Babbitt v. Chicago & A. Ry. Co.

• Decision Date: 07 July 1910
• Citation: 130 S.W. 364,149 Mo. App. 439
• Parties: BABBITT v. CHICAGO & A. RY. CO.
• Court: Missouri Court of Appeals

130 S.W. 364

149 Mo. App. 439

BABBITT v. CHICAGO & A. RY. CO.

Springfield Court of Appeals. Missouri.

July 7, 1910.

Rehearing Denied July 19, 1910.

1. INTEREST (§ 47) — TIME — COMMENCEMENT OF ACTION — "DEMAND."

Rev. St. 1899, § 3705 (Ann. St. 1906, p. 2073), provides for interest "on accounts after they become due and demand of payment is made." A trustee in bankruptcy brought suit on an account against which defendants assert set-offs and in the stipulations filed by the parties was a statement that up to the time of filing the suit defendants had always stood ready and willing to pay the amount claimed in the petition less the amount of the set-offs. Held, that interest should not be allowed plaintiff on the balance due from the date of his appointment as trustee, but should be allowed from the time when suit was brought, as "demand," as used in the statute, is a requisition or request to do a particular thing specified, under a claim of right on the part of the person requesting, and the word "demand" need not be used in making such a legal request; but it is sufficient if any words are used which are understood by both parties to be a demand, or existence of a demand may be shown by circumstantial evidence or inferred from acts and declarations of the parties proven by direct evidence.

2. INTEREST (§ 67) — RECOVERY — BURDEN OF PROOF.

One suing on an account and claiming interest thereon has the burden of proof to show a right to interest by reason of having made the demand required by Rev. St. 1899, § 3705 (Ann. St. 1906, p. 2073), providing that accounts should draw interest after they become due and "demand of payment is made."

3. NOVATION (§ 5) — SUBSTITUTION OF NEW DEBTOR.

A "novation by the substitution of a new debtor" consists of a mutual agreement among three parties, the creditor, his immediate debtor, and the intended new debtor, whereby the liability of the last named is accepted in place of that of the original debtor in discharge of the original debt.

4. NOVATION (§ 12) — EVIDENCE — PRESUMPTION.

A contract of novation will never be presumed, but must be clearly established by evidence of a discharge of the original debt and of an express agreement or acts of the parties clearly showing the intention to work a novation.

5. NOVATION (§ 12) — SUFFICIENCY OF EVIDENCE.

In an action by a trustee in bankruptcy on an account with a railroad company in which defendant asserted a set-off based on a contract with defendant relating to property subsequently transferred to the bankrupt, evidence held insufficient to show a novation under which the bankrupt would be held to have assumed the obligations of the party who contracted with defendant and afterwards assigned all its property to the bankrupt.

Appeal from St. Louis Circuit Court; Robert M. Foster, Judge.

Action by Byron F. Babbitt, trustee, against the Chicago & Alton Railway Company. From a judgment for defendant, plaintiff appeals. Reversed and remanded, with directions to the trial court as to the judgment to be entered.

Bryan & Christie and Alroy S. Phillips, for appellant. Robert & Robert, for respondent.

NIXON, P. J.

This is an appeal from the action of the circuit court in overruling appellant's motion to set aside the finding and judgment and grant a new trial in a suit on an account filed by appellant on January 18, 1908, and tried before the court sitting without a jury on the pleadings and an agreed statement of facts, portions of which, material to the present discussion, will be hereinafter set out.

