In Green v. Caldcleugh, 18 N.C. 320, although it is held that the last item in an open account does not save the whole, yet it is distinctly admitted that such would be the case where there are mutual current accounts, because of the (311) confidence reposed.Summary of this case from Northcot v. Casper
(December Term, 1835.)
The mere existence of disconnected and opposing demands, between two parties, one of which demands is of recent date, will not take a case out of the statute of limitations. There must be mutual running accounts, having reference to each other, between the parties, for an item within time to have that effect.
THIS was an action of ASSUMPSIT, tried at Davidson, on the last Circuit before his Honor Judge NORWOOD. The declaration contained counts for work and labour done in the service of the defendant's testator; goods, wares, and merchandize sold and delivered, and moneys paid to the use of the testator. Pleas, — set-off; and the statute of limitations. To the last plea the plaintiff replied, that the defendant's testator assumed within three years before the issuing of the writ. The plaintiff offered evidence to establish his account, and to show the value of his services, which commenced in 1821 and ended in 1832. The defendant did not produce any account of articles furnished, or debts owing by the plaintiff to her testator, but offered evidence that the plaintiff drew his support, and all the means of his annual necessary expenses from her testator, while engaged in his service. She insisted that the jury should take this into consideration; not as a payment on account between the parties, nor as a set-off, but as affecting the rate of compensation for the plaintiff's services. The plaintiff admitted that he had drawn annually from the estate of the defendant's testator, articles and money for his support and maintenance, up to the year 1832. The defendant further proved, that in May, 1831, her testator paid to a creditor of the plaintiff, at his request, the sum of three hundred and thirty-two dollars, which she insisted upon as a set-off. The defendant's testator died in April, 1833, and the writ was issued the 30th of July, 1833. His Honor charged the jury, that there were mutual accounts between the parties; and the last items in the defendant's account being within three years, the whole claim of the plaintiff was taken out of the operation of the statute of limitations. Under this instruction, the jury returned a verdict for the whole amount of the plaintiff's claim, deducting the sums paid by the defendant's testator; and the defendant appealed.
Pearson and Mendenhall for the defendant, contended: 1st. That the rule as to accounts-current, was laid down too broadly by his Honor, and was not applicable to the case before the Court. The rule is admitted in cases falling within the exception to the statute of limitations, 1715, ( Rev. ch. 2, sec. 5.) It extends to actions on the case, as well as actions of account, and includes mutual current accounts between other traders, as well as merchants. Bull. N. P. 149-151, Coles v. Harris. Cranch v. Kirkman, Peake's N. P. 121. To get the benefit of that exception, a special replication is necessary. Webber v. Tivill, 2 Saund. Rep. 125.
No counsel appeared for the plaintiff.
The rule does not extend further as a rule of law, but is a question for the jury. In Catling v. Skoulding, 6 Term. Rep. 189, it was held, that mutual accounts containing items in time, take the case out of the statute of limitations, independent of the exception; for the entering a new item, and giving credit by a party, is evidence to prove a promise to account. See Heyling v. Hastings, 1 Lord. Ray. 421. 2 Saun. Rep. 127, a. note. But whatever might have been the old doctrine, as to an acknowledgment taking a case out of the statute, it is now the better opinion, that the action is founded on the new promise, which must be an express one; or there must be such an admission of facts, as clearly shows, out of the party's own mouth, that a certain balance is due, from which the law can imply an obligation and promise to pay; or that the parties are yet to account, and are willing to account and pay the balance then ascertained. See Bank of Newbern v. Snead, 3 Hawks, 500. Peeples v. Mason, 2 Dev. 368. Ballenger v. Barnes, 3 Dev. 460. Danforth v. Culver, 11 John. 146. Lawrence v. Hopkins, 13 John. 288. Coltman v. Morsh, 3 Taun. Rep. 380. Pitman v. Foster, 8 Eng. Com. Law Rep. 67. Acourt v. Cross, 11 Eng. Com. Law Reps. 124. And the case, upon all the circumstances, ought to be left to the jury to find the promise.
2nd. This is not an account current; on one side there is but one item; and accounts to take a case out of the statute must be mutual, and must have reference to each other. Mere counter-charges will not have that effect.
— It has been decided, that if there be mutual running accounts on each side, then a new item in either account, within three years, may take the whole account, on both sides, out of the statute; each party in that case, being considered as having suspended the application for payment, on his side, of the demand, in faith of the mutual dealings. 1 Chitty's Prac. 777. Catling v. Skoulding, 6 Term Rep. 189. Peake's Rep. 121. 2 Saund. Rep. 125, 127, notes 6 and 7. But it seems to us, that the true principle to be extracted from these decisions, applies only in those cases, where these items are clearly parts of one continuing, mutual account, which, by the assent of the parties, are to be charged therein, whenever the same shall be adjusted. This assent may be shown by direct evidence of an agreement to that effect. It may be inferred also, when each party keeps a running account of the debits and credits of the account; or where one only, with the knowledge and concurrence of the other, is confined in to keep the account of all the mutual dealings. In these cases, the new items are evidence affirming the continuance of an unsettled account at that time, and warranting the fair presumption of a promise to settle it, and to pay the balance, which may be ascertained on settlement. The whole of the reciprocal demands, comprehended in such running accounts, are thereby taken out of the statute; the account is not to be split; but what shall be found upon all the items to be the balance, is the true debt between the parties. That the mere fact of the existence of disconnected and opposing demands between two parties, one of which demands is of recent date, shall take the case out of the operation of the statute; shall be evidence of a promise to pay that other, or to allow it in a settlement, is, in our opinion, not an inference of law or of reason, although some adjudications, and several loose dicta, appear to sanction it. It would operate in practice to deprive a party of the privilege to oppose two defences to a claim which he denies — set-off, and the statute of limitations. The case before us, does not state any evidence of an account-current between the parties, unless such an account is necessarily to be implied, from the fact of opposing demands. It does not appear that the payment by defendant's testator, to the creditor of the plaintiff, of the sum of three hundred and thirty-two dollars, was intended to be on account of, or in part payment of the plaintiff's demand. It was apparently wholly disconnected therewith. The defendant offered it merely as a set-off. If it had been in part payment, it would have taken the case out of the statute; it would have been a substantial admission of a continuing liability. Burleigh v. Stott, 8 Barn. Cres. 36; 15 Eng. Com. Law Rep. 151.
This Court being of opinion, from the case stated, that there were not mutual, open running accounts between the parties, so as to bring the case within the rule supposed by the Judge; a new trial must be granted.
PER CURIAM. Judgment reversed.