Lancey v. Maine Central Railroad

Virgin, J. When parties make out what they believe to bo a correct itemized statement of their mutual dealings and the-balance is thereupon ascertained and paid, "the items” can no-longer bo considered "unsettled” within the meaning of E. S., c.. 81, § 84, although one was omitted by mistake. And if, six [36] . years thereafter, on discovering the erroneous balance, an action •counting on the entire account is brought to recover the real balance, the statute of limitations will bar the recovery. This is ' made apparent from a history of the statute, its amendments and various decisions thereon. The stat. 1821, c. 62, § 7, which excepts from the statute of limitations "such accounts as concern the trade of merchandise "between merchant and merchant,” is a transcript of the Massachusetts stat. of February 13, 1787, § 1, which in turn is a copy • of the stat of James i, c. 16, § 3. The leading English case upon the subject of mutual accounts between parties other than merchants is Catling v. Skoulding, 6 T. R. 189, in which it was held that, if there be a mutual account • of any sort between the parties for any item of which credit has " been given within six years, that is evidence of acknowledg- : ment of there being such an open account current between them . and of a promise to pay the balance, so as to take the case out •of the statute. Lord C. J. Kenyon said: "Here are mutual- : items of account; and I take it to have been clearly settled, as . long as I have any memory of the courts, that every new item . and credit in an account given by one party to the other is an -admission of there being some unsettled account between them, 'the amount of which is to be afterward ascertained; and any act .which the jury may consider as an acknowledgment of its being ; an open account, is sufficient to take the case out of the statute. ' Daily experience teaches us that if this rule be now overturned, i it will lead to infinite injustice.” This case does not seem to ■ place its decision upon a construction of the statute, but rather i upon an independent ground that, the items within six years are ,- admissions of an unsettled account and is equivalent to evidence ■ of a new promise which takes the other items out of the statute. The Massachusetts court cited and followed that decision, Cogswell v. Dolliver, 2 Mass. 217, and the court in this State •adopted the same doctrine, citing the above cases and calling it a reasonable judicial construction of the statute. Davis v. Smith, 4 Maine, 337. [37] The biter decision in this State defined the word " accounts” in the statute of 1821, as "open or current accounts” as distinguished from "stated accounts;” and "stated accounts,” those which have been examined by the parties, and where a balance due. from one to the other has been ascertained and agreed upon as correct. McLellan v. Crofton, 6 Maine, 307, 337. And the reason for giving a different construction to open and stated accounts was stated by MelleN, C. J. as follows : "While an account remains open, each party is depending, for the recovery of the balance he may consider due him, upon the promise which the law raises on the part of him who is indebted, to pay that balance; but when the parties have stated, liquidated and adjusted the account, and thus ascertained the balance, it ceases to be an account; it has lost the peculiar-' character and attributes of an account; what was before an implied promise to pay what should be found to be a reasonable sum, by such liquidation and stating of the account at once becomes an express promise to pay a sum certain. . . Such balance is a result in which previously existing accounts become merged and lose their character and existence.” In the revision of 184-1, the statute of limitations was redrafted. The clause relating to merchants’ accounts was dropped. The provision relating to accounts no longer retained the form oí an exception, but adopted the decision of the court in the terms used by the court by providing that, " in all actions brought to recover the balance due upon " mutual and open accounts current, the cause of action shall be deemed to have accrued at the time of the last item proved in such account,” c. 146, § 9. The same provision was transcribed into the revision of 1857, c. 81, § 99. In Theobald v. Stinson, 38 Maine, 149, followed by Dyer v. Walker, 51 Maine, 104, the court held that to constitute "mutual accounts” each party must have one or more written charges against the other. Thereupon the legislature added to the section the cláuse : " And it shall be deemed a mutual and open account current, when there have been mutual dealings between the parties, the items of which are unsettled, whether kept or proved by one party or both.” Stat. 1867, c. 117. [38] In the revision of 1871, the definition was substituted for the terms defined. The phrase "mutual and open account current” has given way to " mutual dealings the items of which are unsettled, whether kept or proved by one party or both.” That is mutual dealings whether kept or proved by one party or both, now constitute a "mutualaccount;” and "mutual dealings,” the items of which are unsettled "constitute an open account current” as distinguished*' from a stated account, or one that has been adjusted, liquidated and a balance struck after examination by the parties. And now, as before the amendment in 1867, when the items of the mutual dealings have been examined, the respective sums fixed and the balance agreed upon by the parties and it has been paid, there is no longer"an open account current between them, as stated by Mellen, C. J. sxipra; or, in the language of the statute, there are no longer mutual dealings between the parties, the items of which are unsettled. The settlement changed the character of the account. The items became discharged by the payment of the agreed balance which resulted from setting off against each other the counter items. The discharge of the items is a consideration to sustain a promise to pay the balance. May v. King, 12 Mod. 538; S. C. 1 Ld. Raym. 680; Callander v. Howard, 10 C. B. (70 E. C. L.) 290. And if one of the items of the account was overlooked, the settled account, after six years can afford no aid in taking it out of the statute of limitations. Union Bank v. Knapp, 3 Pick. 96, 113. Neither does it make any difference that a new account runs on from the date of the last item in the settled account, and is begun even before the balance in the former is paid. Parties may , settle frequently or otherwise. If the items are drawn off from ■ one certain date to another, and in due time settled and paid, the running on of a new account from the latter date can have no effect upon the former one which is settled, and neither can the .settled account have any effect upon the new one. On the • contrary the settled account drops out as if it never had existed. An application of these principles to the facts in the case at '.bar sustains the ruling. [39] Tbe plaintiffs had furnished the Portland and Kennebec Railroad Company large quantities of lumber nearly every month from July 31, 1863 to November 18, 1870, of which by the act of consolidation the defendant company became liable for any unpaid balance. August 11, 1864, tbe plaintiffs rendered to the Portland and Kennebec Railroad Company, an itemized bill for lumber delivered between May 7, and August 11, amounting to $712.28, which was settled and paid January 25, 1865, and receipted by the plaintiffs. The plaintiffs continued to deliver to the Portland and Kennebec Railroad Company, lumber on and after August 11, as before. On the last of December, 1864, they rendered a bill which had accrued from August 11, to December 31, 1864, amounting to $10,029.66, which was paid and receipted April 24, 1865, and the plaintiffs continued to deliver lumber and render bills therefor, sometimes monthly and other times at longer periods, down to March 7, 1870, which were all paid and receipted in due time. It was afterwards discovered that four items of lumber delivered on July 31, 1863, amounting to $240.66 and one of 1492 sleepers, delivered July 26,1865,hadbeen overlooked. On March 2, 1876, the plaintiffs sued on their whole account from July 31, 1863 to November 17, 1870, including the omitted items, and contended that they had a right to recover upon the ground of mutual unsettled dealings within the provisions of R. S., c 81, § 84. But the presiding justice ruled that the items which accrued more than six years before the date were barred by the general statute of limitations; and we think the ruling was correct. // We are also of tbe opinion that the exclusion of the several receipts offered by the plaintiffs was correct, as the money represented by them had been allowed by tbe parties upon specific bills rendered and settled. Exceptions overruled. AurletoN, C. J., Walton, Barrows, Libbey and SyaioNds, J J., concurred.