Court Opinion

ID: 9549367
Source: CourtListenerOpinion
Date Created: 2023-08-07 18:16:53.03339+00
Date Added: 2024-06-11T15:20:12.538947
License: Public Domain

THORNTON, J.,
dissenting.
The majority summarily dismisses plaintiffs’ argument that Mrs. Oland should be estopped to deny that her husband was authorized to act on her behalf on the ground that plaintiffs did not plead estoppel. Actually, plaintiffs’ argument is that if Mrs. Oland failed to give her consent to the sale, she should now be estopped to deny consent. In any event, under the circumstances, I would conclude that plaintiffs are entitled to specific performance or, in the alternative, equitable compensation for damages sustained.
Plaintiffs alleged that Mr. and Mrs. Oland were the owners of the land at issue and acted as partners in selling the land to plaintiffs. They also alleged that the Olands, as husband and wife and as partners, failed to execute a deed to the land. Defendants answered, admitting that they were husband and wife and that they owned the land but denied the remainder of the complaint. Defendants did not assert Mrs. Oland’s failure to sign the contract as a defense or as an affirmative defense.
*92Although it is true that plaintiffs did not plead estoppel in their suit for specific performance, during the course of the trial evidence supporting their theory of estoppel was admitted without objection.1 In Rose v. Webster, 51 Or App 293, 297-98, 625 P2d 1329 (1981), we stated:
“It is true, as plaintiffs contend, that defendants’ affirmative defense did not plead facts sufficient to constitute equitable estoppel. At trial, however, defendants offered evidence, without objection, of plaintiffs’ aid and acquiescence in construction of the original dock and the harm that would result from being obliged to remove the portion of the moorage facilites on plaintiffs’ tideland. Where evidence which supports a particular theory comes in without objection, no objection that it was outside the scope of the pleadings will be entertained for the first time on appeal, unless it appears that the appellant was prejudiced. Farley v. United Pacific Ins. Co., 269 Or 549, 559-61, 525 P2d 1003 (1974). ***”
In Farley, the plaintiff attempted to recover under an insurance policy which excluded coverage for the claimed loss. The plaintiff argued that the defendant’s agent had told him that the loss was covered. The plaintiff did not plead estoppel as the basis for coverage. The court noted that generally estoppel must be pleaded. 269 Or at 559. It also stated, “However, this court has also recognized an exception to the rule that the facts out of which an estoppel arises must be pleaded and that exception arises when the facts which justify the estoppel have been admitted in evidence without objection.” 269 Or at 559-60. Further, the court stated:
“The only objection that was made to the introduction of the evidence concerning Kent’s construction of the policy terms had nothing to do with an unpleaded estoppel. In addition, it is apparent that defendant introduced all of its evidence refuting plaintiffs claim about what Kent told plaintiff concerning coverage. Where we can be certain that all of the evidence is in from both sides concerning whether an estoppel would be applicable, it would be honoring form over substance not to treat the issue as if it had been *93pleaded. It may be that the parties were not even thinking in terms of estoppel until after briefing the matter on appeal, but, if it is apparent that all the evidence which bears upon the question has been introduced and the opponent of the party not pleading the estoppel has not been prejudiced, there appears to be no logical reason for not considering the issue if a rational and just determination of the case so requires.” 269 Or at 561.
A perusal of the more than five volumes of transcript in this case convinces me that all the evidence from both sides concerning whether an estoppel would be applicable was introduced and defendants have not been prejudiced. As in Farley, there is no logical reason not to consider the issue, because a just determination of the case so requires.
The rule requiring estoppel to be pleaded by plaintiffs in their complaint is particularly harsh in a case such as this where defendants answered generally, denying the basis of plaintiffs’ claim. A reply was not necessary, and thus plaintiffs were not afforded the opportunity to assert estoppel in a reply. See generally, Mascall v. Murray, 76 Or 637, 647, 149 P 517 (1915); West Side Lumber & Shingle Co. v. Herald, 64 Or 210, 213, 128 P 1006 (1913); Morback v. Young, 58 Or 135, 113 P 22 (1911). For the above reasons, I would consider plaintiffs’ estoppel argument on review.2
