John W. Masury & Son v. Bisbee Lumber Co.

• Decision Date: 22 May 1937
• Docket Number: Civil 3809
• Parties: JOHN W. MASURY & SON, a Corporation, Appellant, v. BISBEE LUMBER COMPANY, a Corporation, Appellee
• Court: Arizona Supreme Court

68 P.2d 679

49 Ariz. 443

JOHN W. MASURY & SON, a Corporation, Appellant, v. BISBEE LUMBER COMPANY, a Corporation, Appellee

Civil No. 3809

Supreme Court of Arizona

May 22, 1937

APPEAL from a judgment of the Superior Court of the County of Cochise. Elbert R. Thurman, Judge. Judgment affirmed.

Messrs Misbaugh & Fickett and Mr. James Elliott Dunseath, for Appellant.

Messrs Sutter & Gentry, for Appellee.

OPINION

LOCKWOOD, J.

This is an action by John W. Masury & Son, a corporation hereinafter called plaintiff, against Bisbee Lumber Company, a corporation, hereinafter called defendant, to recover a balance on an open account amounting to $1,481.98. Judgment was rendered in favor of defendant, and plaintiff appealed.

The complaint, which was filed February 28, 1935, after setting up the capacity of the parties, alleged, in substance, that the defendant had purchased merchandise consisting of paints and painting supplies, from a certain California corporation, in the amount of $10,652.80, and that defendant at different times, between November 21, 1928, and September 13, 1930, had paid on such account $9,170.82, leaving a balance due of $1,481.98. This account was duly assigned to plaintiff, and it was claimed that between the dates of December 9, 1931, and September 19, 1932, the defendant acknowledged such account as a present existing indebtedness, admitted liability thereon, and expressed a willingness to pay the same, in a writing duly signed by it. There was the usual prayer for judgment in the amount set forth.

The defendant, in answering, alleged that the cause of action set up by plaintiff arose out of mutual and current accounts between merchant and merchant; that the dealings between them ceased on the 13th of September, 1930, and that since said date defendant had made no acknowledgment in writing of the justness of the claim set forth in plaintiff's complaint as a present existing debt, nor admitted liability thereon, nor promised to pay it. This, of course, raised the issue of the statute of limitations. The case was submitted to the court on certain letters between plaintiff and defendant, the authenticity of which was acknowledged by both parties, and an admission by defendant that the balance on the account was as stated by the complaint and that it had not been paid. We quote these letters in full so far as they apply to the case, for plaintiff relies upon them to toll the statute, which had otherwise run as against the claim:

"March 17, 1931

"Bisbee Lumber Co., P.O. Box H, Lowell, Arizona.

"Gentlemen: Since closing our California branch we have never heard whether you desire to continue with our line shipped from Chicago. If so, we would be glad to serve you with an arrangement by which you would not suffer through Freight rates.

"May we call to your attention at this time the balance on your account on which no remittance has been received in some time. We will appreciate a settlement. Kindly make check payable to this corporation.

"Very truly yours,

JOHN W. MASURY & SON."

December 5, 1931

"EPP:EMN

"Bisbee Lumber Co., P.O. Box H, Lowell, Arizona.

"Gentlemen: We have not had a remittance from you to liquidate your indebtedness to John W. Masury & Son of California.

"Much to our regret we shall feel compelled to place the account with an agency unless we have an immediately substantial remittance and a satisfactory arrangement designed to discharge the entire balance.

"Very truly yours,

JOHN W. MASURY & SON."

"Lowell, Arizona, Dec. 9, 1931.

"EPP:EMN

"John W. Masury & Son, 42-50 Jay St., Brooklyn, New York.

"Gentlemen: Referring to your letter of December 5th, your company left us with a large stock of paint to dispose of and we are sitting down here like an orphan without a source of supply.

"We have never seen one of your salesmen since we left California and as you know to change Brands it will cost us money.

"We still have a large stock on hand and we feel we are entitled to some adjustment on this account. If you are willing to allow us a reasonable amount for this loss, we will settle the account promptly with you.

"Yours very truly,

"BISBEE LUMBER CO.

"E. MARKS, Manager."

"March 11, 1932.

"Bisbee Lumber Company, Lowell, Arizona.

