Case Title: Elliott v. Whitney

Citation: 215 Kan. 256, 524 P.2d 699

Docket Number: 47,185

State: kansas

Court: Kansas Supreme Court

Date: 1974-07-17T00:00:00Z

Document:
215 Kan. 256 (1974)
524 P.2d 699
ROBERT D. ELLIOTT, Appellant,
v.
W.F. WHITNEY, d/b/a WHITNEY AVIATION, Appellee
No. 47,185

Supreme Court of Kansas.
Opinion filed July 17, 1974.
*257 Robert G. Frey, of Frey and Smith, of Liberal, argued the cause and was on the brief for the appellant.
Eugene L. Smith, of Smith and Greenleaf, of Liberal, argued the cause and was on the brief for the appellee.
The opinion of the court was delivered by
HARMON, C.:
This is an action for breach of an oral contract of sale of a crop dusting airplane and related oral contracts for leaseback of the plane and conducting crop dusting services. By way of summary judgment the trial court ruled that a subsequent written agreement, rather than the parties' oral agreements, governed their rights upon defendant's breach of the written agreement. Plaintiff appeals from the judgment rendered upon the determination. Essentially the issue is whether the written agreement constituted an executory accord rather than a novation or substituted contract.
In rendering its decision the trial court had before it plaintiff-appellant's petition, defendant-appellee's answer, certain admissions and stipulations of fact. Appellant's petition contained these allegations:
Appellee's answer contained the following:
Exhibit A, referred to in appellee's answer, is as follows:
"AGREEMENT
"Now, therefore the parties agree as follows:
Execution of this agreement was admitted by appellant Elliott and appellee made the initial payment to him as called for in that instrument. Shortly thereafter it appears that an insurance agency filed suit against appellant because of appellant's failure to pay past due insurance premiums on the aircraft title to which he was to receive from appellee. In an apparent attempt to shift liability in that suit appellant sought to have appellee brought into that action as a third party defendant. Appellee then declined to make further payments to appellant pursuant to the October 6th agreement whereupon appellant commenced this proceeding.
In the present action the parties stipulated, prior to the rendition of judgment, that appellant's obligation to hold appellee harmless from any liability for insurance premiums pursuant to the last paragraph of their October 6th agreement was appellant's continuing responsibility and further that actual payment thereof by appellant was not a condition precedent to appellee's obligation to pay the installments called for in paragraph one of that agreement.
In entering summary judgment for appellee the trial court ruled that the October 6, 1972, writing was a valid, binding contract and it assessed damages against appellee only for its breach, conceded by the parties to be the amount of the delinquent payments called for therein plus interest, rather than for damages allegedly resulting from breach of the prior oral agreements as claimed by appellant. In effect the trial court ruled that the written agreement was a novation rather than executory accord.
Novation may be broadly defined as a substitution of a new contract or obligation for an old one which is thereby extinguished (66 CJS, Novation, § 1). It is a new contractual relation which has four requisites: A previous valid obligation, the parties must agree to the new contract, the new contract must be valid and the old obligation must be extinguished by the substitution for it *260 of the new one (15 Williston on Contracts, 3d ed., § 1869; 66 CJS, Novation, § 3).
An executory accord has been defined in the following manner:
The distinction between a novation and an executory accord becomes significant in event of breach of the new agreement. If the new agreement constitutes a novation, a breach does not revive the discharged claim and the parties' rights are controlled by the new agreement (6 Corbin on Contracts, § 1293; 66 CJS, Novation, § 24).
On the other hand the effect of a breach of an executory accord is stated in the following:
The eminent author just cited pinpoints the problem at hand in this fashion:
In Davenport v. Dickson, 211 Kan. 306, 507 P.2d 301, we had this to say respecting novation:
Finally, we note the following respecting the intention to create novation:
*261 Applying the fundamental rule that the intention of the parties to a contract is to be determined from the plain, general and common meaning of the words used by them in their contract (Duffin v. Patrick, 212 Kan. 772, 512 P.2d 442) we have no difficulty in concluding the parties here intended that which amounts in law to novation or a substituted contract. Appellant acknowledges that a previous valid agreement existed between the parties and that they agreed to the terms of the new contract. There is no question of fraud or mistake in its execution and its validity is not challenged in any way. The only remaining question is whether the parties intended thereby to extinguish the old contract by the substitution of the new one. They said so in clear and unambiguous language:
The plain and ordinary meaning of the term "hereby" as used above can only be "by or through this document" or "by means of this document." That the intent expressed therein was to discharge all prior obligations upon execution of the written agreement is further borne out by comparison of the terms of the oral agreement as alleged in appellant's petition with those of the October 6th agreement  they are quite different. The latter clearly evidenced the parties' intent thereby to settle and adjust all disputes existing between them and it must be upheld.
There was no genuine issue as to any material fact in the case and the trial court properly entered summary judgment as a matter of law.
Judgment affirmed.
APPROVED BY THE COURT.