Warda v. Schmidt

Defendant appeals from a judgment for plaintiff on a book account.

Plaintiff is a plastering contractor. Defendant is a builder. During the years 1946-1949 defendant opened in the City of Millbrae a subdivision known as Meadow Glen. In 1946 defendant built 48 houses. Plaintiff did the outside plastering work on these houses under an oral contract. He was paid $500 per house. In 1947 defendant commenced building a group of 171 houses. He furnished to plaintiff a master tract plan to enable plaintiff to bid on the plastering work for the 171 houses. The master plan indicated that the 171 houses were to be located on almost level ground and that the windows therein were to have wood casings. On May 22, 1947, plaintiff and defendant entered into a written contract whereby plaintiff was to do the plastering work on the 171 houses for which he was to be paid $500 per house for plastering the outsidé and $800 per house for plastering the inside. Defendant had the option to use sheetrock interiors so that inside plastering might not be required for all the houses. The contract was based upon the master plan. Its terms provided for installment payments of the amount due thereunder: 60 per cent was to be paid to plaintiff when the

Defendant deviated from the master plan during the construction of the 171 houses. The elevations were raised on some of the houses thus requiring a larger area to be plastered. In addition, steel rather than wood casings were used for the windows. Steel window casings are plastered in a different manner than wooden ones. The technique of plastering steel casings is known to the plastering trade as bullnosing. It requires more plaster than is used for a wood window easing.

Plaintiff complained to defendant about the extra plastering necessitated by the changes in the master plan. The parties entered into an oral agreement whereby defendant agreed to compensate plaintiff for the extra plaster work. .No amount was set by the parties. Subsequently, plaintiff billed defendant for the additional plastering at the. rate of $2.25 a square yard for exterior plastering and $1.50 a square yard for' interior plastering. ' .”

Defendant planned to build an additional 110 houses in Meadow Glen. In the latter part of 1947 he entered into an •oral contract with plaintiff whereby he agreed to pay plaintiff the flat rate of $2.50 a square .yard for the plaster work on these houses.

A notice of completion of the 171 houses was recorded on December 22, 1948. One for the 110 houses was recorded on February 25, 1949. Plaintiff commenced this action on January 2, 1953. The complaint filed on that day was in two counts: an account stated and a book aeeount. Plaintiff sought ■to recover $38,658.60 which was alleged to be the balance owed to him by defendant as a result of the aforementioned events. The trial court, sitting without a jury, found and concluded that plaintiff did not prove an account stated; that he had established a book account, and that the amount which defendant was indebted to plaintiff under the' book account was $23,592.64, for which plaintiff was entitled to a judgment. A judgment was accordingly entered. . '

' Defendant pleaded as an affirmative defense the bar ", of the two-year statute of Code of Civil Procedure, ’ section 339, subdivision 1 (liability not founded upon an instrument of writing). It is his position that plaintiff received money -in excess of that provided for in the written contract of May 22, 1947; that' said contract was so discharged' or that it was

A book account is created by the agreement or conduct of the- parties thereto. (Mercantile Trust Co. v. Doe, 26 Cal.App. 246 [ 146 P. 692 ]; Gardner v. Rutherford, 57 Cal.App.2d 874 , 885-886 [ 136 P.2d 48 ]; Parker v. Shell Oil Co., 29 Cal.2d 503 , 507 [ 175 P.2d 838 ].) The mere recording in a book of transactions or the incidental keeping of accounts under an express contract does not of itself create a book account. (Stewart v. Claudius, 19 Cal.App.2d 349 , 352 [ 65 P.2d 933 ] ; see also Tillson v. Peters, 41 Cal.App.2d 671 , 676-677 [ 107 P.2d 434 ]; Lee v. DeForest, 22 Cal.App.2d 351 , 360-361 [ 71 P.2d 285 ].) Such memoranda cannot be utilized under the guise of a book account as a device to extend the statute of limitations beyond the time it would run on the contractual obligation. (See eases collected in Parker v. Shell Oil Co., 55 Cal.App.2d 48 at page 55 [ 130 P.2d 158 ].) However, the parties to a written or oral contract may, by agreement or conduct, provide that monies due under such contract shall be the subject of an account between them. (Mercantile Trust Co. v. Doe, supra, 26 Cal.App. 246 ; Gardner v. Rutherford, supra, 57 Cal.App.2d 874 , 886; Parker v. Shell Oil Co., supra, 29 Cal.2d 503 , 507.) In that event a cause of action arising therefrom is on the account and not on the underlying contract. (Parker v. Shell Oil Co., supra, 29 Cal.2d 503 , 507.) Such is the situation in this case.

