Harold J. Dunbar v. Scott M. Farnum & Wife, Co-Partners

• Decision Date: 04 May 1937
• Citation: 196 A. 237,109 Vt. 313
• Parties: HAROLD J. DUNBAR v. SCOTT M. FARNUM & WIFE, CO-PARTNERS
• Court: Vermont Supreme Court

196 A. 237

109 Vt. 313

HAROLD J. DUNBAR v. SCOTT M. FARNUM & WIFE, CO-PARTNERS

Supreme Court of Vermont

May 4, 1937

February Term, 1937.

Opinion on reargument and petition for new trial filed January 4 1938. Action on Contract for Sale of Water System---Partnership Not Liable on Contract Signed with Individual Names---Partnership Distinguishable from Joint Enterprise---Statute of Frauds Applied to Contract for Sale of Real Estate---Ratification of Unauthorized Act Required to Be in Mode Necessary to Confer Authority to Perform It---Ratification of Instrument under Seal---Of Contract Required to Be in Writing---Essentials of Written Ratification---Ratification Distinguished from Evidence Thereof---Filing on Contract Held Not Ratification---Application to Public Service Commission Held Not Ratification---Partnership a Separate Entity---Status of Partner Acting for Firm---Individual Liability Not in Issue in Suit against Partnership---Suit against Partnership Where Partners' Names Signed to Contract---Waiver of Statute of Frauds---Acts and Statements Held Not to Constitute Waiver---Waiver Defined---How Established---Care Required in Passing on Claim of Implied Waiver---Silence as Waiver---Waiver in Derogation of Statute Right---Waiver of Statute of Frauds Through Failure to Object to Parol Evidence---No Waiver of Statute or Estoppel from Signing of Contract---Acts and Statements Not Known to or Relied upon by Other Party as Constituting Estoppel---Waiver of Right to Question Authority of One Signing Con- tract as Agent Held Not Established---No Recovery against Partner as Joint Promisor in Action against Partnership---Petition for New Trial, When Granted---Petitioner Held Not Entitled to New Trial.

1. Husband and wife doing business as partners were not chargeable in suit against them as such partners on contract for sale of real estate by reason of fact that husband signed thereto his own and his wife's names, but not the firm name.

2. Whether or not partnership is entity as distinct from its individual members, it is not same thing as joint ownership or joint responsibility, and members of partnership may be liable as joint contractors though not liable as partners.

3. Under Statute of Frauds (P. L. 1675), if wife was to be held as a joint contractor on executory contract for sale of real estate, she must have signed contract, either by her own hand or by agent duly authorized in writing, and she was not bound by such contract to which her husband signed her name in absence of proof that he had written authority so to do.

4. Subsequent ratification of contract entered into by purported agent is equivalent to prior authority to bind principal, but ratification of unauthorized act must be of particular mode or form necessary to confer authority to perform it in first place.

5. Power to execute instrument under seal must be given by instrument under seal, and ratification of instrument that law requires to be sealed must also be sealed.

6. Where written authorization to execute contract is required and none exists, ratification must be in writing to bind principal.

7. Written ratification of contract required to be in writing need not be formal document, nor addressed or delivered to other party to contract, but is sufficient to satisfy Statute of Frauds if it recognizes existence of contract and either expressly or impliedly approves it.

8. Though ratification of contract for sale of real estate was required to be evidenced by writing signed by party whose name was signed thereto without written authority ratification itself was merely act of her mind---a deliberate choice to be bound.

9. Filing endorsed by wife on contract required to be in writing, to which her husband signed her name without authority in writing, was not sufficient ratification, since it did not express her approval of the contract.

10. In action on executory contract for sale of water system, to which husband signed his wife's name without authority in writing, application to public service commission for approval of contract was not evidence of ratification by wife where record did not show that she signed it.

11. Partnership is entity separate and apart from individuals composing it.

12. Partner, acting for his firm, acts in single capacity as agent of firm, the individuality of the partners being merged therein.

13. When firm is sued, partnership undertaking must be established to warrant recovery, and individual liability is not within issue to be tried, though such liability may result from plaintiff's verdict.

