Farmers Bk. of Billings v. Oetker
| Decision Date | 25 September 1930 |
| Docket Number | No. 4816.,4816. |
| Citation | 31 S.W.2d 568 |
| Parties | FARMERS BANK OF BILLINGS, RESPONDENT, v. A.E. OETKER, APPELLANT. |
| Court | Missouri Court of Appeals |
Appeal from the Circuit Court of Christian County. — Hon. R.L. Gideon, Judge.
AFFIRMED.
Moore & Moore for appellant.
(1) To constitute a novation by substitution of creditors or debtors there must be a mutual agreement among three or more parties, whereby a debtor, in consideration of being discharged, contracts a new obligation in favor of a new creditor. 29 Cyc. 1131; Lee v. Porter, 18 Mo. App. 377. There must also be a previous obligation to be released. Linneman v. Moross, 57 N.W. 103. (2) The assent of the parties, to such novation, need not be shown by express words but the same may be implied from the facts and circumstances. Snyder v. Kirthley, 35 Mo. 423. The discharge of the original debt is a sufficient consideration for the contract of novation. Badger Lumber Co. v. Melferst, 59 Mo. App. 437. Legacies, judgments, mortgages, guarantees and similar accessories are as much the subjects of novation as simple contract debts. 29 Cyc. 1134. Also see Nickerson v. Merc. Co., 90 Mo. App. 336; 74 Mo. App. 462; 60 Mo. App. 34. Nor does a contract of novation, relating to written instruments or otherwise, have to be in writing. Wilson v. Vass, 54 Mo. App. 221; Lee v. Porter, 18 Mo. App. 377. For late cases on the question of novation, see Bolch v. Coal Co., 220 Mo. App. 59; Babbit v. Railroad, 149 Mo. App. 439, l.c. 455.
Gorden J. Massey and Fred W. Barrett for respondent.
(1) A novation is not established unless it is shown by the evidence that the original debtor is discharged. In a suit against the first debtor, where novation is claimed, the burden is upon him to establish the novation. Elliott v. Qualls, 149 Mo. App. 482; Cutting v. Whittmore, 54 Atl. 1098; Babbit v. Railroad, 149 Mo. App. 439, and novation of a debt is never presumed. Hicksville Handle Co. v. Herb, 226 S.W. 63. (2) The essence of novation is the agreement of all three parties to the agreement and the substitution of a new debtor for old and extinguishment of old debt. Lumber Co. v. Meffert, 59 Mo. App. 437, 441; Hicksville Handle Co. v. Herb, 226 S.W. 63; Elliott v. Qualls, 149 Mo. App. 482; Bank of Senath v. Douglas, 178 Mo. App. 664. (3) The verdict is sufficient and will not be set aside if after judgment is rendered thereon such judgment is based on the verdict and from the whole record it can be ascertained what the jury intended. Goff v. Hines, 229 S.W. 221; Pierson-Lathrop Grain Co. v. Britton, 209 S.W. 331; Gurley v. O'Dwyer, 61 Mo. App. 348; Hays v. Hogan, 200 S.W. 286; Shuff v. Kansas City, 282 S.W. 128.
This case originated in a justice of the peace court in Christian county upon a petition filed with a note attached, signed by the defendant, dated February 23, 1927, for $980 payable on demand to the plaintiff at its office in Billings, Missouri, with interest from date until paid, interest to be paid semi-annually at the rate of eight per cent per annum, if not paid to be compounded annually. Demand protest and notice of non-payment waived by maker and endorser, with an agreement therein to pay an attorneys fee of ten per cent of the amount due if placed in the hands of an attorney for collection. The petition alleged that on March 3, 1927, there was paid on said note the sum of $780 leaving a balance of $200 unpaid on the principal, and prayed for judgment for the unpaid balance of the principal, for the interest due, and for the ten per cent attorney's fee.
The defendant filed the following answer, caption omitted:
In the trial before the justice of the peace the plaintiff prevailed, and an appeal was taken to the circuit court, where at the February, 1929, term, in a trial before a jury, a verdict, directed by the trial court, was returned for the plaintiff, and judgment entered and by proper steps an appeal was taken to this court.
The plaintiff to sustain the issues, introduced the note, showing the date, the amount, the credit thereon, its provisions for interest and attorney's fee, with the signature of the defendant and rested.
The defendant offered the collateral agreement attached to the envelope note, which provided that the maker had attached certain collateral security, but failed to describe it, except to say: "The above collateral has a market value of $3400." This agreement provided for supplying additional security if demanded, and that if the note were assigned the collateral might go with it, and provided for a sale of the collateral if necessary to extinguish the note. The collateral agreement was also signed by the defendant.
The theory of the defense was that the plaintiff agreed to release the defendant from liability on the note and to look to one Frank L. Stowe for payment of the balance due on the note. It was contended that by releasing the defendant and accepting Stowe as payor, that this constituted a novation, and the case was tried on that theory alone. The plaintiff contended that the answer did not sufficiently plead novation, but the defendant insisted that since the cause originated in a justice of the peace court that it was not necessary to definitely plead such an answer, and the trial court sustained defendant's contention in that respect.
After the evidence was introduced by both parties, the plaintiff submitted the following motion for a directed verdict:
"Comes now the plaintiff at the close of defendant's evidence and moves the court to instruct the jury that under all the evidence the verdict must be for the plaintiff in the sum of $200 the balance due on said note, together with interest thereon from February 23, 1927, at the rate of eight per cent per annum compounded annually, together with ten per cent of the amount thus found, as attorney's fee."
This motion was sustained by the court, and the following verdict was returned:
"We, the jury, find the issues for the plaintiff in the sum of $200 principal and (illegible) $34 interest and attorney's fees in the sum of $234 as principal and interest and $23.40 attorney's fees." And in keeping with the verdict the court entered judgment for $257.40, being $200 for principal, $34 interest and $23.40 attorney's fee.
The defendant contends that the court erred in sustaining plaintiff's motion for a directed verdict, instead of submitting to the jury the question of whether an agreement was entered into wherein Stowe was substituted for the defendant and the defendant released from the payment of this debt. The contention was also made that the verdict, because of its peculiar wording, was insufficient upon which to base a judgment.
Regarding a novation, in 46 C.J., at page 573, we find this language:
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