Sec 863

The mere fact of the continuance of business dealings with a firm after a change in its membership by the creditor of the firm, does not involve a release of the retiring partners. If the creditor should say, " I take as debtor the new firm instead of the old," this would, no doubt, constitute a novation, should it be followed by such an interchange of confidence as would constitute a valid consideration; but to release the old firm as such, there must be proof that something to this effect was said, or that from the facts of the case an intention to release the retiring members could be justly inferred.4 The intention of the parties that the new firm should be substituted for the old should be established, if not by express agreement, at least by induction from all the circumstances of the case.5

Retiring partners not discharged by acceptance of new firm.

1 Pollock, 3d ed. 211; Lindley on Part. L. 435; Story on Part. 7th ed. sec 155; Rolfe V. Flower, L. R. 1 P. C. 27; S. C., 3 Moore P. C. N. S. 365.

2 Gibson ex parte, L. R. 4 Ch. 662; Giddings V. Seevers, 24 Md. 363; Armsby V. Farnham, 16 Pick. 318; see Shaw V. McGregory, 105 Mass. 96; Silverman V. Chase, 90 Ill. 37.

3 Infra, sec 957; Thompson V. Perci-val, 5 B. & Ad. 925; Kirwan V. Kirwan, 2 Cr. & M. 617; Harris V. Farwell, 15 BeaV. 31; Harris V. Lindsay, 4 Wash. C. C. 98; Weldes V. Fessenden, 4 Met. (Mass.) 12; Gandolfo V. Appleton, 40 N. Y. 533.

4 Leake, 2d ed. 792; Hart V. Alexander, 2 M. & W. 484; Kirwan V. Kirwan, 2 C. & M. 617; Bilborough V. Holmes, L. R. 5 C. D. 255; Guild V. Belcher, 119 Mass. 257; Torrens V. Campbell, 74 Penn. St. 470; Sham-burg V. Ruggles, 83 Penn. St. 148; Wright V. Brosseau, 73 Ill. 381.

5 Lindley on Part. 4th ed. 389 et seq.; Story on Part. 7th ed. sec 153; Babcock V. Stewart, 58 Penn. St. 179; Hountz V. Holthouse, 85 Penn. St. 235; Beall V. Poole, 27 Md. 645; Sternburg V. Callanan, 14 Iowa, 251; see supra, sec 855.

Sec 864

An insurance company may, by the terms of its charter, reserve the right, as against its policy holders, to assign its business to another company; and when this right is reserved it can relieve itself, by making such an assignment, from liability to parties who have insured in it prior to assignment.1 Whether, when there is no such clause, an assignment by the first insurer is accepted by the insured so as to relieve the former, has been ruled to be a question determinable on all the facts of the concrete case. But the mere payment of premiums to the assignee does not by itself bar the insured from further resort to the assignor.2 But novation has been held to be completed by acceptance of a bonus from the assignee company;3 by procuring a specific recognition by the new company of its liability accompanied by payments of premiums to such company;4 by exclusive dealings with the assignee company for a long lapse of time;5 by application to the assignee company in case of loss as the sole debtor.6 But an application for an endorsement of a policy, such endorsement being refused because the applicant would not sign a written consent to the transfer, coupled with taking receipts in the name of the assignee, does not constitute a novation.7