the plaintiff, but there being no item in it, or evidence of any transaction connected with it, of a date within six years prior to the filing of the bill, nor any suggestion in the bill that the bankers were bound by the agreement or otherwise, to have actually entered the interest as it became due to the credit of the customer in the account, or that they had omitted so to do with a fraudulent intent, the defence was allowed to prevail. Where the action was by a hat-maker against his customer, and there were two items of credit; namely, one for money paid by the defendant to the plaintiff, and the other for a hat returned, and there was also an account of a firm, of which the defendant was a member, against the plaintiff, — it was held, that this was not a case of mutual accounts, and therefore that all items above six years' standing were barred.2

150. The mutual account must subsist as an open and current account in order to be kept beyond the reach of the statute; for the moment it becomes a stated account, it is at an end; and the balance, which is ascertained and admitted to be due, from one party to the other, is immediately subjected to the operation of the statute, as an original and separate demand. By its remaining open, each party is depending for the recovery of the balance he may consider due to him upon the promise which the law raises, on the part of him who is indebted, to pay that balance; but when the parties have stated, liquidated, and adjusted their accounts, and

1 Foley v. Hill, 1 Phillips (Eng. Ch.), 399.

2 Hay v. Kramer, 2 Watts & Serg. (Penn.) 187. [So where A sells goods to B for cash, and other goods to be paid for in goods, and B delivers to A goods more than sufficient to pay for those which he received to be paid for in goods, this is not a mutual account between the parties, so that one item being within six years will take the whole out of the statute. Lowber v. Smith, 7 Barr (Penn.), 381. But the items of payments and receipts by two tenants in common concerning their joint estate constitute an open and mutual account current." Dickenson v. Williams, 11 Cush. (Mass.) 258.]

8 Webber v. Twill, 2 Saund, 125, and Ib. note 6 to p. 127; Farrington v. Lee, 1 Mod. 270; Martin v. Delboe, 1 Ib. 70. In Scotland, the term of prescription does not begin while the account is current, but only when it is closed. The terminus a quo, the period from which the prescription begins to run, is the date of the last article, when the account is closed; or of the article which precedes an interruption in the account. 1 Bell's Com. 251. See also Ramchanden v. Hammond, 5 Johns. (N. Y.) Ch. 200, and the authorities cited on p. 132; and see in particular Toland v. Spring, 12 Peters (U. S.), 300; and Spring v. Executors of Gray, 6 Ib. 156; Purdon v. Purdon, 10 Mees. & Welsb. (Ex.) 562. [The statute begins to run in cases of adjustment, when the adjustment is made. Ex parte Storer, 1 Davies (U. S.), 294; Higgs v. Warner, 14 Ark. (1 Barb.) 192; Brackenbridge v. Bottzell, 1 Carter (Ind.), 333.]

thus ascertained the balance, it ceases to be an account, and has lost the peculiar attributes of an account. What was before an implied promise to pay what was reasonable, by such liquidation and stating of the account, at once becomes an express promise to pay a sum certain.1 An account stated, therefore, is a direct or implied agreement between both parties, that all the articles on both sides. are true;2 and the ascertained and acknowledged balance may be recovered in an action of assumpsit founded upon the fact, that it is admitted by the indebted party, on an adjustment of the respective claims. "All intricacy of account or doubt as to which side the balance may fall is at an end."4 It is like the account of a guardian exhibiting a balance in his hands, which no longer continues him a trustee, and makes him a debtor for the balance when the ward comes of age; and he is, therefore, protected by the statute at the end of six years. An account closed is not necessarily an account stated and liquidated. It may become closed by the death of one of the parties, which is clearly not a statement, and still less a settlement, or an adjustment of a balance. There may be cases, in which the question, whether an account be both closed and settled, would be proper to be determined by the jury. The mere fact of rendering an account by one party does not give it the character of a stated account. The other party must receive it, and, impliedly at least, admit the correctness of the items. If he claim the balance, or offer to pay the balance, as it may be found in his favor or against him, then it becomes a stated account. It is not important that the account has not been made out between the parties. An account current sent by a foreign merchant in this country, and not objected to for two years, has been held an account stated. In Toland v. Spring,10 T. shipped a quantity of merchandise by P. to Gibraltar, who, on arriving there, placed the goods in the hands of S., and received advances from S. upon them. In 1825, S. sold the goods, and transmitted an account of sales as

1 Per Chief Justice Mellen, in M'Clellan v. Croften, 6 Greenl. (Me.) 337.

2 See Davis v. Tiern, 2 How. (Miss.) 786.

See Ashley v. Hill, 6 Conn. 248.

4 4 Leigh (Va.), 249.

5 Green (Ex'r) v. Johnson, 3 Gill & Johns. (Md.) 389; Bull v. Towsen, 4 Watts & Serg. (Penn.) 557.

6 Bass, Executor v. Bass, 6 Pick. (Mass.) 364; s. c. 8 Ib. 187.

7 Ib. M'Clellan v. Croften, 6 Greenl. (Me.) 308.

8 These points held in Toland v. Spring, 12 Peters (U. S.), 300.

* Friedland v. Heron, 7 Cranch (U. S.), 147.