14. Though partner can ratify unauthorized partnership agreement suit against partnership on executory contract for sale of real estate, to which one partner signed his and other partner's names but not firm name, failed regardless of alleged ratification by other partner, since there was no partnership agreement to ratify.

15. Benefit of Statute of Frauds may be waived.

16. That wife, whose husband without written authority signed her name to contract for sale of real estate, received copy of contract from her husband and filed it, that she was satisfied with contract and may have so informed her husband, and that she was willing to go on with it at time of trial of action for breach thereof, held not to constitute waiver of defect therein under Statute of Frauds.

17. Waiver is voluntary relinquishment of known right.

18. To establish waiver, there must be shown an act or omission on part of one charged therewith fairly evidencing intention permanently to surrender right in question.

19. Waiver may be express or implied, but where it is sought to establish implied waiver, care must be exercised both in proof and application, and facts and circumstances relied on must be unequivocal in character.

20. Silence, alone, is never a waiver, but results in establishing waiver only where there is obligation to speak.

21. Waiver is not favored and will not be inferred from doubtful acts where it is in derogation of statutory right.

22. Where it is sought in action to establish liability of party on contract, Statute of Frauds amounts simply to rule of evidence, and if one entitled to invoke statute remains silent when patrol evidence of contract is offered and admitted, he waives right to rely thereon by his silence.

23. One who signed his own and his wife's names to contract for sale of real estate but had no written authority to execute contract for his wife did not waive any rights to rely on Statute of Frauds, nor was he estopped to assert them, because he said nothing about statute when he signed or thereafter.

24. In action on executory contract for sale of real estate owned by husband and wife as partners, to which husband signed wife's name without authority in writing, wife was not estopped from setting up Statute of Frauds as defense by her acts and statements upon which plaintiff placed no reliance and of which he had no knowledge.

25. In such action, acts and statements of wife held not to constitute waiver of right to question husband's authority to sign her name to contract.

26. In action against partnership on contract to which names of individual partners were signed but not firm name, recovery could not be had against partner as joint promisor, in view of character of a partnership as separate entity.

27. In order to prevail on petition for new trial on ground of newly discovered evidence, petitioner must show that lack of earlier knowledge of such evidence was not due to lack of diligence or of attention to requirements of his case on his part or that of his counsel, and that new evidence is of such character as to give reasonable assurance that it will work different result upon retrial.

28. In action against partnership consisting of husband and wife on contract for sale of water system, to which husband signed his and wife's names but not firm name, plaintiff's petition for new trial, on ground of newly discovered evidence that wife signed firm name to application to public service commission for leave to sell, was denied, because only important fact under circumstances of case, that partnership made such application, was proved at trial below, and because in the action as brought there could be no recovery against husband and wife as individuals nor against partnership.

Judgment affirmed.

Conant & Parker for the plaintiff.

Porter, Witters & Longmoore for the defendants.

Present: POWERS, C. J., SLACK, MOULTON, SHERBURNE and BUTTLES, JJ.

OPINION

POWERS

This is an action of contract to recover damages for the breach of an executory contract for the sale of a water system in the town of Lyndon. It was tried by jury in the court below, and, at the close of the evidence, a verdict was ordered for the defendants. The plaintiff excepted.

The defendants are husband and wife. They owned and operated the water system in question and thereby supplied their customers with domestic water at scheduled rates. They carried on this and other business, ostensibly as partners, under the firm name and style of Scott M. Farnum & Wife. They regarded and conducted themselves as partners, and so registered in the Secretary of State's office. The title to the water system and other real estate was held by them in their trade names. Mr. Farnum was the active and managing partner, while Mrs. Farnum made collections, did the banking and kept the company books.

There was evidence warranting findings of the following facts:

The plaintiff negotiated with the defendants for the purchase of the water system, and on November 24, 1934, he and Farnum went to St. Johnsbury, and had a contract drawn by an attorney. This contract is captioned "Memo. of Agreement between Scott M. Farnum and Wife and Harold...