The master of a ship, who with the other members of a mercantile
house were owners of the vessel which he commanded, with the
approbation of the firm, signed a bill of lading to deliver certain
articles of merchandise, the property of the shipper, at the port
of destination of the vessel, "freight to be paid for the goods as
per agreement endorsed." The agreement endorsed was that the owners
of the ship should have, as the freight of the ship, one-half of
the net profits on the proceeds of the goods, which were to be
invested in a return cargo to be consigned to and sold by the
shipper. The proceeds of the outward cargo were received by the
shipper, part in goods and part in money, a portion of the cargo
having been left unsold by the vessel where they were delivered.
The transaction was made the subject of an account current by the
owners of the vessel with the shipper of the goods, and a large
balance was claimed to be due to them on the said account. The
shipment was made in May, 1810, and in May, 1829, a suit was
instituted for the recovery of the balance stated to be due on an
account current. The defendants, the executors of the shipper,
pleaded the statute of limitations of the State of Maine. The
defendants replied that the accounts and promises arose "from such
accounts as concern the trade of merchandise between merchant and
merchant, their factors and servants." The plaintiffs admitted they
had no other cause of action than such as arose from the bill of
lading, and the contract endorsed thereon.
Held that the
bill of lading and the contract were not sufficient to maintain the
issue joined on the part of the plaintiffs in respect to the
replication of merchants' accounts.
The statute of limitations of Maine is copied from the 21st of
James I, and its words are
"All actions of account and upon the case, other than such
accounts as concern the trade of merchandise between merchant and
merchant, their factors or servants &c., shall be
commenced."
It would seem to be the necessary construction of these words
that the action on the case to which the exception applies must be
founded on an account. The language of the act conveys the same
meaning as if it had been "all actions of account, and all actions
on the case other than such as are founded on such accounts as
concern the trade of merchandise," &c. The foundation of the
action must be an account, not a contract.
From the association of actions on the case, a remedy given by
the law for almost every claim for money, and for the redress of
every breach of contract not under seal, with actions of account,
which lie only in a few special cases, it may reasonably be
conceived that the legislature had in contemplation to except those
articles only for which account would lie. The words certainly
imply that the action should be founded on an account. The account
must be one which concerns the trade of merchandise.
The case presented by the exception is not every transaction
between merchant and merchant; not every account which might exist
between them; but it must concern the trade of merchandise. It is
not an exemption from the act attached to the merchant merely as a
personal privilege, but an exemption which is conferred on the
business as well as on the persons between whom that business is
carried on. The accounts must concern the trade of merchandise,
Page 31 U. S. 152
and the trade must be not an ordinary traffic between a merchant
and any ordinary customer, but between merchant and merchant.
The trade of merchandise which can present an account protected
by the exception must be not only between merchant and merchant,
but between the plaintiff and defendant. The account -- the
business of merchandise which produces it -- must be between
them.
A charter party, a contract by which the owner lets his vessel
to another for freight, does not change its character because the
parties happen to be merchants. It is still a special contract
whereby a compensation is stipulated for a service to be performed,
and not an "account concerning the trade of merchandise." It is no
more "an account," and no more connected with "the trade of
merchandise" than a bill of exchange or contract for the rent of a
house or hire of a carriage or other single transaction which might
take place between individuals who happen to be merchants. An entry
of it in the books of either could not change its nature and
convert it from an insulated transaction between individuals into
an account concerning the trade of merchandise between merchant and
merchant. They must depend on the nature and character of the
transaction, not on the books in which either party may choose to
enter a memorandum or statement of it.
The English cases certainly do not oppose the construction given
by the court to the words of the statute; the American cases, as
far as they go, are in favor of it.
On a commercial question especially, or one deeply interesting
to merchants and to merchants only, the settled law of New York is
entitled to great respect.
