Waugh v. Lennard
In Waugh v. Lennard, 69 Ariz. 214, 211 P.2d 806 (1949), an attorney in a joint venture sought the agreement of his lay joint venturers to accept promissory notes in lieu of their share of the joint venture's profits. Id. a 217-18, 211 P.2d at 807-08.
Time passed, and to forestall any collection efforts until after his death, the attorney told his joint venturers that he had arranged his estate so that the notes would not be barred by the statute of limitations and provided a written assurance to that effect. Id. at 218-19, 211 P.2d at 808.
After his death, however, the executrix of his estate denied the joint ventures' creditors' claim, and raised the statute of frauds as a defense against the ensuing complaint filed by the joint venturers' successor-in-interest. Id. at 219, 211 P.2d at 809.
The executrix argued that the agreement to extend the time for payment was not one to be performed within one year and thus violated the statute of frauds. Id. at 220, 211 P.2d at 810. The trial court agreed and dismissed the complaint.
The Arizona Supreme Court, however, reversed the trial court in dismissal for a number of reasons.
First, it noted that equitable estoppel precludes one because of "his own acts from asserting a right to the detriment of another who, entitled to rely on such conduct, has acted thereon." Id. at 223, 211 P.2d at 812.
Second, the court reasoned that the particular facts of the case permitted promissory estoppel to serve as a basis to overcome the statute of frauds defense. Id. at 223-24, 211 P.2d at 812.
Third, the court pointed out that the agreement to extend the notes' due dates until after the attorney's death could have been performed within one year, which made the statute of frauds inapplicable.
Similarly, the joint venturers' full performance abrogated application of the statute of frauds. Id. at 226, 211 P.2d at 813-14.
Finally, the court observed that the widow was estopped from relying upon the statute of frauds because otherwise the attorney, upon whom the partners had relied for his professional expertise, would be allowed to perpetrate a fraud. Id. at 227, 211 P.2d at 814-15.