American Jurisprudence, Second Edition
Copyright © 2011 West Group
Romualdo P. Eclavea, J.D.; Eric C. Surette, J.D.
Estoppel and Waiver
Part One: Estoppel
III. Equitable Estoppel or Estoppel in Pais
B. Elements, Requisites, and Grounds
2. As Related to Party to Be Estopped
d. Silence, Acquiescence, or Delay; Acceptance of Benefits
28 Am Jur 2d Estoppel and Waiver § 57
§ 57 Silence or inaction
Silence that amounts to misrepresentation or concealment of facts can satisfy the "conduct" element of the test for equitable estoppel. n1 Estoppel may arise by silence where one is under a duty to speak or act, n2 and the ensuing silence is wrongful and misleading. n3 Estoppel
by silence or inaction is often referred to as estoppel by "standing by," and that phrase in this connection has almost lost its primary significance of actual presence or participation in the transaction and generally covers any silence where there are knowledge and a duty to make a disclosure. n4 The rule is that a person who stands by and sees
another about to commit, or in the course of committing, an act infringing on his or her rights, and fails to assert his or her rights or title, will be estopped from thereafter asserting them. n5 The principle underlying such estoppels is embodied in the maxim "one who is silent when he ought to speak will not be heard to speak when he ought to
be silent." n6 Where the circumstances are such as to require a silent person to speak so that an injured person may take steps to protect himself or herself against a loss that might otherwise result, then the former will be estopped from asserting the defense that he or she would have had but for his or her silence. n7 Silence, when there is a duty to speak, is deemed equivalent to concealment. n8
On the other hand, mere silence or inaction is generally not a ground for estoppel unless there is a duty to speak or act. n9 Estoppel as a bar to the assertion of
a claim may not be invoked by a party to whom no duty to speak is owed. n10 There must be some element of turpitude or negligence connected with the silence or inaction by which the other party is misled to his or her injury. n11 In other words, to give rise to an estoppel by silence or inaction, there must be a right and an opportunity n12 to speak and, in addition, an obligation or duty to do so. n13
The mere fact that another may act to his or her prejudice if the true state of things is not disclosed does not render silence culpable or make it operate as an estoppel against one who owes no duty of active diligence to protect the other party from injury. n14 There is no obligation to disclose matters of which the other party has actual or constructive knowledge n15 or as to which the information or means of acquiring information of the two parties is equal. n16 Generally, a person is required to speak only when common honesty and fair dealing demand that he or she must do so, n17 and in order that a party may be estopped by silence, there must be on his or her part an
intent to mislead, n18 or at least a willingness that others should be deceived, n19 together with knowledge or reason to suppose that someone is relying on such silence or inaction and in
consequence thereof is acting or is about to act as he or she would not act otherwise. n20 Thus, to work an estoppel, silence must amount to bad faith, and this cannot be inferred from facts of which the party sought to be estopped has no knowledge. n21 Accordingly, a majority shareholder would be barred from asserting estoppel against minority shareholders who remained silent as he arranged the exchange of substantially all of a corporation's assets where it was the majority shareholder's omission, in failing to give the minority shareholders statutory notice of a proposed exchange and their right to dissent and an opportunity to vote, that gave rise to the shareholders' silence and
the majority shareholder's alleged reliance on that silence. n22 Likewise, by participating, as an unsuccessful bidder, in the sale of estate property free and clear of all competing interests without ever asserting a right in the property as an alleged adverse possessor, and without ever objecting to the sale or seeking adequate protection for
her purported interest, an adjoining landowner would be equitably estopped from asserting any adverse possessory interest. n23 However, the failure of an employer's vice president of human resources to object when an employee discussed possible employment opportunities with a competitor would not estop the employer from enforcing the
noncompetition agreement against the employee where the vice president did not give the employee express permission to work for the competitor despite a noncompetition agreement and was not given all the relevant information. n24 Finally, a utility's failure to alert other utilities who purchased electricity generated at the Hoover Dam of its
dissatisfaction with the agency's formula for refunding surplus revenues from such sales affords no basis for estoppel to prevent the utility from the asserting claim where the utility was not in privity of contract with the other utilities, and had no special relationship with them, and thus had no duty to speak out. n25
An owner of personalty who stands by and sees another sell or mortgage it to a third person without making known his or her title will be estopped afterwards from asserting his or her title against the purchaser or mortgagee. n26
The courts are especially disposed to uphold a claim of estoppel by silence or inaction where one party with full knowledge of the facts has stood by without asserting his or her rights or raising any objection while the other party, acting on the faith of such apparent acquiescence, incurred large expenditures
that will be wholly or partially lost if such rights or objections are subsequently given effect. n27
FOOTNOTES:
n1 Maher v. Tietex Corp., 331 S.C. 371, 500 S.E.2d 204 (Ct. App. 1998).
n2 Longley v. Knapp, 1998 ME 142, 713 A.2d 939 (Me. 1998); Heuer v. Heuer, 152 N.J. 226, 704 A.2d 913 (1998); In Interest of Moragas, 972 S.W.2d 86 (Tex. App. Texarkana 1998).
n3 Dunkin' Donuts Inc. v. Panagakos, 5 F. Supp. 2d 57 (D. Mass. 1998).
n4 Vickers v. Peaker, 227 Ark. 587, 300 S.W.2d 29 (1957); American Life Ins. Co. v. Hauer, 218 Miss. 560, 67 So. 2d 523 (1953).