This action was originally instituted in March, 1829, by the
plaintiffs in error, who survived Andrew M. Spring, their
co-partner, in the Court of Common Pleas of the County of York, in
the State of Maine, by process of attachment, and was removed to
the circuit court of the United States upon the petition of the
defendants.
The action was assumpsit, and in the declaration the first count
was for the balance of an account current, which account was
annexed to the writ. The second count was for money had and
received.
The defendants pleaded the general issue, which was joined, and
also the statute of limitations. The plaintiffs, to their pleas of
the statute, replied that "the accounts and promises arose from
such accounts as concern the trade of merchandise between merchant
and merchant, their factors and servants," and issue was taken on
the replication.
The declaration described the plaintiffs as co-partners on 1
July, 1821, "transacting business as merchants in the name of Seth
Spring and Company." The defendants' intestate was described as
"William Gray late of Boston, deceased."
The account annexed to the writ was as follows:
Page 31 U. S. 153
image a:
Page 31 U. S. 154
This account grew out of a special contract between the parties,
and the evidence and instructions of the court to the jury were set
forth in a bill of exceptions which stated that the plaintiffs, to
maintain the issues on their part, offered in evidence and read to
the jury:
A bill of lading of the outward cargo of the Morning Star,
signed by Andrew M. Spring, with the amount of contract on the back
of it, signed by William Gray and Seth Spring and Sons. The bill of
lading was in the usual form, and stipulated that the cargo should
be delivered at Algiers, to Andrew M. Spring, the freight to be
paid as per agreement endorsed on the same. The agreement was as
follows:
"The proceeds of the within cargo, amounting to $35,202.83, as
per invoice, costs and charges, is to be invested in Algiers or
some other port (after deducting all charges, consignee's
commission included, except freight and premium of insurance
within, of which two last mentioned charges are to be made on the
goods), and returned in the said barque
Morning Star to
Boston, when Seth Spring and Sons (owners of said barque) are to
recover one-half of the net profits thereon in lieu of freight and
primage, the voyage round. The consignee's commissions to be two
and a half percent on the sales of the within cargo, and no
commissions to be charged in Boston except what is paid an
auctioneer."
"SETH SPRING AND SONS"
"WILLIAM GRAY"
"$35,202.83"
Also letters of instructions addressed by William Gray to Andrew
M. Spring relative to the voyage of the
Morning Star, and
also the correspondence on the accounts of Andrew M. Spring, and of
the consignees and others relative to the transaction. The
plaintiffs' counsel having closed their evidence, they were
inquired of by the court whether they had any other cause of action
than such as arose from the bill of lading of the outward cargo of
the barque
Morning Star, and the contract endorsed
thereon, answered that they had not.
And thereupon the defendants' counsel moved the court to
instruct the jury that inasmuch as the plaintiffs had admitted that
their whole cause of action arose from said bill of lading
Page 31 U. S. 155
and contract endorsed thereon, the said bill of lading and
contract, with the other papers, documents, and testimony
aforesaid, were not sufficient evidence in point of law to maintain
the issue joined on the part of the plaintiffs in respect to their
replication of merchants' accounts.
The plaintiffs' counsel objected to such instructions and prayed
the court to instruct the jury that the evidence introduced was
sufficient to prove and did prove the issue last aforesaid on the
part of the plaintiffs.
But the court instructed the jury that inasmuch as the
plaintiffs had admitted that their whole cause of action arose from
said last mentioned bill of lading, and contract endorsed thereon,
the said bill of lading and contract, with the other papers,
documents, and testimony aforesaid, were not sufficient evidence in
point of law to maintain the issue last aforesaid on the part of
the plaintiffs.
And thereupon the jury returned their verdict for the defendants
on this issue, and upon the general issue they found no
verdict.
The court gave a judgment for the defendants, and the plaintiffs
prosecuted this writ of error.
Page 31 U. S. 160
MR. CHIEF JUSTICE MARSHALL delivered the opinion of the
Court.
