Mills v. Mcmillan
| Decision Date | 06 August 1919 |
| Parties | MILLS v. McMILLAN et al. |
| Court | Florida Supreme Court |
Error to Circuit Court, Duval County; Daniel A. Simmons, Judge.
Action by C. D. Mills against D. H. McMillan and another. Judgment for defendants, and plaintiff brings error. Reversed.
Syllabus by the Court
A necessary element in novation, where there is a substitution of a new debtor, is the extinguishment of the original debt and the complete release of the debtor.
In pleading discharge or release from an obligation by novation the plea should definitely aver the extinguishment of the original debt as the consideration for the promise of the new debtor, or such must be the necessary inference from the facts averred.
Novation is not presumed from an assignment of a contract which carries an obligation to pay money.
One of the essentials of novation is that the promise of the new debtor must be valid.
COUNSEL Axtell & Rinehart, of Jacksonville, for plaintiff in error.
W. M Toomer and W. H. Surrency, both of Jacksonville, for defendants in error.
The plaintiff in error, as plaintiff below, brought an action against D. H. McMillan and J. A. Holloman for damages for breach of contract. It was alleged that the defendants agreed to purchase from the plaintiff certain lots in or near the city of Jacksonville, and agreed to pay the plaintiff therefor the sum of $25,000, of which $2,500 was to be paid in cash, a mortgage for $2,000 on part of the property to be paid, another mortgage for $8,000 on certain of the lots and other property to be paid, and the remainder to be paid in three installments, of $4,000, $5,000, and $3,500, due respectively on the 1st days of February, 1914, 1915, 1916 with interest; the plaintiff agreeing to make and deliver to the defendants a good and sufficient warranty deed for the property agreed to be sold upon the payment of the aforesaid sums of money, and the land to be subject to the mortgages mentioned if the latter had not been paid.
It is alleged that the plaintiff let the defendants into possession of the land, who paid the sum of $2,500 as agreed, and who promised to pay the taxes for the year 1912, but the defendants had made no other payments, nor did they pay the mortgage for $8,000 as agreed; that the mortgage was foreclosed against the plaintiff, and resulted in the sale, not only of the lots which plaintiff had sold to the defendants, but another lot of the plaintiff which was included in the mortgage and was of the value of $2,500. The plaintiff alleged performance on his part of all conditions precedent, and claimed that the defendants owed him $9,000, with interest from the 1st day of February, 1913, and the further sum of $2,500, with interest from May 4, 1914.
The declaration was filed March 22, 1915. The defendants interposed seven pleas, to which the plaintiff demurred, with the result that the court sustained the demurrer to all the pleas except the sixth. That plea averred that in March, 1913, before the mortgage for $8,000 became due, the defendants assigned their agreement with the plaintiff to American Securities Company, a Florida corporation; that plaintiff consented to the assignment and accepted the corporation as his obligor in place of the defendants; that thereafter, in July, 1913, foreclosure proceedings were begun on the mortgage, with the plaintiff and his wife as sole defendants; that the plaintiff first refused to carry out the agreement on his part, in that on February 1, 1914, before final decree in the foreclosure suit the corporation tendered to the plaintiff the $4,000 due on that date; that at that time the corporation was not in default under the terms of the agreement, but the plaintiff refused the tender and denied the corporation's rights under the agreement. This plea was held to be good, and such ruling was made the basis of the first error assigned.
The plea was bad, and constituted no defense, for several reasons. That the defendants were not made defendants in the foreclosure suit constituted no defense to the plaintiff's action, the defendants had no record title to the lands involved, and even if they were proper defendants, because of their agreement with the plaintiff, the failure of the mortgagee to so consider them could not be visited upon the plaintiff. It is not averred that the mortgagee knew of the agreement nor of its assignment to the corporation, if such matter was of any importance to him in the foreclosure proceeding.
The plea is unsound, in so far as it undertakes to set up a novation, because it does not negative the idea that the corporation, in its agreement with the defendants, merely agreed to pay the debt due by them to the mortgagee, or merely assumed their obligation to the plaintiff to pay that mortgage, a mere promise of a third person to answer for the debt of another. Nor does the plea aver that the plaintiff, in consenting to the arrangement, released the defendants from their obligation to the plaintiff, and discharged and canceled the debt due by them. A necessary element in novation is that the original debt is by the agreement extinguished, and the debtor absolutely released. If novation is pleaded, this element must clearly and definitely appear by averment or necessary inference from the facts averred. If by the agreement the parties intended to keep alive the old debt and accept the new as a sort of security, novation is not accomplished; and if the plea leaves this matter in doubt it is bad, because of the rule which requires that such matters of doubt be resolved against the pleader. He is presumed to have put his defense in the most favorable light before the court; he has taken his own time, chosen his own words, selected his own phrases, and proffered the facts which he deems to be the most favorable to himself, and if that opportunity thus offered to him to make his plea clear and unambiguous fails to produce that result, he alone is responsible, or the circumstances do not justify his contention, and if the fault is his it is visited upon him alone.
It is a well-settled rule that novation is never to be presumed, and it must appear that the original debt has been extinguished. See 20 R. C. L. p. 366; Terry v. Robbins, 128 N.C. 140, 38 S.E. 470, 83 Am. St. Rep. 663; Parker v. Canfield, 37 Conn. 250, 9 Am. Rep. 317; Hopkins v. Jordan (Ala.) 77 So. 710; Armstrong v. Walker (Ala.) 76 So. 280; Donegan v. Baker & Holmes Co., 73 Fla. 241, 74 So. 202. Nor was the plea good as showing a breach of the agreement by the plaintiff. The plea did not aver that the mortgage for $8,000 was not due when the foreclosure suit was begun, and there is no averment of payment of the mortgage nor a tender of the amount due. Subsequently a motion to strike the plea was made, which was denied; but the court by its order directed the plea to be limited to the 'allegation of novation.' Issue was then joined on the plea.
The defendants then asked for and were granted leave to file a further and additional plea. The plea was filed and numbered 7a. The plea is as follows:
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