Opinion ID: 1403474
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Heading: Nevada Library Subcontract:

Text: In Williams v. Crusader Disc. Corp., 75 Nev. 67, 334 P.2d 843 (1959), this court ruled that the substitution of a new obligation for an existing one is a novation because the first debt is extinguished and all parties are discharged on the first contract. If White is discharged by the novation, then the surety is discharged also. Consequently, it must be determined whether or not all of the parties agreed at the time the contract was assigned by White to the corporation that the consent to the assignment constituted a discharge of White as the original debtor and the corporation substituted in his place. Nevada Bank of Commerce v. Esquire Real Estate, Inc., supra. The assignment did not so state. The intent of the parties to cause a novation must be clear. Consent to an assignment is not enough. All inferences must be drawn in Zuni's favor, therefore, it cannot be concluded on summary judgment that Zuni's consent was accompanied by an intent to release White. The case must go to trial to ascertain the intent when the assignment was made. Holland v. Crummer Corp., 78 Nev. 1, 368 P.2d 63 (1962); Reilly v. Cook, McKay & Co., 152 Colo. 269, 381 P.2d 261 (1963); W. Crawford Smith, Inc. v. Watkins, 425 S.W.2d 276 (Mo. App. 1968); Mace v. Conde Nast Publications, Inc., 155 Conn. 680, 237 A.2d 360 (1967). The contract and performance bond both bound the parties, their heirs, executors, successors, administrators, and assigns. Similar language in Illinois Surety Co. v. John Davis Co., supra, was not enough to allow the discharge of the surety. Again, in this instance the surety is required to show some injury from the assignment. Respondent argues that the two stockholders, Scott and Miller, might have been in a position to detrimentally and adversely affect the operation of White, Inc., and by reason of their participation in the corporation a factor was created by the assignment that the surety company had not bargained for. It can be argued conversely that their contributions of capital gave the surety a stronger company upon which it could rely. Such contentions must be fully explored, but not upon affidavits. James Miles & Son Co. v. Aetna Casualty & Surety Co., 1 F. Supp. 925 (D.Mass. 1932); Corvallis & A.R.R. Co. v. Portland E. & E. Ry. Co., 84 Or. 524, 163 P. 1173 (1917); Glens Falls Ins. Co., v. Wright Contracting Co., 276 F. Supp. 122 (D.Md. 1965); Bianco v. Firemen's Fund Indemnity, 72 Ariz. 181, 232 P.2d 386 (1951). Only a full-scale trial can develop the merits of the problems presented. Reversed and remanded for trial in accordance with this opinion. COLLINS, C.J., and BATJER, MOWBRAY and THOMPSON, JJ., concur.