Case Name: Bishop-Babcock-Becker Company, Appellant, vs. Keeley, Respondent
Court: Wisconsin Supreme Court
Jurisdiction: Wisconsin
Decision Date: 1915-04-13
Citations: 160 Wis. 546
Docket Number: 
Parties: Bishop-Babcock-Becker Company, Appellant, vs. Keeley, Respondent.
Judges: 
Reporter: Wisconsin Reports
Volume: 160
Pages: 546–549

Head Matter:
Bishop-Babcock-Becker Company, Appellant, vs. Keeley, Respondent.
March 26
April 13, 1915.
Novation: Acceptance: Bills and notes: Discharge of maker: Evidence.
1. Acceptance by tbe creditor of a novation whereby á new debtor is substituted and the old one discharged need not be by express words, but may be implied from facts and conduct.
2. In an action against the maker of promissory notes, the evidence is held to sustain a finding of the trial court that the payee (plaintiff’s assignor) had consented to an agreement by which the liability of the maker was extinguished and another person was substituted as the debtor on the notes.
Appeal from a judgment of tbe circuit court for Dane county: E. Bay Stevens, Circuit Judge.
Affirmed.
This is an action to recover tbe principal and interest on a series of notes, secured by a chattel mortgage, executed by tbe defendant.
Prior to March, 1910, Mrs. M. W. Keeley, tbe defendant, conducted a confectionery store in tbe city of Madison. Janies T. Keeley, her husband, acted as her agent. About tbe 30th day of August, 1909, tbe defendant executed and delivered to tbe L. A. Becker Company a number of promissory notes for tbe purchase price of a soda-water fountain and supplies. These notes were secured by a chattel mortgage. The L. A. Becker Company assigned tbe notes to tbe plaintiff company in 1911. Tbe plaintiff company is a foreign corporation. During tbe year 1910 the defendant transferred all of tbe personal property, stock, and fixtures in her store to tbe Palace of Sweets Company, which was organized in March, 1910.' When tbe Palace of Sweets Company was organized it assumed and agreed to pay all of tbe liabilities of tbe defendant, including tbe notes given to tbe L. A. Becker Company. Tbe defendant made np' payments on tbe notes subsequent to March, 1910. It is shown by the testimony that the Palace of Sweets Company did make payments after March, 1910, and these payments were accepted by the plaintiff. There is a conflict in the testimony as to whether J. Y. Keeley made an arrangement with the manager of the plaintiff company whereby the plaintiff agreed to accept the Palace of Sweets Company as the debtor of these notes in place of the defendant ox not. In March, 1912, the Palace of Sweets Company filed a voluntary petition in bankruptcy and the L. A. Becker Company appeared in such proceedings and filed a claim as a secured creditor of such company. The United States district court decided that the L. A. Becker Company was not a secured creditor because the chattel mortgage was not properly recorded. The company then appeared as an unsecured creditor and shared pro rata with the other general creditors.
A jury being waived, the circuit court found as facts that defendant, while doing business as a sole trader, gave her promissory notes for a portion of the purchase price of goods purchased of plaintiff’s predecessor;- that in March, 1910, the Palace.of Sweets Company was formed, which took over all the assets of defendant in her business, and that soon thereafter plaintiff’s predecessor in title was informed of the transfer and consented to accept the Palace of Sweets Company' as the debtor on such notes. The court entered judgment dismissing the plaintiff’s complaint and that the defendant recover costs and disbursements. Erom such judgment this appeal is taken.
Eor the appellant there was a brief by Welton, Maries & Porter, and oral argument by O. B. Maries.
To the point that there was no novation they cited Pope v. Vajen, 121 Ind. 317, 22 N. E. 308, 6 L. R. A. 688; Lynch v. Austin, 51 Wis. 287, 8 N. W. 129; Security Nat. Banh v. St. Croix P. Co. 117 Wis. 211, 94 N. W. 74; Hemenway v. Beecher, 139 Wis. 399, 121 N. W. 150; Latiolais v. Citizens’ Bank, 33 La. Ann. 1444: 29 Oye. 1136: De Wiit v. Monjo, 36 App. Div. 553, 61 N. Y. Supp. 1046.
For the respondent there was a brief by Mill •& Bpohn, and oral argument by W. M. Spohn.
They argued, among other things, that to constitute a novation the creditor must have assented to the discharge of the original debtor and have accepted the promise of the new debtor to assume the, debt. Bietzlojf v. Glover, 91 Wis. 65, 64 N. jW. 298; Murphy v. Hanrahan, 50 Wis. 485, 7 N. W. 436. But such assent and acceptance may be implied from the facts and circumstances attending the transaction and the contract of the parties subsequent thereto. 29 Cyc. 1131, 1137; 21 Am. & Eng. Ency. of Law (2d ed.) 667, 671; Union Gent. L. Ins. Go. v. Hoyer, 66 Ohio St. 344, 64'N. E. 435; Warren v. Batchelder, 15 N. H. 129; Mitrovich v. Fresno F. P. Go. 123 Cal. 379, 382, 55 Pac. 1064; III. L. Ins. Go. v. Benner, 78 Kan. 511, 97 Pac. 438; De Wiit v. Monjo, 46 App. Div. 533, 61 N. Y. Supp. 1046; J. II. Lane & Go. v. United 0. Go. 103 App. Div. 378, 92 N. Y. Supp. 1061; Ilemenway v. Beecher, 139 Wis. 399, 401, 121 N. W. 150; Abbott v. Johnson, 47 Wis. 239, 2'N. W. 332.

Opinion:
SiebecKee, J.
The only question raised is, Was there an agreement, consented to by the defendant, the Palace of Sweets Company, and the L. A. Becker Company, by which the debt of M. W. Eeeley on these notes was extinguished and the Palace of Sweets Company accepted as the obligor of the debt evidenced by the notes? The Palace of Sweets Company admittedly agreed with the defendant, M. W. Keeley, to assume this debt in consideration of the transfer of all the property of defendant to the company. It is not required that acceptance of the terms of novation be shown by express words, but it may be implied from the facts and circumstances of the transaction and the conduct of the parties in relation thereto. An examination of the evidence and the conduct of tbe parties attending tbe transaction of novation bas satisfied us that tbe circuit court was fully justified in concluding that tbe L. A. Becker Company, plaintiff's assignor and tbe owner of tbe notes in question when tbe Palace of Sweets Company bad been organized in March, 1910, consented to accept tbe Palace of Sweets Company as tbe obligor on these notes and thereby released tbe defendant from liability. We cannot say that tbe findings of tbe trial court are against tbe clear preponderance of tbe evidence.
By the Court. — Tbe judgment appealed from is affirmed.