Barre Granite Co. v. Fraser

Tyler, J. It appears by the exceptions that in August, 1905, the defendant Fraser, a wholesale dealer in granite in Mansfield, Ohio, made a written contract with one Jordan, who did business in Barre in this State under the name of the Sterling Granite Company, for the manufacture of ten monuments at $100 apiece; that Jordan, the next November, assigned the contract to the plaintiff, the Barre Granite and Quarry Company, to secure it for' stock and material furnished him for the construction of the monuments; that the plaintiff thereupon gave the defendant written notice of the assignment, which he acknowledged. In his letter to the plaintiff, acknowledging notice he said: “Your favor of the 5th inst. is at hand enclosing two contracts one for No. 12,766 and one for 10 stock monts. ordered Aug. 10th, which contracts have been assigned to you by the Sterling Granite Co. We have made a note on same that payment for these jobs when shipped shall be made to you, but we have also suggested to the Sterling Granite Co., whom we are writing by this mail, that when they make shipment they send their invoice in the regular way indorsed over in your favor. If they will carry out this suggestion it will simplify matters greatly and conform to our regular system.” [57] “There is one point however that is not clear and on which we wish you would advise us, and that is, is the Sterling Granita Co. going to complete these orders or will they be built elsewhere! ’ ’ “It makes no difference to us who ships the work or whom we pay for it so long as we receive what we order. We return herewith the contracts mentioned above.” To this letter the plaintiff replied that the work would be cut by the Sterling Granite Company according to the original contract, unless it should become embarrassed in some way, in which case'the plaintiff would probably see that the work was completed elsewhere. It further said: “Your suggestion to invoice is all right, but should the Sterling Granite Company fail to indorse the invoice over in our favor we shall expect you to make remittance to us just the same. ’ ’ The correspondence shows that there were delays in the execution of the' contract; that two monuments were finally completed and forwarded to the defendant by the Sterling Granite Co.; that one was paid for by the defendant; that the other is the one now in controversy; that the defendant cancelled the contract for the remaining eight; that in March, 1906, the plaintiff assigned the contract and the amount due upon it to Chas. H. More & Co. The only question is whether there was a novation of parties so that the plaintiff was entitled to maintain this action of general assumpsit in its own name against the defendant to recover the price of the monument. It is essential to a complete novation that the original debtor be discharged from his liability to his original creditor by contracting a new obligation in favor of a new creditor by the order of the original creditor. Heaton v. Angire, 7 N. H. 397, 28 Am. Dec. 353, illustrates the rule. In that ease H sold a wagon to A who sold it to C, who promised to pay A the price that A had promised to pay, and H agreed to take C as his debtor; held, that the agreement discharged A from the debt and that H might recover the price of C. Tatlock v. Harris, 3 D. & E. 180, is cited in the opinion, where Butter, J., said: Suppose A owes B one hundred pounds, and B owes C the same sum, and the three agree among them that A shall pay C that sum: B’s debt is extinguished and C may recover the sum of A. [58] In Hard v. Burton, 62 Vt. 314, 20 Atl. 269, the Court quoted from Justinian, Inst. Lib. III, tit. 19, pl. 3, where he says that novation takes place only when the contracting parties expressly disclose that their object in making the new contract is to extinguish the old contract; that otherwise the old contract remains in .force. Our own cases are in accordance with this rule. In Bacon v. Bates, 53 Vt. 30, W. and W. by a written order directed the defendant to pay the plaintiff whatever sum might be found due them on settlement. The defendant accepted the order by writing his name across it; held, that upon the plaintiff receiving and presenting the order to the defendant and his accepting it there was a novation and that the plaintiff might maintain an action upon the order in his own name. Trow v. Braley, 56 Vt. 560; Hard v. Burton, supra. See, also, Studebaker Bros. Mfg. Co. v. Endom, 51 La. Ann. 1263, 26 So. 90, 72 Am. St. Rep. 489 and notes. Is the present case within the rule ? Clearly it is not. The transaction was in law, an assignment of a non-negotiable chose in action as collateral security for the payment of a debt and was not a novation. The trial court erred in holding that the plaintiff could maintain the action in its name. Judgment reversed and judgment for the defendant to recover his costs.