Raissl v. Loskot

Doerfler, J. From the testimony of the plaintiff heretofore quoted it appears clearly that when he went to the bank on October 3, 1919, he had information of the sale, of defendant’s farm to his son; that he expected either that his note would be paid or that some new arrangements would bé made with respect to the same. It is also clear that when the plaintiff testified that the defendant told him at the bank that “this money is on the farm, so might just as well stay there again,” that he intended thereby to express the view that the one who owned the farm should pay the amount of the defendant’s note. The quotation immediately preceding was understood by the son to mean precisely as we have here interpreted it, for in reply to the defendant’s suggestion the son said “I will give you the note on this money.” To this reply of the son, according to plaintiff’s testimony, the father said nothing. His failure to speak at that time was an indication either that he was- satisfied with the proposed arrangement and consented thereto, or [510] that it was not necessary for him to further express himself upon the subject because he had already previously done so. The plaintiff clearly manifested his intention of accepting the son as his debtor and to substitute him as such in place of the defendant. Fie had two notes in his possession: one from the defendant and the other from the latter’s son. Had he retained both notes it might readily be inferred that he took and held the son’s note as additional collateral. But this was not plaintiff’s understanding. He realized fully what evidently was in the minds of all the parties, that because the son had become the owner of the property he should also assume the indebtedness of the father to the plaintiff. With these facts clearly in mind the plaintiff surrendered defendant’s note to him, and the latter, evidently being satisfied that his obligation had been released and discharged, destroyed the note. Under these circumstances the question arises, Was a novation effected? Whether the note of the son afforded better security than the original note is entirely immaterial. That it did afford him better protection was the conviction of the plaintiff, for he accepted the new note of the new debtor in place of the old note and the old debtor. That there was a substitution of debtors, with the consent of all parties concerned, need not be shown by express language in that regard. It can be inferred from circumstances; and as said in the case of T. W. Stevenson Co. v. Peterson, 163 Wis. 258, 157 N. W. 750, “It is not necessary to a substitution of debtors that the assent of the creditor to táke a new debtor in place of the old one should be given by any writing or by express words. The fact is the vital thing. If that appears clearly by circumstances and the other essentials also appear, they establish a novation.” In fact, the assent of the creditor in many instances may appear more strongly from the facts and circumstances in the case than from written words or oral language. According to the testimony [511] of the plaintiff, this substitution of debtors was suggested by the defendant. That being the case, it follows by necessary implication that in consideration of the assumption by the son of the defendant’s obligation, the defendant, who was a creditor of the son, would either pay him for such assumption, or allow him for the same upon the son’s ini debtedness to him. It is difficult to conceive of a stronger situation where the facts and circumstances more conclusively point to a complete novation than that presented in the instant case. There was a valid, subsisting, and bona fide consideration moving to each party. In Fidelity Ins., T. & S. D. Co. v. Shenandoah Valley R. Co. (86 Va. 1, 9 S. E. 759), 19 Am. St. Rep. 858, on page 859, it is said (syllabus): “Whether a transaction amounts to a novation or not is a question of intention, to be decided from all the circumstances of the case, although nothing positive be expressed. The giving up of a security or an evidence of indebtedness, when accepting another, is a decisive circumstance in determining whether or not the security or evidence of indebtedness so accepted was received in payment or only as additional security.” In 20 Ruling Case Law, 364, it is said: “In the absence of proof of a special agreement, the giving ‘up or the retention of the original security will, in general, be a decisive circumstance in determining that question; for if the creditor means, in any contingency, to resort to the original indebtedness, he will scarcely be willing to surrender all evidence of that indebtedness to his debtor without fortifying himself with some acknowledgment of the real nature of the transaction.” See, also, 20 Ruling Case Law, 366-369, 371, 372; T. W. Stevenson Co. v. Peterson, 163 Wis. 258, 157 N. W. 750; Hedstrom v. Schaumann, 174 Wis. 354, 357, 183 N. W. 968; Hemenway v. Beecher, 139 Wis. 399, 121 N. W. 150. We therefore conclude that there was a complete nova [512] tion; that the indebtedness of the defendant to the plaintiff was canceled; that the plaintiff for a valuable consideration accepted the note of the son; and that the defendant, by necessary implication, agreed to either pay the amount Of the note to his son or make him an allowance therefor upon the indebtedness of the son to the defendant. By the Court. — The judgment of the lower court is reversed, and the cause is remanded with directions to dismiss plaintiff's complaint.