Redman v. Green, 38 N.C. 54, 3 Ired. Eq. 54 (1843)

June 1843 · Supreme Court of North Carolina

38 N.C. 54, 3 Ired. Eq. 54

MELVIN REDMAN & AL. vs. JOHN B. GREEN & AL. (^a)

Where a bond has been given on the settlement of an account and the obligor complains of errors in the account stated, he can only be relieved upon a clear exhibition of such errors.

If the defendant denies that there is any error, as far as he knows, and avers that the stated account was left in the possession of the plaintiff, the latter must either produce the account, or prove its loss, its contents, and the errors complained of.

This cause, at Spring Term, 1843, of Iredell Court of Equity, having been set for hearing, was removed on the affidavit of the defendants to the Supreme Court.

It appeared from the bill, that in May, 1837, the plaintiff! Melvin, and the defendants entered into partnership in a small country store ; and, alter carrying on the trade for bout seven months, they dissolved by the defendants selling out to the said plaintiff, who was to take the debts at their nominal amount, the stock of goods on hand at cost and insurance, and some goods the defendant had at another store ; aud for the sum that might be found due to the defendants for their stock and advances to the firm, and their share of the profits and other things, the plaintiff, Melvin, was to give his bond to the other party. On the 14th of December, 1837, the parties came to a settlement in the premises, upon which the sum of $1,203 05 appeared to be doe from the said plaintiff; and he gave his bond with the other plaintiff as surety therefor. The accounts between the parties, on which the settlement was made, were stated by the defendants, who were supposed to be the more competent accountants ; and they were not particularly examined and compared with the books by the plaintiff, Melvin,'as alleged in the bill. A few days afterwards, the defendants informed the said plaintiff, that they had discovered errors in the accounts before stated by them, which were in their (.the defendants’) favor, and offered to correct them. What these errors were, is not stated in the pleadings. But the parties proceeded to make the corrections ; and by the second settlement the sum due to the defendants was reduced to $783 59; upon which the former bond was cancelled and a new one given for the latter sum. At that time all the books and papers of the firm aud the accounts stated between the parties, on which the plaintiff’s bonds were founded, were delivered to the plaintiff, Melvin. The defendants afterwatds instituted an action on the bond and recovered judgment; and then, in November, 1840, the plaintiffs filed this bill, and therein ask relief, on the ground that the settlement was erroneous, and that the sum, to which the defendants were entitled, was not as large as that for which the bond was given. For the purpose of establishing that fact, the bill alleges, that the plain-Melvin, was not skilled in accounts, and adopted the statements of the defendants without understanding them ; j)n(. tjla¡. j-,e sjnce caused a statement to be made from the books by competent persons, whereby the shares of each partner, for capital and other advances, interest and profits, have been duly ascertained, and whereby the whole sum truly due from the said plaintiff to the defendants appears to have been only $381 52, instead of $783 59. The bill then sets forth a statement of the effects of the firm at the dissolution, and of the accounts of the respective partners with it, as standing in their books; from which that balance of $381 52 is the result; and it states that the plaintiff, Melvin, had applied to the defendants to open the accounts and correct them, and that the latter had refused. — . The bill further states, that the plaintiffs are unable to point out positively in what manner the error arose, or in what item or items it consisted ; but it alleges that the defendants were indebted to the firm in the sum of $478 12; of which $85 were lor merchandize and appeared in the books among the general accounts, and $393 12 were charged in a memorandum in the cash book, which latter sum the plaintiffs are convinced was omitted to be charged to the defendants in the account settled, and, with some other small mistakes, made an error to the amount of $402 07. The bill then seeks a discovery from the defendants of the items composing the account stated, and whether they did not omit to charge themselves with $478 12, or $393 12, or some other sum, with which they ought to have been charged, and what sum ; and, also, whether they did not make improper charges against rhe plaintiff, Melvin, and what they were. And against the stun of $402 07, the bill prays an injunction "and relief.

