Jansen v. McNamara ( 1918 )

GATES, J.

On December 18, 1910, the plaintiffs and the defendant were copartners doing a mercantile business at Carter, S. D., under the firm name of Jansen-MeNamara Company. On HJhiait date the defendant -sold his one-fourth interest in the firm to. plaintiff Hiaiseh. The contract between them recited:

“All liabilities (of 'the old firm) to be deducted from said invoice and assumed by the new.firm.”

The new firm was Jansen & Haisoh, these plaintiffs. A bill of goods 'that had' been ordered by McNamara for the old firm was -refused -by the new firm. Action was 'brought thereon against Jansen & McNamara. Cduns'd appeared in defense of that action, hut for some reason the appearance on behalf of McNamara was withdrawn without his direction, and judgment by default was entered against McNamara, which he paid. In this action, 'brought by these plaintiffs against -him arising out of -another transaction, -the defendant sought to counterclaim the amount of the judgment paid by him. Verdict was directed for plaintiffs. Defendant appeals from the judgment entered tbareicm.

[i, 2] In support of the judgment it i-s urged that Haiis-ch by bis personal agreement with defendant co-u-ld not bind the new firm. Of course, he could not. North Star B. & S. Co. v. Stebbins, 2 S. D. 74, 48 N. W. 833; Id., 3 S. D. 540, 54 N. W. 593. But he could bind the firm s-o far as he was concerned, and if Jlanisen assented to the agreement it would' be binding on the new firm. It was alleged in defendant’s counterclaim that said 'agreement was entered into with the knowledge and dcme'ent of Jansen. The new firm was a separate entity from the old firm-. Fior the purpose of this ca'se we assume, without deciding, that a promise • of the new firm to answer for the debit of tihe -old firm widukl be such a 'promise as is required to b:e in writing unldler the statute of frauds. Section 1238, C. C., subd. 2. The plaintiff Jansen testified that he read the -contract and signed bis name as a witness to it. In other w-cirds, he knew that the terms of the contract purported to obligate the new firm- to assume the debts of the old. With such knowledge •be placed his signature to the contract as a witness. We think he thereby supplied the written evidence necessary to make the contract valid) as to the new firm under the statute of frauds, and that he is thereby estopped from claiming that said agreement was entered into without his knowledge and consent. Equitable Loan & Sec. Co. v. Lewman, 124 Ga. 190, 52 S. E. 599, 3 L. R. A. (N. S.) 879. As stated in the oa'se -mote accompanying said last-named dtaltiion:

This “is in fact merely a specific application of the equitable principle that one who is silent when justice anid) fair dealing ■require him to speak, or who permits another to expend money in reliance upon a supposed -state of facts which he knows -does not exist, is precluded from thereafter asserting the right as to which he has kept silent.”

We therefore are of the opinion ¡that the trial court erred in directing a verdict for the plaintiffs.

The judgment is reversed.