Foster v. Dwire
| Decision Date | 25 July 1924 |
| Citation | 199 N.W. 1017,51 N.D. 581 |
| Court | North Dakota Supreme Court |
Rehearing denied September 15, 1924.
Action on account stated. Appeal from judgment of the District Court of Ward County, North Dakota, Lowe, J.
Affirmed.
Fisk Murphy & Nash, for appellants.
There is some question raised as to whether an account stated must cover all transactions whatsoever. Parties holding mutual and open claims against each other may agree as to some of such items, leaving other items for future adjustment, and an action upon an account stated may be maintained for the balance arrived at from the items considered. But in such action the party against whom the balance is claimed may offset against it any balance which he claims from the items not included in the settlement.
The California case states the rule to be "when all the items of the account are admitted to be correct except certain ones which are left by the parties for future adjustment, the account becomes stated as to those items which are admitted to be correct." Lemke v Thompson, 35 N.D. 192.
The rule in this jurisdiction that an account can be opened or corrected or impeached only on the ground of mistake or fraud or undue advantage is well settled in Montgomery v Fritz, 7 N.D. 349; Lay v. Emery, 8 N.D. 515; Little v. Little, 2 N.D. 175.
McGee & Goss, for respondent.
Fraud may be predicted on the nonperformance of a promise in certain cases where the promise is the device to accomplish the fraud, or where a relation of trust and confidence exists between the parties. False representations as to future events will constitute fraud where those events depend upon the acts of the parties making the representations and form the inducement whereby the other party is led into the transaction.
And, if the promise is accomplished with statements of existing facts which show the ability of the promisor to perform his promise, and without which the promise would not be accepted or acted upon, such statements are denominated representations, and if falsely made are grounds of avoiding the contract, though the thing promised to be done lies wholly in the future. 12 R. C. L. 257, P 23.
It is very generally held that fraud may be predicated of a promise accompanied by a present intention not to perform it and made for the purpose of deceiving the promisee and inducing him to act where otherwise he would not have done so, and by virtue of which the promisor has procured either real or personal property from the person to whom the promise is made. 12 R. C. L. 26, P. 28.
Under the general rules as to the latitude of inquiry permitted in actions involving fraud, plaintiff is entitled to introduce any facts or circumstances otherwise competent tending to establish presence of a fraudulent intent, such as that the false representations were made with knowledge of their falsity and with the intent that plaintiff should act upon them. 27 C. J. 56, § 189.
Evidence of defendant's subsequent conduct may be admissible to show fraudulent intent, or motive for making the alleged fraudulent representations. Same authority, § 190.
One who wilfully deceived another with intent to induce him to his injury is liable to an action of deceit for any damage which the injured party suffers thereby. Guild v. More, 32 N.D. 432, 155 N.W. 44.
Where a person makes material false representations concerning matters and under circumstances which from their nature or situation may be assumed to be within the peculiar knowledge or under the power of the party making the representations, the party to whom it is made has a right to rely on them and it will be presumed that the party to whom such material false representations were made relied and acted thereon. Guild v. More, 32 N.D. 468.
Ordinarily one who buys property has a right implicitly to rely upon representations of the seller, and, if they were false and made with intent to deceive the purchaser, the seller will not be allowed to urge that the buyer, by investigation, could have discovered their falsity. Fargo Gas & Coke Co. v. Fargo Gas & E. Co. 4 N.D. 219, 59 N.W. 1066.
The authorities agree that in determining whether a contract shall be treated as severable or as an entirety the intention of the parties will control, and this intention must be determined by a fair construction of the terms and provisions of the contract itself. In order to arrive at a correct construction, due regard must be had to the intention of the contracting parties as revealed by the language which they have employed and the subject matter to which it has reference. 6 R. C. L. 858, § 246.
A party may attack an account stated for fraud, mistake or error, whether his admission of its correctness was expressed or implied, merely from a failure to object to the account when rendered. 1 R. C. L. p. 17, § 16.
