188 Ga. 783 | Ga. | 1939
“One simple contract as to the same matter, and on no new consideration, does not destroy another between the same parties; but if new parties are introduced by novation, so as to change the person to whom the obligation is due, the original contract is at an end.” Code, § 20-115. While that section refers to simple contracts, the principle of law which it declares has been applied by this court to all contracts, without regard to whether they were merely simple contracts or contracts under seal. There.
Most of the cases decided by this court on the subject of novation have dealt with situations involving the relationship of debtor and creditor; and generally it has been true that in the new contract constituting a novation a third party was substituted for a debtor, and the original debtor thereby released from the obligation to pay the original debt. In reality the legal principle involved is equally effective whether the substitution is for the debtor or the creditor. 20 R. C. L. 362, § 4. Nor is the principle limited to contracts whereby money obligations are imposed. Restatement of the Law of Contracts, 809, § 430, gives the rule as follows: “Where a first and second party, who have rights against one another, and a third party all agree that the third party shall immediately acquire a right against the first party and be subject to a duty to him, in substitution for the previously existing right and duty to the second party, there is a novation that is operative according to the terms of the agreement.” The rule is applicable to all contracts where obligations are imposed upon a contracting party and a new contract substitutes either an obligee or an obligor for a party to the original contract. It is necessary in every case that the parties to the new contract and the party to the original contract who has been eliminated from the new contract all agree to the execution of the new contract. It is not essential that all the parties expressly agree that the new contract shall take the place of the original contract, but only that they agree that the new contract itself be executed. In the instant case it was admitted that Aeree procured the execution of the contract between Andrews, who, as Aeree contends, was bound as assignee of Kay to the terms of the
But it is contended by Aeree that since he was sales agent for Sinclair Refining Company, its contract with Andrews in no wise affected his contract, and that the two were capable of execution at the same time, in that he made the deliveries and collected for the gasoline and oil sold by Sinclair Refining Company to Andrews. In this connection it should be noted that the evidence showed that Aeree’s contract with Sinclair Refining Company provided that it could be terminated at any time by either party. The fallacy of the plaintiff’s contention is illustrated by the fact that had the company terminated its contract with Aeree immediately upon the execution of its contract with Andrews, Aeree could not then deliver the Sinclair products to Andrews; and had Andrews accepted delivery from Aeree of any products other than those of Sinclair Refining Company, he would thereby have definitely
Judgment affirmed.