Stewart v. St. Louis & Suburban Railway Co.

137 S.W. 46, 157 Mo. App. 225, 1911 Mo. App. LEXIS 393

• Court: Missouri Court of Appeals
• Decided: May 2, 1911
• Status: Published

Opinion

REYNOLDS, P. J.

(after stating the facts). — In 1 Am. and Eng. Ency. (2 Ed.), p. 437, an account stated is defined as “an agreement, between parties who have had previous transactions of a monetary character, that all the items of the accounts representing such transactions are true and that the balance struck is correct, together with a promise, express or implied, for the payment of such balance. The importance of an account stated is due to the fact that it operates as an admission of liability from the person against whom the balance appears, or, in the language of the common law, The law implies that he against whom the balance appears has engaged to pay it to the other,’ and on this implied promise or admission an action may be brought.” In the same book at page 444, it is stated: “The meeting of the minds of the parties upon the correctness of an account stated is usually the result of a statement of accounts by one party and the acquiescence therein by the other. The form of this acquiescence or assent is immaterial. It need not be in writing, nor signed. It may be express, or implied from the conduct of the parties, but there must in every case be proof in some form of an assent to the account rendered, that is, a definite acknowledgment of indebtedness in a certain sum.” In the same book, at par. C, pp. 440, 441, it is said: “An account stated must be founded on previous transactions of a monetary character creating the relation of creditor and debtor between the parties. These transactions may have consisted of mutual or cross demands, or of a single item only. When the account is stated with reference to a single item, that item must be of a character which creates an actual debt between the parties; but when there are cross demands, and the relation of debtor and creditor already subsists, and the parties strike a balance, they may include therein debts not due in praesenti, and equitable as well as legal demands.” Among other cases for this is cited State ex inf. v. Hartman Steel Co., infra.

In Abbott’s Trial Evidence (2 Ed.), p. 565, it is said: “An allegation of account stated is supported by evidence that the parties actually met and considered and agreed upon the items and the result. ... To prove an account stated the evidence must justify the inference of an agreement as distinguished from a mere admission. ... A qualified acknowledgment is not' enough; but an unqualified admission of a single item is competent; and obection to one item alone may imply admisión of the rest.” And at page 568 it is said: “If defendant’s express assent to the account is proved, he nmy prove in his own favor all that was said by him in the same conversation that in any way qualifies or explains the statement already in evidence, or modifies the use that plaintiff might otherwise make of it. . . . If express promise or assent is not shown by direct evidence, the account is not conclusive, but only shifts the burthen of proof. The inference of assent may be repelled not only by direct evidence of objection made before the account was rendered, or even after acting on it, but by any circumstance tending to a contrary conclusion.” Abbott defines an account stated (p. 56B, par. 1) to be, “An agreement between persons wbo have had previous transactions, fixing the amount due in respect of such transactions, and promising payment. As distinguished from a mere admission or acknowledgment, it is a new cause of action, and hence, if appearing to have been made since the action commenced, is not competent evidence.”

Prof. Greenleaf says: “In support of the count upon an account stated, the plaintiff must show that there was a demand on his side, which was acceded to by the defendant. There must be a fixed and certain sum admitted to be due;- but the sum need not be precisely proved as laid in the declaration. . . . The admission itself must be voluntary, and not made upon compulsion; and it must be absolute, and not qualified. But it need not be express and in terms; for if the account be sent to the debtor, in a letter, which is received but not replied to in a reasonable time, the acquiesence of the party is taken as an admission that the account is truly stated.” [2 Greenleaf on Evidence (16 Ed.), sec. 126.] “The original form, or evidence of the debt, is of no importance, under the count upon an account stated; for the stating of the account alters the nature of the debt, and is in the nature of a new promise or undertaking. . . . It is not necessary to prove the items of the account; for the action is founded, not upon these, but upon the defendant’s consent to the balance ascertained.” [Ib. sec. 127.]

One of the cases cited by Greenleaf in support of the text of section 126 as above, is that of Stenton v. Jerome et al., 54 N. Y. 480. In that case it is said (pp. 484-85), in substance, that to make an account stated it takes two parties, the debtor and the creditor, and there must be a mutual agreement between them as to- the allowance and disallowance of the respective claims and as to the balance as it is struck upon the final adjustment of the whole account and demands of both sides. “Their minds must meet as in making other agreements, and they must both assent to the account and the balance as correct. . . . But in all casés there must be proof, in some form, of an express or implied, assent to the account rendered by one party to. another, before' the latter can be held to be so far concluded that he can impeach it only for fraud or mistake.”

