Mississippi Motor Finance, Inc. v. Enis, 43746

• Decision Date: 17 January 1966
• Docket Number: No. 43746,43746
• Citation: 181 So.2d 903,254 Miss. 625
• Parties: MISSISSIPPI MOTOR FINANCE, INC. v. Bill ENIS.
• Court: Mississippi Supreme Court

Page 903

181 So.2d 903

254 Miss. 625

MISSISSIPPI MOTOR FINANCE, INC. v. Bill ENIS.

No. 43746.

Supreme Court of Mississippi.

Jan. 17, 1966.

Scribner & Brewer, Tupelo, for appellant.

Dudley R. Carr, Tupelo, for appellee.

GILLESPIE, Presiding Justice.

Mississippi Motor Finance, Inc., sued Bill Enis for the balance due on a conditional sales contract payable in installments. The issue presented to the jury was whether there was a contract of novation whereby another person was substituted, and defendant released from liability. The jury found for defendant, and plaintiff appealed.

The question for our decision is whether the evidence justified the jury in finding that the parties entered into a contract of novation. We hold that the defendant failed to offer evidence that plaintiff agreed to release defendant and that the evidence did not present a jury issue as to whether there was a contract of novation.

The facts are stated in the light most favorable to defendant in whose favor the jury found.

On June 22, 1962, defendant purchased a 1962 Rambler from Safety Motors, a partnership composed of W. H. Cooper and himself, used car dealers. Defendant executed to Safety Motors a conditional sales contract for $4,172.80, payable in twenty-four monthly installments. Failure to pay any installment accelerated the entire debt. The conditional sales contract was assigned by Safety Motors, acting throgh W. H. Cooper, to plaintiff, with recourse. In November, 1962, the partnership was dissolved, and defendant was released from further responsibility as a partner. Thereafter Safety Motors continued to operate under the sole ownership to Cooper. In the dissolution of the partnership defendant was not released from liability under the conditional sales contract for the 1962 Rambler.

Defendant made payments on the conditional sales contract from July, 1962, through August, 1963, totalling $2,365.30.

On June 28, 1963, defendant purchased a 1963 Rambler from W. H. Cooper, doing business as Safety Motors, and executed to Safety Motors a conditional sales contract for the full purchase price. The contract did not show any trade-in or cash payment. Cooper had told a representative of plaintiff, prior to the purchase by defendant of the 1963 Rambler, that the trade would be made and that he, Cooper, would pay off the balance due on the 1962 Rambler when he sold it. A representative of plaintiff knew when the trade was consummated between Cooper, doing business as Safety Motors, and defendant, and that the 1962 Rambler was on the yard of Safety Motors after the transaction. As between Cooper and defendant it was agreed that Safety Motors would pay off the balance due on the 1962 Rambler, and words to that effect were written by Cooper on the invoice. Plaintiff did not receive this invoice.

After the trade on June 28, 1963, two payments on the 1962 Rambler for the months of July and August, 1963, were made by defendant, but he testified that the money was furnished him by Cooper.

Cooper, doing business as Safety Motors, became financially involved in September, 1963, and went out of business. He sold the 1962 Rambler and failed to pay plaintiff. Plaintiff sued defendant Enis for the balance due on the conditional sales contract for the 1962 Rambler.

A novation involving substitution of debtors is a contract that (a) discharges immediately an existing contractual obligation, (b) creates a new contractual obligation by, (c) including as the new obligor a party who was not previously obligated. Greenwood Leflore Hosp. Commission v. Turner, 213 Miss. 200, 56 So.2d 496 (1951); Sussman, Wormser & Co. v. Sea Food Co., 127 Miss. 420, 90 So. 116 (1921); Corinth, S. & S. Turnpike Co. v. Gooch, 113 Miss. 50, 73 So. 869 (1916); 39 Am.Jur. Novation Sec. 2 at 254-55 (1942); Restatement, Contracts Sec. 424 (1932). The contract of novation is a mutual undertaking among all parties concerned.

In order to establish his affirmative defense of novation, it was necessary for defendant Enis to prove (a) that he, Enis, was immediately discharged from the obligation to pay the debt evidenced by the conditional sales contract for the 1962 Rambler, (b) a new contractual obligation was created between plaintiff and Cooper, whereby Cooper would become liable to plaintiff, and (c) that Cooper was not previously obligated to plaintiff on the...