Hansen v. Fettig, 8641

• Decision Date: 21 September 1970
• Docket Number: No. 8641,8641
• Citation: 179 N.W.2d 739,45 A.L.R.3d 435
• Parties: Verner HANSEN, d/b/a Hansen Implement Company, Plaintiff and Respondent, v. Nick FETTIG, Defendant and Appellant. Civ.
• Court: North Dakota Supreme Court

Page 739

179 N.W.2d 739

45 A.L.R.3d 435

Verner HANSEN, d/b/a Hansen Implement Company, Plaintiff and Respondent, v. Nick FETTIG, Defendant and Appellant.

Civ. No. 8641.

Supreme Court of North Dakota.

Sept. 21, 1970.

Syllabus by the Court

1. A specification of error is deemed abandoned unless supported by written argument in the brief filed in the supreme court.

2. An account consisting only of charges on one side and payments on the other is not a mutual account.

3. Limitations against an action to enforce an account stated begin to run at the time the statement is made. This rule of law is qualified by that part of Section 28--01--36, N.D.C.C., which requires that the statement be in writing signed by the party to be charged thereby.

4. If a debtor makes no specific appropriation, a creditor may apply the debtor's payment to any one of two or more debts owed him by such debtor.

5. A direction by a debtor to apply a voluntary payment to a particular item or debt must be communicated to a creditor; the mere intent of a debtor, not communicated to a creditor, or attended by any act or declaration manifesting it to him, is insufficient.

6. The exercise of the right of appropriation of payments belongs exclusively to the debtor and creditor and no third person may control or compel an appropriation different from that agreed on or made by them.

Greenwood, Swanson, Murtha & Moench, Dickinson, for defendant and appellant.

Marshall T. Bergerud, Killdeer, for plaintiff and respondent.

ERICKSTAD, Judge.

The defendant Nick Fettig appeals from a judgment of the district court of Dunn County entered on the 7th of January, 1970, obtained by the plaintiff Verner Hansen in the sum of $1091.65, plus interest, costs and disbursements.

The judgment arises out of a suit brought by Mr. Hansen to recover the balance due on account for goods sold and services rendered to Mr. Fettig between January 1958 and May 28, 1965. Mr. Fettig's answer generally denied every allegation of the complaint and further asserts that the claim is barred by the statute of limitations.

Mr. Hansen offered as evidence during the trial, before the court sitting without a jury, sales slips alleged to be the carbon copies of the sales slips made at the time of sales to Mr. Fettig covering a period extending from January 1958 through May 288 1965. Among these sales slips was one dated August 24, 1961, for a used Minneapolis-Moline combine, which, with tax, amounted to $1734. The sales slip was marked as a charge and carries Mr. Fettig's signature. These slips were received in evidence under our Uniform Business Records as Evidence Act.

Mr. Fettig admits signing the sales slip for the combine and does not deny any of the charges asserted by any of the sales slips. It is his contention, however, that because he subsequently on the same date executed a retail installment contract for the combine in the sum of $1734, which contract provided for specific payments during 1961 and 1962, the contract did not become a part of the open account. It is further his position that he made no payments on the contract and that accordingly when action was brought on the open account, by complaint served August 19, 1968, the same being more than six years after August 24, 1961, the date of the purchase of the combine, the said action was outlawed by the six-year statute of limitations. See Section 28--01--16, Subsection 1, N.D.C.C.

Mr. Hansen testified that in periodic billings sent Mr. Fettig he included the purchase price of the combine in determining the balance due and owing him by Mr. Fettig and that Mr. Fettig made no objection to the amounts of any of the bills sent him.

The trial court found that Mr. Fettig must have made payments on the combine within six years of the commencement of this action, because between November 1, 1962, and May 28, 1965, he made total payments of $2543.76 to Mr. Hansen, which exceeded his open account of $1901.71, if the combine debt is excluded, by $642.05.

Mr. Fettig, however, argues that since three of those checks, one dated February 3, 1965, for $107.52, one dated May 28, 1965, for $743.37, and one dated August 19, 1964, for $1392.87, had notations written on the face of them indicating that they were to be applied for truck repair and general repair, they could not be applied towards the payment of the combine. He testified in the trial court that these notations were placed upon the checks by representatives of the Farmers Home Administration, from which he acquired the funds to pay the checks. He concedes that he made no objection, however, to the manner in which these payments were credited at the time of payment. The credit slips received in evidence show that they were marked 'on acc't.' or 'credit acc't.' Mr. Hansen denies seeing any notations on the face of the checks as of the time that he received them. He testified that it was his practice to apply all checks to the oldest accounts and that he did this with these three checks as well as the check for $300 received on November 11, 1962, upon which there is no notation. None of the employees of the Farmers Home Administration were called to verify or deny the directions for specific payment.