Another case cited in the note to section 126, Greenleaf, supra, is that of Volkening v. DeGraaf et al., 81 N. Y. 268. There Chief Justice Forger (l. c. 270 and following), says: “An account stated is an account balanced-and rendered with an assent to the balance express or implied; so that the demand is essentially the same as if a promissory note had been given for the balance. [Bass v. Bass, 8 Pick. 187.] By the same authority, an account closed is not an account stated. [And see Mandeville v. Wilson, 5 Cranch, 15.] There must be an assent by the party to be charged, either express or fairly implied. [Stenton v. Jerome, 54 N. Y. 480.] The emphatic words of a count upon an account stated were, in former days, insimul computassent, that they, the plaintiff and defendant, accounted together; and the count went on to say that on such accounting the defendant was found in arrear and indebted to the plaintiff in a sum named, and being so found in arrear, he undertook and promised to pay the same to the plaintiff. [2 Chitty’s Pl. 90; 1 id. 358.] Now there is no evidence in this case from which a jury would' be allowed to find or infer that the defendants ever assented, expressly or impliedly, that they were indebted to the plaintiffs in the balance or sum claimed, and undertook, by express or implied promise, that they would pay it. . . . Whatever wras their agreement, and however they have performed or failed to perform it, it is clear that they (defendants) never accounted together with the plaintiff, and on a balance being found against them, undertook to pay it. It is clear that no account was ever rendered showing a balance, that they ever by express promise or impliedly, agreed to pay.”

Another case referred to in the note to the section above quoted is that of The Equitable Accident Insurance Company v. Stout et al., 135 Ind. 444, where, citing among other cases Volkening v. LeGraaf, supra, the Supreme Court of Indiana says (l. c. 455): “Where the action is upon an account stated, and the evidence fails to show the assent of the parties to the balance by express agreement or fair implication, there can be no recovery.”

In Terry v. Sickles, 13 Calif. 427, a decision by Judge Cope, concurred in by Judge Field, afterwards Associate Justice Field, it is said that in an action upon an account stated it is necessary to show that there was a demand in favor of the plaintiff which was acceded to by the defendant.

In State ex rel. Weigel v. Hartman Steel Company, 51 N. J. L. 446, it is said (l. c. 452) : “So it appears that an assent to the balance of the sum total of the account need not be expressed in any formal undertaking, but, from acquiescence in the claim, it may be inferred that the account is correct, and that the sum total is due. But any such assent, whether express or implied, must not be qualified by any condition or contingency which relieves it from the character of a promise to pay the amount.” The court, referring to the case of Evans v. Verity, R. & M. 230, and to the action of the court in that case in refusing to set aside a non-suit, quotes the court as arriving at this conclusion because the promise relied on “is not an unqualified acknowledgment but only an admission that ten pounds would have been due if something else had not happened.”

In Zacarino v. Palloti, 49 Conn. 36, l. c. 38, Abbott’s Trial Evidence, p. 458, is approvingly quoted in support of the proposition that “An account státed is an agreement between persons who have had previous transactions, fixing the amount due in respect of such transactions and promising payment.” go also Ohitty on Contracts, p. 562, as holding that, “It must appear that, at the time of accounting, there existed some demand between the.parties respecting which an account was stated, that a balance was then struck and agreed upon, and that the defendant expressly admitted that a certain sum was then due from him .as a debt.” To like effect 2 Greenleaf on Evidence, section 126, is also quoted.

In Loventhal & Son v. Morris, 103 Ala. 332, it is held (l. c. 336) that, “An account becomes stated when a, specified indebtedness, is admitted to be correct. The mere admission of indebtedness alone will not render an account stated, but the admission must be the sum charged, and claimed to be due.” Quoting many authorities, the court says: “These decisions of our own state are conclusive, that an account where there are debits and credits does not become stated, until there has been an adjustment, and an assent to the conclusion.”

What may be called the leading cases in this state on this matter of action on account stated are the cases of Cape Girardeau & State Line R. R. Co. v. Kimmel, 58 Mo. 83, and Powell v. Pacific Railroad, 65 Mo. 658. In the former case it is said (l. c. 84), that the action in suit was on account stated and that suing on that, whatever transactions there may have been had between the parties, became merged in this settlement or account stated, “and a new obligation then attached to the party found in arrear, which the law construes into a promise that he would pay the balance so agreed to be due. To maintain an-action upon such premises, the first essential is, that the balance be acknowledged by the party to be charged. If a plaintiff seeks to recover for money received by the defendant and not accounted for, he must make those facts distinctly appear in his pleading. But if, in his petition, he elects to rely on a settlement made and a balance struck and agreed upon, he cannot in his proofs abandon that ground of recovery and fall back upon the original subject-matter of the settlement. He may prove the earlier transactions, if necessary, as a foundation for the settlement and in order to explain it. But the settlement itself, or rather the defendant’s assent in some shape to a balance found due, is none the less essential, as the very bottom upon which the right of recovery rests. These principles are as old as the law books and as familiar to the profession.” Referring to the petition in the case as defectiye in its omission to state the defendant’s promise — “which, though implied in law must be pleaded as a fact — to pay the balance found against him,” the court holds that this defect was not objected to and was cured by the verdict and is immaterial.