The answer admits the settlements, and that they were founded on accounts made out by the defendants ; that there were errors in the first, but that they were discovered and corrected on the 19th of of December, 1837, when the second bond was given. The answer states that there were various other dealings between the parties, and particularly for goods furnished from another store; that the defendants cannot recollect the items composing the accounts, as stated by them ; but that they were drawn out at length, and conneetedly and minutely set forth all the dealings between the parties in partnership and otherwise; and that the same, as the defendants believed and still believe, contained a full, fair and just account between the parties, and was at the time delivered to the plaintiff, Melvin, and no copy kept by the defendants. And the defendants insist on the same as binding and conclusive, unless some error be shewn therein. The answer denies that the defendants refused to re-examine the accounts ; but, on the contrary, it states, that, when the plaintiff; Melvin, sometime after the settlement, suggested that there was an error, the defendants offered, if the said plaintiff would produce the settlement and point out any error in it, either of omission or false charge, that they would correct it; but the said plaintiff declined or omitted to shew the accounts, and said they were lost. And they submit now to correct any error that can be established in their settlement.

A witness, examined for the plaintiffs, states that he had been a clerk in the store, and was present when the settlement of the 14th of December was made. He is unable to state the contents of the account then stated between the parties; but bethinks that the account against the defendants in the cash book of about $393 12, as stated in the bill, was not brought iuto that settlement; and he also states, that some of the cash, which made up that sum, might, probably, have been laid out by the defendants for cattle and other effects for the firm, and not applied to the defendants’ own use. This witness also attested the bond given on the last settlement of December 19th ; and says it was given for the sum agreed on by the parties, as being due after then correcting all the errors of the previous settlement, as far as then detected ; but that those corrections were made on the account by the parties themselves, who communicated to him the result alone, and did not mention the particular corrections on either side, nor does he know them.

The canse was set for hearing upon the bill, ansivsr and the deposition of this witness.

No counsel for the plaintiffs.

Hoke for the defendants.

a (Note a). The opinion of this cause was delivered at June Term, 1843.

Ruffin, C. J.

The plaintiffs must fail for want of the requisite proof of their case. Having given their bond on the settlement of accounts, they eannot be relieved from it, but for error in the accounts. If they can shew an error, they may surcharge and falsify the account stated. The statements of this bill as to errors are very vague, and not, indeed, very intelligible ; and, probably, if the defendants bad chosen, the plaintiffs might have been stopped in limine for that reason. But the defendants submit to answer, and in the answer submit to correct any error the other party may be able to establish. By the answer the defendants purge themselves of all knowledge or belief of error, though they state themselves to be unable to answer to particular items being or not being charged or credited in the account stated, because one of the plaintiffs himself had the possession of the original settlement, and the defendants had no counterpart thereof; and the defendants’ memory would not serve them to re-state the accounts at the distance of more than three years. The plaintiffs, therefore, gain nothing by the discovery sought from the defendants ; and the latter give a reasonable account of their inability to make it more full, and insist that the contents of the account should be made appear by the production of the account itself. Certainly, like every other writing, the contents must be shewn by the instrument itself; and, without being informed what were the matters embraced in the account, it is impossible to determine, whether the settlement was right or wrong.— Therefore, the plaintiffs should have accounted for the non-production of that document; which they have not done. It is true, the defendants state the plaintiff, Melvin, told them that he had lost it, and, for that reason, urged him to go into a settlement anew, which the defendants declined. But the plaintiffs have not proved the destruction of the insirumsnt, nor stated upon their own oath what has become it, nor even given secondary evidence of its contents. They have, indeed, examined one witness, to prove that, in a previous settlement, which all parties admit to have been erroneous, a particular debit against the defendants was probably omitted. But the witness, without .clearly establishing even that, informs ns, that .there was a subsequent settlement, of the contents of which he is ignorant,and upon which, the bond was given, which gives rise to the present controversy. Now, it may have been, that one of the errors of the first settlement, which was corrected in the second, was with respect to the sum of $393 12, which the plaintiffs state was omitted, as they suppose; and this is the more probable, as that sum is so near the amount of the total errors claimed in the bill, namely $402 07. But, however that may be, it is the plaintiffs’ misfortune not to be able, by an admission drawn from the defendants or by other evidence, to shew us what was included in the settlement; and, consequently, we cannot see that the account embraced any false charge, or omitted any proper credit.

Per Curiam, Bill dismissed with costs.