Kushner v. Knopf

• Decision Date: 15 January 1929
• Citation: 227 Ky. 369
• Parties: Kushner v. Knopf.
• Court: United States State Supreme Court — District of Kentucky

227 Ky. 369

Kushner v. Knopf.

Court of Appeals of Kentucky. Common Pleas Branch, First Division.

Decided January 15, 1929.

1. Novation. — One of the ways by which a novation may be effected is by substitution of a new debtor in place of the old one, with intent to release latter.

2. Novation. — It is not essential that assent to terms of novation be shown by express words to that effect, but assent may be implied from the circumstances attending transaction and the conduct of parties thereafter.

3. Novation. — In action on notes received from defendant maker for price of corporate stock, evidence held sufficient to take to jury question whether plaintiff agreed to release defendant from liability and look for payment on notes to another who purchased defendant's interest in corporation, and who agreed to pay such notes.

4. Frauds, Statute of. — Where payee of notes received for price of corporate stock agreed to release maker and to accept purchaser of maker's interest in corporation in maker's stead, original maker's debt was extinguished, and promise of purchaser to pay the notes was not a collateral undertaking to pay another's debt, required to be in writing under Ky. Stats., sec. 470, but an undertaking based on a sufficient consideration to pay his own debt.

5. Trial. — Where evidence is not admissible generally but is admissible only for a particular purpose, court may limit scope of evidence and instruct jury that evidence is admissible for the particular purpose and no other.

6. Trial. — In payee's action on notes received for price of corporate stock, plaintiff's requested instruction that extract from minutes of corporation, which was read in evidence, did not constitute a contract nor an agreement on part of plaintiff to release maker from liability of the notes sued on as claimed by maker, held properly refused as being on weight of evidence.

7. Bills and Notes. — Instruction to find for payee suing on notes unless jury believed from evidence that he agreed with maker and J. to accept J. as his debtor on notes in place of maker, and that J. promised payee that he would pay notes, in which event jury should find for defendant, held not erroneous because of failure to use word "release," since necessary effect of transaction as stated in instruction was to release maker.

Appeal from Jefferson Circuit Court

GIFFORD & STEINFELD for appellant.

WALTER F. ALT for appellee.

OPINION OF THE COURT BY JUDGE CLAY.

Affirming.

David Kushner owned a dry-cleaning establishment in Chicago, which he conducted under the name of Woodlawn Cleaners & Dvers. The business was afterwards incorporated under the name of K. & K. Kleansers, and the stock was divided equally between Kushner and Peter C. Knopf, except that the wife of each held one share. Afterwards an employee, George Jawney, acquired one share. In payment for his stock, Knopf executed to Kushner three notes, each for $500. It was agreed between the parties that neither should sell his stock without first offering it to the other, and that neither should sell to any one objectionable to the other.

This action was brought by Kushner against Knopf to recover on the notes. Knopf defended on the ground that he, Kushner, and George Jawney had entered into a contract by which Kushner agreed to release him and look to Jawney for payment of the notes, and that Jawney had agreed to pay and did pay the notes. The court ruled that the burden of proof was on the defendant. Knopf testified, and introduced the deposition of Jawney. There was also introduced in evidence the following entry on the books of the corporation:

"April 13, 1923. A special meeting was called by the directors for the purpose of changing officers. All directors were present, either in person or by proxy. Those present were D. Kushner, P.C. Knopf and George Jawney. Those represented by proxy were Mrs. D. Kushner and Mrs. Lillian R. Knopf. P.C. Knopf, secretary and treasurer, said he would not hold the office any longer, and his resignation was accepted. A motion was made by Mr. P.C. Knopf and seconded by D. Kushner that Mr. Geo. Jawney be elected at once as secretary and treasurer at a salary of $60.00 per week. Then a motion was made by Mr. Geo. Jawney and seconded by Mr. Kushner that P.C. Knopf be elected vice president at a salary of $40.00 per week. Mr. Kushner gave Mr. Jawney permission to buy Mr. Knopf's interest. He also said he would release Mr. Knopf's obligations of the three notes and agreed to settle the said notes between himself and Mr. Jawney.

                                      "David Kushner [Signed]
                                         "President
                                      "P.C. Knopf [Signed]
                                         "Vice President
                

"[Signed] George Jawney, Sec. and Treas."

The court held this writing to be conclusive, and refused to permit Kushner to show that he had not made the agreement, or that the writing did not express correctly the agreement that was made. On appeal we held that, while the writing was competent against each of the parties as an admission, it was not conclusive, and that either...