C. A. Babcock Co. v. Katz

253 P. 373, 121 Or. 64, 1927 Ore. LEXIS 51
CourtOregon Supreme Court
DecidedJanuary 28, 1927
StatusPublished
Cited by10 cases

This text of 253 P. 373 (C. A. Babcock Co. v. Katz) is published on Counsel Stack Legal Research, covering Oregon Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
C. A. Babcock Co. v. Katz, 253 P. 373, 121 Or. 64, 1927 Ore. LEXIS 51 (Or. 1927).

Opinion

COSHOW, J.

The first witness for the plaintiff, O. A. Babcock, president and manager of the plaintiff corporation, testified as follows:

“Q. Just tell the jury how this account happened to be opened, this account in question, the Waucomah Farm, with J. A. Lipp & Company. A. Why, he came there first, they were buying through another house and we were filling the order for this house and he came in one day and wanted to know why he could not buy direct. He said he and Mr. Katz were partners in the Waucomah Farm and he would like to buy from us as it was a lot more convenient; he didn’t like to go to the west side of the river and pick up what he wanted and it was more convenient *70 for him to stop at our place and pick up what he wanted. I said I didn’t know who the Waucomah Farm was. He said: ‘Go call up Mr. Katz.’ While he was staying there I did, and Mr. Katz said what he told me was correct, that they were running the Waucomah Farm as a partnership and whatever Mr. Lipp required at any time to let him have and it would be all right, and he would see that the bills were taken care of. On his say-so we started to sell Mr. Lipp.
“Q. How did you enter that account in your books? A. J. A. Lipp, Waucomah Farm. * *
“Q. To whom did you look for the payment of this account? A. To Mr. Katz, although every check that I received at the time, I think, came from Mr. Lipp.
“Q. You say you looked to Mr. Katz; did you look to Mr. Katz for the payment of this account? A. Well, the checks came from Lipp but then at the same time I was figuring that Mr. Katz was' responsible just the same.
“Q. Responsible how? A. Of the ^Waucomah Farm. ’ ’

Mrs. Lipp, wife of defendant Lipp, testified to the effect that on Sunday, after her husband had absconded, the defendants Katz and Wight came to her residence on the Waucomah Farm and carried away all of the papers, including checks, letters and the contract between the defendants; that at that time the defendant Katz stated that as partners they desired to examine the papers belonging to the defendant. She also testified to the effect that the defendant Wight said they must take away all the papers which indicated a partnership. The conduct of the parties tends to support the contention of the plaintiff that a partnership existed. The witness Babcock, president of the plaintiff corporation, testified that he had not personally known either of the defendants Katz or *71 Wight. Fox' a shox't time he sent the bills to the offices of the Waucomah Farm, Corbett Building, Portland, Oregon. Instead of paying the bills monthly as agreed when the account was opened, the defendants took about sixty days in which to make the payments. When Mr. Babcock complained of the delay he was informed by the defendant Lipp that as the bills were sent to the defendants at their office in the Corbett Building, it was necessary for the defendants Katz and Wight to refer the bills to Lipp for his avouchment which caused delay; that if the plaintiff would send its bills directly to defendant Lipp at the Waucomah Farm they would be paid more promptly. Accordingly, thereafter, until late in 1923, the bills wex'e mailed to Lipp at Waucomah Farm. Instead, however, of the payments being made directly by the Waucomah Farm, defendants Katz and Wight paid the amounts to the defendant Lipp who in turn gave his personal check. Payments were thereafter ix'regularly made in that manner until the autumn of 1923. The defendants Katz and Wight referred in their testimony to themselves as partners as do their counsel ixx propounding questions to them. There was therefore material evidence that the defendants Katz and Wight had held themselves out to plaintiff as copartners, and upon the faith of such representations the credit was extended to the defendants as partners under the firm name and style of Waucomah Farm. Most of the payments made on account- were, made by the personal checks of defendant Lipp. None of the merchandise sold to the defendaxxts was ordered by either Katz or Wight. o They admit in their pleadings that they ordered through Lipp a large part of the merchandise sold to the defendants by plaintiff, and claim credit for all payxnents made *72 by Lipp. They also testified that all the money paid by Lipp to the plaintiff on account came from the produce of Waucomah Farm.

The reply alleging grounds for estoppel on the part of the answering defendants as to a partnership is not a departure from the complaint: Mayes v. Stephens, 38 Or. 512 (63 Pac. 760, 64 Pac. 319). Equitable estoppel is available at law as well as in equity.

“Estoppel by misrepresentation, or equitable estoppel, is defined as the effect of the voluntary conduct of a party whereby he is absolutely precluded, both at law and in equity, from asserting rights which might perhaps have otherwise existed, either of property, of contract, or of remedy, as against another person who in good faith relied upon such conduct, and has been led thereby to change his position for the worse, and who on his part acquires some corresponding right either of contract or of remedy. This estoppel arises when one by his acts, representations, or admissions, '* * intentionally * * 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. 1113, § 116.

The uniform practice in this state has been to plead equitable estoppel in actions at law: Collins v. Delashmutt, 6 Or. 51, 54; Section 798, subd. 4, Or. L.; Doerstler v. First Nat. Bank, 82 Or. 92 (161 Pac. 386); Carlon v. First Nat. Bank, 80 Or. 539 (157 Pac. 809); Verrell v. First Nat. Bank, 80 Or. 550 (157 Pac. 813).

It is not essential to plaintiff’s cause of action that he prove a copartnership between the defendants. This is not an action between copartners. If the defendants Katz and Wight held themselves out as partners with Lipp and the plaintiff was thereby *73 induced to extend the credit given defendants, they are liable as partners to the plaintiff.

“Persons who are not actually partners may nevertheless become subject to the liabilities of partners, either by holding themselves out as such to the public and the world generally, or to particular individuals; or by knowingly or negligently permitting another person to do so. Tet in fact such a person does not become a partner; he is merely liable as a partner; for individuals may be liable as partners as to third persons, while as between themselves they are not to be considered partners. * * The liability as a partner of a person who holds himself out as a partner, or permits others to do so, is predicated on the doctrine of estoppel, and on the policy of the law seeking to prevent frauds on those who lend their money on the apparent credit of those who are held out as partners.

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Cite This Page — Counsel Stack

Bluebook (online)
253 P. 373, 121 Or. 64, 1927 Ore. LEXIS 51, Counsel Stack Legal Research, https://law.counselstack.com/opinion/c-a-babcock-co-v-katz-or-1927.