Summary
In Millet v. Bradbury, 109 Cal. 170, it was said that a bill of particulars is to be regarded as an amplification of the complaint, and the defendant claims that by virtue of what is there said he was authorized to deny each of the items in the bill of particulars as fully as though originally set forth in the complaint.
Summary of this case from Chamberlain v. LoewenthalOpinion
Department One
Appeal from a judgment of the Superior Court of the County of Los Angeles. Lucien Shaw, Judge.
COUNSEL:
Davis & Hill, and Thomas R. Owen, for Appellant.
Bicknell & Trask, for Respondents.
JUDGES: Harrison, J. Garoutte, J., and Van Fleet, J., concurred.
OPINION
HARRISON, Judge
The plaintiff presented to the defendants, as the executors of the last will and testament of L. L. Bradbury, deceased, a claim in the following form:
" To balance due this claimant upon an open, mutual, current, and unsettled account, and upon reciprocal demands existing between the decedent and this claimant up to the time of the death of said decedent, the same having arisen out of, and being upon, said account and reciprocal demands, and, on this claimant's side, particularly for and on account of work, labor, and personal services of a domestic, confidential, and fiduciary character, of the greatest difficulty, importance, and value to the decedent, his family, property, and estate, the last item of said open and mutual account, and of said reciprocal demands, having accrued and become due and payable on the 14th day of July, A. D. 1892; said balance being thirty-six thousand dollars."
Upon their refusal to allow her claim she brought this action to establish the same. The defendants, in their answer, denied the allegations of her complaint, and also pleaded the statute of limitations. Prior to the trial of the cause the plaintiff, upon the demand of the defendants, furnished them with a bill of particulars, or copy of the account sued upon, from which it appeared that her claim consisted of items for work, labor, and services rendered the deceased, in each year from 1873 until his death in July, 1892; that no compensation had been agreed upon between them for said services, but that the reasonable value thereof amounted to forty-seven thousand dollars; that during that period the deceased had made various payments upon said claim, the last of which was made in the year 1887, and that the aggregate amount of said payments was ten thousand nine hundred dollars. In the copy of the account furnished the defendants by the plaintiff was the statement that during the time covered thereby "the decedent delivered to and intrusted with plaintiff various sums of money, to be by her expended for his use and benefit from time to time, and as directed by him, in connection therewith, at or after the intrusting thereof by him with her; all of which moneys were from time to time, prior to the death of said decedent, laid out and expended by plaintiff for his use and benefit, under his directions, save and except one hundred and thirty dollars." At the trial the court, upon the objection of the defendants, excluded any evidence of services rendered by the plaintiff at any time prior to two years before the death of Bradbury. Judgment was rendered [41 P. 866] in favor of the plaintiff for one thousand dollars, from which she has appealed.
The bill of particulars which was furnished to the defendants is to be regarded as an amplification of the complaint, and for the purpose of determining the plaintiff's right of recovery, or the admissibility of evidence that may be offered in support of her claim, is to be regarded as if it had been incorporated into the complaint as originally filed. It is claimed by the appellant that the account of the moneys that had been deposited with her by Bradbury to be disbursed by her according to his directions, of which there remained one hundred and thirty dollars in her hands at the time of his death, had the effect, by virtue of the provisions of section 344 of the Code of Civil Procedure, to take her claim out of the statute of limitations. That section is as follows:
" In an action brought to recover a balance due upon a mutual, open, and current account, where there have been reciprocal demands between the parties, the cause of action is deemed to have accrued from the time of the last item approved in the account on either side."
The reference in the section to "an action brought to recover a balance due upon a mutual, open, and current account" contemplates that the transactions between the parties are susceptible of being reduced to a single account, in which all the items on one side may be grouped in opposition to those on the other side, and treated as payments or offsets, and a recovery had for the balance. "A balance due upon an account" implies an account between the two parties in which the amount of the items upon one side of the account is deducted from the amount of the items upon the other side, and the balance thus ascertained. The term "account" involves the idea of debt and credit, and the balance of an account is the result of the debit and credit sides of the account, which constitutes a debt or claim, for which the party in whose favor it exists has the right of recovery. "It has uniformly been held that distinct and different items of charge in an open and mutual account do not constitute separate claims, but that the claim or debt is found in the balance of the account, and that it is the balance only that constitutes the claim of the party to whom it is due." (Hodge v. Manley , 25 Vt. 210; 60 Am. Dec. 253.) It is immaterial whether the account of these transactions is kept by one or by both of the parties, nor is the form in which the account is kept material. "The particular mode of keeping the account, whether on book 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, so far as the statute of limitations is concerned." (Abbott v. Keith , 11 Vt. 525.) It is, however, essential that the items upon the two sides of the account shall have resulted from mutual dealings between the parties, and constitute reciprocal demands between them. The "reciprocal demands" named in the section is only a synonym or equivalent of the "mutual account" named in the first part of the section. (Green v. Disbrow , 79 N.Y. 1; 35 Am. Rep. 496.) "Mutual accounts are made up of matters of setoff. There must be a mutual credit, founded on a subsisting debt on the other side, or an implied agreement for a setoff of mutual debts." (Norton v. Larco , 30 Cal. 130; 89 Am. Dec. 70.) The account is not mutual, unless the parties have dealt with each other in the same relation, and unless the items upon the different sides of the account are capable of being set off against each other. The demands must be reciprocal; that is, they must be of such a character that each party has an immediate right of action against the other. "Where there are mutual accounts between two persons, it is always the understanding that the account upon one side shall offset that upon the other; and in law the debt due from one to the other is only the balance left after the application in reduction of the accounts on the opposite side. In any form of action the recovery can only be for the balance. The very theory upon which this statute is based is that the credits are mutual, and that the account is permitted to run with the view of ultimate adjustment by a settlement and payment of the balance; and this theory is recognized in