## Facts

- Ralph Herrmann wrote a $10,000 check payable to the Ormsby House, a Nevada hotel-casino, to replace earlier counter checks used to obtain gaming chips.
- The check was dishonored for insufficient funds.
- The casino assigned the check to Sea Air Support, Inc., a collection agency, to take legal action to collect.
- Sea Air sued Herrmann to recover $10,567 (the check amount plus additional sums).
- The obligation represented repayment of money advanced for gaming purposes.

## Issues

1. Whether Nevada law treats a check given to repay money advanced for gaming as void and unenforceable.
2. Whether an assignee collection agency can enforce such a check as a holder in due course under Nevada’s U.C.C.

## Decision

- The Nevada Supreme Court affirmed dismissal of Sea Air’s collection action.
- The court held the check was drawn to repay money knowingly advanced for gaming and was therefore void and unenforceable in Nevada under the Statute of Anne as incorporated into Nevada law.
- The court rejected Sea Air’s holder-in-due-course claim because Sea Air did not take the check for value and took it with notice of defenses, including dishonor and the gambling nature of the underlying obligation.
- The court stated any change to Nevada’s rule against enforcement of gambling debts must come from the legislature.

## Legal Principles

- Nevada incorporates the common law, including the Statute of 9 Anne, c. 14, § 1, absent conflicting statutory or constitutional provisions; instruments given to repay money knowingly advanced for gaming are “utterly void.”
- Under Nevada precedent, legalized gambling does not make gambling debts or instruments given for them judicially enforceable unless the legislature provides otherwise.
- Holder-in-due-course status requires taking an instrument for value, in good faith, and without notice of defenses or dishonor; an assignee who promises only future collection efforts and takes after dishonor with knowledge of defenses does not qualify.
- Where a statute renders an instrument void, the defense defeats enforcement and is not avoided by ordinary negotiable-instrument transfer rules.

## Conclusion

The court held that a check issued to repay money advanced for gambling is void and cannot be collected in Nevada, and that an assignee collection agency taking the dishonored gambling check lacked holder-in-due-course protection and remained subject to the gambling-debt defense.


Sea Air Support, Inc. v. Herrmann, 613 P.2d 413 (Nev. 1980)