This cause depends entirely on the question whether the
plaintiffs are within the exception of the statute of limitations
made in favor of "such accounts as concern the trade of merchandise
between merchant and merchant."
The plaintiffs in error brought an action on the case against
the defendants in the proper court of the state of Maine,
Page 31 U. S. 161
which was removed by the defendants into the Circuit Court of
the United States for the District of Maine.
The first count was for balance of accounts annexed to the writ;
the second was for money had and received. The defendants pleaded
nonassumpsit and the statute of limitations. Issue was joined on
the first plea. To the second the plaintiffs replied that the
accounts and promises mentioned in the declaration are and arose
from such accounts as concern the trade of merchandise between
merchant and merchant, their factors and servants, and issue was
jointed on this replication.
At the trial, the plaintiffs produced the bill of lading of the
outward cargo of the barque
Morning Star, signed by Andrew
M. Spring, the master of said barque, with the contract on the back
of it, signed by William Gray the testator of the defendants, and
by Seth Spring and Sons, the plaintiffs and owners of the barque
Morning Star, which bill of lading and contract are in
these words:
"Shipped in good order and well conditioned by William Gray of
Boston, a native citizen of the United States of America, for his
sole account and risk, in and upon the barque called the
Morning Star, whereof is master for this present voyage,
Andrew M. Spring, now in the harbor of Boston, and bound for
Algiers, to say: [The merchandize is here described by marks,
numbers and quantities], being marked and numbered as in the
margin, and are to be delivered in like good order and well
conditioned at the aforesaid port of Algiers (the dangers of the
seas only excepted) unto Andrew M. Spring or to his assigns, he or
they paying freight for the said goods as per agreement endorsed
hereon, without primage or average. In witness whereof, the said
master of the said barque hath affirmed to four bills of lading of
this tenor and date, one of which being accomplished, the other
three then to stand void. Dated in Boston, May 26, 1810."
"ANDREW M. SPRING"
"The proceeds of the within cargo, amounting to $35,202.83, as
per invoice, costs and charges, is to be invested in Algiers or
some other port (after deducting all charges, consignee's
commission included, except freight and premium of insurance
within, of which two last mentioned charges are to be made
Page 31 U. S. 162
on the goods) and returned in the said barque
Morning
Star to Boston, when Seth Spring and Sons (owners of said
barque) are to recover one-half of the net profits thereon in lieu
of freight and primage, the voyage round. The consignee's
commissions to be two and a half percent on the sales of the within
cargo, and no commissions to be charged in Boston except what is
paid an auctioneer."
"SETH SPRING & SONS"
"WILLIAM GRAY"
"$35,202 83"
The plaintiffs also produced several letters and papers from
William Gray the master of the
Morning Star, and others,
respecting the outward voyage of the barque, together with the
bills of lading and invoices of her inward cargo, which was
delivered to the defendants. They also produced an account from the
books of Seth Spring and Sons, as follows:
image:b
When the plaintiffs had closed their evidence, the court asked
whether they had any other cause of action than such as arose from
the bill of lading of the outward cargo of the barque
Page 31 U. S. 163
Morning Star and the contract endorsed thereon, and
they answered that they had not.
The counsel for the defendants then moved the court to instruct
the jury that inasmuch as the plaintiffs had admitted that their
whole cause of action arose from said bill of lading and contract
endorsed thereon, the said bill of lading and contract, with the
other papers, documents, and testimony aforesaid were not
sufficient evidence in point of law to maintain the issue joined on
the part of the plaintiffs in respect to their replication of
merchants' accounts.
The plaintiffs' counsel objected to such instructions and prayed
the court to instruct the jury that the evidence introduced was
sufficient to prove and did prove the issue joined on the part of
the plaintiffs.
The court instructed the jury that inasmuch as the plaintiffs
had admitted that their whole cause of action arose from said last
mentioned bill of lading and contract endorsed thereon, the said
bill of lading and contract, with the other papers, documents, and
testimony aforesaid were not sufficient evidence in point of law to
maintain the issue last aforesaid on the part of the plaintiffs. To
this instruction an exception was taken.