The second case above cited, Powell v. Pacific Railroad, was also an action on account stated. In that case our Supreme Court (l. c. 660) distinctly affirms the correctness of an instruction, given at the instance of the defendant, which, in effect, told the jury that an account stated in the law, “is.an account settled between the debtor and creditor therein, in which a sum of money or a balance is agreed on, and an acknowledgment by one in favor of the other, of a balance or sum certain to be due, and an express or implied promise to pay the same by one to the other;” and that the plaintiffs cannot recover in the action unless they have proven by evidence, an account stated between plaintiffs and defendant. The court also approved an instruction asked by plaintiffs and refused by the court, to the effect that it was not necessary to constitute an account stated that the admission of the demand should be made in express terms; that if the plaintiffs’ assignee had rendered his account to defendant, exhibiting the items thereof and the amount due to him, aud if the same was never objected to by tlie defendant, the acquiesence of defendant therein is to be taken as an admission that the account was truly stated. Citing Greenleaf, as we have before quoted that author, that to support an action on account stated, plaintiff must show that there was a demand on one side which was acceded to on the other, our Supreme Court holds that there must be a fixed and certain sum admitted to be due.

Without going into a fuller quotation or citation of authorities, it is sufficient to say that all of them, leading authorities, establish beyond all question the proposition that to constitute an account sfated, there must be assent to that account as correctly setting out the amount due from the one party to the other, and that the amount .stated is due and owing from the one to the other. When this is shown the law, in the absence of evidence to the contrary, implies a promise to pay. All the cases hold that there must be a promise to pay, either express or implied. Not a case cited by the learned counsel for appellant holds to the contrary. We are referred to no case by that industrious counsel which holds that a promise to pay is implied in the face of a direct, positive, repeated refusal to’pay and denial on the part of defendant that he owes plaintiff the balance claimed to be due as shown in the account exhibited to him. Stating an account is one thing: agreeing on the account as stated is another. As said by the authorities and in all the cases, the action is not then upon the account, but in assumpsit upon the promise to pay; that promise either express or implied.

In the case at bar, as appears by the undisputed evidence in the case, when the account of plaintiffs was exhibited to defendant, while defendant admitted that the items therein stated were correct and correctly set out, it expressly and clearly denied that it owed the balance claimed. It refused to admit that the balance claimed was due from it to plaintiffs, claiming that under and by virtue of a certain contract between it and plaintiffs, plaintiffs had insured defendant against loss for any accidents that might occur in doing the work out of which the account arose, it appearing that in the progress of the work a workman had been severely injured. and had brought suit to recover damages for the injuries sustained. This was developed beyond question by the testimony of plaintiffs: was confirmed by that of defendant. It clearly appears by plaintiffs’ own evidence that when the managers of plaintiffs and defendant and their respective attorneys came together to discuss the account, defendant’s agents and attorneys, in unmistakable terms, refused to settle the balance claimed by plaintiffs as due, unless plaintiffs would agree to take care of and settle what defendant claimed was their proper and proportionate amount of the damage claimed by this injured workman; in other words, while admitting the correctness of the items in the account so far as they went, the admission was coupled with a distinct denial of any indebtedness by defendant to plaintiffs on that account. This was so far'from being an admission that it would pay, or an implied promise to pay, on which alone an action on account stated can be based, that the demurrer to the evidence interposed by defendant at the close of plaintiffs’ testimony should have been given.

The learned counsel for appellants claims before us that the judgment is for the right party, inasmuch as if it is found that the account stated has not been proven, plaintiffs can -then recover on a quantum meruit, as in assumpsit, for work and labor done, materials furnished, etc. We dispose of this by saying that there was no evidence introduced whatever on any such theory; the case was tried on no such theory; the instructions given at the instance of plaintiffs, those asked by defendant and refused, proceeded upon no such theory. We are to dispose of the case on the theory upon which it was tried. Counsel himself, when testifying as a witness gives a very correct definition of the difference between suing on an “account stated” and on an open account. We have quoted the testimony he gave on which we base this There was no effort to prove the account by items.

The instruction given by the court at the instance of plaintiffs, tested by the principles and rules we have set out, was erroneous — fatally so: those asked by defendant correctly stated the law and it was error to refuse them. Cutting back of this, however, the demurrer interposed by defendant at the close of plaintiffs’ evidence, should have been given. Nor did defendant, by any evidence introduced by it, help out the case for plaintiffs; to the contrary it was in confirmation and corroboration of the evidence introduced by plaintiffs.

The action of the learned trial court in sustaining the motion for a new trial was correct, both for the reasons given by him as also for those we have set out.

The action of the court in setting aside the verdict is affirmed and the cause remanded.

Nortoni and Caulfield, JJ., concur.