Strauss Bros. v. Denton

• Decision Date: 14 December 1925
• Docket Number: 25299
• Citation: 140 Miss. 745,106 So. 257
• Court: Mississippi Supreme Court
• Parties: STRAUSS BROS. v. DENTON. [*]

106 So. 257

140 Miss. 745

STRAUSS BROS. v. DENTON. ^[*]

No. 25299

Supreme Court of Mississippi

December 14, 1925

Division B

ESTOPPEL. Held to arise from silence of one when notified of receipt of his guaranty of future account, knowing it to be forgery.

Defendant receiving notice from plaintiff of receipt and acceptance of his guaranty of future account of another, and knowing such guaranty to be a forgery, was under duty to speak the truth and so is estopped by his silence to deny genuineness of guaranty after it has been acted on.

HON GREEK L. RICE, Judge.

APPEAL from circuit court of Tallahatchie county, Second District, HON. GREEK L. RICE, Judge.

Action by Strauss Bros. against C. Denton. Judgment for defendant, and plaintiff appeals. Reversed and judgment rendered.

Judgment reversed.

Ward & Ward, for appellant.

C. Denton is estopped to deny that he executed the guaranties because of his silence which caused appellants to sell the merchandise sued for to Purnell, believing the guaranties genuine. We think the facts show an estoppel in pais and the principles of estoppel in pais apply to this case.

Estoppel by conduct arises from an act or declaration of a person intended or calculated to mislead another, on which that other has relied and has so acted or refrained from action as that injury will befall him if the truth of the act or declaration is denied. Staton v. Bryant, 55 Miss. 272; Tobin v. Allen, 53 Miss. 562.

The principle on which the doctrine of estoppel rests is that it would be a fraud for one to assert what his previous conduct has denied, when on the faith of that denial others have acted. Staton v. Bryant, 55 Midd. 261.

This estoppel arises when one by his acts, representations or admissions, or silence when he ought to speak out, intentionally or through culpable negligence induces another to believe certain facts to exist and such other rightfully relies and acts on such belief so that he will be prejudiced if the former is permitted to deny the existence of such facts. 21 C. J., page 113, sec. 116; 11 Am. & Enc. of Law, page 421.

Whenever one of two innocent persons must suffer by the, acts of a third person, he who has enabled such third person to occasion the loss must sustain the loss. 21 C. J., page 1170, sec. 176.

J. J. Breland, for appellee.

The appellant contends that the appellee is liable on the grounds of estoppel and cites a number of authorities in support of its contention. We have examined the authorities cited by the attorneys for the appellant in their brief and, in our opinion, the authorities are not in point and do not support the appellant's contention.

The record shows affirmatively that the appellee was not the agent of the appellant in any sense of the word and was under no duty to appellant by contract or otherwise. The record does show, and it is admitted by the appellant, that the wrong done the appellant was brought about through the instrumentality of the crime of forgery.

It is our contention that the most that could be claimed by the appellant is that the appellee is estopped by his silence, or his failure on receipt of the two letters received by him from the appellant to reply to these letters and inform the appellant that he had not signed the letters of guaranty. We think, however, by the overwhelming weight of authority, that the principle of estoppel is not applicable to the case at bar even because of the silence of the appellee.

The rule, by many authorities, is stated as follows: "As a general rule, an estoppel may arise from silence as well as words, but this only where there is a duty to speak." See 11 A. & E. Law, Second Edition, page 427, par. F., citing Kelly v. Wagner, 61 Miss. 299; also 11 A. & E. Enc. L. Second. Ed., page 432; 11 R. C. L., page 692, par. 21. Many authorities are cited under Note 7 in support of this rule of law.

Under the holding of the above authorities, before the appellee can be held to be estopped by his silence, the record must affirmatively show that the appellee was under a duty to the appellant to speak. As a matter of fact, the record in this case affirmatively shows that the appellee was under no duty whatever to the appellant. The record does not show that the appellee ever read the letters admitted to have been received by him, nor does the record show that, even if he read the letters, he knew Garfield Purneal, for whose benefit the signature of the appellee was forged to the written guaranty.

This is simply a case where the appellant, because of its own negligence and its failure to look after its own business properly, and where, through criminal acts of another, the wrong was done to the appellant, if any wrong or injury was suffered by the appellant.

We, therefore, respectfully submit that under the facts as shown by this record this case should be affirmed.

OPINION

ANDERSON, J.

The appellant, Strauss Bros., a corporation, brought this action in the second district of the circuit court of Tallahatchie county, against appellee, C. Denton, to recover an alleged indebtedness of three hundred forty-nine dollars and forty-one cents claimed by appellant against appellee. A jury was waived by the parties, and, by agreement, the circuit judge determined the law and facts of the case. There was a judgment for appellee that appellant recover nothing, from which judgment appellant prosecutes this appeal.

Appellant sought to recover from appellee the amount of an open account for three hundred forty-nine dollars and forty-one cents, incurred with appellant by one G. W. Purnell, which account appellant alleged that appellee had become primarily liable therefor by virtue of two separate written guaranties.

The agreed facts upon which the case was tried were evidenced by a stipulation in writing between the parties as follows:

"It is agreed by the attorneys for the plaintiff and for defendant C. Denton that this cause be submitted for trial on the following agreed statement of facts before the judge jury being hereby waived:

"It is agreed that some time before the 3d day of January, 1923 the defendant G. W. Purnell applied to the plaintiff, Strauss Bros., for a line of credit, and that plaintiff was unwilling to extend the credit desired unless he would first secure a written guaranty of some responsible person to become liable therefor when said Purnell submitted to plaintiff the name of C. Denton, the other defendant herein, and plaintiff then agreed to extend the credit to the amount of two hundred fifty dollars upon the execution of a written guaranty signed by C. Denton, and so notified the defendant G. W. Purnell, and in response to their letter so notifying him, G. W. Purnell sent to plaintiff a purported written guaranty, a copy of which is made Exhibit A to the declaration herein; that on receipt of this supposed written guaranty with name C. Denton attached to it, and before any credit was given to G. W. Purnell, plaintiff wrote a letter to said C. Denton, a copy of which is made Exhibit B to the declaration, and posted said letter directed to C. Denton, Sumner, Miss., and registered said letter. That afterwards in May, 1923, the defendant G. W. Purnell, having exhausted his credit under the aforesaid supposed guaranty, applied to plaintiff for further credit and offered to furnish plaintiff a written guaranty signed by said C. Denton, defendant, and in pursuance of said offer delivered to plaintiff a supposed guaranty having the supposed signature of said C. Denton, a copy of which is made Exhibit C. to the declaration herein, whereupon plaint...