Leckie v. Bennett

• Decision Date: 04 December 1911
• Citation: 160 Mo. App. 145,141 S.W. 706
• Parties: LECKIE v. BENNETT et al.
• Court: Missouri Court of Appeals

141 S.W. 706

160 Mo. App. 145

LECKIE v. BENNETT et al.

Springfield Court of Appeals. Missouri.

December 4, 1911.

1. APPEAL AND ERROR (§ 171) — REVIEW — THEORIES OF CASE.

The appellate court sits in review of the errors of law committed by the trial court, and positions taken on appeal must conform to those taken at the trial.

2. PARTNERSHIP (§ 217)—ACTION AGAINST— BURDEN OF PROOF.

Where an action was brought against defendants as partners, and plaintiff alleged a cause of action against one of the defendants for the whole account, and the other defendants for the account, less one item, and the defendants pleaded an estoppel, and that the partnership, which was admitted, had been organized to take over a mineral lease owned by one of the defendants, and that such partnership had assumed to pay plaintiff the total sum claimed to be due, less the one item, the defendants on this condition of the pleadings had the burden of establishing affirmative defenses of estoppel by subsequent acts toward a corporation which took over the firm business, or novation by a substitution of the corporation as the debtor.

3. CORPORATIONS (§ 485)—RIGHTS OF CREDITORS—TRANSFER OF PROPERTY — ESTOPPEL OF PURCHASER.

Where a mining corporation, acting within the scope of its corporate powers, purchased and took into its possession all the property of a partnership which had operated the same property, no other consideration for the purchase having been given, it was estopped to deny an assumption of the partnership debts as the consideration of the purchase.

4. EVIDENCE (§ 419) — PAROL EVIDENCE — CONSIDERATION.

Where a mining corporation purchased and took over all the property of a partnership which had been operating the same property, under the terms of a written contract, it was competent to show by oral testimony that the real consideration for the transaction was an assumption of the partnership liabilities.

5. CONTRACTS (§ 187)—ASSUMPTION BY CORPORATION OF FIRM DEBT—RIGHTS OF CREDITOR.

A corporation which, for a consideration, expressly assumed the debts of the partnership, to which it succeeded, became thereby indebted to the creditor, who was entitled to thereafter maintain an action against it, even though he was not privy to the consideration.

6. FRAUDS, STATUTE OF (§ 18)—PROMISE TO PAY ANOTHER'S DEBT—CONTRACTS.

A contract, whereby a party assumes the debts of one to whom it succeeds, is valid, though not in writing.

7. CONTRACTS (§ 187)—CONTRACT FOR BENEFIT OF THIRD PERSONS—REMEDIES OF CREDITOR—LIABILITY OF ORIGINAL DEBTOR.

Where a corporation assumes to pay another's debt in consideration of a transfer of

property to it by the debtor, the creditor could hold the corporation liable without releasing his original debtor.

8. NOVATION (§ 5)—NATURE AND REQUISITES.

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

9. NOVATION (§ 12)—EVIDENCE.

A novation will never be presumed, but a discharge of the original debt, and agreement by the creditor and the debtors, showing an intention to work a novation and discharge the original debt, must be clearly established.

10. NOVATION (§ 12)—ASSENT OF PARTIES— EVIDENCE.

To establish a novation, it is not essential that an assent to and acceptance of the terms should be expressly shown, as a novation will be implied from the facts and circumstances attending the transaction, but the creditor's assent to the release of his original debtor is not to be implied merely from the fact of the subsequent performance of the contract by the substituted debtor; and the fact that the creditor closed the original account, and transferred the balance due thereon to an account against the new corporation, and rendered accounts to it, including the old account, does not necessarily show his assent to the novation.

11. NOVATION (§ 3) — DISCHARGE OF OLD DEBT—CONTEMPORANEOUS AGREEMENT.

A novation to be valid must be supported by the release of the original debt as a consideration, and the creditor's subsequent acquiescence in the contract is not sufficient; but to constitute a novation a discharge of the old debt must be contemporaneous with and result from the consummation of the agreement with the new debtor.

12. NOVATION (§ 12)—SUFFICIENCY OF EVIDENCE —DISCHARGE OF OLD DEBT.

Evidence, in an action by a creditor of a partnership, defended on the theory that there had been a novation of the partnership debt, held insufficient to show that the creditor made any contemporaneous agreement with the alleged substituted debtor as a consideration for the release of the partnership debt.

