Sheldon Grain & Feed Co. v. Schuetz

• Decision Date: 10 April 1971
• Docket Number: No. 45937,45937
• Citation: 207 Kan. 108,483 P.2d 1033
• Parties: SHELDON GRAIN AND FEED COMPANY, Appellant, v. Edward SCHUETZ and Edna Schuetz, husband and wife, Appellees.
• Court: Kansas Supreme Court

Page 1033

483 P.2d 1033

207 Kan. 108

SHELDON GRAIN AND FEED COMPANY, Appellant, v. Edward SCHUETZ and Edna Schuetz, husband and wife, Appellees.

No. 45937.

Supreme Court of Kansas.

April 10, 1971.

Syllabus by the Court

1. Generally, a mutual, open, running account may arise when a merchant sells merchandise to a customer and extends general credit on the various sales without express agreement as to the terms of sale. Matters such as openness, currency, homogeneity and mutuality should be considered and given weight by the courts in identifying such an account.

2. Items of a mutual, open, running account which are within the period of the statute of limitation draw after them items beyond that period. In such cases the statute of limitation does not run against each item separately, but only against the balance due. It commences to run from the time the last item is rightfully credited to the party against whom the balance is due.

3. When an account is a mutual, open, running account the debtor cannot unilaterally destroy the nature of that account or shorten the period of the statute of limitation by making payment of specific items previously included and debited in the account.

4. The record in an action to recover on an account is examined and it is held the trial court erred in holding 337 sales and purchases of poultry feed and supplies constituted separate individual transactions each with its own separate liability and cause of action, and it is further held the trial court erred in limiting plaintiff's recovery to purchases made within three years next preceding the filing of the petition.

Charles S. Arthur, Manhattan, argued the cause and Charles D. Green, Manhattan, was with him on the brief, for appellant.

Morris D. Hildreth, Coffeyville, argued the cause and Richard L. Becker, Coffeyville, was with him on the brief, for appellees.

FROMME, Justice.

This is an appeal by plaintiff from a limited judgment entered by the trial court against the defendants for poultry feed and supplies purchased from the plaintiff.

Plaintiff, a feed and grain merchandising company, sued to recover a balance of $7875.21 due on purchases made by defendants between August 25, 1961 and January 27, 1967.

The judgment entered in the amount of $1844.45 plus interest limited plaintiff's recovery to purchases made by defendants within the three years next preceding the filing of the petition. This limitation was based upon K.S.A. 60-512.

K.S.A. 60-512 in pertinent part reads:

'The following actions shall be brought within three (3) years: (1) All actions upon contracts, obligations or liabilities expressed or implied but not in writing * * *.'

The trial court held that the feed purchases were separate individual transactions, each with its own separate liability and cause of action.

The plaintiff-appellant contends the action was on one open mutual, running account between the parties, and that its cause of action was properly brought to recover the entire balance due on the account.

Items of a mutual, open, running account which are within the period of the statute of limitation draw after them items beyond that period. In such cases the statute of limitation does not run against each item separately, but only against the balance due. It commences to run from the time the last item is rightfully credited to the party against whom the balance is due. (Waffle v. Short, 25 Kan. 503; Sacher v. Paige, 149 Kan. 662, 88 P.2d 1013; Shepard v. Klein, 172 Kan. 250, 239 P.2d 930.) In such case the last item so credited to the party against whom the balance is due is not payment of any particular item against him, but is in a sense treated as part payment of every item rightfully charged against him in the entire account.

In limiting the judgment the trial court made four findings of fact:

'1. This account by reason of the treatment and practices of the parties consisted of a series of individual transactions each with its own cause of action and termination date under K.S.A. 60-512.

'2. The defendants never made any payment not directed to, and received and recorded by plaintiff as, payment of a specific item or items of charge.

'3. The defendants did not acknowledge any account other than the specific items paid.

'4. The defendants did receive all merchandise they are alleged to have received.'