A verdict was found for the defendants, and this writ of error
brings up the judgment which was rendered thereon.
The statute of Maine is copied from the 20th of James I, and its
words are
"All actions of account and upon the case other than such
accounts as concern the trade of merchandise between merchant and
merchant, their factors or servants, &c., shall be
commenced,"
&c.
It would seem to be the necessary construction of these words
that the actions on the case to which the exception applies must be
founded on an account. The language of the act conveys the same
meaning as if it had been "all actions of account, and all actions
on the case other than such as are founded on such account as
concerns the trade of merchandise," &c. The foundation of the
action must be an account, not a contract.
From the association of actions on the case, a remedy given by
the law for almost every claim for money, and for the redress of
every breach of contract not under seal, with actions
Page 31 U. S. 164
of account, which lie only in a few special cases; it may
reasonably be conceived that the legislature had in contemplation
to except those actions only for which account would lie. Be this
as it may, the words certainly require that the action should be
founded on an account. The account must be one "which concerns the
trade of merchandise." The case protected by the exception is not
every transaction between merchant and merchant, not every account
which might exist between them, but it must concern the trade of
merchandise. It is not an exemption from the act, attached to the
merchant merely as a personal privilege, but an exemption which is
conferred on the business as well as on the persons between whom
that business is carried on. The account must concern the trade of
merchandise, and this trade must be not an ordinary traffic between
a merchant and any ordinary customers, but between merchant and
merchant. This "trade of merchandise," which can furnish an account
protected by the exception, must be not only between merchant and
merchant, but between the plaintiff and defendant. The account --
the business of merchandise which produces it -- must be between
them.
If these propositions be well founded, and we believe they are,
let us apply them to the case.
The defendants were undoubtedly merchants. The plaintiffs, Seth
Spring and Sons, were also merchants. But they were likewise ship
owners. They were the proprietors of vessels which they hired to
others for freight. A charter party, a contract by which the owner
lets his vessel to another for freight, does not change its
character because the parties happen to be merchants. It is still a
special contract whereby a compensation is stipulated for a service
to be performed, and not an account concerning the trade of
merchandise. It is no more "an account," and no more connected with
"the trade of merchandise," than a bill of exchange or a contract
for the rent of a house, or the hire of a carriage, or any other
single transaction which might take place between individuals who
happened to be merchants. An entry of it on the books of either
could not change its nature, and convert it from an insulated
transaction between individuals into an account concerning the
trade of merchandise, between merchant and merchant. This must
depend on the nature and character of the
Page 31 U. S. 165
transaction not on the book in which either party may choose to
enter a memorandum or statement of it.
Had the freight contracted for been a sum in gross or a sum
dependent on the space occupied by the cargo or on its weight or on
any estimate of its value, it would have been perceived at once to
be a claim founded on contract, and not on account.
Is the nature of the transaction varied by the fact that the
freight to be paid by the charterer, instead of being a specific
sum or a sum to be ascertained by some given rule, is dependent on
the profits of the adventure? That the sales of the outward and
inward cargo and all the expenses attendant on the enterprise must
be examined in order to ascertain the amount of freight? This
process must undoubtedly be gone through in an action on the
contract, but does its necessity convert the action, which ought to
be on the contract, into one founded on an account concerning the
trade of merchandise between merchant and merchant? The account of
the sales of the outward cargo is to be adjusted between the
shipper and his consignee, not between the shipper and the ship
owner in his adventitious character of a merchant. So the sales of
the return cargo must be examined in order to ascertain whether any
and how much profit has been made and whether the ship owner is
entitled to any and how much freight. But this account is not
founded on trade and merchandise between the owner and affreighter
of the vessel. It is founded on the trade of the affreighter alone,
to which reference must be made in order to ascertain the amount of
freight. Mr. Gray could not be considered as the factor of Seth
Spring and Sons, selling their goods. He was selling his own, and
the relation between them was not that of merchant and factor, but
of charterer and charteree of a vessel by special contract.
