Guichard v. Brande

• Decision Date: 31 May 1883
• Citation: 15 N.W. 764,57 Wis. 534
• Parties: GUICHARD v. BRANDE.
• Court: Wisconsin Supreme Court

57 Wis. 534

15 N.W. 764

GUICHARD

v.BRANDE.

Supreme Court of Wisconsin.

Filed May 31, 1883.

Appeal from circuit court, Milwaukee county.

J. V. Quarles, for respondent, Adolph Guichard.

Finches, Lynde & Miller, for appellant, Samuel Y. Brande.

COLE, C. J.

1. We do not see that the doctrine of novation has any just application to the facts of this case, even if that defense had been relied on in answer, as it is not. It is admitted that the defendant collected for the plaintiff $1,156.69 on what is called the Scott mortgage. While this money was in the defendant's possession, the plaintiff saw Thiers, who had an office in the same room with defendant, and had formerly been--if he was not then--defendant's partner, and entered into an arrangement for exchanging this money and other securities for the Pennoyer note and mortgage. This arrangement was made in the absence of the defendant, perhaps without his knowledge at the time, but the money did not actually pass from his possession. The business was transacted by the plaintiff and Thiers alone. There is no fact or circumstance shown which will warrant the assumption that there was an intention to substitute Thiers as the debtor for the defendant, or that the plaintiff agreed to look to Thiers for the payment of the money. This was not the nature of the transaction. But the plaintiff did agree with Thiers to exchange the Ernst securities which he owned, and this money which was then in the defendant's safe, for the Pennoyer note and mortgage.

The arrangement entered into would, doubtless, have had the effect to release the defendant from his liability to account to the plaintiff for the money, had there been no fraud in the transaction. But the Pennoyer note and mortgage were forged and worthless, so that the plaintiff received no consideration for the transfer of his Ernst securities and his claim on the defendant for the money. And though Thiers went through the form of applying that money on the purchase of worthless securities, still the debt or claim for it remained the same. The defendant retained the money, and, unless he is released on some other ground, must account for it. “Novation means simply the substitution of one debtor for another,”--LYON, J., in Lynch v. Austin, 51 Wis. 287, [S. C. 8 N. W. REP. 129,]--or it is the substitution of a new obligation for an old one, which is thereby extinguished. Bronson v. Fitzhugh, 1 Hill, 186. We, therefore, cannot see that there was any novation in the case. Would the transfer of the absolutely void and worthless Pennoyer note and mortgage have the effect in law to extinguish the plaintiff's valid obligation against the defendant? If so, upon what principle? Where there is a novation by the substitution of a new contract for an old one, the new contract must be a valid one upon which the creditor can have his remedy. Hosack v. Rogers, 8 Paige, 238;Clark v. Billings, 59 Ind. 509. For these reasons we think the doctrine of novation has no proper application to the facts of this case.

2. The only defense set up in the answer is payment. That defense is not seriously relied on; certainly it was not sustained by any evidence given on the trial. The matters to show payment would, doubtless, be--if such a defense was seriously urged--the transfer by Thiers to the plaintiff of the forged securities to which we have referred. But it surely requires no argument to sustain the position that a valid obligation cannot be paid or satisfied by transferring forged securities, any more than it could be by being paid in counterfeit coin or the bills of a broken bank. When payment is relied on as a defense, the defendant must prove the payment of money, or something accepted in its stead. If Thiers had transferred valid securities, the transaction would be regarded in law as equivalent to actual payment. But while this defense is really the only one set up in the answer, it is not pressed, therefore need not further be considered.

3. The real defense relied on to defeat a recovery is an estoppel. It is insisted that upon the facts disclosed the plaintiff is estopped from asserting or claiming that the defendant owes him the Scott collection. It is true, no estoppel was set up in the answer, but all the evidence tending to establish that defense was admitted without objection. It is, therefore, too late to insist now that such evidence was not admissible under the answer. Mowry v. Mosher, 16 Wis. 48. The facts which give rise to the alleged estoppel are in the main these: A few days after the transaction between the plaintiff and Thiers, above mentioned, the defendant saw these parties together in the street, when he asked the plaintiff if Thiers had paid him the money which he, the defendant, had collected on the Scott mortgage. The plaintiff answered that he had. The defendant then said, in the presence of both parties, that he would go and charge it up on the firm books; that is, he would credit it to Thiers and would charge himself with it in the account. And the defendant says in his testimony that on the strength of this statement or admission of the plaintiff that Thiers had paid him this money, he did in fact charge himself with it upon the books of Brande & Thiers, and credit Thiers with that amount, and that these entries so stood up to the time of trial. The entries were made some time in April or May, 1881, and in October following the plaintiff found out that the Pennoyer securities which he had taken from Thiers were forgeries. The plaintiff then saw Thiers, who agreed to make the matter right with him. Thereupon the plaintiff delivered up to Thiers the...