Jewell v. General Air Conditioning Corp.

• Citation: 226 Ark. 304,289 S.W.2d 881
• Decision Date: 30 April 1956
• Docket Number: No. 5-938,5-938
• Parties: Nat F. JEWELL et ux., Appellants, v. GENERAL AIR CONDITIONING CORPORATION, Appellee.
• Court: Arkansas Supreme Court

Page 881

289 S.W.2d 881

226 Ark. 304

Nat F. JEWELL et ux., Appellants, v. GENERAL AIR CONDITIONING CORPORATION, Appellee.

No. 5-938.

Supreme Court of Arkansas.

April 30, 1956.

Rehearing Denied May 28, 1956.

Richard W. Hobbs, Hot Springs, for appellants.

House, Moses & Holmes and E. B. Dillon, Jr., Little Rock, for appellee.

MILLWEE, Justice.

Appellee, General Air Conditioning Corporation, is a contractor and wholesale distributor of air conditioning and refrigeration equipment at Little Rock, Arkansas, and will hereinafter be referred to as 'General.' Appellants, Nat F. Jewell and wife, hereinafter called 'Jewell,' are partners in the sale and installation of air conditioning and refrigeration equipment at Hot Springs, Arkansas. Jewell was a dealer in equipment sold by General from 1951 to 1953, inclusive, and the parties joined in several contracts for the installation of such equipment.

On November 23, 1954, General brought suit against Jewell to reopen, surcharge and restate an alleged account stated entered into by the parties October 12, 1953, under which alleged errors in Jewell's favor occurred either through mutual mistake of the parties or by a mistake of fact on the part of General and fraud on the part of Jewell. The answer of Jewell pleaded an accord and satisfaction or compromise of the accounts between the parties as a complete defense to the suit. This appeal is from a decree in General's favor in the sum of $3,091.

Jewell first contends the chancellor erred in refusing to hold that a written settlement of accounts executed by the parties constituted an irrevocable accord and satisfaction, or compromise, instead of an account stated, as the court found. In this connection it is also argued that there is no evidence to support the court's finding that errors amounting to $3,091 in said written settlement occurred through a mutual mistake of facts by the parties. We cannot agree with counsel in these contentions.

According to the evidence General and Jewell were indebted to each other in varying amounts over the period from 1951 to 1953 on joint installations of air conditioning equipment in certain business buildings in Hot Springs. In 1951 they were jointly involved in installations at the S. H. Kress Store and St. Joseph Hospital, which jobs were completed prior to December, 1951. Jewell kept inadequate records and did not furnish General with statements of its charges for labor and materials on these and subsequent jobs. In closing out the two contracts for accounting and income tax purposes on December 31, 1951, General estimated the amount due by it to Jewell on the two jobs at $3,000 and Jewell was credited with this amount on General's books. Jewell's continued failure to keep proper records or furnish General with statements of the amounts due it precluded a balancing of accounts from time to time. In the summer of 1953 the account had grown so large that General's president insisted upon a settlement. After some negotiations, General furnished Jewell with an itemized statement of what the latter owed it on September 25, 1953, and Jewell furnished General with a similar statement of the amount owing to Jewell on October 3, 1953.

On October 12, 1953, the parties entered into a written letter agreement settling the accounts between them. Each party accepted the account previously rendered to the other as stating the correct amounts due each other, except for a minor mathematical correction, and Jewell paid General $521.21, which represented the difference between the two accounts, in full settlement of the contracts specified in the letter agreement. At the time of the settlement, neither party recalled the $3,000 estimated credit given Jewell December 31, 1951, and this credit was overlooked and not taken into consideration in reaching the settlement. The result of this mutual mistake was to credit Jewell with $3,000 more than it was entitled to receive inasmuch as the charges under the Kress and St. Joseph Hospital contracts were included in the settlement. In the annual audit of General's books for 1953 which was completed in February or the early spring of 1954 the auditors discovered the $3,000 error and required General to set the amount back on its books as a charge against Jewell. In June, 1954, General demanded payment of the $3,000 and also the sum of $91 represented by an additional error in Jewell's favor which appeared on the face of the Jewell statement of account used as a basis of the 1953 written settlement.

While Mr. and Mrs. Jewell testified they had no knowledge of the $3,000 error until June, 1954, they admitted that they noticed the discrepancy when General rendered statements to Jewell in January, 1952. It is also undisputed that each party accepted at face value the respective statements of account which formed the basis of the written settlement of October 12, 1953, and that neither p...