Leckie v. Bennett
| Decision Date | 04 December 1911 |
| Citation | 141 S.W. 706,160 Mo.App. 145 |
| Parties | WILLIAM LECKIE, Appellant, v. JOSIAH BENNETT et al., Respondents |
| Court | Missouri Court of Appeals |
Appeal from Jasper Circuit Court.--Hon. David E. Blair, Judge.
REVERSED AND REMANDED.
Judgment reversed and cause remanded.
E. F Cameron, L. S. Dewey and W. J. Owen for appellant.
(1) The individual members of the Missouri Standard Mining Company could not assume the debts of the Oakwood Mining Company, but same would have to be done by a majority of the persons duly assembled as a board of directors. R. S. 1909, sec. 2992; Hutchinson v. Green, 91 Mo. 367; K. C. Hay Co v. Devol, 72 F. 721; Calumet Paper Co. v. Haskell, 144 Mo. 331. (2) There is no novation here. A novation requires the mutual assent of all parties to the transaction, a mutual agreement extinguishment of the old debt, a new promise from the substituted debtor, as a specific agreement by the creditor to release the old debtor, and the release, the consideration for the substitution of the new party in the place of the old. Brown v. Croy, 74 Mo.App. 466; Davis v. Dunn, 121 Mo.App. 494; Lee v. Porter, 18 Mo.App. 377; Edgell v. Tucker, 40 Mo. 523; Wallace v. Axtell, 30 P. 594; Hill v. Warner, 20 Ind. 309; Hanson v. Nelson, 84 N.W. 742; Murphy v. Hanrahan, 50 Wis. 489, 6 L.R.A. 688; Vanderline v. Smith, 18 Mo.App. 61; Kelso v. Flemming, 3 N.E. 830; Bank v. Gardner, 57 Mo.App. 268; Cox v. Sloan, 158 Mo. 411; Bank v. Walker, 132 Mo.App. 117. (3) The mere fact that the members of the partnership and the stockholders of the corporation were the same person imply an assumption by the corporation of the partnership liabilities, but the corporation must by some affirmative act assume them and by doing so, both the partnership and the corporation become liable and the creditor may look to both for payment of the debt. Schufeldt v. Smith, 139 Mo. 367; Porter v. Wood, 138 Mo. 539; Rogers v. Goswell, 51 Mo. 466. (4) A creditor may without releasing his original debtor take advantage of the agreement of a third person to pay the debt in consideration of a transfer of property to him by such original debtor. The original debtor need not be discharged to hold the other liable. Bank v. Gardner, 59 Mo.App. 268; Griswold v. Ins. Co., 1 Mo.App. 104; Wickam v. Loan Association, 80 Ill.App. 523; Rothermel v. Coal Co., 79 Ill.App. 667; Devers v. Howard, 144 Mo. 671; State ex rel. v. Light Co., 102 Mo. 482; Ellis v. Harrison, 104 Mo. 276; Ins. Co. v. Meyer, 8 Mo.App. 18; Mfg. Co. v. Burrows, 40 Kan. 361, 16 L.R.A. 85.
Spencer, Grayston & Spencer for respondents.
(1) Defendant's request to the court to declare as a matter of law that judgment should be for all of the defendants should have been given. Elec. Supply Co. v. Mysenberg, 85 Mo.App. 337; Koegel v. Givens, 79 Mo. 77; Macke v. Davis, 61 Mo.App. 524; Marmon v. Waller, 53 Mo.App. 610. (2) Plaintiff's prima facie case shows defendant Bennett to be indebted for the whole of the account proven, and the other defendants to be indebted for the account proven, less the first item for which Bennett alone is liable, if it shows anything under his pleading. It was a misjoinder and a proper case for election. Moore v. Hunt, 8 Mo. 467; Liney v. Martin, 29 Mo. 28; Doan v. Holly, 25 Mo. 357; Wooner v. Levy, 48 Mo.App. 469; Beattie Mfg. Co. v. Gerardi, 166 Mo. 142. (2) In the civil law, novation took place only when the contracting parties expressly disclosed that their object in making a new contract was to extinguish the old contract. Under our law, novation may be inferred from circumstances without proof of an express agreement. 29 Cyc. 1132; Jones v. Austin, 26 Ind.App. 399, 59 N.E. 1082; In re Dixon, 13 F. 109; Hard v. Burton, 62 Vt. 314, 20 A. 269. (4) In proving a novation or agreement of the creditor to accept a third person as his debtor the agreement of the creditor to accept a third person as his debtor need not be shown to have been made in express terms; if it can be implied from the facts in the case, it will be sufficient. 9 Ency. of Evidence, 8; Culbertson Co. v. Wildman, 45 Neb. 663, 63 N.W. 947; Warren v. Batchelder, 15 N.H. 129.
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 that time, but is silent as to any assumption of debts. The testimony of the defendants was that at one of their meetings, soon after they received the corporation's charter, it was unanimously voted and agreed that the corporation would take over the asserts of the partnership and assume its debts. There was no written evidence of such agreement in the records of the proceedings of the corporation. The testimony as to the plaintiff's part in the assumption agreement was that he had advised such a course before the formation of the corporation; that he was notified soon after the action was taken by the corporation. No witness was able to give the exact date when he was thus notified, but plaintiff's entries on his books show that the last item charged to the partnership was under date of March 28, 1908, and from that date on everything was charged to the corporation. The account against the partnership was closed on his ledger, showing a balance of $ 469.38 due. Under date of March 28, 1908, plaintiff opened a ledger account against the Missouri Standard Mining Company incorporated, as successor to the Oakwood Mining Company, beginning the account with the balance of $ 469.38 with which the partnership account was closed. From that time on, every bill or statement sent out by the plaintiff was directed to the Missouri Standard Mining Company, and this old partnership balance figured in the account of the corporation in every such statement without exception. The record shows no statement of account against the Oakwood Mining Company dated later than March 28, 1908, the time when the account was charged against the corporation. Defendants took the position that the plaintiff's assent to the novation agreement could be shown circumstantially if the circumstances were certainly sufficient to support the finding of the trial court.
After February 26, 1908, the Missouri Standard Mining Company had a meeting and sent for the plaintiff, and he refused to come and the next morning defendant Mattison came to plaintiff and brought him a check for twenty-five dollars, and a statement that the corporation would assume the debts. On March 17, 1910, the president of the corporation wrote a letter to plaintiff offering to make the account sued on the...
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