On de novo review, ORS 19.125(3), I would conclude that the doctrine of equitable estoppel should be applied. As the Supreme Court noted in a case involving similar facts:
“This doctrine of equitable estoppel or estoppel in pais is that a person may be precluded by his act or conduct, or silence when it was his duty to speak, from asserting a right which he otherwise would have had. The one invoking such doctrine must show that he was entitled to rely upon such conduct, action or silence, that he acted thereupon and would be prejudiced if the doctrine of estoppel *94were not applied.” Marshall v. Wilson, 175 Or 506, 518, 154 P2d 547 (1944).
In the present case, plaintiffs and Mr. Oland signed an agreement for purchase of the land. Plaintiffs paid Mr. and Mrs. Oland the down payment of $4,000 pursuant to the agreement. Plaintiffs also made monthly payments of $136.39 until the payments were refused in October, 1977. When negotiations for the purchase were taking place, Mrs. Oland did not object to the sale. Mrs. Oland made no objection to the sale until six months after the contract was signed. Plaintiffs, with the aid of Mr. Saxon, prepared the necessary partition of the land and subdivision plan. They took possession of the property by clearing and thinning trees and started work on culverts along the road adjoining the property. They also prepared plans, surveyed and obtained bids for the construction of their home. Mrs. Oland was aware that the above was taking place, yet failed to object. Further, in June, 1977, Mr. Oland sold another five-acre parcel to a third party by a deed signed by Mr. Oland only.
In Young v. Neill et al, 190 Or 161, 220 P2d 89, 225 P2d 66 (1950), the plaintiffs appealed from a decree denying specific performance of a business lease that the parties did not sign. In discussing whether the defendant’s wife could avoid the lease even though defendant was bound, the court applied the doctrine of estoppel:
“Where the issue is whether a husband was the agent of his wife, with the authority to act for her, evidence that he had previously acted for her in the same type of transaction is admissible. Hawkins v. Windhorst, 77 Kan. 674, 96 P. 48; Sidle v. Kaufman et al., 345 Pa. 549, 29 A. (2d) 77; 41 C.J.S., 552 § 74; Restatement, Agency, 65 § 22.
“The fact of the close relationship between the McGees; the fact that Mrs. McGee took part in the loan application at the bank and helped the Neills obtain a loan of $10,000.00 based on the assumption that there would be a lease; the fact that she had permitted her husband to conduct the business in his own name; the fact that she had permitted him to lease the butcher shop in his own name; the fact that she accepted rentals under the lease; the fact that she had knowledge of the lease as drawn by Briggs and did not object to the same until becoming *95apprised of the Neills’ divorce, and other facts adduced by the evidence, impel us to hold that Mrs. McGee was bound by the terms of the lease, and that both she and her husband are estopped to deny the validity of the same. * * *” 190 Or at 174.
The same considerations apply in the present case. Mrs. Oland should be bound by the terms of the contract signed by her husband, and both should be estopped to deny its validity. I would reverse and grant plaintiffs specific performance or, in the alternative, equitable compensation for damages sustained.

 In their brief, defendants contend that they “objected at trial when those matters [agency, consent and estoppel] were raised.” However, defendants’ objection came after the evidence supporting those theories was admitted. The objection that defendants note took place during closing argument to the court.

 It is interesting to note that the majority concludes that the issue of Mrs. Oland’s consent is relevant to the question of whether the contract between plaintiffs and Mr. Oland is enforceable. See 61 Or App at 89. Plaintiffs did not plead that the contract should be enforced as against Mr. Oland alone. Rather, the complaint alleged that Mr. and Mrs. Oland as husband and wife and as partners failed to perform their agreement and should both be required to specifically perform the agreement.