The defendant pleaded setoff,and sought to charge the plaintiff for the use and occupation of certain real estate of his testator. It appeared that, from the time that a right of action accrued upon this item for use and occupation until it was pleaded as a setoff, the statute of limitations had become a bar to its recovery, unless the furnishing of materials and labor by the plaintiff, which was of a more recent date, made a mutual account between the parties. The court held that there was nothing in the facts of the case to prevent the running of the statute as against this claim for use and occupation, and, in rendering the opinion, used the expres sion referred to. In the latter case the plaintiff below brought an action to recover for goods sold and delivered to the defendant by his testator. The defendant below pleaded the statute of limitations to the larger portion of the account, and to the balance claimed a setoff for professional services rendered (he being an attorney at law) to this amount, and also claimed a balance in his favor. The plaintiff below claimed that this was a mutual account, and that the statute had not run as to any portion of his testator's account. Upon these facts the court held that this was not a mutual account, and after giving several definitions of a mutual account draws the following conclusion, viz: "As defined the account (mutual account) on each side relates to trades in merchandise. This may include labor or any thing that is provable by book of original entry. Such account on one side is not enough. A demand on the other side founded on anything else than such accounts as concern the trade of merchandise is not sufficient to bring the account of the other within the exception;" and then, in further discussion of this question, uses the expression referred to above The only meaning that can be taken from these expressions is, that mutual indebtedness is not sufficient of itself, without any agreement or understanding between the parties to apply them to each other, to bring a case within the exception of the statute, unless it is a mutual account per se. For the court, in the case of Seitzinger v. Alspach, says: "It is true, the mutual accounts need not necessarily be between merchants. Other persons may so deal together if there be reciprocal accounts between them as in like manner to take them out of the statute." And in Mattern v.

Mc Divitt, the court says: "Nor does either (mutual demands or debts) prevent the running of the statute against the other, unless both are such accounts as bring the case within the exception."

This question as to when mutual debts between two parties constitute a mutual account, is more clearly stated by the court in the case of Eldridge v. Smith, 144 Mass. 35, in which the facts appear as follows: The plaintiff sued as the surviving partner of a late firm, on an account most of which was for the hire and keeping of horses. The first item charged being in November, 1854, and the last one, in December, 1872. The defendant in his answer set up the statute of limitations to this account, and also filed an account in setoff for medical services and medicines furnished the plaintiff from February, 1874. to May, 1883. The plaintiff's partner died in 1872; the suit was brought December 28th, 1884. It will be seen that, unless the plaintiff could bring his case within the exception of the statute in regard to mutual accounts, that his whole claim was entirely barred by the statute before he brought suit. The court held that this was not a mutual account, and in deciding this question referred to Penniman v. Rotch, 3 Met. (Mass.) 216, and Sofford v. Barney, 121 Mass. 300, as enunciating the correct rule as to this class of cases, and then says: "Both of these cases make one of the elements of a mutual and open account to be that there must be a mutual agreement, express or implied; that the items of the account on the one side and the other are to be set against each other. In other words, there must be one account upon which the items on either side belong, and upon which they operate to extinguish each other pro tanto so that the balance on either side is the debt between the parties. It is quite clear that the right to set off independent debts under our statute is not sufficient to create a mutual open account. For instance, in this suit upon the plaintiff's account, the defendant might have a right to set off a promissory note of the plaintiff's, which the defendant holds as endorsee from the payee. But it cannot for a moment be contended that this would make the plaintiff's a mutual and open account. It is not enough that there should be mutual debts, but they must, by agreement of the parties, be parts of one account, upon which they would apply to and satisfy each other pro tanto."

On this question in the case of Green v. Caldcleugh, 1 Der. & B. (N. Car.) L. 321; 28 Am. Dec. 567, DANIEL, J., after stating the rule as to the statute of limitations concerning mutual accounts, and citing some authorities on that point, says: "But it seems to us that the true principle to be extracted from these decisions, applies only in those cases where these items are clearly parts of one continuing mutual account, which by the assent of the parties are to be charged therein, whenever the same shall be adjusted. This assent may be shown by direct evidence of an agreement to that effect. It may be inferred also when each party keeps a running account of the debits and credits of the account; or where one only, with the knowledge and concurrence of the other, is confided to keep the account of all the mutual dealings. In these cases the new items are evidence affirming the continuance of an unsettled account at that time and warranting the fair presumption of a promise to settle it, and to pay the balance which may be ascertained on settlement. The whole of the reciprocal demands comprehended in such running accounts are thereby taken out of the statute; the account is not to be split; but what shall be found upon all the items to be the balance is the true debit between the parties. That the mere fact of the existence of disconnected and opposing demands between two parties, one of which demands is of recent date, shall take the case out of the operation of the statute, shall be evidence of a promise to pay that other, or to allow it in a settlement, is, in our opinion, not an inference of law or of reason, although some adjudications and several loose dicta appear to sanction it." S. P. Higgs v. Warner, 14 Ark. 192; Loeffel v. Hoss, 11 Mo. App. 133; Huebner v. Roosevelt, 6 Daly (N. Y.) 337; Kimball v. Kimball, 16 Mich. 211; Thompson v. Reed, 48 Ill. 118; Cuck v. Quackenbush, 13 Hun (N. Y.) 107; Sawyer v. Lufkin, 58 Me. 429; Parker v. Schwartz, 136 Mass. 30; Safford v. Barney, 121 Mass. 300; Gordon v. Lewis, 2 Sumn. (U. S.) 143; Greene v. Darling, Mass. (U. S.) 201; Fox v. Fisk, 6 How. (Miss.) 328, 346; Talcott v. Smith, 142 Mass. 542; Chamber v. Marks, 25 Pa. St. 296.

