Travis v. Central Surety & Ins. Corporation
| Decision Date | 11 February 1941 |
| Docket Number | No. 9670.,9670. |
| Parties | TRAVIS et al. v. CENTRAL SURETY & INS. CORPORATION. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Dillon Hartridge and J. Henry Taylor, both of Jacksonville, Fla., for appellants.
Harry T. Gray, of Jacksonville, Fla., for appellee.
Before SIBLEY, HUTCHESON, and HOLMES, Circuit Judges.
This is a suit by the Central Surety & Insurance Corporation against its former agent, Beale Travis & Co., Inc., and Beale Travis, M. R. Blood, and Philip M. Travis, guarantors of the agency agreement, to recover insurance premiums collected by the agent and not remitted to the appellee. From an adverse judgment against them and the agent, the guarantors bring this appeal.
The agreement between the insurer and the agent was entered into on January 1, 1938. By its terms, the agent was required to pay balances owed to the company not later than seventy-five days after the end of the month for which the account was rendered. These appellants guaranteed the faithful performance of the contract, and bound themselves to pay, upon demand, any sums becoming and remaining due from the agent to the company.
On May 7, 1938, when the agent owed the appellee more than $5,000, the agency contract was cancelled. On May 20, 1938, appellee agreed to make a new agency contract with a successor corporation, Travis & Holmes, Inc., which was to acquire the good will and other assets of, and was to assume and agree to pay the debt owed to appellee by, the corporation succeeded. The new contract was guaranteed, in writing, by Beale Travis, J. E. Holmes, and M. R. Blood. These contracts, when reduced to writing and put in force, were dated back to January 1, 1938, the date of the original agreements.
Appellants acknowledge that the new contracts did not expressly release the obligors of the guaranty agreement, but they claim that the new agency agreement with the new guaranty superseded, replaced, and supplanted the original agreement under which their liability accrued, and by implication released them from any obligation under their guaranty. Further, they contend that the transfer of all the assets and good will of the original corporation to the successor released the original guarantors under the first corporation in the same manner that the release of the maker of a promissory note also precludes recovery from any of the endorsers thereon.
The precise question presented is whether or not the new contract constituted a novation which discharged the old debt owed by these appellants. The instruments evidencing these transactions were completely silent as to the effect of the new arrangements upon the original guaranty contract and the indebtedness then owing thereunder. Therefore, novation must be determined by ascertaining the intent of the parties from the evidence in the case. Novation cannot be presumed; it must be shown to have been intended by a clear preponderance of the evidence, and upon the party urging it is cast the burden of making the required proof.1
Since the trial below resulted in a summary judgment, the necessary proof was made, if at all, in the pleadings and exhibits and the brief stipulation of facts. This evidence, we think, does not indicate that any...
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