Miller v. Longshore

Spring, J.: The issues were tried before a referee, who allowed the plaintiff’s claim in full.. The books of the plaintiff’s testator were received in evidence, and other proof was given to support the validity of the account presented. The referee found that .the account was not rejected until more than a year after its presentation, and that the miller kept honest books and that, as matter of law, the claim was a valid one for the full amount and interest without any specific finding of fact that the articles and produce sold embodied in the account were charged at reasonable prices. The conclusion • of law establishing this account seems to be on the ground that the claim had become liquidated by the long delay of the defendant in rejecting the claim. The account did not become established by this failure of the-defendant to reject the claim. (Schulz v. Morette, 146 N. Y. 137; Matter of Callahan, 152 id. 320; Matter of Edmonds, 47 App. Div. 229; Matter of Brown, 76 id. 185, 188; Matter of Jacobs, 109 id. 293; Coombs v. Joerg, 125 id. 615.) The account of the plaintiff commenced in 1891 and if the defendant’s claim is wholly disallowed; a considerable part of' the demand of the plaintiff was barred by the Statute of Limitations, although the defendant has not interposed that defense, as she was obliged to do. (Butler v. Johnson, 111 N. Y. 204, 212; Schutz v. Morette, supra, 143.) . The plaintiff urges that two credits in the account have kept alive the entire account. The proof shows, however, that the cash comprising these two credits was paid for definite purchases, and not to apply on the account. [217] , In any event, as a new trial is to be had, the validity of the plaintiff’s claim, should be specifically determined on the merits. I think the two accounts consisted of reciprocal demands, constituting a mutual, current account within section 386 of the Code of Civil Procedure. (Green v. Disbrow, 79 N. Y. 1; Sandel v. Sommers, 131 App. Div. 537.) In order to make the accounts mutual it is not essential that they be kept only by one of the parties, or by debit and credit in form. (Ross v. Ross, 6 Hun, 80.) They need not be entered in a book,- or even written at all. The parties must expect that the two accounts are to be adjusted together, the balance making up the indebtedness. The accounts must be unadjusted, existing demands, the one against the other; and if they meet these requirements they are within the definition of mutual accounts. The determination is not a question of bookkeeping, but depends upon the transactions themselves and the intent of the parties. It is quite common where two men have open accounts against each other that each keeps a record of his own charges. He does not know the items against him. They are mutual accounts, and any other rule would operate unjustly and in contravention of the intent of the parties. The testators of the parties to this action allowed their accounts to run along for years without any adjustment. It is a reasonable inference that each relied upon the validity of his own account to offset the charges against him. They perhaps assumed there was no substantial difference between the sum total of each account, or their conduct may be ascribed to carelessness. No matter, as long as each was cognizant in a general way of both accounts, believing the balance unpaid was the actual indebtedness. Tn the procedure to adjust these accounts it was necessary for each party to assert her rights according to the practice prescribed by statute. Failure to do this might result in the defeat of the claim of the delinquent party on technical grounds, The account presented by the plaintiff, not containing the items of the defendant’s account, it was ■ important for the latter to present her own account, which she did. When [218] this account was repudiated and rejected, she must commence an action for its enforcement within the time limited or suffer the consequence. While the balance due constituted the debt, if the defendant neglected to counterclaim or omitted any act of procedure essential to the maintenance of her demand, her claim might become wholly barred. If the plaintiff in her own account had recognized the validity of the defendant’s demand, of course this rule would not obtain. If the defendant seasonably acted upon the rejection of her claim so that its merits can properly be considered by the trial court, then the two accounts must be treated as mutual accounts. If the notice of rejection served on the attorney for the defendant is to prevail, more than six. months had elapsed thereafter before the counterclaim was interposed, or the action commenced, and, consequently, the claim was effectually barred. (Code Civ. Proc. § 1822.) There is no proof of any specific' authority given to the attorney for the defendant to receive the notice of rejection of her claim. She testified he was employed generally by her, and added: “ He has taken charge of the presentation of my claim against the estate of Richard Miller since there was anything done, and I have left all matters with him now since we had any trouble with reference to the presentation of my claim against the estate of Richard Miller.” Probably this is sufficient to show he acted within the scope of his authority. (Heinrich v. Heidt, 106 App. Div. 179; Lockwood v. Dillenbeck, 104 id. 71.) And it would be effective, even though not reported to the defendant by her attorney. (Gardner v. Pitcher, 109 App. Div. 106.) It seems, however, that the attorney who served the notice of rejection on behalf of the plaintiff, for some reason, was not satisfied with the service made, and thereafter on the same day mailed a similar notice to the defendant at Cold Brook. She interposed the counterclaim within one year from the service of this notice; I am inclined to think the defendant had the right to treat this notice as the one served upon her. The statute barring the rejected claim, if not sued upon in six months, must be strictly construed against the person asserting it. In this case [219] its operation debars consideration of the claim of the defendant upon the merits, although the referee has found that Dr. Long-shore kept honest books of account and a valid claim for some amount existed in his favor in reduction or extinguishment of the one presented by the plaintiff. The plaintiff elected to serve notice of rejection upon the executrix, and if any advantage inures to her because of that service ■ the plaintiff cannot complain. She wished apparently to be in the attitude of having a proper rejection of the claim if that made on the attorney was insufficient. If it develops that the service on the defendant’s attorney was adequate, the plaintiff ought not to be permitted to maintain that the service on the defendant was superfluous if she recognized and acted upon it as the valid rejection. Section 798 of the Code of Civil Procedure, in force when all the matters referred were occurring, provided: “Where it is prescribed in this act, or in the general rules of practice, that a notice must be given, or a paper must be served, within a specified time, before an act is to be done, or that the adverse party has a specified time, after notice or service, within which to do an act,” if service is made through the post office, double the time specified is allowed. (See Laws of 1876, chap. 448, § 798.) The section is applicable to the present situation. (Matter of Smith, 58 Misc. Rep. 498.) Section 1822 of the Code of Civil Procedure, which prescribes the>statutory limitation relied upon in this case, is, of course, a part of the act mentioned in section 798. The latter section is hi chapter 8, title 6, article '3, which article is entitled “Service of Papers.” Section 2538 of the Code of Civil Procedure is in chapter 18, title 2, article 1, which is entitled “Process and Service thereof.” Section 2538 enumerates certain portions of the act which are made, applicable to Surrogates’ Courts and to the proceedings therein, “ except where a contrary intent is expressed, ” etc. Among the portions enumerated is article 3 of title 6 of chapter 8, containing section 798. Notice of rejection of the claim was one step in the procedure essential to secure its determination in accordance with section 1822. All of which is commented upon by the learned surrogate in the case cited, [220] The question was not considered at all in Heinrich v. Heidt (supra), relied upon hy the respondent’s attorney. I think the claim of the defendant was not barred when she interposed it as a counterclaim.. The judgment should be reversed. All concurred; Kruse and Robson, JJ., in result only. Judgment reversed and new trial granted, before another referee, with costs to appellant to abide event.