#### Horace Inman and Harry A. Inman, Respondents, *v.*F. N. Burt Company, Appellant.

Third Department,

January 8, 1908.

Contract — novation — sale of factories and machinery — unaccepted machine not included — Statute of Frauds — letter not constituting contract. -

To constitute a contract of novation the original Obligation must be extinguished and there must be a mutual agreement among the parties to the old obligation and the new whereby the new obligation is substituted for the old.

The purchase by A of a manufacturing plant from B, with “ all machinery and appliances * * * in and around the box factories,” does not make A liable to C for a machine on the premises which B had ordered from C but refused to accept and pay for, and a substitution of parties is not shown by a subsequent letter from A to 0 stating that the machine was unsatisfactory and giving C a specified time to remedy defects, especially where 0 subsequent to A’s purchase of the plant demanded payment of B.

A letter from A to C acknowledging the receipt of new parts to repair the machine,, but stating that it is still -unsatisfactory and giving 0 a week to . demonstrate that it can do satisfactory work, does not make A liable, for even if the letter contains any agreement it is insufficient in form to comply with the Statute of Frauds as no consideration or terms of purchase are expressed nor reference made to any other agreement containing them.

*74Appeal by the defendant, the F. N. Burt Company, from a judgment of the Supreme Court in favor of the plaintiffs, entered in the office of the clerk of the county of Montgomery on the -16th day of July, 1907, upon the verdict of a jury, and also from an order entered in said clerk’s office on the 16th day of July, 1907, denying the defendant’s motion for a new trial made upon the minutes.

*Wallace Thayer,*for the appellant:

*Henry V. Torsi,*for the respondents.

Sewell, J.:

The complaint alleges that on or about the 1st day of November, 1906, the plaintiffs sold and delivered a machine, known as a lining and drying machine, for which the defendant promised and agreed to pay the sum of $1,100.

The, plaintiffs attempted to establish the liability of the defendant by proof showing that in January, 1904, they entered into an agreement with one Fred N. Burt, whereby they were to manufacture, erect and complete the machine in question for the. sum of $1,100, which Burt agreed to pay; that the machine was constructed and set up in Burt’s factory about March 1, 1905 ; that Burt claimed it would not do the work it was intended to perform, and refused to • accept and pay for it; that on the 1st day of September, 1906, Burt transferred to the defendant bv a bill of sale “All machinery, appliances, tools, chattels and personal property of every kind and description in and around the box. factories £A,’ 6 B’ and ‘ C ’ operated by first party in the city of Buffalo, N. Y., it being intended by this instrument to transfer and convey to second party all of the personal property owned by the first pertaining and'appertaining to his paper-box and lithographic printing business, condueted'heretofore in the city of Buffalo under the name of Fred N. Burt,” and ■ that a letter was thereafter written in behalf of the defendant company, of which the following is a copy:

> “ *October 24th,*1906.

> “ Inman Meg. Co., .

> “Amsterdam, N. Y.:

> “ Gentlemen.— Since receiving your last letter we have received new parts and new canvas, and put them on the lining machine, *75and have done onr best to get the machine to do satisfactory work, but we have hot yet met with any success. We will let the machine stand until November first, and if you wish to come on and satisfy yourself that it will not do satisfactory work, yon are at liberty to do so.

> “.Notwithstanding all that has been written and said about this very unsatisfactory machine, we will give you oné more chance to demonstrate that you can make the, machine do satisfactory work, provided yon make the demonstration between now and November first. Tours truly,

> “E. N. BUBT CO.”

It was not shown that there was a mutual arrangement among the parties, by which the defendant assumed the contract with the plaintiffs and the• liability of Burt was extinguished or released; nor did if appear that Burt and the defendant made any agreement for the benefit of the plaintiffs. On the contrary, the plaintiffs’ letter to Burt, dated October 16, 1906, in which they wrote, “We have filled our contract and did first-class lining and sent new canvas belt and parts to take the place of temporary pieces, as per arrangements made with your J\Ir. Palmer, and we now demand onr money as the machine is your property,” shows that the plaintiffs were not parties to any such arrangements or agreement by adoption or otherwise, and that they understood that their contract with Burt still subsisted.

It is quite clear from what appears in the record that the case was tried upon the theory that the legal result of the defendant’s letter was a substitution of parties. The court charged the jury that “for the purpose of this case, it stands before you as if the defendant company had made the agreement for the purchase of the machine.”

I think this case is distinguishable from a case of novation. To constitute a contract of novation the original indebtedness or obligation must be extinguished. There must be a mutual agreement among the parties to the old and the new obligation, whereby the new obligation is substituted for the prior one. *(Ryan*v. *Pistone,*89 Hun, 78.)

The bill of sale executed by Burt only passed title to the prop*76erty then owned by him. It imported no promises on the part of the defendant .to purchase the machine or to'assume thé contract. There is nothing in the case to ' show that any of the parties intended to novate, and my conclusion is that the only question presented is. whether the defendant became bound to pay the purchase price of the machine by reason of the letter of October 24, 1906. I am inclined to the view that the letter does not contain an agreement of any kind, but it is unnecessary td consider that question, for if it imports, a promise on the part of the defendant it is' insufficient in form under the requirements of the Statute-.of Frauds.* It does not express any consideration or terms of purchase,nor refer to any agreement containing them, and it is impossible to say, from the contents of the letters, what the contract in fact was, and hence is wholly ineffectual for the purposes of a note or memorandum in writing óf any contract whatever.

In *Brauer*v. *Oceanic S. N. Co.*(178 N. Y. 339) the court said: “ The general rule is held by this court to bd ‘ that a note or memorandum sufficient to take a contract out of the operation of the Statute of Frauds must state the whole contract with reasonable certainty so that the substance thereof may be made to appear from • the record itself without regard-to parol evidence,’ ” and cited *Ward*v. *Hasbrouck*(169 N. Y. 407) and *Drake*v. *Seaman*(97 id. 230).

It follows that the order and judgment appealed from should' be reversed and-a new trial granted, with costs to abide the event.

All concurred; Kellogg, J., in result.

Judgment and order reversed and new trial granted, with costs to appellant to abide event.

*

 See Pers. Prop. Law (Laws of 1897, chap. 417), §, 21.— [Rep.