Bulletin: OR000006

Date:
November 29, 1989
To:
All Oregon Agents
RE:
Assignment of Contract

Dear Associates:

The Oregon Court of Appeals has ruled that a lender obtained nothing by an assignee's subsequent assignment of his interest in a vendor's interest in a land purchase contract where the assignee had only a security interest in the contract and did not assign the underlying debt that it secured. Futrell v. Wagner , 96 Or. App 27, 771 P. 2d 292 (1989).

Futrell sold property under a land sale contract to Waibel. Futrell borrowed $200,000 from Busby and assigned his interest in the Waibel contract to Busby as security. Busby then borrowed $100,000 from Houston and assigned his assignee's interest in the Waibel contract to Houston as security. There was no assignment to Houston of the $200,000 Futrell to Busby promissory note. Busby defaulted on the $100,000 loan to Houston.

Houston was without security. The court of appeals held that the "assignment of a security interest without the assignment of the debt that it secures yields the assignee nothing."

THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER  AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.

References

Bulletins Replaced:
None
Related Bulletins:
None
Underwriting Manual:
3.52 Contracts For Sale
Exceptions Manual:
None
Forms:
None