If we were to decide this case on the words of the statute, we
should not think that the plaintiffs had brought themselves within
the exception. We should not consider the action as founded on
"such an account as concerns the trade of merchandise between
merchant and merchant."
This opinion is not changed by cases which are to be found in
the books.
In
Webber v. Tivil, 2 Saunders 121, the plaintiff's
declaration contained two counts, one in
indebitatus
assumpsit for
Page 31 U. S. 166
money had and received by the defendant for the plaintiff's use
and for goods, wares, and merchandise sold and delivered and the
other on an
insimul computasset. To the plea of the act of
limitations the plaintiff replied that the money in the several
provisions mentioned became due and payable on trade between the
plaintiff and defendant as merchants, and wholly concerned
merchandise. The defendant demurred, and the whole court gave
judgment in his favor.
Morton, Justice, was of opinion, that only actions of account
were within the exception. The report does not contain the reasons
assigned by the other judges otherwise than by stating that they
were the reasons given by Mr. Jones in his argument. These were
that the statute intends to except nothing concerning merchandise
between merchants, but only accounts current between them, whereas
the declaration in the second count was on an account stated and
agreed. He also contended that the first count did not make a case
to be brought within the exception, it being only a bargain for
wares sold and for money lent, and although it concerned
merchandise, and was between merchants, yet that was no reason why
it should be excepted out of the statute, for if it should be
excepted, by the same reason every contract made between merchants
would also be excepted, which was not the intention of the statute,
for in the statute accounts between merchants only are excepted,
and not contracts likewise. He also contended that actions of
account only were within the exception. This point has been since
overruled, though it seems to have been long considered as settled
law.
This case having been decided, as the reporter informs us, for
the reasons assigned by Jones, his argument must be taken as the
opinion of the court. It decides that only accounts, not contracts,
between merchants, even although they may concern the trade of
merchandise, are within the exception, and that the accounts must
be current.
In
Cotes v. Harris at Guildhall, Dennison, Justice,
held that the clause in the statute of limitations about merchants'
accounts extended only to cases where there were mutual accounts,
and reciprocal demands between two persons. This was only the
decision of a single judge, but Mr. Justice Buller seems to have
given it his sanction, also, by introducing it into his work.
Page 31 U. S. 167
Bul.Ni.Pri. 150.
And Lord Kenyon quoted it with approbation in
Cranch v.
Kirkman, Peake's Ni.Pri. 121, adding that he had furnished his
note of the case to Mr. Justice Buller.
The distinction between an account current and an account stated
has been often taken, 1 Ves. 456; 4 Mod. 105; 2 Ves. 400; 1 Mod.
270, and is now admitted.
The English cases certainly do not oppose the opinion we have
formed on the words of the statute.
The American cases, as far as they go, are in favor of it.
In
Mandeville v.
Wilson, 5 Cranch 15, this Court said that the
exception extended to all accounts current which concerned the
trade of merchandise between merchant and merchant. The only
addition made in this part of the opinion to the words used in the
statute is the introduction of the word "current." The statute
saves "accounts current." The opinion proceeds to say that an
account closed by the cessation of dealing between the parties, is
not an account stated, and that it is not necessary that any of the
items should be within five years. This decision maintains the
distinction between accounts current and accounts stated.
In
Ramchandu v. Hammond, 2 Johns. 200, the court
determined that the statute of New York, though slightly varying in
its language from the English statute, was to be construed in the
same manner, and "must be confined to actions on open or current
accounts."
"It must be a direct concern of trade: liquidated demands, or
bills and notes which are only traced up to the trade or
merchandise, are too remote to come within this description."