10 12 Peters (U. S.), 308.

of the merchandise received from P. to T., who received it in September, 1825, stating the balance of the proceeds to be two thousand five hundred and seventy-eight dollars. T., in 1825, wrote to S., directing him to remit the amount to him, deducting one thousand dollars, which had been advanced by S. on the goods, and which had been remitted by P. to T.: S. refused to make the remittance, alleging that P. was largely indebted to him. No suit was instituted by T. against S. until August, 1834. The account was a stated account, and the statute of limitations applied to it.

151. But the balance, when found and assented to, may be the commencement of, and constitute an item in, a new mutual account. Thus it was remarked by Chief Justice North, in one of the early cases, that, "if, after an account stated, upon the balance of it a sum appear due to either of the parties, which sum is not paid, but is afterwards thrown into a new account, it is now slipped out of the statute again." The meaning of this declaration is, that the balance forms the first item in the new account, and is a part of it. And if the account is thus renewed and continued, the statute will be a bar to the items of the first account, though the balance will be saved. That is to say, if six years have elapsed since the adjustment of the former account, and it should then be found that the balance was incorrect, and an action brought for the recovery of a different balance, the statute may be pleaded. Otherwise, old accounts, which have been once settled, might be the subject of litigation after the lapse of many years. This exposition of the law, as laid down by Chief Justice North, was concurred in by the Supreme Court of the State of Massachusetts, in an action of assumpsit, by a bank against a depositor, to which was pleaded the statute of limitations.2 It appeared that the usage of the bank was, at the end of every month, to balance the book of a depositor, and to make the balance the first item in a new account. It was held, that, where an account has been balanced, it is no longer an open and running account, and that the parties could not go behind such settlement, without leave obtained, upon a bill in chancery, to inquire whether the balance was founded in error. Putnam, J., who delivered the opinion of the court: "We do not think that the facts of the case at bar prove this account to be open and running from November, 1817, to January, 1824. On the 1 Farrington v. Lee, 1 Mod 270.

2 Union Bank v. Knapp, 3 Pick. (Mass.) 96.

contrary, it is proved that the accounts have been stated and settled monthly. To what is the following account to be added? Not to the former account as it stood, but to the balance of the former account, as it had been settled. That balance constitutes one of the items of the new account; and if the new account shall run on mutually to a time within six years, that balance, although arising more than six years before, will be saved and drawn out, as it is sometimes expressed, from the operation of the statute, by the charges which are within six years. For example, suppose that the balance of the account stated in November, 1817, had been carried to a new account, which had continued to run on mutually, until January, 1824, without any intervening settlement. In such a case, the law would infer a promise to account for all the items in such new account, and to pay the balance of the same. But this construction will not avail the plaintiff, because the account which was added to the balance of November, 1817, did not continue open and running till January, 1824, but was open and running only for a month at a time. The acknowledgment, which is to be inferred from the mutual and open accounts, within six years, should be limited to the items appearing in the same. If, for example, one of the items should be a sum of money, being the balance of a former account settled more than six years before the action, it would be protected from the operation of the statute, by the items which are within six years. In such a case, the law would infer a promise to settle for all the items of the new account. The promise and acknowledgment may reasonably be extended so far; but not to the various charges and disbursements in former times, from which the balance charged in the open account arose. What of doubt now appears, might in time of the transaction have been explained by papers, vouchers, or witnesses; but it would be doing great violence to go behind the account, which is open and current, and behind a hundred or more stated accounts, to inquire, if, at some former period, during the trade between the parties, perhaps some twenty or forty years ago, a mistake did not happen in one or more of the settlements, which, if corrected, would make the balance constituting one item in the open account to be either too little or too great, or on the other side." 1

1 See also Ferguson v. Fyffe, 8 Clark & Finn. (H. L.) 121. [Clark v. Jenkins, 3 Rich. Eq. (S. C.) 314].

CHAPTER XV.

MERCHANTS' ACCOUNTS.

152. THE words of the exception in the third section of the statute of James, in respect to merchants' accounts, which was referred to in the commencement of the preceding chapter, are, "all actions of account, and upon the case, other than such accounts as concern the trade of merchandise between merchant and merchant, their factors or servants." In the latest revised acts of limitation in this country, this exception has not been retained; 1 but, in those States in which it has been deemed expedient to dispense with it, it might be relied on in respect to causes of action which accrued when the exception was in force.2

1

153. The above exception has, in two rather recent cases, been subjected to technical disquisition, and they have established an interpretation before not clearly settled. According to Erskine, J., in Cottam v. Partridge, in the English Common Pleas, the exception seems to have been inserted in order to give merchants the same period of time for proceeding at law, to compel their correspondents or agents to furnish accounts, as they would have had if they had proceeded to enforce an account in equity. The meaning of the words of the exception is not "other than in an action of account," but "other than actions for an account,” and refer seemingly to actions strictly brought for an account. The court were all of opinion that the exception was confined to accounts in respect of which the one party might maintain against the other an action of account, or an action upon the case, for not accounting. In the Court of Exchequer, Baron Parke (in delivering the judgment of the court), in Inglis v. Haigh, says, that the exception does not apply to an action of assumpsit for the several

1 It has not been retained, as will appear by referring to the Appendix, in Maine, New Hampshire, Vermont, Massachusetts, Connecticut, New York, Delaware, Ohio, Michigan, Missouri, Arkansas. [Repealed in England 19 & 20 Vict. c. 97, § 9.] 2 See ante, Ch. II. § 22.

3 Cottam v. Partridge, 4 M. & Grang. 290.

4 Inglis v. Haigh, 8 Mees. & Welsb. (Ex.) 769.