Dougherty v. Van Riper

OPINION OP THE COURT. M’FIE, J. 1 2 There is but one issue in this case, as disclosed by the record and briefs of counsel, and that is whether or not there was a complete and unconditional novation created by the settlement of the former litigation between the parties. The court below found that a complete novation had been established by the evidence and thereafter rendered judgment for the full amount due plaintiffs. Under the civil law there were at least three different kinds of novation and under the common law there can be no doubt- of the existence of the kind of novation alleged in this case. “Novation means simply the substitution of one debtor by mutual agreement for another. Kelso v. Fleming, 104 Ind. 180. The novation here defined, is identical with the novation pleaded by the plaintiffs in this case where a new debtor is substituted for the old." On page 11 of appellant’s brief the following admission is made: “The testimony of Holt, Dougherty and Sutherland is in substantial accord, that Yan Riper agreed to pay Darden’s debt to them in consideration of Darden’s releasing to Yan Riper the property in controversy and Darden’s release by Dougherty, et al, from his obligation to them." This statement -seems to comprise a complete novation as having been established, at least by the testimony of the three plaintiffs above named, and as found by the court. The indebtedness of Darden to the plaintiff was not denied, nor was the .fact of this settlement agreement controverted, nor the further fact that a draft for the full amount due the plaintiff-s was made by or on behalf of the defendant, Mrs. Yan Riper, and with her knowledge and that the draft was given to the plaintiffs and accepted by them, so that the only real controversy is as to whether the payment of the indebtedness evidenced by the draft, which was dishonored when presented for payment, was conditional or not. It is insisted bjr counsel for the defendant that after Mrs. Van Eiper had entered into the contract to assume and pay the plaintiffs attorneys fees on condition that Mr. Darden would convey and transfer to her all of the property referred to in the contract, that Mr. Britt, one of the attorneys for the defendant, demanded that the draft should be made on ten days’ time and that defendant’s counsel insisted upon the property being free of all incumbrances or other obligations and that this was a condition upon which counsel for Mrs. Van Eiper based the claim; that the acceptance of the property from the plaintiff was conditional and such condition not having been complied with novation was incomplete and there couhl be no recovery. If the contract was conditional in this respect, the law is well settled that until the condition is fulfilled the novation contract would not be complete, but an examination of the evidence and the finding of the court does not sustain the existence of this condition. Three witnesses. Holt, Dougherty and Sutherland, testified that the agreement to assume and pay the indebtedness due the plaintiffs at the time the contract was entered into, was unconditional and that while Mr. Britt did raise this question as to incumbrance upon the property, plaintiffs refused to consider that matter for the reason that Mrs. Van Eiper had entered into the contract without any condition whatever and that plaintiffs insisted upon the unconditional character of'the contract. It appeared from the testimony that there was some controversy about the giving of this draft, but, to settle that controversy,, Mr. Eenehan endorsed the draft, thus making it acceptable to the plaintiffs, and it is in testimony that the reason Mr. Britt assigned for requesting that the draft should be on ten days’ time was because he intended to visit Mexico and would, therefore, be absent for a time, and not for the reason that he desired time to examine as to the incumbrance of the property to be conveyed to his client; and it further appears that when this matter of examining the property as to incumbrance was mentioned to the plaintiffs and the plaintiffs were requested to consent thereto they refused to consent and refused to even mention the matter to Mr. Darden. That thereupon Mr. Benehan requested permission to have a consultation with Mr. Darden, and did have a conversation with him, but the plaintiffs deny that the result of that conversation was ever-made known to them or that they at any time admitted the conditional character of the contract claimed by defendant’s counsel. 3 4 Mr. Britt and Mr. Benehan testified that there was this condition, and in that respect their testimony is in conflict with testimony for the plaintiffs. It must be admitted, therefore, that there is a conflict in the evidence as to this vital point, three witnesses testifying to the unconditional character of the contract of novation and two witnesses testifying to the conditional character of it. Such being the case this court has 'repeatedly held that the findings of the trial court based upon conflict'ing evidence will not be disturbed by this court upon appeal, there being substantial evidence upon which to base the finding and verdict. Candelaria v. Miera, 13 N. M. 360, and cases cited. The findings, however, are supported also by the admitted facts that Mr. Darden did convey or. return to the defendant the properfy which the contract provided should be returned to her and the draft was actually executed and given to the-plaintiff. These facts not only show that the defendant had entered into the contract to assume and pay this indebtedness to the plaintiff, but that Darden as well as the plaintiffs and' defendant was a party to the transaction and performed his part of the contract. The acceptance of the draft by the plaintiffs completes the link in the chain of novation. In the case of Kelso v. Fleming, 104 Ind. 180. the court said: “One of the essential elements to a novation is, that there should have been an extinguishment of the old debt : and another is that there should have been a mutual agreement between all the parties that the old debt should become the obligation of the new debtor.” And in the case of McCartney v. Kipp, 171 Pac. 644, the court said: “There must be an acceptance of the new debtor by the creditor and that the parties in interest assented to the extinguishment of the old debt.” It is.apparent from the fact that the draft was issued for the payment of the old debt and Darden, the other party to the transaction, having conveyed the property to the defendant as a consideration for the payment of the old debt by the defendant, that it was in contemplation of all the parties that the old debt should be extinguished as far as Darden was concerned and that the defendant, Mrs. Yan Eiper, became the new debtor by assuming and agreeing to pay the indebtedness which she knew Darden owed to the plaintiffs. The acceptance of the draft executed under the contract of the defendant to pay the debt is further evidence of the intention of the plaintiffs to release Darden from the payment of the old indebtedness. It seems, therefore, that every essential of contractual novation is found in the present contract as was foujid by the court below. Based upon the supposition of defendant’s counsel that the contract was conditional so as to defeat complete novation, counsel argue that recovery in this case is barred by the statute of frauds, but the law is that a contract of novation is not obnoxious to the statute of frauds or governed by it. In the case of Hamlin v. Drummond, 91 Me. 175, it is held that the statute of frauds does not apply in case of a complete novation. A number of other citations might be made to this same effect, but it is deemed unnecessary in this case. Finding no error in the rendering of the judgment of the court below, the same will be affirmed with costs.