Barr v. Lake

NORTONI, J. This is a snit on an account stated. The plaintiff recovered and defendant appeals. It is alleged, substantially, that plaintiff and defendant had certain business transactions in April, 1902, as a result of which defendant received from the plaintiff certain telephone equipments and the'sum of fifty dollars in cash. And that afterwards, in February, 1904, they settled their accounts and agreed upon a balance of sixty dollars being due from defendant to the plaintiff thereon, which sum of sixty dollars defendant promised to pay plaintiff. The testimony on the part of plaintiff tends to prove the cause of action stated. It is true the plaintiff gave no evidence as to the items of the account, his entire testimony going to the effect there was an unsettled account between the parties and that they met and agreed upon the balance of sixty dollars due from defendant to him which sum the defendant agreed and promised to pay. The cause of action having originated before a justice of the peace, no formal pleading was filed on the part of the defendant. The defendant gave testimony to the effect that there had been no' settlement of accounts between the parties and no promise to pay. As to this matter, he denied the plaintiff’s theory of the case in toto. However he admitted having received fifty dollars from the plaintiff at the time mentioned in the complaint but sought to deny that he had ever received any telephone equipments from him and sought, too, to give evidence with respect to certain matters of account for telephone service and otherwise which he claimed plaintiff owed him prior to the alleged settlement or statement of the account between them. All of this testimony the court — 256 — excluded on plaintiff’s objection. Tbe principal point ■relied upon for a reversal of the judgment relates to the action of the court in excluding so much of the defendant’s testimony as tended to prove he had received no telephone equipments from the plaintiff. It is argued that as our courts have said the transactions prior to the settlement may be referred to by plaintiff as a foundation for the settlement and in order to explain it, it was error to exclude the defendant’s offer of proof to the effect that he had received no telephone equipments from the plaintiff said to have been one of the items of the account adjusted. In view of the pleadings, we believe this argument to be unsound. No pleading whatever was filed on the part of the defendant, and the case having originated before a justice of the peace, the defendant’s appearance to the action operated as though the general issue were raised at common law. [Kane v. McCown, 55 Mo. 181; Schmidt v. Rozier, 121 Mo. App. 806, 98 S. W. 791; Farmers Bank v. Williamson, 61 Mo. 259.] It is certain that an account stated must be founded on previous transactions of a monetary character creating the relation of creditor and debtor between the parties thereto. [1 Am. and Eng. Ency. Law (2 Ed.), 440.] In view of this fact, the courts permit a plaintiff suing on an account stated to show enough concerning the earlier transactions, between the parties, if necessary, to afford a foundation for the settlement and in order to explain it. However, in such actions the plaintiff will not be permitted to abandon the cause of action, that is, the account stated, and fall back upon the orignal subject-matter, for having sued upon a stated account, he must recover on that or not. at all. He may refer to the transactions prior to the statement of the account for the purpose only of showing that there was an account existing between the parties and that it afforded a competent basis for the settlement out of which the new cause of action arises. — 257 — [Cape Girardeau, etc., R. R. Co. v. Kimmel, 58 Mo, 82; Koegel v. Givens, 79 Mo. 77.] The theory of the law is that an account stated is in the nature of a new promise or undertaking and raises a new cause of action between the parties. [1 Am. and Eng. Ency. Law (2 Ed.), 456; Cape Girardeau, etc., R. R. Co. v. Kimmel, 58 Mo. 82; Koegel v. Givens, 79 Mo. 77; Columbia Brewing Co. v. Berney, 90 Mo. App. 96; Burger v. Burger, 34 Mo. App. 153.] In view of the principle thus established, the law forbids an inquiry into the validity of the items composing the original cause of - action, which question is merged in the new promise on the stated account, except upon valid grounds affording relief in other contractual matters such as fraud, accident or mistake. The very purpose of an account stated is to foreclose matters of dispute with respect to the various items thereof which afford the consideration for the new promise involved in the stated account, and, therefore, the law forbids an inquiry into the validity of a portion of the items of which the original cause of action was composed unless it be on the grounds of fraud, accident or mistake. That is to say, the validity of portions of the original account may not be inquired into under a general denial. [Columbia Brewing Co. v. Berney, 90 Mo. App. 96; 1 Ency. Pl. and Pr., 89; Martin v. Beckwith, 4 Wis. 219; Warner v. Myrick, 16 Minn. 91; Moody v. Thwing, 46 Minn. 511; 1 Am. and Eng. Ency. Law (2 Ed.) 456.] The leading authority relied upon by the defendant in the argument here is Koegel v. Givens, 79 Mo. 77, 79. That was a suit on an account stated. The principle we have sought to illustrate was not only recognized in that case but enforced by the Supreme Court as well, for there it appeared the plaintiff was permitted to give testimony tending to show that he had performed work and labor for the defendant and the account was after-wards stated between them. The defendant proffered — 258 — testimony to tbe effect that the work and labor performed by plaintiff was without value and this the court rejected. The Supreme Court said the proof was competent in so far as plaintiff was concerned as it merely served as a matter of inducement to show that there was a foundation for a settlement between the parties, but the proof proffered on behalf of defendant to the effect that the labor performed by the plaintiff was without value was incompetent for the reason that it tended to open up the merits of the antecedent transaction. Although the matter of the pleadings is not mentioned in that case, it appears the common law general issue was raised, as the proceeding originated before the justice of the peace and no answer was filed. It would seem in that case the proof rejected should have been received under the common laAV general issue but it was not, and the Supreme Court declared it