Spellman v. Muehlfeld

• Decision Date: 12 March 1901
• Citation: 166 N.Y. 245,59 N.E. 817
• Parties: SPELLMAN v. MUEHLFELD.
• Court: New York Court of Appeals Court of Appeals

166 N.Y. 245

59 N.E. 817

SPELLMAN

v.MUEHLFELD.

Court of Appeals of New York.

March 12, 1901.

Appeal from supreme court, appellate division, First department.

Action by John H. Spellman, receiver, against Frank Muehlfeld. From a judgment of the appellate division (62 N. Y. Supp. 746) affirming a judgment dismissing the complaint, plaintiff appeals. Reversed.

John Delahunty, for appellant.

John J. O'Connell, for respondent.

PARKER, C. J.

Plaintiff, as receiver of a corporation of which defendant was formerly president, sought to recover upon an account stated. After the testimony was all in, the trial court dismissed the complaint, and the appellate division, in affirming the judgment entered thereon, held that the plaintiff had failed to establish a cause of action. With such determination there would be no opportunity for quarrel, provided it was necessary, in order to make out the plaintiff's case, that he should show an express assent to the correctness of the account. The case has heretofore been considered apparently on the theory that one who seeks to prove an account stated assumes that burden. But this is not so, for it is quite sufficient for a party to prove facts from which an assent may be implied, and the cases, with which the reports abound, present nearly, if not quite, as many instances in which the plaintiff has relied upon facts from which it was asked that an assent to the account should be implied as where it was claimed that an express assent had been proved. The rule governing accounts stated arose from the practice of merchants, and was first applied by courts of chancery to merchants only; but after a time it was extended to cases at law. As between merchants at home, an account which had been presented, and no objection made thereto, was, after the lapse of several posts, treated under ordinary circumstances as being by acquiescence a stated account (Sherman v. Sherman, 2 Vern. 276); while between merchants in different countries a longer time was given. But, if no objection was made after several opportunities of writing, it was considered an acquiescence. Willis v. Jernegan, 2 Atk. 251; Tickel v. Short, 2 Ves. Sr. 239. And so when Judge Story came to write upon this subject he said, ‘What is a reasonable time is to be judged of by the habits of business at home and abroad.’ 1 Story, Eq. Jur. § 526. While the rule has been confined in some jurisdictions to merchants, it has in most of the states of this country been extended to all classes; and it is so in this jurisdiction, with the possible exception that the courts have not attempted to lay down any general test by which to determine what constitutes a reasonable time for the retention of an account in order to make it an account stated. In Lockwood v. Thorne, 11 N. Y. 170, Judge Parker, writing for the court, asserted the general rule to be that, where an account showing a balance is rendered, the party receiving it is bound within a reasonable time to examine it, and object if he dispute its correctness. If he omit to do so, he will be deemed from his silence to have acquiesced, and will be bound by it as an account stated, in absence of proof of fraud or mistake. In such a case the assent is not expressed, but it is implied from the fact of a retention of the account for a period of time without objection to any of its items. The mere retention of an account without objection for a reasonable length of time is said to prima facie establish assent to its correctness by the party receiving it, but this may be overborne by proof of circumstances tending to a contrary inference. Lockwood v. Thorne, 18 N. Y. 285. Therefore, while the proposition is correctly laid down in Volkening v. De Graaf, 81 N. Y. 268, that ‘an account stated is an account balanced and rendered, with an assent to the balance, express or implied, so that the demand is essentially the same as if a promissory note had been given for the balance,’ nevertheless, in proving an account stated, ‘it is not necessary to show an express examination of the respective demands or claims of the parties, or an express agreement to the final adjustment. All this may be implied from circumstances.’ Lockwood v. Thorne, 18 N. Y. 285, 288. In the same case it is said that: ‘An account stated or settled is a mere admission that the account is correct. It is not an estoppel. The account is still open to impeachment for mistakes or errors. Its effect is to establish prima facie the accuracy of the items without other proof.’ These authorities were recently approved in Brake Co. v. Prosser, 157 N. Y. 289, 51 N....