Case ID: wis_139/html/0399-01.html
Source: Caselaw Access Project
Author: {"author": "Winslow, C. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Hemenway, Respondent, vs. Beecher and wife, Respondents, and American Bank Trust Company, Appellant.
    
      April 20—May 11, 1909.
    
    
      .novation: Essential elements: Substitution of debtor: Judgments: Pleading: Sufficiency to charge new debtor.
    
    1. The essentials of a novation are a mutual agreement to which the creditor, the old debtor, and the new debtor assent, by which the old obligation is extinguished and a new and valid obligation is created and takes its place.
    .2. Where, a debtor transferred to a third person real and personal property, in consideration of which the third person agreed to pay his debt, and thereafter the debtor went to the creditor and told him of the arrangement, to which the creditor assented and agreed to accept the third person as obligor for the debt and release the debtor, the transaction constitutes a novation.
    -3. In an action at law on a promissory note, where the plaintiff brings in a third person whom the defendant alleges had assumed the debt for a consideration, and by the amended complaint, containing a complete copy of the defendant’s answer, apprised the third person of the claim he must prepare to meet, in the absence of a motion under sec. 2656a, Stats. (1898), for further pleadings, the issue is sufficiently framed to warrant overruling an objection that a novation was not alleged in the complaint.
    Appeal from a judgment of tbe circuit court for Bayfield ■county: John E. Parish, Circuit Judge.
    
      Affirmed.
    
    Tbe plaintiff brought action in tbe municipal court of Bay-field county against tbe defendant Beecher and bis wife upon -a promissory note for $55. Tbe Beechers answered admitting tbe execution and delivery of tbe note, but claiming that thereafter tbe American Bank Trust Company, an Iowa corporation, agreed for value to pay tbe note, and that plaintiff thereupon released tbe defendants from liability. Tbe defendants bad judgment in tbe municipal court and tbe plaintiff thereupon appealed to tbe circuit court and made application to tbe latter court that the American Bank Trust Com
      
      pany be brought in as a party defendant. The application was based on an affidavit of plaintiffs attorney, stating the-claims made by the Beechers, and denying that he agreed to - the alleged novation, but claiming that a complete determination of the controversy could not be had without the presence of the trust company as a party. The motion was granted, the trust company made a party defendant, and the plaintiff ordered to serve an amended complaint. The amended complaint, after alleging the execution, delivery, and nonpayment of the note, set forth in full the answer made by the defendants Beecher in the municipal court, and then alleged that the plaintiff had no knowledge of the novation claimed by the • Beechers, and denied that he ever -released them from liability, but that he was unable to determine which of the defendants was liable on the note, and demanded judgment against such defendant or defendants as the court or jury should determine to be liable on the note. The trust company answered the amended complaint, denying any knowledge as to the execution or existence of the note, and further denying each and every allegation of the amended complaint. No further pleadings were served or filed. At the opening of the trial' the trust company objected to any evidence tending to charge it with liability on the note, because no claim or cause of' action was stated against it in the complaint, but the objection was overruled. The jury by special verdict found (1) that there was $90.57 due on the note; (2) that the defendant American Banh Trust Company promised for value to pay the note; (3) that the plaintiff, Uemenway, agreed-with the defendant F. F. Beecher to accept the trust company for the payment of the note; (4) that Uemenway also agreed to release Beecher from all liability on the note. Motions to-set aside the verdict and for judgment for the defendant trust, company notwithstanding the verdict were overruled, and judgment rendered against the trust company for the amount, of the note and costs, from which judgment the trust company;appeals.
    
      
      J ohn W dish, for the appellant.
    Eor the respondents there was a brief by A. W. McLeod, attorney for the plaintiff, Hemenway, and E. O. Alvord, attorney for the defendants Beecher; and the cause was argued orally by Mr. McLeod.
    
   Winslow, C. J.

Two claims are made by the appellant trust company upon this appeal, viz.: (1) That there was no sufficient proof of a contract of novation; and (2) that there could be no judgment rendered against the trust company because there was no allegation in the complaint that it ever promised or agreed to pay the note.

As to the claim that there was no evidence of a contract of novation, we think it clear that it must be overruled. The defendant F. E. Beecher testified that he transferred to the company certain property, real and personal, together with some money, and that the company, in consideration thereof, not only agreed to pay off certain chattel mortgages upon the personal property, but also agreed to pay the note in suit. He further testified that shortly afterward he went to the plaintiff and told him of the arrangement and that the plaintiff said it was all right, that he would accept the defendant company as payor of the note and release Beecher. This testimony tended to prove all the essential facts necessary to constitute a novation, namely, a mutual agreement to which the creditor, the old debtor, and the new debtor assent, by which the old obligation is extinguished and a new and valid obligation is created and takes its place. Bohn Mfg. Co. v. Reif, 116 Wis. 471, 93 N. W. 466.

The claim that no judgment could be rendered against the appellant because there was no charge of novation in the complaint must also be overruled. Sec. 2610, Stats. (1898), relating to the interpleading of additional parties, and see. 2666a of the same Statutes, relating to cross-complaints and proceedings where controversies arise between defendants, are very broad in their terms and were intended to give courts plenary powers not only to call in new parties, but to mould the pleadings and dispose of all branches of a controversy in one action after having obtained jurisdiction of the necessary parties. The idea in both sections is to enable the court to grasp all the issues germane to the main controversy, whether arising between the plaintiff and the defendant, or between defendants, or between a defendant and an outside party, and dispose of them in one and the same action, and thus.avoid circuity of action and multiplicity of suits. This purpose should be encouraged rather than discouraged by the courts. It is in line with the idea that courts are formed to decide con- ^ troversies without unnecessary delay and without undue re-' finement as to pleading or procedure so long as the parties are before the court and the issues understood. It is true that the court has held that, in a purely legal action to obtain only a money judgment, the plaintiff cannot be compelled to bring in other parties than the one he has chosen to sue. Taylor v. Matteson, 86 Wis. 113, 56 N. W. 829. No such question is presented here. In the present case the plaintiff himself chose to bring in another party whom the defendant claimed had assumed the debt for a consideration. Had he not brought in this third party, and had the defendant’s allegations been proven to the satisfaction of the jury, the plaintiff would have been obliged to go out of court and commence a second action against such third person, perhaps to be defeated in that action also. It seems that he should have the privilege, if he chooses, thus to settle the entire controversy in one action and avoid the necessity of two actions and the possibility of contradictory results.

Doubtless, under see. 2656a, the court should have directed the defendants Beecher to serve an answer or cross-complaint on the appellant and required the appellant to answer thereto, because the real issue of fact in the case was between the defendants Beecher on the one side, alleging novation, and the appellant and the plaintiff on the other, denying any novation. This procedure would have been the more orderly, but the omission is not fatal, at least under the circumstances here present. The plaintiff’s amended complaint contained a complete copy of the defendants’ answer, thus apprising appellant of the claim which he must prepare to meet. This was served on the appellant and he answered thereto without objection. No motion was made by any one for any further pleadings. All parties came to the trial knowing the issues which they were expected to meet. Looking at matters of substance rather than of form, we cannot but regard the issue as quite fully made up, and therefore we think that the court rightly overruled the appellant’s objection made at the opening of the trial.

By the Gowrt. — Judgment affirmed.