This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
Novation is a term derived from novatio of the Roman law, but its use in common law is in some respects different from the corresponding term at Roman law. At Roman law a novatio was the transmutation of a prior debt into another obligation.1 The name was employed at Roman law because the new obligation between the parties superseded the original obligation. Since the term was used in this sense, it is evident that the Roman law made no attempt, as far as name was concerned, to distinguish between forms of novation in which the parties to the original debt were made parties to the new obligation and those forms of novation in which a new and different debtor was substituted for the debtor from whom the original debt was due and owing.
3 Gray v. Jones, 47 Or. 40, 81 Pac. 813.
4 National Contracting Co. v. Hudson River Water Power Co., 192 N. Y. 209, 84 N. E. 965.
5 National Contracting Co. v. Hudson River Water Power Co., 192 N. Y. 209, 84 N. E. 965.
6 National Contracting Co. v. Hudson River Water Power Co., 192 N. Y. 209, 84 N. E. 965.
7 Beattie v. McMullen, 80 Conn. 160. 67 Atl. 488.
8 Fontano v. Robbins, 22 D. C. App. 253.
9 Beattie v. McMullen, 80 Conn. 160. 67 Atl. 488.
10 Fontano v. Robbins, 22 D. C. App. 253.
11 Beers v. Town Site Co., 97 Wis. 212, 72 N. W. 870.
On the other hand, at common law it became necessary to distinguish between these two cases. It was regularly said, although perhaps it was not so regularly meant, that the consideration must move from the promisee.2 After the Statute of Frauds was enacted, a promise by one to answer for the debt, default or miscarriage of another, could not be enforced unless such contract could be proved in writing.3 A debt could not be assigned at common law, as distinguished from the law-merchant, so that the assignee could sue in his own name.4 Accord executory, without satisfaction, was inoperative as a discharge of the original liability. The common-law courts, however, held that none of these principles applied to cases in which B was indebted to A, and C was indebted to B, and by mutual agreement between A, B and C, C agreed to pay his indebtedness to A, B agreed to discharge his obligation to C, and A agreed to discharge his obligation to B. If such transaction could be upheld, the result of it would be that C was indebted to A, and that A's claim against B and B's claim against C had both disappeared. Such effect was given by the common law to this transaction, and as a result it became necessary to distinguish it in some way from the ordinary contracts in which a third person furnished the consideration,5 from contracts in which a third person agreed to answer for the debt, default or miscarriage of another,6 and from assignments.7 Accordingly, this kind of a transaction was set apart from other transactions, and it was referred to as a novation in the more limited sense of the term.
1 "Novatio est prions debiti in aliam obligationem, vel civilem vel naturalem, transfusio atque translatio, hoc est cum ex praecedenti causa ita nova constituatur, ut prior peiematur. Novatio enim a novo nomen accipit et a nova obligatione." Digest Lib. 46, 2, l.
2 See Sec. 530.
3 See Sec. 1218 et eeq. 4 See ch. LXXI.
5 See Sec. 530 et seq. 6 See Sec. 121S et seq. 7 See ch. LXXI.