Langdon v. Roane's Adm'r

6 Ala. 518

• Court: Supreme Court of Alabama
• Decided: January 15, 1844
• Status: Published

Opinion

COLLIER, C. J.'

-The frame of the bill does not require that the state of the accounts between the intestate and Messrs. Lea & Langdon, previous to the 10th November, 1836, should be examined; for although the account rendered by the latter, on that day, was not strictly correct, yet the error was admitted and corrected by the parties themselves. [Davis v. Spurling, 1 Russ. & My. Rep. 64.] We have only to inquire whether there was due to Lea & Langdon, on the 28th of October, 1837, the sum for which they received the intestate’s note of that date? It cannot be intended that there was a mistake in the settlement; and, consequently, the onus of showing an error prejudicial to the intestate, rests upon the complainant. Where parties have settled their accounts, and struck a balance, which has been adjusted by cash, or with a security for its payment at a future day, it is incumbent upon the party complaining of fraud or mistake, to allege it specifically, and to establish the allegation by proof. The agreement of the parties, which is admitted by the answer of Lea & Langdon, and proved by the deposition of Harding, that all errors should be corrected, and the deed of trust stand as a security for so much as was really due the cestuis que trust, cannot render inapplicable the rule we have stated. That agreement was merely affirmative of what the law was, in the absence of any express understanding.

In Chappedelaine, and another, v. Dechenaux, [4 Cranch’s Rep. 306,] the bill was filed to set aside a stated account, which was signed by the parties thereto upon a suggestion of fraud; or if it be not set aside, to correct its errors, and to obtain a settlement of transactions subsequent to that account. The account stated, was pleaded in bar of so much of the bill as required, that the subject should again be opened. The court said, that the plea must be sustained, except so far as it may be in the power of the complainants to show clearly, that errors have been committed, is a proposition about which no member of the court has doubted for an instant. “No practice could be more dangerous than that of opening accounts which the parties themselves have adjusted, on suggestion supported by doubtful or by only probable testimony.” [To the same effect, see Blackledge v. Simpson, 1 Hayw. Rep. 259; Philips v. Belden, 2 Edw. Rep. 1; Bullock v. Boyd, et al. id. 293; Wilde v. Jenkins, 4 Paige’s Rep. 481; Endo v. Caleham, 1 Younge’s Rep. 306.]

It is said to be a general rule, that where an account is made up and rendered, he who receives it, is bound to examine the same, or to procure some one to examine it for him; if he admits it to be correct, it becomes a stated account, and is binding upon both parties — the balance being the debt, which may be sued for and recovered at law upon the basis of an insimul computas-sent. So, if, instead of an express admission of the correctness of the account, the party receiving it keeps the same by him, and makes no objection within a reasonable time, his silence will be construed into an acquiescence in its justness; and he will be bound by it as if it were a stated account. [Phillips v. Belden, 2 Edw. Rep. 1.] So in Freeland v. Heron and others, [7 Cranch’s Rep. 147,] it was held, that when one merchant sends an account current to another residing in a different country, between whom there are mutual dealings, and he keeps it two years without making any objections, it shall be deemed a stated account, and his silence and acquiescence shall bind him, at least so far as to cast the onus probandi on him. In fact, the rule as laid down by the authorities, would seem to be, that if one does not object to a stated account which has been furnished him, within a reasonable time, he shall be bound by it, unless he can show its incorrectness. [Murray v. Toland, 3 Johns. Ch. Rep. 569; Wilde v. Jenkins, 4 Paige’s Rep. 481.]

In Leaycraft v. Dempsey, [15 Wend. Rep. 83,] the court said, that where a bill is filed to open the settlement of an account, the request is not granted as a matter of course. If the account has been settled, or an instrument executed for the payment of the balance, the error should be specified in the bill. The plaintiff must show clearly, that he has been imposed upon, before the court will allow him to unravel the account. Such, also, is the decision in Philips v. Belden, [2 Edw. Rep, 1.] In the latter case, the court consider the distinction between surcharging and falsifying an account, and accounting generally. It is said, where liberty is given to surcharge and falsify, the court takes the account to be a Stated and settled account, and establishes it as such. If either party can show an omission for which an entry of debit or credit ought to be made, such party surcharges, that is, adds to the account; if any thing be inserted which is wrong, he is at liberty to show it, and this is a falsification. The onus probandi is always on the party making the surcharge or falsification. Butin a general accounting, the party producing the account, to charge his adversary or relieve himself, must show the items to be correct.

The direct inference from the principles stated, is, that a party dissatisfied with a settled account, must in a bill brought for that purpose, state explicitly the grounds on which he seeks to surcharge or falsify it; and that the burthen of making out the case, rests upon him. Further, where a merchant furnishes his customer with an account current of his dealings, and the latter retains it in his possession for a considerable length of time, without objection, he will be presumed to have admitted its correctness.