As to necessity of knowledge of facts by one to be estopped, see § 44.
n5 McCartney v. Schuette, 243 Iowa 1358, 54 N.W.2d 462 (1952).
n6 Vickers v. Peaker, 227 Ark. 587, 300 S.W.2d 29 (1957); Weiland v. Turkelson, 38 N.J. Super. 239, 118 A.2d 689 (App. Div. 1955); Huff v. Northern Pac. Ry. Co., 38 Wash. 2d 103, 228 P.2d 121 (1951).
n7 Mohr v. Universal C.I.T. Credit Corp., 216 Md. 197, 140 A.2d 49 (1958).
n8 Reichert v. Reichert, 77 S.D. 258, 90 N.W.2d 403 (1958); Concord Oil Co. v. Alco Oil & Gas Corp., 387 S.W.2d 635 (Tex. 1965).
n9 National Data Payment Systems, Inc. v. Meridian Bank, 18 F. Supp. 2d 543 (E.D. Pa. 1998), aff'd, 212 F.3d 849 (3d Cir. 2000); Prime Medica Associates v. Valley Forge Ins. Co., 2009 PA Super 39, 970 A.2d 1149 (2009), appeal denied, 605 Pa. 688, 989 A.2d 918
(2010).
n10 Southern California Edison Co. v. U.S., 43 Fed. Cl. 107 (1999), rev'd on other grounds, 226 F.3d 1349 (Fed. Cir. 2000).
n11 Thompson v. Gaudette, 148 Me. 288, 92 A.2d 342 (1952); Terrell Hills Baptist Church v. Pawel, 286 S.W.2d 204 (Tex. Civ. App. Austin 1956).
n12 Thompson v. Gaudette, 148 Me. 288, 92 A.2d 342 (1952); In re Gibson's Estate, 7 Wis. 2d 506, 96 N.W.2d 859 (1959).
n13 Karsznia v. Kelsey, 262 S.W.2d 844 (Mo. 1953); Weiland v. Turkelson, 38 N.J. Super. 239, 118 A.2d 689 (App. Div. 1955); Willadsen v. Crawford, 75 S.D. 161, 60 N.W.2d 692 (1953) (stating that silence can never be the basis of an estoppel unless there is a duty to speak);
Barbee Mill Co. v. State, 43 Wash. 2d 353, 261 P.2d 418 (1953); In re Gibson's Estate, 7 Wis. 2d 506, 96 N.W.2d 859 (1959).
n14 Thompson v. Gaudette, 148 Me. 288, 92 A.2d 342 (1952); In re Gibson's Estate, 7 Wis. 2d 506, 96 N.W.2d 859 (1959).
n15 Karsznia v. Kelsey, 262 S.W.2d 844 (Mo. 1953); Weiland v. Turkelson, 38 N.J. Super. 239, 118 A.2d 689 (App. Div. 1955).
n16 Weiland v. Turkelson, 38 N.J. Super. 239, 118 A.2d 689 (App. Div. 1955).
n17 Weiland v. Turkelson, 38 N.J. Super. 239, 118 A.2d 689 (App. Div. 1955); Cantrell v. Booher, 201 Va. 649, 112 S.E.2d 883 (1960).
n18 Weiland v. Turkelson, 38 N.J. Super. 239, 118 A.2d 689 (App. Div. 1955); Cantrell v. Booher, 201 Va. 649, 112 S.E.2d 883 (1960).
n19 Weiland v. Turkelson, 38 N.J. Super. 239, 118 A.2d 689 (App. Div. 1955).
n20 Weiland v. Turkelson, 38 N.J. Super. 239, 118 A.2d 689 (App. Div. 1955); Cantrell v. Booher, 201 Va. 649, 112 S.E.2d 883 (1960).
n21 Victory Cab Co. v. Churchill Downs, 312 Ky. 363, 227 S.W.2d 924 (1950).
n22 Hansen v. 75 Ranch Co., 1998 MT 77, 288 Mont. 310, 957 P.2d 32 (1998).
n23 In re Colarusso, 382 F.3d 51 (1st Cir. 2004).
n24 Bridgestone/Firestone, Inc. v. Lockhart, 5 F. Supp. 2d 667 (S.D. Ind. 1998).
n25 Southern California Edison Co. v. U.S., 43 Fed. Cl. 107 (1999), rev'd on other grounds, 226 F.3d 1349 (Fed. Cir. 2000).
n26 McPherson v. Hicks, 232 Ark. 427, 338 S.W.2d 201 (1960).
n27 Trustees of Internal Imp. Fund v. Bass, 67 So. 2d 433 (Fla. 1953).
REFERENCE: West's Key Number Digest, Estoppel [westkey]52.15 to 60, 63 to 65, 70, 81 to 85, 88, 89.1, 90, 92 to 96
A.L.R. Index, Collateral Estoppel
A.L.R. Index, Equitable Estoppel
A.L.R. Index, Estoppel and Waiver
A.L.R. Index, Promissory Estoppel
West's A.L.R. Digest, Estoppel [westkey]52.15 to 60, 63 to 65, 70, 81 to 85, 88, 89.1, 90, 92 to 96
Detrimental Reliance on Promise, 4 Am. Jur. Proof of Facts 2d 641
Am. Jur. Legal Forms 2d §§ 102:4, 102:5
West's Key Number Digest, Estoppel [westkey]93 to 95
Estoppel to assert that article annexed to realty is or is not a fixture, 60 A.L.R.2d 1209
