Vicen's Estate, In re

• Decision Date: 04 June 1957
• Citation: 83 N.W.2d 664,1 Wis.2d 193
• Parties: In re ESTATE of Frank VICEN, Deceased. Charles A. LEPP et al., co-partners, d/b/a Lepp & Phillips, Respondents, v. Minnie TAMER et al., as Adm'rs, etc., Appellants.
• Court: Wisconsin Supreme Court

Page 664

83 N.W.2d 664

1 Wis.2d 193

In re ESTATE of Frank VICEN, Deceased.

Charles A. LEPP et al., co-partners, d/b/a Lepp & Phillips, Respondents, v. Minnie TAMER et al., as Adm'rs, etc., Appellants.

Supreme Court of Wisconsin.

June 4, 1957.

Martin N. Sussman, Milwaukee, for appellants.

Burton Lepp, Kenosha, for respondents.

STEINLE, Justice.

The respondent law firm, Lepp & Phillips, had rendered legal services for the decedent, Frank Vicen, for a number of years. On November 25, 1952, the decedent, through his agent, Helen Tunkieicz, enclosed a money order for $10 in a letter addressed to Attorney Lepp requesting that the same be applied on Mr. Vicen's account. In the letter the sender stated that Mr. Vicen would 'like to have you mail him an itemized statement of his account to my office at the above address so he can check against his receipts.' On November 28, 1952, Lepp & Phillips mailed an itemized statement to the decedent showing a balance of $94 due on account. On October 26, 1953, Lepp & Phillips sent another statement to the decedent which read: 'Balance due on old fees account, $39.00.' Frank Vicen died on May 19, 1954 and Lepp & Phillips filed a claim against his estate for $234 representing the balance due on account. At the hearing Attorney Lepp testified that the statements sent to Vicen on November 28, 1952 and October 26, 1953 were incorrect in that they did not reflect charges for services indicated in the law firm's ledger under dates of March 11, 1948 and April 13, 1948 in total sum of $150. The trial court determined that all of the professional services shown in the respondents' claim had been performed; that the same were reasonably of the value as claimed; and that the billings in 1952 and 1953 (as heretofore indicated) were erroneous. From receipts presented by the administrators at the hearing, the court found that Vicen had paid $30 more on account than was indicated in the statement accompanying the claim. The court determined that 'the account with its showing of services rendered at various times, and payments made over a period of years, is a mutual and open account as contemplated by sec. 330.25 of the Wisconsin statutes, and that the six years' statute, (limitation) does not apply.' The court found that the balance due was $204, and allowed the claim in said amount together with interest at five per cent from May 14, 1953.

Appellants contend that the court erred in determining that the claimant's account was a mutual and open account current; that all items which accrued six years before the filing of the claim on December 9, 1954 are barred by sec. 330.19(3), Stats. (six year limitation statute); that there was an account stated between decedent and claimants; that mistake as between the parties was not established by clear and positive proof; that the claimants are barred by laches from impeaching the account stated.

A mutual account arises where there are mutual dealings, and the account is allowed to run with a view of an ultimate adjustment by a settlement and payment of the balance. 1 Am.Jur., Accounts and Accounting, p. 266, sec. 4. Mutual accounts are made up of matters of set-off. There must be a mutual credit founded on an express or implied agreement for a set-off of mutual debts. Ibid. A mutual and open account current is an account wherein are set down by express or implied agreement by the parties concerned a connected series of debit and credit entries of reciprocal charges and allowances, where the parties intend that the individual items of the account shall not be considered independently, but as a continuation of a related series, and that the account shall be kept open and subject to a shifting balance as additional related entries of debits and credibts are made thereto, until it shall suit the convenience of either party to settle and close the account; and where, pursuant to the original express or implied intention, there is but one single and indivisible liability arising from such series of related and reciprocal debits and credits. Spencer v. Sowers, 1925, 118 Kan. 259, 234 P. 972, 39 A.L.R. 365. Mere money payment upon an account does not make the account a mutual and open account current. In an annotation at 1 A.L.R. 1068, the author points out that:

'According to the weight of authority, the mere payment of money upon an account does not have the effect to render the account mutual, but operates simply as a reduction pro tanto of the claim. As said in Green v. Disbrow (1879), 79 N.Y. 1, 35 Am.Rep. 496, 'the payments do not, in such case, enter into the account. They are at once applied and reduce the account'.'

Sec. 330.25, Stats., provides:

'In actions brought to recover the balance due upon a mutual and open account current the cause of action shall be deemed to have accrued at the time of the last item proved in such account.'

In Hannan v. Engelmann, 1880, 49 Wis. 278, 282, 283, 5 N.W. 791, 792, it was said:

'Says Mr. Angell, in his work on Limitations: 'The rule that items within six years draw after them other items beyond that period is by all the cases strictly confined to mutual accounts, or accounts between two parties which show a reciprocity of dealing.' Section 148. Again he says: 'Mutual accounts are made up of matters of set-off. There must be a mutual credit, founded on a subsisting debt on the other side, or an express or an impartial agreement for a set-off of mutual debts'.'

See also In re Estate of Reinke, 1946, 249 Wis. 19, 23 N.W.2d 470.

Since in the matter at bar the account was merely one that involved charges for professional services for which money payments were made from time to time, and did not involve a situation where each party had an account against the other, we are obliged to determine that a mutual and open...