In the case of
Coster v. Murray, 5 Johns.Ch. 522, a
purchase of goods was made by the agents of the parties at
Copenhagen, and shipped to the defendants, merchants in New York,
on joint account under an agreement made by the agents, that the
goods should be sold by the defendants, free from commission, and
one-third of the proceeds paid to the plaintiffs, who were
insurers. The goods were received and sold by the defendants, who
mingled the money with their own, and refused to pay any part of it
to the plaintiffs, unless on terms to which the plaintiffs would
not accede. To a bill filed by the plaintiffs, the defendants
pleaded the act of limitations. The plaintiffs contended that the
claim was within
Page 31 U. S. 168
the exception of the statute in favor of accounts between
merchants, and also that it related to the execution of a trust,
and was therefore not within the statute.
On the first point, Chancellor Kent said
"To bring a case within the exception of the statute, there must
be mutual accounts and reciprocal demands between two persons."
"In the present case there was no account current between the
parties. There are no mutual and reciprocal demands."
"The defendants took charge of and agreed to be accountable for
some goods or the proceeds thereof, in which the parties had a
joint interest, and as concerns the parties, and as between them,
this hardly seems to be a trade of merchandise between merchant and
merchant."
The chancellor took a very elaborate review of all the English
cases in which this exception had been discussed. Many of them went
off on other points, many were indecisive, and some of them seem to
be opposed to each other, though not on the precise question which
has been argued in this case.
He concluded this review by observing:
"Assuming the case before me to be one that concerned the trade
of merchandise between merchant and merchant, I should rather be
inclined to think the statute was well pleaded and that the case
did not fall within the exception."
A decree was made in favor of the plaintiff on the other point,
from which the defendant appealed to the Court of Errors.
The cause was argued on several points, the first of which was
"whether it came within the exception of the statute concerning the
trade of merchandise between merchant and merchant, their factors
or servants."
Mr. Chief Justice Spencer said the chancellor had examined the
case very elaborately, and had come to the conclusion that the
statute was well pleaded, and that the case does not fall within
the exception. He added,
"Whether the statute is at all applicable to a case of mutual
dealing and mutual credits between merchant and merchant is a
question not now necessary to be decided, because the present is
not a case of that kind. On the part of the respondents, this is no
account at all. This is a case of an account merely on the part of
the appellants; there is no selling or trading. It is a case of a
joint purchase of
Page 31 U. S. 169
goods, where one of the purchasers takes the whole goods, and is
to account for one-third of the proceeds. In such a case, where the
items of an account are all on one side, in my judgment it is not
within the reason or principle of the exception, which must have
intended open and current accounts, where there was mutual dealing
and mutual credits."
Judges Platt and Woodworth concurred. There was some division in
the Court of Errors, but the decree of the chancellor was
affirmed.
This case is stronger than that under consideration, and turns
on principles which decide it.
No doubt is expressed in it on the necessity of accounts being
mutual and being open and current to bring them within the
exception of the statute.
On a commercial question, especially on a question deeply
interesting to merchants, and to merchants only, the settled law of
New York is entitled to great respect elsewhere.
We have found no conflicting decision in any of the states.
The account from the books of the plaintiffs contains one item
not founded on the contract for the freight of the barque
Morning Star, the loss on the sloop
Francis,
insured by said Gray. But this item itself is not within the
exception, and was abandoned by the plaintiffs, who declared that
their whole cause of action arose from the contract. The claim, to
bring the case within the exception, rests entirely on the sale of
the inward cargo. This single transaction has not equal (certainly
not superior) pretensions to being an account current between
merchant and merchant, a case of mutual accounts between them, with
the sale made by the Murrays, in
Carter v. Murray, of
goods purchased on joint account, shipped to the defendants on
joint account, and sold by the defendants on joint account.
We are of opinion that this action is not founded on an account
concerning the trade of merchandise between merchant and merchant,
their factors of servants, and is not within the exception of the
statute of limitations. There is no error in the instructions given
by the circuit court, and the judgment is
Affirmed with costs.