The first three findings are challenged on appeal as not being supported by substantial competent evidence. The evidence upon which these findings must rest is undisputed. Therefore, the question of its sufficiency to support the findings is one of law which an appellate court may determine. This court's function is confined to a determination of whether or not there is substantial competent evidence to support the trial court's findings. (Sullivan v. Sullivan, 196 Kan. 705, 413 P.2d 988. See also Hatcher's Kansas Digest, Permanent Supplement Vols. 1-3, Appeal and Error § 502.)

The evidence establishes that plaintiff is a partnership doing business as a feed and grain merchant. The defendants are engaged in the business of feeding and raising poultry. During the period from 1961 to 1967 defendants placed 337 separate orders with plaintiff for poultry feed and supplies. The feed and supplies were delivered to defendants' farm by plaintiff's employees along with sales tickets showing the items purchased and the sales price. During this same period defendants mailed or delivered 175 separate checks to plaintiff in payment. Some payments were made within a week and others as long as six months after the feed was delivered to the defendants. All of these checks contained a notation at the bottom indicating the amount paid was for a designated number of tickets identified by the date or dates the purchases were made. During this same period plaintiff purchased feed sacks from the defendants. The sacks were paid for by entering a credit on plaintiff's books at the time the sacks were delivered by defendants to plaintiff's employees. There were 36 separate credits to defendants entered in plaintiff's books for feed sacks. When the credits were entered on the books of plaintiff a credit ticket was issued and mailed or delivered to defendants. These credit tickets showed the amount of the current credit and the running balance due from the defendants on all unpaid purchases.

It was agreed and the court found that the defendants received all the merchandise listed and charged to them on the books of the plaintiff. These separate purchases of merchandise varied in amounts from a low of $6.70 for 'Malathion' received July 18, 1962 to a high of $362.96 for 'corn' received April 2, 1963. Purchases were made three or four times each month throughout the period. Payments were made throughout the period with no more than two months between any two payments. The first sale of sacks for credit was on May 16, 1962 and credits for sacks were made during each year thereafter. The final sale of sacks was on January 27, 1967 and credit to the account balance of $7880.21 was given in the amount of $5.00 thereby reducing the balance to $7875.21 as of that date. The petition was filed and service obtained on April 26, 1967.

The plaintiff's bookkeeper used a double entry system of bookkeeping. Each purchase was listed under defendants' account by ticket number, date, item and price. The price on each purchase ticket was added to the balance remaining due on all previous purchases and carried forward. When a payment was received an entry was made 'Paid on a/c'. The date of payment was listed along with the ticket number and the amount. The balance forward was reduced by the amount of the payment. The same practice was followed when a credit was given for sacks except the entry made was 'Cr: Sacks', and the number of sacks received and the credit given was entered.

The practice of defendants with regard to their purchases was to keep the charge tickets in a box and when defendants desired to make a payment they picked out one or more of the tickets to be paid and wrote their check for the combined amount. A notation was made on the check as to the number of tickets and the dates of purchase. Defendants also kept the credit tickets which they had previously received for sacks sold to plaintiff. In making a payment they sometimes added the purchase tickets then subtracted any credit ticket they may have received before arriving at the amount of the check they were about to issue to plaintiff. When a check was received by plaintiff's bookkeeper, after entering the amount paid on account and adjusting the balance to be carried forward, she went back in the account record and placed a check mark in the books opposite the purchase ticket designated by the date on defendants' check. The bookkeeper testified she did this as a double check since the defendants always put the ticket numbers on their checks and this was for their reference. She further testified the tickets were not paid in chronological order, some were old tickets. At the times defendants made payments the bookkeeper mailed credit tickets which listed the balance remaining due on the account. She did not credit any payments to any particular tickets but credited them to the account.

The defendant, Edna Schuetz, testified she did not agree to the balances remaining due as shown on the credit tickets issued by plaintiff. She testified as follows:

'A. It was at different tiems over the telephone when I would tell him that wasn't right that he had on those tickets.

'Q. Tell him what wasn't right?

'A. ...