It may be now said that an account stated does not create an estoppel, and that neither a stated nor a settled account is conclusive, but simply affords strong presumptive evidence which may be rebutted by showing fraud or mistake. 1 C. J. 709, § 335.
To constitute an account stated the admission must be direct and unconditional. Thus where a debtor admits the correctness of the charge against himself but accompanied such an admission with a demand for additional credits, the transaction does not constitute an account stated. 1 C. J. 668; Cahill v. Morrissey (Neb.) 93 N.W. 204; Hall v. New York, 88 N.Y.S. 582; Weigel v. Hartman Co. (N.J.L.) 20 A. 67; Stephens v. Tuller, 4 Mich. 387; Shea v. Kerr (Del.) 40 A. 24; Pierce v. Pierce (Pa.) 48 A. 689.
Where the promise to pay is conditional upon a future event, the party seeking to recover on the account stated must show the happening of the contingency. 1 C. J. 698, § 302, and authorities under note, 86 citing Work v. Beach, 6 N.Y.S. 27.
Where plaintiffs allege an express contract as a basis for recovery, they will not be permitted to recover on an implied contract or quantum meruit. Lowe v. Jenson, 22 N.D. 148, 132 N.W. 661.
This is an appeal from a judgment of the District Court of Ward County, entered upon two verdicts, one dismissing the plaintiffs' action and the other dismissing defendant's counterclaims. This case was here on a former appeal. See, 42 N.D. 319, 172 N.W. 782.
The plaintiffs are partners and were, at the time the facts constituting the cause of action arose, engaged in the business of plumbing and heating contractors in the city of Minot. The complaint alleges that between the 15th day of October, 1916, and the 5th day of October, 1917, the plaintiffs, at the special instance and request of the defendant and pursuant to a contract therefor, performed labor and furnished materials in and about the construction and installation of a heating and plumbing system in a certain building belonging to the defendant and that the reasonable value of the materials furnished and the services rendered was $ 8607.85; that no part of this has been paid except the sum of $ 6613.95, and that on or about the 23rd day of January, 1918, the plaintiffs and defendant agreed upon a stated account of the balance due in the sum of $ 2068.73; that there is due and owing thereon to the plaintiffs the sum of $ 2068.73 with interest from the 23rd day of January, 1918. Judgment is demanded for this amount.
The defendant answered, admitting the rendition of an account on the 23rd day of January, 1918, and that the defendant agreed to the correctness of the same and promised to pay it, and did, in fact, pay thereon the sum of $ 260.00. The defendant then alleges that at the time the parties agreed upon the balance, as aforesaid, and as a part of the same transaction, the plaintiffs agreed to remedy defects alleged to exist in the heating and plumbing installed by the plaintiffs and to make the same satisfactory to the defendant; that the plaintiffs knew that such system was unsatisfactory, improper and inefficient and promised to remedy the same so that the system would properly and adequately heat the building under all weather conditions and furnish a complete supply of hot water at all times to the apartments therein; that the plaintiffs admitted that the equipment was insufficient and did not operate successfully and that plaintiffs did "state and represent that if the defendant would approve a settlement of their mutual accounts in the sum of $ 2068.73, that the plaintiffs would remedy any and all deficiencies aforesaid in said heating system and in the plumbing system they had installed in the said apartment building;" it is then alleged that the defendant agreed to the account stated in good faith, because of the statements, representations and promises made by the plaintiffs, as alleged. Defendant further alleges that she was ignorant of the real cause of the deficiency in the heating system and did not discover the cause until afterwards; that the plaintiffs failed, neglected and refused to remedy the deficiencies and to perform according to their promises and representations; that the representations made on and prior to January 23, 1918, by plaintiffs to defendant were fraudulently made, without intention to perform the same, but were made for the sole purpose of deceiving the defendant and inducing her to settle an account and promise to pay the account thus stated.
As a second defense the defendant alleges: That the plaintiffs performed work and labor and furnished materials between August 15, 1916, and October 5, 1917, upon the building aforesaid,...
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