Bank of Antigo v. Ryan

[39] The following opinion was filed October 20,1899: Winslow, J. A number of exceptions were taken to ruling upon evidence and instructions, but the view which we have taken of the evidence renders unnecessary any discussion of them. The entire testimony, construed most favorably to the plaintiff, and with every controverted question resolved in its favor, presents the following state of facts: Ryam,, the defendant, owned over 600,000 feet of pine logs, upon which the plaintiff bank held a chattel mortgage to secure the payment of Ryan’s note (being the note in suit) for $1,500. About September 1, 1897, the Ingersol Land •& Lumber Company sent to Ryan an agent named Bruce to purchase the logs, and Bruce and Ryam agreed on the price, but the sale could not be completed, because Bruce had no cash to pay, and hence Ryam could not pay off the bank and obtain the release of the chattel mortgage. Thereupon Bruce and Ryam went to the bank to see if the matter could not be arranged without cash, and saw Bucknam, the cashier of the bank, with whom it was finally arranged that the Ingersol Company should give a note and mortgage and insurance policies on the logs for the amount of Ryami’s note, and, wheu they gave them, Ryamis note and mortgage were to be canceled. Thereupon the bank gave the Ingersol Company permission to remove the logs; and Ryan, relying on this consent, also consented to the removal, and superintended the shipment. The Ingersol Company removed the •entire lot of logs, and manufactured them into lumber. A few days later Bucknam sent the necessary papers for completing the transaction by mail to the Ingersol Company, but, owing apparently to some disagreement as to the length of credit, they were not signed; and in a short time the Ingersol Company failed, and the papers were never executed, nor has the bank been paid. Ryan’s note was never surrendered. The entire purchase price of the logs was [40] $4,270, of which, the Ingersol Company has paid Rycm $1,800, the greater part or all of which was paid into the plaintiff bank, and drawn out by Rycm by checks. The defendant claims that there was a complete novation here, but it may be doubtful whether, upon the plaintiff’s evidence, as just stated, it can be held, as matter of law, that a novation took place. To constitute novation, there must be a substitution of one valid and enforceable contract for another. Spycher v. Werner, 74 Wis. 456. Whether there was such a new contract here, we find it unnecessary to decide, because the facts show that the plaintiff is estopped from now claiming any liability on the part of Ryan. Rycm owed the bank, and had in his possession ample property to pay the debt with. lie refused to part with this property because it was pledged as security for that debt. The bank, in substance, requested him to turn it over to the Ingersol Company, because the Ingersol Company had agreed to assume Ryan’s debt and give their own note and securities therefor. Acting upon this request or consent, Ryan turned over the lumber, and thus divested himself of an ample fund with which to pay his debt. The act of the bank clearly induced this change of position on the part of Ryan. To allow the bank now to disaffirm the act and claim that the Ingersol Company did not succeed in assuming the debt, and therefore that Rycm is still liable therefor, would amount to a fraud on Ryan, and hence would be a clear Violation of the law of estoppel. Though the defense of estoppel was not pleaded in express terms, still all the facts essential to constitute the estoppel were alleged. The jury should have been directed to find a verdict in favor of the defendant. By the Court.— Judgment affirmed. A motion for a rehearing was denied December 15,1839.