Kansas Pacific Railway Co. v. Anderson

Account Stated, Not Conclusively Shown; No Error. A railway company brought an action against A., formerly its agent, on an account stated. A. filed an answer containing a general denial. On the trial the plaintiff read in evidence a letter of A. to the auditor of the company, dated February 12, 1874, proposing to pay every dollar of the defalcation of one B., to the amount of $7,582.11, if he had time, and stating therein that his January report was short $5,042.07, and that the balance of $2,540.04 would have to be reported in his February account, and then produced as a witness the auditor, one S., who testified that the account sued on was furnished by him to A. on March 21,1874; that A. went out of office on February 14, 1874; that he met A. in regard to the account three or four times; that the account included the whole of February, 1874; that he saw the account in his possession, and that he made no objection to it; that several other statements of account were sent A. before and after March 21, 1874; that they were not all like the one sued on; that those after March 21 were different, and that these statements were given A. as matters of information. Held, That the stated account was not conclusively established by the testimony, and therefore not error for the district court to submit the question in the case to the jury. And further, held, on return of a verdict by the jury for the defendant A., and the rendition thereon of a judgment for costs in favor of A., this court will not set aside the judgment on the ground that the verdict is contrary to the evidence.

Error from, Shawnee District Court. Action on an account stated, brought by the Kansas Pacific Railway Company against T. J. Anderson. The amount claimed was $7,617.16, with interest from March 1, 1874. The action was commenced February 10, 1875. To the petition, the defendant filed a general denial, and in a second count of the answer set forth new matter as an additional defense. On motion of the plaintiff, the court struck out the second count, and the case was tried at the December Term, 1876, on the petition and the general denial, by the court and a jury. The jury returned a verdict for the defendant, and answered the questions submitted to them as follows : 1. “ Did the plaintiff and defendant settle and agree upon the condition of their accounts, and was an account stated between the parties, as alleged in the petition? Answer: No. 2. “Did the defendant receive any of the money or funds sued for in this case? Ans.: No evidence to prove. 3. “Was Belford the agent of the defendant, or of the plaintiff? Ans.: Unknown to the jury. 4. “Did the defendant’s duties, concerning moneys collected by Belford, commence until Belford had turned them over to him? Ans.: No evidence to prove. 5. “What was the scope of Anderson’s agency? Ans.: Unknown.” Thereon a judgment was rendered in favor of said defendant for costs. The plaintiff excepted, and brings the case •here. The court erred in not instructing the jury to find for plaintiff, as requested by plaintiff’s counsel. Only one witness testified in the case, whose testimony was uncontradicted, and it must therefore be considered true. That being the •case, the question whether the facts testified to by him proved a stated account, was one of law, for the court, which should have directed the jury to find for the plaintiff, in the amount claimed. This was the only verdict that could properly have been rendered in the case. (13 Cal. 427.) The facts having been admitted, everything in the case was for the court, and nothing for the jury. Smith testified that he had charge of all of the accounts of the company plaintiff, including the account of moneys received and paid out by agents; that he presented to Anderson the account sued on, met him three or four times in regard to it, saw it in his hands, and that he made no objection to its correctness; that he had demanded payment of defendant several times, but that the account was not paid. This was ample proof that the account was stated, and the jury should have so found. The instructions of the court plainly enough indicated that the legal construction of the letter in evidence was an admission of the debt; and so it was, not the admission of a nominal debt, but a debt of great magnitude. The court instructed the jury that the burden of proof was upon the plaintiff to show that the defendant had recognized the account in evidence to be correct. If that position be the law, which is not admitted to the extent of the charge to the jury, the question is, what volume of proof is necessary to establish the affirmative upon that question ? The law seems to be settled that if an account is furnished to a party claimed to be a debtor, if he makes no objection to it within a reasonable time, it is to be presumed that he owes the debt as stated. Yet he may show, it seems, excuse for not returning the account, or that he did not owe the debt. (18 N. Y., 285.) In other words, the fact that an account has been submitted, and has not been objected to, does not work an absolute estoppel from showing its injustice. In this case there was no attempt on the part of defendant, although present, to prove that the account which had been forwarded to him was in any respect erroneous. There was no evidence, or suggestion even, that he did not owe the amount. The plaintiff offered to show that he was notified on two or three occasions of the receipt of some small balances that would slightly vary the account. That was objected to by the defendant, and the evidence was ruled out. Plaintiff did prove by its auditor, whose business it was to settle this account, that after he sent the account to Anderson, he saw it in his hands, and they talked about the account and of settling it in some way, and defendant made no objection to it. The plaintiff also offered to prove that as to one means of settling it he offered to make a mortgage of his property, which evidence was objected to and rejected by the court. It is not to be supposed that the court would have so ruled if it had been an open question in the mind of the court whether it had not been already abundantly proved that defendant had assented to the statement of his account. If the proof was thus uncontradicted, then the verdict was wrong. If it had not already been conclusively proved, the court erred in rejecting the testimony. The evidence being so conclusive upon that subject, in connection with the rejection of the testimony offered, it is submitted that the court ought not to have instructed the jury in respect to the burden of proof upon that subject. It all comes to this: was the jury justified in finding that the witness Smith did not testify to the truth ? He was a witness whose character was not assailed, and of undoubted capacity to testify what the facts were in this case. The jury had no right to repudiate his testimony. If he testified truly as to seeing the paper in defendant’s hands, as to meeting him on several occasions, as to the payment of the-money, as to defendant making no objections to it, the case, within the rule of law laid down by the court, was fully established. In courts of justice, corporations have equal rights with individuals. Juries have no right, from caprice, passion or prejudice, to disregard the testimony of the witnesses of unpopular parties. It has often been decided in such cases, that their verdicts cannot be sustained. (49 Barb. 583; 29' 111. 