Smith v. Fetterhoff

SCHOTTKY, J.

Appellant brought this action on an open book account to recover a balance due from respondent for services rendered and materials supplied in connection with the repair of automobiles at the request of respondent. Appellant recovered judgment in the sum of $161.42, plus accumulated interest, on two parts of the book account, but was denied recovery on the third part of $1,006.57. This appeal is limited to that part of the judgment denying recovery of this sum.

The court found that, except for the sum of $106.09, the services were rendered and materials supplied to respondent

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as a known agent for unknown principals (various insurance companies); that the reasonable charges for such services and materials were correctly reflected in appellant’s original ledger

sheets;

that these ledger sheets were kept in the normal course of appellant’s business; and that they constituted an open book account for the credits extended to respondent from time to time, and amounts due and owing to appellant from time to time. The court found further that no part of this book account was barred by the statute of limitations. This appeal raises no issue as to the above-mentioned findings of fact.

That part of the book account on which appellant was denied recovery consists of three ledger sheets commencing with an entry for January 28,1947, and ending with an entry for December 31, 1952. The next to last entry in this portion of the book account, under the date of October 27, 1951, shows a balance due in the sum of $1,006.57. The last entry of December 31, 1952, shows a book credit of $1,006.57, bringing the balance down to zero. Appellant’s explanation as to the credit of $1,006.57 shown in said book account was that it was a mere entry for income tax purposes, but the court in finding against appellant on this issue chose to rely upon the entry in the book account, stating in its findings: “That defendant is not indebted to plaintiff in the sum of $1,006.57, or in any sum whatsoever, for any balance due as shown in that portion of the open book account contained in Plaintiff’s Exhibit 1.”

Appellant contends that it was error to deny recovery of an unpaid balance due merely by reason of a subsequent credit entry that did not reflect an actual payment but was nothing more than a bad debt write-off for income tax purposes. Appellant argues that the court erred in refusing to consider evidence that proved the correct and unpaid balance, because, although a balance due must be shown before recovery can be had on an open book account, evidence is admissible to prove the correctness of the items of the account and the true balance due.