the statute, as it mentions an action 'brought to recover a balance due' upon an account." (Green v. Disbrow, supra .) This limitation of the right of recovery to the balance of the account implies the right of the plaintiff to apply the items upon the defendant's side of the account in reduction or extinguishment of the amount upon his own side; and such application can be made only when the transactions between the parties have been had in the same capacity. If the accounts between them do not affect them in the same relation -- as, for example, if upon one side of the account the party is individually liable, while the transactions upon the other side of the account have been had in his representative capacity as executor, guardian, or trustee -- the demands are not reciprocal. The theory upon which a "mutual account" is taken out of the statute is that the obligations on the one side are in law applied as payments or offsets to those on the other; but, if a transaction between the parties does not create a debt or claim which may be so applied, such transaction cannot be regarded as a payment or offset to a debt, or be the foundation of a mutual account or reciprocal demand. The right to demand an article of property that has been deposited with another, and the right to demand a debt due from the depositor, are not reciprocal. If the depositor has the right to demand the property itself, the other is merely a bailee or depositary, and the foundation of an account is wanting. There can be no [41 P. 867] debt unless the consideration for which the debt is claimed to exist has ceased to be the property of the claimant, and has become that of the other. Unless the one with whom property has been deposited has thereby become its proprietor, there is no debt for the property so deposited, whether the same be money or merchandise. One cannot be a creditor for money which is his own, and of which he still retains the right of disposal. By section 20 of the bankrupt act of the United States (14 U.S. Stats. 526), providing for proving claims in bankruptcy, it is declared that "in all cases of mutual debts or mutual credits between the parties, the account between them shall be stated, and one debt set off against the other, and the balance only shall be allowed or paid." In Libby v. Hopkins , 104 U.S. 303, Hopkins at the time of going into bankruptcy was indebted to the plaintiffs upon an open account for merchandise, and also upon a mortgage debt. He was also accustomed to deposit moneys with the plaintiffs, against which he would draw in favor of his creditors. Prior to going into bankruptcy Hopkins had transmitted to the plaintiffs a certain sum of money, with directions to apply it upon his mortgage debt. But, instead of doing so, they, without any authority from him, applied it to his credit upon their open merchandise account against him. In an action between the plaintiffs and the assignee of the bankrupt concerning their respective rights to the money thus remitted to the plaintiffs and applied by them, the court held that the merchandise account of the plaintiffs against Hopkins, and the moneys remitted to them by Hopkins, were not mutual debts which could be set off against each other, under the foregoing section of the bankrupt act, saying: "To authorize a setoff there must be mutual credits or mutual debts. The remitting of certain money assets by Hopkins to the plaintiffs, to be applied by them according to his directions, did not make them his debtors, but his trustees, so that there were in the case no mutual credits or debts. The indebtedness was all on the side of Hopkins. The plaintiffs owed him nothing. They held his money in trust to apply it as directed by him."
In view of these principles, it must be held that the respective claims of the plaintiff and Bradbury did not constitute a mutual account, and that the respective demands or claims of the one against the other were not reciprocal. Bradbury was her debtor for the services rendered by her, and was at all times liable to an action by her for the amount of her claim. On the other hand, she was at no time his debtor, or liable to an action by him for the money which he had deposited with her, until after a previous demand by him and refusal on her part. (Schroeder v. Jahns , 27 Cal. 274.) The money was deposited by him upon an express trust, and the terms of the trust constituted a contract between them, which measured the extent of their relative liability. Either party could have terminated the trust at any time; but, so long as the trust continued, Bradbury had exclusive power to direct the disposition of the money, and her power over the same was limited to following his directions. The rules applicable in the case of an involuntary trust, or where money has come into the hands of one who, by his own agreement or by operation of law, has become liable to pay it to another, have no application here. In such a case an action may be brought without any previous demand. It is otherwise, however, where money is held under a trust created by an agreement between the parties. Bradbury could at any time have demanded that the plaintiff pay over to him the money in her hands, and her refusal to do so would have been a conversion, for which he could have sued her in tort, or he could have elected to treat her as liable in contract for the money. But this right of election was never available to her. She never had the right to apply the money deposited with her in payment of her claim against him (Civ. Code, sec. 2229), and, if she had done so, it would have constituted a tort or conversion by her, for which he would have had an immediate right of action; and in such action it would have been no defense that he was indebted to her for services.
For the purpose of determining whether the account was mutual, it is immaterial that at the death of Bradbury she had in her hands any of this money that had been deposited by him. If the account was mutual, it was so by reason of its own nature rather than by the fact of Bradbury's death. If the plaintiff had died, the money in her hands would not have constituted a part of her estate, and Bradbury could have recovered it in a direct action against her executor, without the necessity of presenting a claim against her estate. (Lathrop v. Bampton , 31 Cal. 25.) If Bradbury had died insolvent, the money in her hands would have formed a part of his estate, irrespective of her claim against the estate.
The death of Bradbury did not give to the plaintiff any rights in regard to the money that she did not have prior thereto. As she did not in his lifetime have the right to apply the money in payment of her claim for services, she did not upon his death become entitled to make such application, and the demand against her which passed to his executors is the same in character as was held by Bradbury in his lifetime, and is not a demand reciprocal to that of the plaintiff.
The court did not err in refusing to allow the plaintiff to amend the bill of particulars. The amendment proposed was not in any material respect different from that which had already been given to the defendants, and the plaintiff's attorney stated at the time of making the motion that, under the proposed amendment, he expected to show that the money, when placed in her possession, was [41 P. 868] understood between Bradbury and her to be his money, and that it was to be expended for his use and benefit.
The judgment is affirmed.