Where the only credit items on an account that was sought to be brought within the exceptions of mutual accounts were items of money and other

articles of merchandise, marked, “returned," held that these items were not sufficient to bring the case within the exception in relation to mutual accounts. Campbell v. White, 22 Mich. 178; 25 Mich. 462.

Where the transactions are remote and there is nothing in their own nature or the evidence in a case to connect them, there can be no propriety in extending the exception of the statute to embrace them. Belles v. Belles, 12 N. J. L. 339.

Where money is paid as a loan with an understanding between the parties that they are to be a part of their mutual dealing, and are to affect the general balance due thereon, it is sufficient to operate as a removal of the statute bar. Plimpton v. Gleason, 57 Vt. 604.

The mutuality of the reciprocal demands must be established to bring an account within the statute. Reciprocal demands which are not the proper subject of an unliquidated account will not answer the purpose. Becker v. Jones, 37 Hun (N. Y.) 35; Cuck v. Quackenbush, 13 Hun (N. Y.) 107; Edmonstone v. Thomson, 15 Wend. (N. Y.) 554; Coster v. Murray, 5 Johns. (N. Y.) Ch. 522; Hallock v. Losee, 1 Sandf. (N. Y.) 220; Green v. Ames, 14 N. Y. 225; Huebner v. Roosevelt, 6 Daly (N. Y.) 337; Campbell v. White, 22 Mich. 178; 25 Mich. 462; Thompson v. Reed, 48 Ill. 118.

Mutuality of Parties.-The mutual accounts and dealings which will save a balance on either side from the bar of the statute of limitations must be those between the accounting parties, and the whole transaction must be of such a character as to raise a legal presumption that the accounts are intended to apply to the payment or extinguishment of each other, and thus, like payments on note, operate

as

an acknowledgment of the precedent indebtedness. But running accounts with a partner, though he be a surviving partner, and as such has the collection of the partnership assets, certainly cannot be called an account with the firm, and can therefore be of no avail to stop the running of the statute against a partnership claim. Stewart's Appeal, 105 Pa. St. 307.

A person having an open, mutual

and

current account, purchased an open book account which a third person had against that other, and without notifying him of the purchase, entered it into his account, and thus attempted to save it from the effect

of the statute. The account thus assigned was not barred when it was assigned, but was barred by the statute at the time suit was brought, unless it formed a part of the mutual account that already existed between them, which was not barred at this time. Held, that the item thus assigned to the plaintiff was barred by the statute; that, although it had been contended that, in reciprocal accounts the intention of the law was to compensate or immediately set off one account against the other, and that it was just that the law should provide as it does, that the limitation should run only from the last item of the account; yet, in order to do this and to retain the justice contended for, it must be confined to cases where the items are between the same parties, known to both, and originating between them, or adopted by them as part of their mutual account. Green v. Ames, 14 N. Y. 225.

As to Manner of Keeping a Mutual Account. It has been held that, in order to create a mutual account, it is necessary that each party should keep a book account and have charges upon it against the other, or, at least, have written charges against each other. Theobald. Stinson, 38 Me. 149; Dyer v. Walker, 51 Me. 104, 106; Edmonstone v. Thomson, 15 Wend. (N. Y.) 554. 555. But as to the main cases, it seems by the case Lancey v. Maine Central R. Co., 72 Me. 34, 37, that they have been abrogated on amendment to the statute, which provides that "it shall be deemed a mutual and open account current, where there have been mutual dealings between the parties, the items of which are unsettled, whether kept or proved by one party or both. Stat. 1867, ch. 117. And the case of Green v. Disbrow, 79 N. Y. 1; s. c., 35 Am. Rep. 496, is considered as settling the law as to mutual accounts in New York-held that an account was a mutual one, although the account was kept by one party only. In Kimball v. Kimball, 16 Mich. 211, the court, in discussing this question where a butcher presented an account to the legal representatives of a deceased person for meats furnished the deceased, which would be barred by the statute unless it was a mutual account, COOLEY, J., said: "It is not enough for the claimant to prove that, as a meat market man, he supplied and charged the deceased with meats. Here would be a credit on but one side