incompetent. This ruling, we believe, curtailed the scope of the general issue in so far as suits on^account stated are concerned and the case is a precedent by which we are bound. Under the form of non assumpsit, which raised the general issue at common law, the defendant might show the items which formed the basis of the account stated were incorrect. The question has been squarely met and decided by a common law court of high authority. [Thomas v. Hawkes, 8 M. & W. 140; 1 Ency. Pl. and Pr., 89.] Such evidence was admissible under the common law general issue because everything was open to proof on the part of defendant under that plea which tended to show a defense. [Northrup v. Mississippi, etc., Ins. Co., 47 Mo. 435.] In this respect the general denial under the code is not so comprehensive. Under the modern general denial, the defendant may disprove only such matters as are essential to sustain the plaintiff’s case. Such plea is a mere traverse in bar of the material facts pleaded in the petition. [Northrup v. Mississippi, etc., Ins. Co., 47 Mo. 435, 444; 1 Ency. Pl. and Pr., 816, 817.] — 259 — However, notwithstanding the more extensive scope of the plea of the general issue at common law and the competency of proof thereunder, which may not he given under the code general denial, and notwithstanding the fact that the common law general issue is raised by the appearance of the defendant before a. justice of the peace when no answer is filed, it appears our Supreme Court has furnished a precedent for applying the doctrine of the general denial to suits on account stated arising before the justice when no answer is filed. In other words, the Supreme Court in Koegel v. Givens, 79 Mo. 77, 79, ruled in a case originating before the justice on a stated account and in which no answer was filed that proof proffered by the defendant tending to show the validity of items of the account stated was incompetent. This case is a precedent by which we are concluded under the Constitution. We believe there can be no doubt in a case such as this one, where the defendant denies there has been an account stated and the promise to pay it, by interposing a general denial, that he may introduce any evidence thereunder which shows that there was actually no account between him and the plaintiff and that he had no dealings at any time with him. The principle is that which permits the defendant to show under the general denial any fact which goes to disprove the plaintiff’s cause of action. Indentically as the defendant may show that there was no settlement of the accounts between the parties and, therefore, no new promise, he may show, too, that he never had any dealings whatever with the plaintiff and that there was actually no account between them to settle, for such goes to destroy the entire cause of action or the very foundation of the cause of action relied upon. [Columbia Brewing Co. v. Berney, 90 Mo. App. 96, 99; Field v. Knapp, 108 N. Y. 87, 89; 1 Enc. Pl. and Pr., 89, 90.] It is always competent to prove any fact under the general denial which goes to show that plaintiff never had any cause of ac — 260 — tion. [Hoffman v. Parry, 23 Mo. App. 20; Northrup v. Mississippi, etc., Ins. Co., 47 Mo. 435-444; Greenway v. James, 34 Mo. 326, 328; 1 Enc. Pl. and Pr., 817.] But in this case the defendant did not seek to show that there had been no dealings whatever and that no account existed between the parties which might, afford a basis for the settlement. On the contrary, he admitted haying received the fifty dollar item referred to and sought only to impeach the one item with respect to the telephone equipments which his counsel says he did not receive. To permit this proof, operates to again open up the merits of the controversy which is presumed to have been included and settled in the stated account. If a defendant is overreached in a settlement by having been induced through fraud, accident or mistake to agree to pay for an item which he had not received, then he is entitled to relief to that extent under a competefit pleading to falsify .the account. And in the absence of fraud affirmatively appearing, it devolves upon the defendant to specially plead the fraud, accident or mistake relied upon to the end of surcharging or falsifying the stated account, for the plaintiff is entitled to notice of the special defense relied upon. [Columbia Brewing Co. v. Berney, 90 Mo. App. 96; Martin v. Beckwith, 4 Wis. 219; Warner v. Myrick, 16 Minn. 91; 1 Enc. Pl. and Pr. 89; 1 Am. and Eng. Ency. Law, 460, 461, 462, 463.] The general rule is that any defense not admissible under the general denial must be pleaded. [1 Ency. Pl. and Pr. 89.] The defendant sought to introduce evidence tending to prove that the plaintiff owed him a considerable amount for telephone service furnished by defendant to the plaintiff for some two or three years prior to the alleged settlement of accounts between the parties. This evidence was. excluded. It is argued this ruling was error for the reason defendant sought thereby to show the account had been paid by the rendering of such telephone service prior to the alleged settlement — 261 — in which the balnnce of sixty dollars was found to be dne the plaintiff. This proof in no manner met the issue involved which was as to whether or not the running account between the parties was settled in February, 1904, as alleged by the plaintiff, and the defendant promised to pay the balance found to be dne. The action on the stated account, as said before, is on a new promise into which all prior transactions are merged. All of this matter pertaining to an indebtedness from the plaintiff to defendant is presumed to have been reckoned with and balanced off at the time of the settlement between the parties. Any proof of payment, to be competent, must therefore necessarily post-date the alleged settlement. For the transactions prior thereto must be regarded as having been merged in the settlement of the stated account. [Columbia Brewing Co. v. Berney, 90 Mo. App. 96, 99.] Defendant sought to introduce testimony to the effect that plaintiff owed him about fourteen dollars for telephone service rendered to the plaintiff since the date of the alleged settlement. The court excluded this evidence. There was certainly no error in this, as no set-off or counterclaim was filed in the case. Our statute provides no set-off or counterclaim may be pleaded in the circuit court that was not pleaded before the justice. [Sec. 4078, R. S. 1899; see also Compton v. Parsons, 76 Mo. 455.] The judgment should be affirmed. It is so ordered. All concur.