O'Hanlon Co. v. Jess

MR. JUSTICE HURLY delivered the opinion of the court. This action originated in the justice court on February 7, 1917. Upon appeal to the district court a stipulation was entered into between the parties, which, so far as necessary to this decision, was to the effect that the plaintiff furnished to defendant Henry Jess, Jr., goods, wares and merchandise, between August 25, 1909, and May 2, 1913, and that on May 31, 1913, plaintiff rendered to defendant a statement showing balance due upon the account, to the correctness of which defendant never objected until after action brought, and contained an admission upon the part of the defendant that such balance had not been paid, although demand had been made. The answer pleaded the statute of limitations in bar of the cause of action. Judgment was rendered for defendants, and plaintiff appeals. It is the theory of the plaintiff that the rendition to and retention by the defendants of the account rendered constituted an account stated. It is contended by the defendant: “The rule that items within the period of limitation draw after them items beyond that period is strictly confined to mutual accounts, showing a reciprocity of dealing between the parties. * * * There must be a mutual or alternate [418] course of dealing, giving rise to cross-demands, upon which the parties might respectively maintain actions. It follows that where there is no such mutuality of dealing, or where the items are all on one side of the account, the statute runs against- each item from its date” (25 Cye. 1121, and note; Millett v. Bradbury, 109 Cal. 170, 41 Pac. 865); and therefore that the cause of action upon the original transaction was barred when the action waá commenced. Conceding, but not deciding, that such may be the rule, no question of the statute of limitations having barred action upon the account at the time of the rendition of the account of May 31, 1913, could be well asserted. It, therefore, follows that the account stated, if it came into being at all, did so before the running of such statute as to the original account. It is quite generally held that where parties have been [1-3] engaged in a course of dealings and there is an antecedent indebtedness in favor of one as against the other, and an account or bill purporting to be a statement of the account is rendered by the creditor to the debtor, who retains the same for an unreasonable length of time without objection, this.is evidence of his assent to the correctness of the account, and, accordingly, is an account stated. (See 1 Corpus Juris, p. 691, sec. 276, p. 695, sec. 288. See, also, cases in Decennial and Century Digests, “Account Stated,” sec. 6.) In our view, by virtue of the stipulation and the rule here cited, the plaintiff stated its account against the defendant Henry Jess, Jr., on May 31, 1913. “An account stated is an agreement between the parties, either express or implied, that all the items are correct. * * * The action is based upon the agreement, the consideration of which is the original account, and the agreement has the force of a contract. This contract is the cause of action, and the plaintiff must recover upon it, or fall in the action.” (Martin v. Heinze, 31 Mont. 68, 77 Pac. 427. See, also, Johnson v. Gallatin Valley Milling Co., 38 Mont. 83, 98 Pac. 883.) [419] The California Code of Civil Procedure, section 360, contains [4] a provision found in our section 6472: “No acknowledgment or promise is sufficient evidence of a new or continuing contract, by which to take the case out of the operation of this title, unless the same is contained in some writing, signed by the party to be charged thereby.” The supreme court of that state, upon conditions somewhat analogous to the instant case, has said: “It is further urged that the court erred in holding that the cause of action accrued at the date the account was stated between the parties (if in fact stated), and that therefore the statute did not apply to any item after January 31, 1878, two years before the alleged statement, and that the court also erred in holding that by silence or acquiescence, or concurrence by unwritten words in the correctness of the account, the defendant could become liable to pay larger interest than '7 per cent per annum. “ An open account, already barred by the statute of limitations, cannot be relieved from the bar of such statute by an oral statement of such account, for the reason that under our Code (Code Civ. Proc., sec. 360) no acknowledgment or promise is sufficient evidence of a new or continuing contract by which to take the ease out of the operation of the statute, unless the same is contained in some writing, signed by the party to be charged thereby. “Where, however, the demand is not barred at the date of the account stated, although the statement is verbal, the statute begins to run upon the new cause of action, thus brought into existence, from the date of the settlement and new promise arising thereunder; and, if verbal, an action may, under subdivision 1 of section 339 of the Code of Civil Procedure, be brought within two years after such settlement.” (Auzerais v. Naglee, 74 Cal. 60, 15 Pac. 371.) In the later ease of Kahn v. Edwards, 75 Cal. 192, 7 Am St. Rep. 141, 16 Pac. 779, the above holding was approved. Again in Baird v. Crank, 98 Cal. 293, 33 Pac. 63, the court said: “ * * * It is further strenuously urged that the [420] plaintiff’s cause of action was barred by the statute of limitations pleaded, and that the finding of the court that it was not barred was contrary to and not justified by the evidence. This position is rested upon the theory that the statute began to run against plaintiff’s claim when he completed his services on January 20, 1887, and that under section 360 of the Code of Civil Procedure its running was not sustained or affected by the oral statement of the account, and hence that, as more than two years had elapsed when the complaint was filed, the action was barred. It is admitted * * * by the learned counsel that this theory is in direct conflict with the rulings upon the same question in Auzerais v. Naglee, 74 Cal. 60, 15 Pac. 371, and Kahn v. Edwards, 75 Cal. 192, 7 Am. St. Rep. 141, 16 Pac. 779, but it is claimed that these cases were not well considered, and should be overruled. * * # In answer to the claim that these cases should be overruled, so far as they treat upon the subject in hand, it is enough to say that they are supported by many authorities elsewhere, and in our opinion should be sustained.” (See, also, Brown & Manzanares Co. v. Gise, 14 N. M. 282, 91 Pac. 716; Figge v. Bergenthal, 130 Wis. 594, 110 N. W. 798.) We, therefore, are of opinion that, there having been a settlement of accounts at a time when the bar of the statute of limitations had not intervened, and the cause of action upon the account stated not being barred at the time of the commencement of the action, the plaintiff was entitled to judgment against the defendant Henry Jess, Jr. The itemized statement of account, made a part of the [5] stipulation, however, shows that the sales of goods upon which the account is based were made to defendant Henry Jess, Jr., only, and there is-nothing in the complaint or otherwise showing that the same were of the character mentioned in section 3707, Revised Codes, nor that the wife was chargeable therefor. There being nothing to indicate an antecedent debt from the wife to the plaintiff, no account was stated as against her, and she was entitled to judgment. [421] Tbe judgment of the district court is sustained as to the defendant, Mrs. Henry Jess, Jr., and is reversed as to tbe defendant Henry Jess, Jr., with, directions to that court to render judgment for plaintiff against him for the amount claimed. Remanded, with directions. Mr. Chief Justice Brantly and Associate Justices Matthews and Cooper concur.