Held v. Caldwell-Easton Co. — 97 A.D. 301

Majority

p. 301

Henry Held, Appellant, v. Caldwell-Easton Company, Respondent.

Headnote

" Novation —what order on a third person and acceptance thereof constitutes a novation , —evidence that, in other cases, orders so given were accepted as security and not as payments is inadmissible.

■A novation requires the creation of new contractual relations as -well as the extinguishment of old ones. There must be the consent of all the parties to the substitution resulting in the extinction of the old obligation and the creation of a valid new one.

A corporation indebted to one Held upon a promissory note gave to Held an order for the amount of the note upon one Dewey, who was indebted to the

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corporation. Held presented the order to Dewey for acceptance, and while the latter did not at once accept it, he subsequently gave Held credit for the amount thereof. Held subsequently sent the corporation a letter stating that the order upon Dewey had been settled by notes.

¡Held, that the transaction constituted a novation;

'■That, in an action brought by Held against the corporation upon the note, the court properly refused to receive evidence that, in transactions other than the one in suit, Held had accepted orders from the corporation on other persons than Dewey as security for, instead of in payment of, his claims against the corporation.

Appeal by the plaintiff, Henry "Held, from a judgment of the Municipal Court of the city ®f Hew York, borough of Brooklyn, in favor of the plaintiff, entered on the 11th day of March, 1904, awarding to the plaintiff the sum of one dollar and twenty-nine cents damages and two dollars costs in an action upon a promissory note for three hundred dollars.

Joctb II. JBa7bton, for the appellant.

Willard TJ. Taylor, for the respondent.

This is an action upon a promissory note for $300, in which the plaintiff has recovered only the amount paid out by him for protest fees, the court below having held that the defendant had established the defense of novation. The proof fairly sustained this conclusion, and it cannot be held1 that, the judgment, in so far as it is unfavorable to the plaintiff, is against the evidence or weight of evidence. The plaintiff was demanding payment of the note in suit. The defendant gave him an order upon one Dewey, who was the defendant’s debtor, for the payment of the amount of the note. There is a dispute as to whether the plaintiff accepted this order expressly in payment of the note or not; but however that may be he presented it to Dewey for acceptance, and while Dewey did not accept it at once, he subsequently gave the plaintiff credit for the amount of the order. This fact appears not only by the testimony of Dewey himself, but by a letter from the plaintiff to the defendant, stating that the order upon Dewey had been settled by notes. It has been said that a novation “ requires the creation of new contractual relations as well as the extinguishment of old. There must be the consent of

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all the parties to the substitution, resulting in the extinction of the old obligation and the creation of a valid new one.” (Izzo v. Ludington, 79 App. Div. 272 , 276.) In the present case we have proof not only that the plaintiff looked to Dewey instead of to the defendant for the payment of the $300 represented by the note in suit, but that the claim of the plaintiff upon that obligation was actually discharged by means of a credit and note given by Dewey, which were declared by the plaintiff to have been received in settlement.

There was no error in refusing to*receive evidence that in transactions other than the transaction in suit the plaintiff had accepted orders from the defendant on other persons than Dewey as security instead of payment of his claims against the corporation. The fact thus sought to be established had no tendency to prove the true character of the transaction between the parties with reference to the note in suit. v

The judgment should be affirmed.

All concurred.

Judgment of the Municipal Court affirmed, with costs.