13. ESTOPPEL (§ 96)—ACTION AGAINST—ESTOPPEL.

In an action against a partnership, defended on the ground that there had been an assumption of indebtedness by the corporation which had succeeded it, the fact that the plaintiff had failed to collect from the corporation, which had since become insolvent, does not estop him from an action against the partnership, where he frequently presented his claim to the corporation.

14. ESTOPPEL (§ 112)—INDUCEMENT—SUFFICIENCY OF PLEADING.

Defendants, in an action against them as partners to recover for goods sold, pleaded that plaintiff had rendered bills to a corporation, which had succeeded the partnership and assumed its debts, including in such bills the amount sued for; that he could have collected from the corporation by reasonable diligence; that the corporation had since disposed of all of its property; and that it would be unjust for plaintiff to hold defendants liable. Held, that the plea insufficiently alleged an estoppel, as it charged no acts of the plaintiff inducing the defendants to change their position to their detriment.

15. EVIDENCE (§ 424) — PAROL EVIDENCE — EFFECT OF WRITING ON PERSONS NOT PARTIES.

In an action against partners, where plaintiff made out a prima facie case against one defendant for goods sold plaintiff, not being a party to any alleged agreement of the partnership to assume such liability, might show the assumption of liability by any competent evidence whatever, whether in writing or not.

Appeal from Circuit Court, Jasper County; David E. Blair, Judge.

Action by William Leckie against Josiah Bennett and others. Judgment for defendants, and plaintiff appeals. Reversed and remanded.

E. F. Cameron, L. S. Dewey, and W. J. Owen, for appellant. Spencer, Grayston & Spencer, for respondents.

NIXON, P. J.

This was a suit, instituted by appellant, against the respondents as partners, doing business under the firm and style of Oakwood Mining Company. The petition is in one count, and the cause of action is based upon an account stated, consisting of various articles for use in the mining business, and for rent of a hoister, said items extending from September 12, 1907, to October 2, 1909, and to the date of the formation of the corporation (hereinafter referred to), known as the Missouri Standard Mining Company, which account is not preserved in the record.

The answer is a general denial, coupled with a plea of novation, a plea of estoppel, and a plea of misjoinder of parties defendant as to one of the items sued upon by plaintiff. The defendants Josiah Bennett, Charles Markwardt, W. A. Hagler, and J. P. Hagler filed joint affidavits, denying partnership, first general, then specially limiting said denial to the items under date of September 12, 1907. The defendant Wesley M. Smith filed an affidavit, denying partnership, in the first instance, generally, and then limiting said denial to September 12, 1907. Defendant W. A. Mattison filed an affidavit, denying partnership, limiting his denial to September 12, 1907.

The testimony of plaintiff as to the first item shows that it was for a boiler, sold by him to one of the defendants, Josiah Bennett, for $250; and that at that time one Baldwin was associated with Bennett, and they together had a contract from the plaintiff on certain mining land, but before anything was taken, or the boiler moved onto the mining lease, Baldwin dropped out, and Bennett had other parties interested with him, and they were beginning operations under the name of Oakwood Mining Company; the parties interested with him, under the name "Oakwood Mining Company," being Charles Markwardt, W. A. Hagler, J. P. Hagler, and possibly Wesley M. Smith. After these persons had become interested together as the Oakwood Mining Company, all other items on the account up to and including March 16, 1908, were incurred, and were ordered by, charged to, and delivered to, the Oakwood Mining Company at the place where these defendants were carrying on mining operations. The Missouri Standard Mining Company was organized as a corporation, and took over the property of the Oakwood Mining Company as its capital stock, and the first charge, as shown by the plaintiff's books, against the Missouri Standard Mining Company was under date of March 28, 1908. After defendant Smith became interested, bills were presented to him with the $250 item thereon, and money was paid by him on the account so presented; and this account, showing the item of $250, under date of September 12, 1907, was presented to W. A. Hagler, and it was also presented to J. P. Hagler, as a member of the Oakwood Mining Company (with the $250 item thereon), and payment demanded. The defendants organized the Missouri Standard Mining Company on February 21, 1908, with a capital stock of $60,000, and on February 26, 1908, all of the defendants made a bill of sale to the corporation, conveying the property of the Oakwood Mining Company for the consideration of $60,000, and at a meeting of the corporation on that date the minutes of the meeting show the property of the Missouri Standard Mining Company, and what business was transacted at...