"Gentlemen: We have given much thought to your communication of December 9th wherein you state that you are entitled to some consideration because of the closing of our branch house in California.

We wish to be fair in every respect and therefore advise you that it will be satisfactory for you to deduct 20% from the open account and settle in full.

"Very truly yours,

JOHN W. MASURY & SON."

"Lowell, Arizona, Sept. 19, 1932.

"EPP:EMN

"John W. Masury & Son, Box 1012, City Hall Station, New York City, N.Y.

"Gentlemen: Attention Mr. E. P. Person

"We are not satisfied with the amount of discount offered us; you know in changing lines as you have forced on us by closing your San Francisco Branch we stand to lose considerable, and all the advertising on which we spent our own money is now a total loss.

"It will take us about six months more to get the paint reduced so that we may tell just what our loss will be on the stock, at which time we will be willing to settle with you, or we will give you a check for the amount on the basis of twenty-five cents on the dollar and call it 'square'; or we will pick up enough of your paint to settle the account and ship it to you at any designated place, you to pay the freight.

"Very truly yours,

"BISBEE LUMBER CO.

"E. MARKS, Manager."

There is but one ultimate question for our consideration, and that is whether the letters above set forth take the case out of the statute of limitations. The two letters written by defendant were dated, respectively December 9, 1931, and September 19, 1932. The present action was filed February 28, 1935, being on an open account between merchant and merchant. The statute applicable is subdivision 2, section 2061, Revised Code 1928, which reads as follows:

"Four year limitation. There shall be commenced and prosecuted within four years after the cause of action shall have accrued, and not afterward, the following actions: ... 2. by one partner against his co-partner for a settlement of the partnership account, or upon mutual and current accounts concerning the trade of merchandise between merchant and merchant, their factors or agents, and the cause of action shall be considered as having accrued on a cessation of the dealings in which they were interested together."

The last dealings between the parties in regard to the account in question was September 13, 1930. The original account then was barred by the statute above set forth on September 13, 1934. Plaintiff does not dispute this, but contends that defendant by his letters of December 9, 1931, and September 19, 1932, tolled the statute by acknowledging the justness of the indebtedness, in writing, and promising to pay it. Defendant contends, on the other hand, that these letters do not amount to such an acknowledgment of the indebtedness as will take the case out of the statute, for several reasons, (a) that they do not sufficiently identify the indebtedness in question; (b) that they do not admit but rather deny the justness of the debt; and (c) that there is no unconditional promise to pay the debt, but, at the most, an offer of compromise and settlement. In passing upon the sufficiency of the letters in question to toll the statute, we think it advisable to discuss the statute of limitations somewhat at length as there are several legal principles bearing on the case which have never been definitely settled in this jurisdiction.

Since be development of statutes of limitations in America has followed very closely that of the English statutes, a brief survey of the origin and history of the rule in England will aid in better understanding of the principles applicable to our statutes. In the drawn of the English law, there was no definite time limit prescribed within which any particular action might be brought. It is true that there was a presumption of the payment of a debt after twenty years, but this was not conclusive, and only shifted the burden of proving nonpayment of the party seeking to enforce the claim. But the trouble caused by the attempted enforcement of stale claims rendered this situation unsatisfactory, so that Parliament began to fix certain historical events as time limitations, and causes of action which arose previous to these events could not be enforced. Examples of such events are the reign of Henry I and the coronation of King Richard. The theory upon which these statutes was based was that it was beyond the power of man to remember back any further than the dates thus specified. This also, however, proved unsatisfactory, and in 1540 the statute of 32 Henry VIII was enacted, which, for the first time, assigned specific periods of time beyond which certain actions pertaining to realty could not be brought. It was not, however, until 1623 that such limitations were fixed for the bringing of personal actions. In that year the statute of 21 James I was passed. It prescribed a limitation of six years after the debt was due for the bringing of certain actions, including most of what are now called personal actions arising out of contract. It did not, however, provide for any manner whatever in which rights of action of the nature governed thereby could be enforced after the statutory time had run. Murdock v. Waterman, 145 N.Y. 55, 39 N.E. 829, 27 L.R.A. 418.

In the interpretation of such statutes by the courts, the question naturally arose as to whether they were based on the old common-law rule of presumption of payment above referred to,...