Badger Lumber Co. v. Meffert

Gill, J. The gist of plaintiff’s case, as set out in its petition, is this: Meffert was indebted to West in the sum of $226, and West was at the same time owing the lumber company a like amount. It was agreed that instead of Meffert paying West said sum, he (Meffert) should pay it to the lumber company. The defendant failed to comply with this promise and hence this suit. It was what the law calls a novation; the contractual relations existing between West as creditor and Meffert as debtor was to give way to the new arrangement whereby Meffert was to stand as debtor to the lumber company. A novation is a contract, whereby one legal obligation is substituted for an existing one. The new contract can have no force, unless supported by a consideration passing between the parties at the time. The extinguishment or abandonment of all claim against the original debtor furnishes the consideration for the undertaking of the new promissor. Without such discharge of the old debtor there is no valid novation—no substitution, indeed no new contract as there would be no consideration to support it. If A [441] owes B a certain sum of money, and B at the same time owes C a like amount, then in order to establish a new and substituted contract between A and C, whereby A is to pay B’s debt to C, there must be an agreement between the three parties, not only that A will pay C but that B shall be discharged of his obligation to pay C. And without this there is no substitutionary contract, no novation. The obligation of A to 0 and B to C for the' same debt can not coexist. It is the matter of the substitution of one contract for another, not the creation of a collateral undertaking. 1 Parsons, Cont., 217, et seq.; 16 Am. and Eng. Encyclopedia of Law, 862; Lee v. Porter, 18 Mo. App. 377. So then, the mere promise by Meffert that he would pay the claim which the lumber company held against West, without more, was of no. binding force, unless it was at the same time agreed between all the parties that the lumber company should no longer hold West, or in other words that his debt to the lumber company should be considered as extinguished. This was the theory of law which the defendant requested the court, by proper instruction, to declare, but which was refused. It appearing then that the trial court decided the case on an erroneous theory of the law, the judgment must be reversed and cause remanded. All concur.