it would not be mutual. There must have been a credit upon the other side; that is, on the part of the deceased, either expressly given or impliedly; that is, a mutual or alternate course of deal; in other words, there must have been a credit given by the deceased, either expressly or impliedly by his consent of some items of deal. It is not necessary that it should be put on a book by deceased, or be brought forward by his representatives here as a claim, if the claimant and the deceased, at the time, understood that the items credited by the defendant were so intended to go on the credit of the deceased upon the account; if not, then the items of credit will not operate to make a mutual account current." And in the case of Abbott v. Keith, 11 Vt. 525, REDFIELD, J., in discussing this question, says: "It is apprehended, therefore, that the particular mode of keeping the account, whether on books or loose scraps of paper, or without any written charges, or whether it is all kept in one shape or in different forms, as in the present case, is unimportant. If all the items in the expectation of the parties have reference to and are to be adjusted in one accounting, it may be considered as one transaction as far as the statute of limitations is concerned.

It makes no difference that the account is kept by one of the parties only. Chambers v Marks, 25 Pa. St. 296.

A party bringing an action on a mutual account may declare on the debit side of his account only when his only object is to obtain a balance, leaving the other party to file an account in offset, or to prove the items of his side of the account, in payment, if he can do So. If the defendant does neither, he can only avail himself of the statute of limitations by pleading it. Then the plaintiff may avoid it, and bring himself within the statutory exception, by proving affirmatively as he would any other fact, which is material in his case, and is traversed that there was such a mutual and open account current, and items of debit and credit on both sides, and then by proving items on either side within the statutory period, the exception would apply and show that the course of action accrued, by the terms of the statutory period, before the action brought. When this is done, the action will be deemed brought for the balance within the meaning of the stat

I. Definition and Distinctions, 17. II. Kinds of Mutual Insurances, 18.

1. Premium Note Assessment,
18.

2. Benefit Assessment, 19.
(a) Recent Development of
Law on the Subject, 19.
(b) Forms of Organization
of Benefit Societies, 21.

Bank, 85 N. Y. 590; King v. King, 9 N. J. Eq. 44-49.

1. The precise legal definition of the words "mutual dealings" does not seem to have been settled. In Young v. Little, 15 N. J. L. 1, the court said: "A defendant can only plead payment and give notice of set-off where there have been mutual dealings between him and the plaintiff, and where, if there is a balance due the defendant, he can have judgment for it against the plaintiff, and the same general language is used in the case of Cumberland Bank v. Hann, 18 N. J. L. 222." Receivers v. Paterson G. L. Co., 23 N. J. L, 283.

Where the plaintiff company had deposited cigars with the defendants to secure a debt, an order for winding up the company was afterwards made, and, the secured debt having been paid off, the liquidator of the company claimed a return of the cigars, but the defendants refused to give them up. The liquidator brought an action of detinue for the cigars. Their value having been assessed, the defendants claimed, by way of counter-claim to set off, another debt due from the company to them against such value by virtue of the conjoint effect of section thirty-eight of the Bankruptcy act 1883 (the mutual dealings sections), and section ten of the Judicature act 1875, which applies to the rules of bankruptcy law to cases of winding up. Held, that they were not entitled to do

(c) Legal Status, 24.

(d) Internal Management and Powers, 26.

III. Certificates of Membership, 28. 1. Essentials and General Features, 28.

2. Whole Term Life Certifi

cates, 33.
3. Endowment, 33.
4. Fire Policies, 34.

so on the ground that section thirtyeight is only applicable where the claims on each rule are such as result in pecuniary liabilities, whereas the right of the plaintiffs was to a return of the goods. Eberle's Hotels & Restaurant Co. v. Jonas, 18 Q. B. D. 465.

2. Where a person has given a town a bond in a criminal cause and he has a claim against the town, such a claim cannot be set off against the bond; they are not mutual debts. Town of Wallingford v. Hall, 45 Conn. 350.

In a suit brought by partners upon a partnership debt the defendant cannot set off a debt against one of the partners under statutes that provide for the selling off of mutual debts between parties to an action. Meeker v. Thompson, 43 Conn. 77-80.

3. An action was brought against the city of Boston to recover money due the plaintiff for his services as a teacher in the public schools in the city. The real party in interest was one Ödin, to whom this claim had been assigned, and the city sought to set off certain taxes assessed to said Odin, and another as assignees of John Odin, which were unpaid. Held, that taxes assessed upon a citizen are neither demands founded on a judgment nor contract between the parties, and therefore these taxes and the said claim did not constitute mutual demands. There was a want of mutuality in the parties. Pierce v. Boston, 3 Metc. (Mass.) 520.