Carpy v. Dowdell , 131 Cal. 495 ( 1901 )

This case has been before the court in the past. (Carpy v.Dowdell, 115 Cal. 677.) The facts involved in the litigation are set out in detail in the decision rendered at that time, and we will now only state those which are necessary to a consideration of the questions presented upon this appeal. Defendants are appealing from a judgment of foreclosure rendered against them upon two certain notes and chattel mortgages. Plaintiff, as assignee of the notes and mortgages from the Bank of St. Helena, brings this action of foreclosure.

It is first contended that the findings are substantially the same as those upon the previous appeal, and that by the decision rendered upon that appeal it was held that plaintiff was estopped from bringing the action. By that decision it was held: 1. That the acts of the cashier of the bank were the acts of the bank; and 2. That this plaintiff, the assignee of the bank, stood in its shoes. But it was not held that an estoppel existed which barred the prosecution of this action for every part of the mortgaged property.

The salient facts important here are these: Defendants sold three hundred and sixty-eight thousand gallons of wine to Chevalier Co., to be delivered in fifty thousand gallon installments, the purchase price to be paid as the wine was delivered. The Bank of St. Helena held chattel mortgages upon defendants' personal property, which included this wine, other wine, manufacturing plant, etc. The sale by defendants to Chevalier Co. was evidence by an instrument in writing which the bank prepared, and at the bank's suggestion and request, and with the consent of both parties to the contract, the following clause was inserted in that writing: "All payments on said wines to be made to the Bank of St. Helena for our account, the cashier of said bank to receipt for the same."

As suggested, the substance of the decision upon the first appeal as to the question of estoppel is a contested matter here. And while isolated excerpts may be taken from that decision tending to show that a complete estoppel upon the entire cause of action stood against plaintiff, yet if the decision as a whole is considered, it is plain that such a holding was never contemplated or intended by the court. In the absence of language in the opinion pointing directly to a declaration of that character, we will not so hold now, for the reasoning by the court at that time does not demand it, and neither the facts of the case nor general principles of law justify a conclusion that such is the law. The reasonable and fair construction of the decision, therefore, is that the estoppel only involved the three hundred and sixty-eight thousand gallons of wine. When the cause went back for a second trial plaintiff was free to litigate his rights as to the balance of the property covered by the mortgages.

It is contended that "the contract between the defendants and Chevalier Co., consented to by the bank, was a complete novation by which the new obligation of Chevalier Co. to pay these moneys to the bank, to be credited by the bank to the account of the defendants, was substituted for the original obligation of the defendants to the bank." Under section 1531 of the Civil Code a novation in this case could only take place: "1. By the substitution of a new obligation between the same parties with intent to extinguish the old obligation; 2. By the substitution of a new debtor in place of the old one with intent to release the latter." There is no question here of the substitution of a new obligation between the bank and these defendants. Hence, the principle found in subdivision 1 of the aforesaid section cannot be invoked. We deem it equally clear that Chevalier Co. was not substituted as a new debtor in place of these defendants with intent to release them. The findings in this case neither justify the conclusion that the parties intended to substitute a new debtor nor to extinguish the old obligation. The agreement of Chevalier Co. to pay these moneys, the various installments of the purchase price of the wine, to the bank for the account of defendants has none of the essentials of a novation as demanded by the aforesaid section of the Civil Code. Even conceding this covenant of the contract to be so broad that under it the bank was authorized to credit the payments thus made by Chevalier Co. upon defendants' notes, still that fact alone does not fill the measure furnished by the statute. We cannot find an intimation in the contract that the bank intended to release defendants from the notes and mortgages and look to Chevalier Co. alone for the money due upon them, and the contract has no such legal effect. An intent upon the part of the bank to release these defendants from their original obligations is a vital element going to make up a novation in this case. That intent is lacking, and for this reason alone the claim of novation must fail.

Even conceding the finding of fact made by the trial court to the effect that the bank, under the Chevalier transaction did not release any of the mortgaged property from the effect of the mortgages, may be inconsistent with some other finding, still the mere presence of an inconsistency in findings does not constitute reversible error. The Chevalier wine was not included in the decree of foreclosure. Hence, appellant has no cause to complain, looking at the case from that standpoint. There being neither an estoppel against plaintiff's prosecution of this action as to the remainder of the mortgaged property, nor a novation as to the original obligations held by the bank, this finding of which complaint is made cuts no figure in the case.

The description of the property included in the decree of foreclosure coincides with the description found in the instruments of mortgage, and in the absence of some showing to the contrary, this being an appeal from the judgment without a bill of exceptions, the decree will be presumed to be correct.

For the foregoing reasons the judgment is affirmed.

Harrison, J., and Van Dyke, J., concurred.

Hearing in Bank denied.