112 Ky. 138 | Ky. Ct. App. | 1901
Opinion of the court by
Reversing.
The Louisville Ranking Company and the Pineville Banking Company were correspondents for each other. The Pineville Bunking Company made an assignment on July 28, 1893, to appellee, T. J. Asher, for the benefit of all its creditors, being then- hopelessly insolvent. As shown by the books of tbe Louisville Banking Company, the Pine-ville Banking Company had' then to its- credit with it $1,370.42. As shdwn by the books of the Pineville Bunking Company, this balance Was $4,928.83. But this omitted a credit of $500 which should have been entered, so that, as .shown by these books as corrected, the balance wals $4,428.-83. This litigation involves a settlement of these accounts. On February 28, 1890, five notes were executed by different persons to P. Barry, due six months after date, negotiable and payable at the Pineville Banking Company, aggregating in all $2,168.28. Barry discounted these notes to the Citizens’ National Bank of Cincinnati, and on August 15, 1890, that bank sent them to the" Louisville Banking Com
It is earnestly insisted for appellant that after the numerous statements sent, and' acknowledged to be correct,, the account was stated, and the balance shown by the statments is conclusive between the parties. We think, under the evidence, it should be regarded as an account stated.. Henderson Cotton Mfg. Co. v. Lowell Machine Shops, 86 Ky., 668 (9 R., 831), 7 S. W., 142; Union Bank v. Planter’s. Bank, 31 Am. Dec., 113. The rule as to an account stated is., thus well put in 3 Enc. Law & Proc., pp. 451, 455. “Formerly the stating of an account was considered so deliberate an act as to preclude an examination into'the items, but since an early day a greater latitude has prevailed; and it may now be said to be the ruile that an account stated does not create an estoppel, and that neither a stated nor a settled account is conclusive, but simply affords strong presumptive evidence, which may be rebutted by showing fraud or mistake. And, while the practice uf opening accounts, which the parties have themselves adjusted is considered dangerous, yet a settlement must be so far considered as. made upon absolute mistake or imposition, if palpable errors are shown, as not to be obligatory upon the injured party. The presumption is one relating to the evidence. In determining whether am account stated can he impeached, the case is put upon the same footing as if the money had been paid. Such payment would be conclusive, subject to the right to recover it back on a failure of consideration; and so, on the statement of an account, if the case is one in which a payment, if made, could have been re
In the correspondence between the two banks it seems to have been assumed that the indorser of the notes had been released by the failure to protest 'them, and that the Pineville bank was responsible for the loss if the notes were sent to it by the Louisville bank with instructions to protest them if not paid. But promissory notes are only put on the footing of foreign bills of exchange when they are regularly discounted by the bank at which they are payable, or another bank in this State incorporated under its laws, or organized in this State under the laws of the United States. Kentucky Statutes, sec. 483; Carlisle v. Chambers, 67 Ky., 268, 96 Am. Dec., 304. Thie notes in question, having been discounted by the bank in Cincinnati, Ohio, and not by any bank in this State, were not, therefore, placed on the footing of a bill of exchange, but stood ns any other promissory note which had been assigned. The indorser was not released by the failure to protest them. The Cincinnati Ibank had not sustained any loss by reason of the failure to protest them. The protest would have been only an unnecessary expense. There was no liability of the Louisville bank to the Cincinnati bank, or of the Pineville bank to the Louisville bank, for the failure to protest the notes, which were executed! in this State, were payable here, and must be governed by its laws-.
It is olear from the evidence that the parties to the notes were all insolvent at the time, and that the notes were in fact worthless. The question then arises, is' there such a palpable mistake here that equity should relieve against it, treating the account as stated, and applying the principles followed in this State in the case of a payment of money by mistake? The distinction made in some jurisdie
The next matter in dispute arises in this way: The Pine-ville bank held a four-months note, dated March 30, 1893, on ’Wyman & Cairns. The Louisville Banking Company discounted the note on April 28, 1893. It was payable at the Pineville Banking Company. On July 25, 1893, the-Louisville Banking Company sent the note to the Pineville
The nest matter to be considered is the proper basis for the settlement of the accounts.. The commissioner adopted as'his basis the balance shown by the books of the Pineville Banking Company. This was error. The Louisville bank had no notice of the account as it was kept on these books. The entries were not shown to have been made at the time of the transactions, or in the regular course of business. The account as leapt on the books of the Louisville Banking Company had been submitted at the end of every month to the Pineville bank, and had been acknowledged by it to be correct. As we have said,-it must be treated as an account stated. The commissioner should have taken the balance as shown by this account as the basis. To this balance should be added the amount of the Barry notes' charged to the Pineville bank on the account, with six per cent. • interest from the time it was charged. We do not see from the record any other mistake in the account. If any appears, it may be .corrected according to the principles laid down above. The $1,200 note made by the Pineville Banking Company should be charged to the account at its maturity; also the Wyman & Cairns note, and the checks paid; and interest should be allowed on the balance, as it may appear, up to the time the proceeds of the Bell county bonds were received.
This is not a bill of interpleader. The costs should be
Judgment reversed, and canse remanded for further proceedings consistent herewith.
Petition for rehearing by appellant overruled.