions by respondent's counsel:

"Q. Did you make a statement to them (trustees) at that meeting, that if you didn't get a gambling license that you wouldn't have any use for the second floor of the building? A. I did make such a remark. It was brought up by Mr. Cravens (one of the trustees) who thought that the lease should read that if I didn't get my gambling license that I wouldn't be permitted to occupy the upper floor for the $500.00 figure.

"Q. Was this at the last meeting? A. I think it was either the last or the next to the last. It was one of the two, and I told them, ``Well, that could be put in there but it is going to necessitate having this rewritten,' and I said, ``I give you my word that I have no need for the upper floor if I don't get a gambling license.' Mr. Blad (one of the trustees) said, ``Well, your word is good enough for me.' Mr. Cravens said, ``Well, I suppose after all we have eight hundred members in our organization and if you break your word we will go ahead and boycott you,' and I said, ``I'll stay by my word'."

I believe it is clear from appellant's own testimony that the written instrument was subject to several conditions before it would become effective, and that further negotiations were necessary before there was a meeting of the minds as to just what particular portion of the premises was to be leased, and at what consideration.

I believe the rule to be well established that parol evidence is admissible, not necessarily to vary the terms of a written instrument, but to establish any condition precedent to the effectiveness of such written instrument, or to the same effect that there was a conditional delivery. Wigmore on Evidence, 3d Ed., vol. 10, at p. 7, subdivision 5, and authorities there cited. We also cite the decision of this court in Allenbach et al., v. Ridenour, et al., 51 Nev. 437, 279 P. 32; and Saunders v. Stewart, 7 Nev. 200.

There is substantial evidence in the record to support the decision of the trial court and to support the findings of fact and conclusions of law, and as this court has repeatedly held, findings of fact and conclusions of law based upon substantial evidence will not be disturbed upon appeal. Cut Rate Drug Co. v. Scott Gilbert Co., 54 Nev. 407, 20 P.2d 651; Ward v. Scheeline Banking Trust Co., 54 Nev. 442, 22 P.2d 358. I am therefore satisfied that the various assignments of error asserting the lack of evidence to support the findings of fact and conclusions of law are not well taken.

The appellant contends in his motion for a new trial in the court below, and in various assignments of error in this court, that the respondent in its reply admits the execution of the renewal lease and that hence the trial court's conclusion of law that the new lease was signed subject to the approval of the Grand Lodge is contrary to said admission and outside the issues. It is alleged in the reply in response to defendant's answer that the plaintiff, respondent's trustees, informed the defendant, appellant, that they had no authority to enter into an agreement disposing of its Lodge Hall on the second floor of its building, without approval of the Grand Lodge, and the restrictive requirements of the bylaws were also pleaded, and also appear in the bill of particulars which was furnished to the appellant by respondent, and in which there is set forth the time and place of giving said information to the appellant. The oral testimony fully supports these allegations.

I take the same view as did the trial court that these pleadings on the part of respondent sufficiently apprised the appellant of respondent's contention that the second lease was void and ineffectual due to the lack of approval on the part of the Grand Lodge, and that appellant had been so informed by respondent in due time, and that the negotiations and actions of the Local Lodge so far as they pertain to the execution of the second lease, were subject to the approval of the Grand Lodge. It is conceded that the Grand Lodge refused to approve of the second lease in question and expressly instructed the Local Lodge to disapprove the same, which the Local Lodge did by vote of its members.

Appellant assigns as error No. 14 the introduction in evidence of respondent's Exhibit "C," being the constitution for subordinate aeries of 1944, and respondent's Exhibit "E" constitution for subordinate aeries of 1939. The documents were identified by the secretary of the Local Aerie as having been sent him by the Grand Lodge for government of the Local Lodge, and the secretary testified that said constitution of 1944 was the constitution under which the Local Lodge conducted its affairs and was open for examination by any member of the Lodge or by other parties dealing with the Lodge. The only pertinent part of the document insofar as this case is concerned, is section 3 of Article 33 thereof which was pleaded in full by respondent in its complaint, and which section provides:

"Article 33. "Section 3. Sale and Disposition of Real Estate.

"No real estate which is owned or acquired by any subordinate aerie, or by any person or body, in trust, constructive or otherwise, for the use of such aerie, may be sold, exchanged, conveyed, mortgaged or encumbered, by trust deed or otherwise, by such aerie unless the details of the subject matter thereof together with the pertinent, relevant and material facts warranting such sale, exchange, mortgage, encumbrance or conveyance of real estate shall first have been submitted in writing to the Grand Worthy President, for the purpose of securing the recommendation of the Board of Grand Trustees thereon and the written approval of the Grand Worthy President, and any action taken by any subordinate Aerie or the officers thereof, without first securing such approval shall be invalid and ineffective for any purpose. The proceeds of such sale, exchange, mortgage, encumbrance or conveyance shall be placed in the proper fund of the Aerie."

Sections 1545, 1546, N.C.L. 1929, provide that a leasehold estate is an interest in real property, and it was so held by this court in the case of Adams v. Smith, 19 Nev. 259, 272,9 P. 337, 10 P. 353. I think the restrictive provisions in said section 3, article 33, were made known to the appellant by the trustees themselves, and therefore conclude that there was in fact sufficient foundation laid insofar as the said section is concerned.

As I am satisfied that the trial court was correct in holding with the principles of estoppel and ratification, while applying to the original lease did not apply to the renewal lease, I am unable to concur with the majority opinion that the respondents were estopped from attacking the validity of the renewal lease. By reason of the constant adherence of this court to the rule that the findings of the trial court will not be disturbed where there is any substantial evidence to sustain the same, I am also unable to concur in the conclusion that no condition precedent was established with reference to the effectiveness of the renewal lease, nor do I find anything amounting to prejudicial error in any of the other assignments. I am therefore of the opinion that the judgment and order denying a new trial should be affirmed.