In the present case, the allegations of the bill are attempted to be sustained, by proof that Lea informed the intestate, he had paid for him, his note to Harding, as well as his drafts in favor of Harvey and-Webb & Dugger; that this statement was wholly untrue; that intestate was deceived by it, and induced to make the note and execute the deed in question. The evidence of Harding goes to this extent, and so far as it respects his note, is confirmed by the testimony of Walke. Conceding that the proof on this point is sufficient to outweigh the answer, and it by no means follows that such a case is made out as will vacate the note and deed. The conclusion will not then be wan-anted, that the balance due the defendants, Lea & Langdon, was not equal in amount to the note. It will be remembered, Walke testifies, that although Lea told him, his house had paid the note to Harding, yet in the account which he shewed him, it was not charged:— Further, it is admitted in the bill, that Lea & Langdon, in February, 1838, furnished the intestate an account current of all previous dealings. True, it is alleged that this account is imperfect, not because it charges too much, or omits any thing that is proper; but because, in noting the items stated, it is not sufficiently full and explicit. We inffir that the account thus rendered, is identical with that exhibited with the b.ll. In fact, such an inference is a necessary sequence from the case as presented; for if they were variant from each other, it would have been entirely competent for the complainant to have shown it; and he certainly would have done'so, if the claim to relief could have been thus strengthened.

The account exhibited shows, that after placing to the intestate’s credit the sum of seven hundred and seventy-one dollars and seventy-five cents, the proceeds of seventeen bales of cotton sold on the 20th of January, 1838, there was due to Lea & Lang-don, a balance equal to the amount of the note, saving six hundred and sixty-eight dollars and fifty-three cents, for which a credit was given. It is not alleged that the intestate paid the note which he made in November, 1838, in any other manner than by an appropriation of the proceeds of his cotton crop of that year; nor is it denied by the bill, that he did not after the first settlement, continue to deal with Lea & Langdon as previously_ Taking the case as stated by the complainant himself, and it is clear, that as the cotton sent by him to his factors, was insufficient to extinguish the note, there was due to them a balance thereon; and that that note, instead of being paid in full, was taken up by making so much as was due thereon, a part the consideration of the note given in October, 1837. In this view, it is impossible that the intestate could have been charged with the note of Harding, and the defendants to Harvey, and Webb & Dugger; for taking the statements of the bill to be a true, and complete deve-lopement of the case, and the last note should have been for a much larger amount than it really is.

Again: The intestate received the account current of Lea & Langdon, in February, 1838, and retained it without objection, so far as we are informed, up to the time his bill was exhibited in January, 1839. This, considering the distance of the residence of the parties from each other, must be regarded as an implied admission that the account was correct. > True, it would not operate so conclusively against the complainant, as to prevent him from surcharging and falsifying; but the proof in the cause is in-sufficeint to authorise'relief upon either of these grounds. In fact, the interference of equity is not sought upon an objection to the account, but because the intestate was overreached by Lea, who represented to him that Lea & Langdon had made advances for him to pay debts which were still outstanding. The chancellor was opinion that this allegation was made out by evidence, and that it warranted a perpetuation of the injunction; because it showed that the defendants, L. & L., had perpetrated a fraud upon the complainant. Without stopping to inquire whether the proof was such as the court of chancery supposed, we are satisfied, that the conclusion there attained cannot be supported.

Here it is admitted, and in fact proved, that all errors in the settlement were to be corrected, and the deed to stand as a security for so much as was really due. If the law were otherwise, this stipulation of the parties, would sustain the deed in despite of fraud on the part of the cesluis qile trust-, to the extract of their demand. But the chancellor’s view of the law is incorrect, as applied to a case in the posture in which the present comes before us. It may be conceded as a general rule, that the enforcement of a contract may be prevented, by showing a fraud on the part of him who seeks to derive a benefit from it; unless the fraud has been assented to, or acquiesced in. But it cannot be endured that a debtor should be allowed to become an actor in equity, and avoid a security which he has given lor a debt clearly due, merely because he was induced by the false representations of the creditor, made most probably in ignorance of the fact, rather t'hári from a settled purpose to deceive. [See Barnett v. Stanton & Pollard, 2 Ala. Rep. 181.]

In respect to the notes of the intestate discounted by the branch 'bank at‘Mobile, in 1838, the proceeds of which were checked out by Lea;& Langdon, it is quite enough to say, that there is no allegation in the bill in respect to them; and even if the proof establishes a liability upon Lea & Langdon to account for the money thus appropriated by them, that liability cannot be enforced in the present case.

From what we have said, it results that the complainant is entitled to a perpetual injunction for the sum of six hundred and sixty-eight dollars and fifty-three cents, to be applied as a credit on the note on the 20th of January, 1838; that as to the other mat-tei’s in controversy, the bill must be dismissed. If Lea & Lang-don are liable for the monies checked out of Bank, the representative of the intestate should have the benefit of them in extin-guishment of the note and deed of trust; and that he may not be prejudiced in the assertion of his rights, the decree is so far modified, as to dismiss the bill without prejudice to the matter stated, as the ground of a new suit.

As it does not appear that there was a necessity for a resort to equity, to obtain the credit to which we have seen the complainant is entitled, the defendant in error will be taxed with the costs, both of this court and the court of chancery. The decree will accordingly be reversed, and here rendered in conformity to. the views expressed.