Kahn v. D. P. Edwards

Foote, C. This is an action upon an account stated. Both of the defendants pleaded the statute of limitations of two years, under section 339, subdivision 1, Code of Civil Procedure. One of them, Goodin, further pleaded, in bar of the action, that he by agreement had been absolved from paying the account sued on.

The trial court found that the amount of the account was correct; that no such agreement as Goodin claimed had in fact existed, but held that the cause of action as ■ to both defendants was barred by the statute of limitations.

From the judgment roll, it appears that the defendants were indebted upon an open account to a partnership of whose effects the plaintiff was the sole owner at the time of the institution of this suit. Before the statute of limitations had barred any portion of that account, the-parties met and agreed orally upon the balance that was due from the defendants to the plaintiff; in other words, an accounting was had between the parties, and the balance which the plaintiff claimed to be due from the defendants, they then and there orally admitted to be due, as he claimed, and agreed to pay.

At the time when this action upon the “ account stated ” was instituted, two years had not elapsed since %ie agreement had been made to pay the ascertained balance due on the original account. Therefore the cause of action upon which this suit is based was not barred, and the plaintiff should have had judgment upon the finding. •

“An open account already barred by the statute of limitations cannot be relieved from the bar of such statute by an oral statement of such account.....

“Where, however, the demand is not barred at the [194]date of the account stated, although the statement is verbal, the statute begins to run upon the new cause of action thus brought into existence from the date of the settlement and new promise arising thereunder, and if verbal, an action may, under subdivision 1 of section 339, Code of Civil Procedure, be brought within two years after such settlement.” (Auzerais v. Naglee, 74 Cal. 67.)

The judgment, therefore, should be reversed, and the court below directed to render judgment upon the findings for the plaintiff.