The petition contains an allegation to the effect that the respondent is indebted to the appellant upon an account for coal sold and delivered to the respondent by the Randolph-Macon Coal Company at respondent's special instance and request between January 2, 1907, and February 23, 1907, amounting to $18,784.75, and that on April 1, 1907, appellant made demand of respondent for the payment thereof. The prayer is for judgment for said amount with interest from the date of the demand. The answer admitted the allegations of the petition, and was to the effect that on February 20, 1907, the Randolph-Macon Coal Company was duly adjudicated a bankrupt, and that on May 10, 1907, appellant was duly appointed and qualified as trustee in bankruptcy of the estate of the bankrupt; that respondent had purchased the coal of the Randolph-Macon Coal Company and agreed to pay for the same; "that it had ever been ready and willing to pay for the said coal, less the amount of said set-offs hereinafter mentioned." Further answering, "denies that the plaintiff demanded the payment of the said amount on April 1, 1907, but charges the fact to be that from the date of the appointment of the trustee for the plaintiff there had been negotiations for settlement between the plaintiff and the defendant, and that the defendant has offered and at all times stood ready and willing to pay said sum of money less the amount of the set-offs and counterclaim hereinafter mentioned." For a first set-off, the answer pleads facts which, if allowed, would entitle respondent to the sum of $3,970.24, under the contract between it and the Coal Creek Coal & Mercantile Company. The second set-off is for $283 due for car service. The third set-off is for $49.50 for coal. The counterclaim is for $6 for car service since the adjudication in bankruptcy. In the agreed statement of facts, the parties admit that the sum of $18,784.75 is due appellant for coal upon the account attached to the petition, and that the respondent is entitled to a set-off in the sum of $339.50 under its second and third set-offs and under its counterclaim. "That up to the filing of the suit in this case, the defendant has always stood ready and willing to pay the amount claimed in the petition, to wit, $18,784.75, less the four amounts claimed in the three set-offs and counterclaim, amounting to $4,308.74."

On May 7, 1904, respondent and the Coal Creek Coal & Mercantile Company entered into the following contract:

"This agreement, made this seventh day of May, A. D. 1904, by and between the Chicago & Alton Railway Company, party of the first part (hereinafter called the railway company), and the Coal Creek Coal & Mercantile Company, a corporation of the state of Missouri, party of the second part (hereinafter called the coal company), witnesseth: That whereas, the party of the second part has applied to the railway company for the construction of a railroad switch track from the main tracks of the railway company to its coal mine, situated near Yates, in the state of Missouri, and the railway company is willing to construct the same, upon the terms and conditions hereinafter set forth: Now, therefore, in consideration of the premises and of the covenants and agreements hereinafter set forth to be kept and performed by each of the parties hereto, it is mutually covenanted and agreed by the parties hereto:

"First. The railway company agrees that it will furnish the necessary track material and lay and construct the railroad switch track upon the premises of the coal company at the place and in the manner shown and marked in red upon the blue print hereto attached and made a part hereof.

"Second. The coal company agrees that it will do all the necessary grading for said track at its own expense, and furnish the necessary right of way therefor.

"Third. The ownership of the ties, rails and any other track material used in the construction of said track, shall remain in the railway company.

"Fourth. The coal company agrees to furnish to the railway company a surety company's bond, satisfactory to the railway company, in the penal sum of $10,000.00, conditioned that the coal company will during the period of three years, commencing on the date the first car load (of 30,000 pounds) of mercantile coal is shipped from its said mine, load and ship over the lines of the railway company not less than 3,300 cars of mercantile coal, it being understood and agreed that the cost of said track is approximately $6,600.00; that the same will be charged to the coal company on the books of the railway company, and a credit will be allowed by the railway company upon the amount so charged of $2.00 per car upon each car of mercantile coal shipped by the coal company over the lines of the railway company to stations other than Yates, Mo. In the event that said coal company shall fail to ship the 3,300 cars of mercantile coal over the lines of the railway company during said period of three years, the coal company covenants and agrees that it will pay the railway company the entire cost of said side track, less the amount credited against such cost at the rate of $2.00 per car for each car of mercantile coal shipped over the lines of the railway company, if there be any such credit. It is mutually understood and agreed by and between the parties hereto that in the event the coal company fails to open its said mine and commence the regular shipment of at least 100 tons of mercantile coal per day on or before June 1, 1905, this contract shall thereupon cease and determine, and the coal company will thereupon pay to the railway company the total cost of said side track. The coal company agrees that it will notify the railway company promptly at the date of the shipment of the first car of mercantile coal under this contract.

"Fifth. On or after three years from the date of the shipment of the first car of mercantile coal over said tracks, the railway company may take up and remove the rails, ties and track material upon giving the coal company thirty days' notice of its intention to so remove the same.

"Sixth. The railway company agrees to keep and maintain said side track in good condition and repair during the life of this contract.

"Seventh. The coal company covenants and agrees to indemnify and save harmless the railway company from any and all damage and expense whatsoever in any manner growing out of the...