A COMMERCIAL QUESTION

New Zealand Mail, Issue 1746, 23 August 1905, Page 62

A COMMERCIAL QUESTION

WHAT ARE “ACCOUNTS STATED”?

The case of the Wellington Loan Company, Limited, v. Francis Loudon, which came before the Chief Justice, sitting Avith a jury in the Supreme Court last Aveelc, disclosed a point in commercial law of gome little interest. Mr Gray, who appeared for the plaintiff company, briefly stated the case, and Mr F. O'B. Loughnan, who was for the defendant, agreed in his description of it. Mr Gray said tho claim was for <£l64 17s 3d upon accounts stated. The company was a financial institution in this city which dealt largely in bill discounting, and in lending money. It had dealt with the defendant for a number ■of years, and accounts Avere taken some time ago between the parties, after which a fresh start in tlieir business relationship was made. On the 17th of July last the company made out Loudon’s account, and found there Avas a balance owing by him to them on that date of £164 17s 3d, including intei*est at the rate he had agreed to pay them, and had been paying them for a number of years. A letter Avas Avritten to defendant by the secretary of the company asking him for a cheqvbe for the amount stated, and intimating that unless it was paid by a certain date the matter would be placed in a solicitor's hands. In ans Aver to that letter the defendant wrote a day or two later: “I ha\ r e your letter of the 17th, and in reply I am prepared to give you my bill at three months from the date hereof for the amount of your claim without any further interest, and if that is not satisfactory, you can go on Avith the music.” That, said Mr Gray, was the A\ r liole of the plaintiff's case, and the only question was whether the defendant's letter Avas sufficient for “ accounts stated,” which lie maintained it was. His Honor: And I suppose you say the offer of a bill is not the amount ing. Well, the elementary rule is that there must be an admission of a debt due to support a claim for “accounts stated”; and you say that the offer to give a bill is an admission that the amount is due? Mr Gray said that was the case. The defendant had written another letter stating that if the company had asked for £l4O 10s lOd they AA’ould have had a far better chance of getting it, and adding “ As the legal profession is a necessary evil, I have no objection to subsidising it.” (Laughter.) Mr Loughnan moved for a non-suit on the evidence (the letter put in). He maintained that an ‘'account stated ” must be an “nneaui vocal admission of a debt

due." He pointed out that the' only amount the defendant referred to as be» ing due by him was <£l4o 10s lOd, which, he said, they would have had a far bettflff chance of getting had they claimed it. His Honor: But..that is not the letter which plaintiffs rely upon—it's the letter of the 19th they put forward. MrLoughnan: Yes; but this letter throws some light upon the whole transaction. In the letter of the 19th the defendant said in effect, “ I am prepared te give you something less than you claim; I don't admit that I owe it; and if you don't think that a satisfactory arrangement, then I shall dispute it. Your claim is for <£l64 17s 3d, and I'll give you a bill for that amount at three months, but without any further interest.” That was to say he would give them something very much less than their claim; this would be better for him because he would have the use of their money for three months, and not at 30 per cent, interest, which were the company's rates, but “ without further interest.” Mr Loughnan argued that this offer was tantamount to a refusal to pay the amount claimed, and a statement that if they did not like his proposal the defendant would dispute the whole thing. Consequently there Avas no “ unequivocal admission of a debt due.” Mr Gray replied that Avhat the defendant dicT say in that letter Avas in effect; “ I cannot give you cash for the amount of your claim, but I'll give you my promissory note,” and that Avas a. full admission of the debt due. His Honor said lie Avould take time to consider the matter. It was many years since the cases cited by counsel during the argument had been before him, and he wished to read them again; but his impression was that “ accounts stated” must be a clear and explicit admission of a debt -due.