Mr. Hansen's bookkeeping system was such that whenever a payment was made on an account he made a credit slip similar to the slip that was made for each purchase and the purchase and credit slips were posted to a daily work sheet. The daily work sheets were periodically posted to individual accounts. The ledger of Mr. Fettig's account was received in evidence, showing the purchase of the combine as a debit. No credit was given for the execution of the retail installment contract. Incidentally, the seller's copy of the contract was never filed with the register of deeds. The purchaser's copy of this contract was so filed only in 1970.

A number of specifications of error have been asserted, but we shall consider herein only those supported by written argument in the brief filed with us. This is consistent with past practice. See Regent Cooperative Equity Exchange v. Johnston's Fuel Liners, Inc., 122 N.W.2d 151 (N.D.1963), Syllabus 4, wherein we said: 'A specification of error is deemed abandoned unless supported by written argument in the brief filed in the Supreme Court.'

Let us first consider what type of an account we have in this case. In that connection, Mr. Fettig refers us to Section 28--01--37, N.D.C.C., which reads:

When cause of action upon open account accrues.--In an action brought to recover a balance due upon a mutual open, and current account, when there have been reciprocal demands between the parties, the cause of action shall be deemed to have accrued from the time of the last item proved in the account on either side.

The account in the instant case may be an open account, but it is not, strictly speaking, a mutual account.

Pertinent thereto is the following from an A.L.R. annotation published in 1925:

Effect of credit items to give account a mutual character; majority view.

The rule stated in the annotation in 1 A.L.R. 1068, as supported by the weight of authority, that an account consisting of charges on one side and payments on the other is not a mutual account, is adhered to in the following cases: Carter v. Canty (1919) 181 Cal. 749, 186 P. 346; Furlow Pressed Brick Co. v. Balboa Land & Water Co. (1921) 186 Cal. 754, 200 P. 625; Shuler v. Corl (1918) 39 Cal.App. 195, 178 P. 535; Brazell v. Hearn (1925) (33) Ga.App. (490), 127 S.E. 479; Crump v. Sefton (1918) 172 N.Y.S. 338; Sanger & Jordan v. Duncan (1921) 196 App.Div. 55, 187 N.Y.S. 604; Hollingsworth v. Allen (1918) 176 N.C. 629, 97 S.W. (S.E.) 625; Sharp v. Miller (1923) 94 Okl. 217, 221 P. 747; Dillard v. Dugger Grocery Co. (1921) Tex.Civ.App., 232 S.W. 360.

Thus, an ordinary store account, consisting of charges on one side any payments on the other, is not a mutual account. Hollingsworth v. Allen (1918) 176 N.C. 629, 97 S.W. (S.E.) 625. 39 A.L.R. 372 (1925).

The annotation concedes that there is a minority view contrary to the view prevailing in most other jurisdictions that payments of money on account are sufficient to render the account mutual. In support of the minority view is Fuerbringer v. Herman, 225 Mich. 76, 195 N.W. 693 (1923), 39 A.L.R. 372.

Earlier in the annotation we note the following:

In Missouri, it has been held, that when it is fairly inferable from the conduct of the parties while an account is accruing, and all the charges are on one side, that the whole may be considered as one account, then none of the items are barred unless all are. Gammon v. McDowell (1921) 208 Mo.App. 616, 235 S.W. 461; Poague v. Mallory (1921) 208 Mo.App. 395, 235 S.W. 491; Smith v. Collins (1923) Mo.App., 247 S.W. 457; Loveland v. Collins (1923) Mo., 254 S.W. 22; Craighead v. Roberts (1924) Mo.App., 263 S.W. 536. But this statement is properly to be taken only as meaning that where all the items of a unilateral account constitute a single demand, the Statute of Limitations begins to run from the date of the last item. So understood, it is not at variance with the generally recognized rule that an account all the items of which are on one side is not a mutual account. 39 A.L.R. 371, 372 (1925).

In a later A.L.R. annotation it is said:

The rule stated in the annotation in 1 A.L.R. 1068, and restated in 39 A.L.R. 372, that an account consisting of charges on one side and payments on the other is not a mutual account, is adhered to in Brock v. Franck (1927) 194 N.C. 346, 139 S.E. 696, where an ordinary store account was held not to be a mutual account within a statute stating a limitation period. 57 A.L.R. 203 (1928).

Considering the language of Section 28--01--37, N.D.C.C., it would appear to us that our legislature contemplated a result such as the majority view would produce. Accordingly, such section has no application to the instant case.

We must next decide the effect or...