161; 41 Tex. 355.) In all the evidence, where is anything tending to prove a stated account? Not in Anderson’s letter, for though he says he proposes paying every dollar of Belford’s defalcation, he does not say to whom, nor does it appear that plaintiff had any interest in whether that defalcation was paid or not; and the proposal to pay was not absolute, but coupled with a condition — “but I must have time.” No further agreement appears; we are not informed that the conditional offer was accepted. This was not evidence of a stated account, for the admission must be absolute and unqualified. Where, then, was the evidence of a stated account? Not in the statement handed to defendant, for without the aid of extrinsic testimony, which was not given, that statement conveys no meaning. There are sundry “additions,” and there are certain deductions” of a cabalistic character, which, no doubt, meant .something to the expert gentleman who made out this document, .but which are as unintelligible as cuneiform inscriptions to the uninitiated. This statement results in a deduction no clearer than the premises whence it is drawn — “Short in •cash, $7,617.16.” What was meant by “short in cash?” The jury were not told; and is it to be presumed that they knew? Did these words convey to Anderson the meaning that he owed the plaintiff that amount? In what sense did the parties understand those words? No explanation was given. Unless we can say that those words meant that defendant was indebted to that amount, no implication can arise from his silence. Unusual expressions, the nomenclature of trade, commerce and art, must be explained to courts and juries by competent evidence, and when not thus explained they are meaningless, and there is a failure of proof. With-out any evidence explaining the meaning of “Short in cash,” •could the court or jury say what those words meant? Yet their meaning must be ascertained before any inference can be drawn from defendant’s silence. The questions propounded to the jury and answered, were fair tests of the ■obscure character of this evidence. Does the silence of a party upon receiving a statement setting forth an alleged indebtedness constitute a stated account? Must there not be something more? The fallacy of plaintiff’s attorneys is in looking upon an account stated as in the nature of a promissory note or a due-bill; while as a matter •of law a stated account is nothing more than an amount fixed, a balance struck. The plaintiff having first proved transactions between the parties, and an indebtedness, then •offers the account stated to prove the agreed amount of that indebtedness. The only legal efficacy of an account stated is, that it finds the amount of an asserted indebtedness; but there must be proof of an indebtedness, aliunde. Before a party can be bound by his silence, it must be shown that he was silent under circumstances which required him to .speak. There must be proof of an actual debt in an action upon an account stated. ( Whitehead v. Howard, 2 Brod. & B. 377; Tucher v. Barroio, 7 B. & C. 624.) But when the balance of cash “short” was at length certainly ascertained, what were the consequences? Upon whom rested the blame? Who was responsible for the deficiency? There is no intimation that Anderson had used or misapplied the money: what caused the deficiency? Who took the money? The only light we can obtain is from defendant’s letter, which speaks of “Belford’s” defalcation in the sum of $7,582.11. The shortage in cash was caused, then, as nearly as we can learn, by the defalcation of Belford. Did the defalcation of Belford create a debt against Anderson? If it did, then there would be a basis for a stated account if the other facts were proved; if not, then there could be no stated account, for there was no indebtedness. Having shown this shortage to have arisen from Belford’s acts, we must inquire whether Anderson was responsible for what Belford did? Was he Anderson’s agent or the company’s? From defendant’s letter it appears that Belford was in the pay of the company, for he sends an order for his pay, which order defendant sends to the company, to be credited to his account at the agency. Belford then being employed by the company and not by the defendant, Anderson was not indebted for his defalcation. But the jury have said that there was no evidence upon the subject of either Auderson’s or Belford’s agency. But this statement was not a statement of the account between the parties. Anderson, no longer agent, had no access to the books, and Smith says these statements were sent him “as matter of information,” not as claims of indebtedness. But this statement does not purport to be a statement of the account; on the contrary, it is but a summary of “additions” to and “deductions” from an account. It was but a purported correction or assertion of errors in an account previously stated, and not the account itself in which those errors were asserted to exist; it was a mere supplementary statement containing additional items of debit and credit, and: a summary statement showing how the balance would stand w'ith those additional debits and credits figured in. The account to which this supplement related, was not produced for the enlightenment of the jury. The party’s silence is not conclusive: that depends upon circumstances; and the inference from that silence in the light of circumstances is to be drawn by the jury. In di’awing that inference, it was proper for them to consider that Anderson had been removed from his agency, and that all the books and vouchers were in the hands of the company.