Case ID: ad_130/html/0305-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Cochrane, J. :", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Scott G. Boyce, Respondent, v. Warren D. Walker and Mary E. Walker, Appellants.
    Third Department,
    January 6, 1909.
    Contract — account stated — evidence — proof that account was erroneous — defense to foreclosure of mortgage securing amount found due on account stated.
    An account stated is merely grima, facie evidence of its correctness and may be impeached for mistake.
    Hence, in an action to foreclose a mortgage given to secure a balance due for lumber sold, it is error to exclude evidence by the mortgagor showing that by a subsequent investigation the accounts stated between the parties were found to be erroneous as to the amount and quality of the lumber delivered, so that there was no debt to support the mortgage.
    Chester, J.,-dissented.
    Appeal by the defendants, Warren D. Walker and another, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Franklin on the 19th day of December, 1907, upon a decision of the court rendered after a trial at the Franklin Trial Term before the court' without a jury.
    This is an action to foreclose a bond and mortgage on real estate executed by the defendants to the plaintiff August 4, 1902.
    
      Charles A. Burke, for the appellants.
    
      F. H. Bryant and Florence Boyce Bryant, for the respondent.
   Cochrane, J. :

In the years 1900, 1901 and 1902 the defendant Mary E. Walker was engaged in a lumbering business and sold lumber to the plaintiff. The plaintiff from time to time advanced her money exceeding, as he claims, what was due her for lumber. The defendant Warren D. Walker is the husband of Mary E. Walker and was her agent in,respect to the transactions between her and the plaintiff.

The places of business of the parties were some miles separated. At the close of their dealings in 1900, plaintiff rendered to the defendants a statement of the amount of lumber in the aggregate which he had received. A similar statement was given showing the aggregate amount of lumber received for the year 1901. In the year 1902 separate statements were mailed after the receipt by plaintiff of each carload showing the amount of lumber received in each car and the price therefor. On July 30, 1902, a statement was mailed the defendants which contained a recapitulation of the previous statements so far as the quantity of lumber was concerned. ¡None of the statements contained a detailed statement óf the lumber furnished in the years 1900 and 1901, but. only the aggregate amount furnished in each of those years respectively. Previous to the last statement of July 30, 1902, the matter had been placed by the plaintiff in the hands of his attorney for collection. After some negotiation the defendants on August fourth executed the bond and mortgage in question for the balance claimed by plaintiff to be due as the same appeared by the statement of .July 30, 1902. Some question is raised as to the amount of money advanced by plaintiff but the principal controversy exists concerning the quantity of lumber sold to him.

At the trial Warren D, Walker testified that when the bond and mortgage were executed his books showing the quantity of lumber were at the mill some twenty-one miles from his residence; that he had not Compared the statements of the plaintiff with such books; that the plaintiff had told him in regard to the statements of the years 1900 and 1901, that they corresponded with the accounts of defendants’ bookkeeper. . He ■ further testified that he did not attempt to verify plaintiff’s statements until the year 1907, when the bookkeeper of defendants made up their books. Defendants then attempted to prove that in the year 1900 they sold to the plaintiff 405,429 feet of lumber as against 350,219 feet credited to them in plaintiff’s statement of that year; that in the year 1901 they sold to the plaintiff 88,649 feet as against 79,478- feet credited to them in plaintiff’s statement of that year; and that in the year 1902 more lumber was sold than was credited to them in plaintiff’s statements of that year. They also attempted to prove that there was no defective lumber delivered. Had the defendants succeeded in making this proof it would have appeared that there was no balance due plaintiff when the bond and mortgage were executed, and that the latter were, therefore, without consideration.

The evidence so offered was excluded on the ground that an account had been stated between the parties, and that the bond and mortgage were given for a balance due on such statement and settlement. The trial justice was right in holding that there had been an account stated, but lie was in error in holding that for that. reason the evidence offered was inadmissible. An account stated is subject to impeachment for mistake. Its effect is merely to establish prima facie the accuracy of the account, and to cast the burden of proof on him who claims a mistake.

In Lockwood, v. Thorne (18 N. Y. 285, 292) it was said: “An account stated or settled is a mere admission that the account is correct. It is not an estoppel. The account is still open to impeachment for mistakes or errors. Its effect is to establish prima facie the'accuracy of the items without other proof; and the party seeking to impeach it is bound to show affirmatively the mistake or error alleged.”

The above language is quoted approvingly in Spellman v. Muehlfeld (166 N. Y. 245, 248), and the same principle has been many times reiterated. (Samson v. Freedman, 102 N. Y. 699; Young v. Hill, 67 id. 162, 175; Eames Vacuum Brakc Co. v. Prosser, 157 id. 289, 300 ; Conville v. Shook, 144 id. 686 ; Welsh v. German American Bank, 73 id. 424 ; Sedgwick v. Macy, 24 App. Div. 1.)

It was, therefore, clearly error for the court to exclude the profferred testimony. It might not have proved very weighty in view of the circumstances and defendants’ long acqxxiesceneo in the account as stated. But they were entitled to have the evidence received, and the question of its importance would then have been a matter for consideration in the light of its probabilities, and their explanation fortified by such strength, if any, as the testimony itself might seem to inherently suggest. Plaintiff claims that no mistake was established. But that was just what the defendants were not permitted to establish. , Warren D. Walker had testified that he had not made any comparison of plaintiff’s accounts with his own, and that at the time of the execution of the bond and mortgage, which seem to have been given according to his testimony under the stress of some pressure, his books were not accessible, and that lie had no opportunity to make such comparison. If his testimony was true he did not know that plaintiff’s statements were erroneous until afterward, and it was proper for him to show if he could that an error had been made in the adjustment of the accounts and' in the consideration of the mortgage.

The judgment must be reversed and a new trial granted, with costs to the appellants to-abide the event.

All concurred, except Chester, J., dissenting.

judgment reversed and new trial granted, with costs to appellants to abide event.