George Bryant, who was plaintiff’s foreman and bookkeeper at the time of the events here involved, testified that the installment-payment provisions of the May 22, 1947, contract were never followed and that all payments made by defendant to plaintiff were on account. Plaintiff testified likewise. Linea Miller, who was defendant’s bookkeeper at the

If there is an account relation between the parties the requirements as to the character of the book or books and the manner in which the account must have been kept to be acceptable as a book account under section 337, subdivision 2, supra, are not very stringent. ‘‘ The law does not prescribe any standard of bookkeeping practice which all must follow, regardless of the nature of the business of which the record is kept. We think it makes no difference whether the account is kept in one book or several so long as they are permanent records, and constitute a system of bookkeeping as distinguished from mere private memoranda.” (Egan v. Bishop, 8 Cal.App.2d 119 , 122 [ 47 P.2d 500 ].) The book must show against whom and in whose favor the charges are made. (Wright v. Loaiza, 177 Cal. 605 , 607 [ 171 P. 311 ].) It must have been kept in the ordinary course of business. (Epley v. Cunningham, 134 Cal.App.2d 769 , 770 [ 286 P.2d 380 ].) It must state the debits and credits of the transactions involved completely enough so that the amount due to the claimant can be reasonably determined from it. (Robin v. Smith, 132 Cal.App.2d 288 , 291 [ 282 P.2d 135 ].) Although normally entries in an account book must be made at or near the time of the transactions to which they relate and there should be no long delay without satisfactory explanation (Landis v. Turner, 14 Cal. 573 , 575), an irregularity in that respect is not necessarily fatal to an action on a book account. (See Schneider v. Oakman, Consol. Min. Co., 38 Cal.App. 338 , 341 [ 176 P. 177 ], in which an entry was accepted as properly included in the account although it was due on December 3, 1912, but entered upon the books as late as August, 1914.

The evidence in this case clearly establishes that plaintiff had in his office a loose leaf ledger book of a permanent nature known as a Dibold ledger. Three pages from the ledger were received in evidence. The pages are dated 1948,

Bryant, by way of foundation, testified that he made notes of the plastering work actually done in a memorandum or work book. These figures were reduced to itemized sheets showing the work done and computing the monetary value thereof. These sheets were attached to a bill submitted by plaintiff tó defendant on January 14, 1949. Bryant testified that the bill was not earlier submitted because plaintiff had been receiving payments on account and it was only when the job was nearing completion that the bill was prepared. Plaintiff testified that this bill along with others rendered were kept in a “regular book.” Plaintiff at the trial did not contend that book of bills was one of several books constituting the book account. (See Gardner v. Rutherford, supra, 57 Cal.App.2d 874 ; Egan v. Bishop, supra, 8 Cal.App.2d 119 .) The bill from plaintiff to defendant was admitted in evidence for the limited purpose of explaining entries in the ledger sheets upon which plaintiff relied to establish the book account. It is so treated on this appeal. Defendant’s expert witness Davey testified that plaintiff’s method of keeping accounts was not unusual for contractors, that they enter the cash received, make up a bill and detailed invoices from measurements taken and then make an actual debit charge for the balance when the job is done. A simple mathematical calculation demonstrates that the debit balance posted on January 14, 1949, is the difference between the bill submitted to defendant and the credits previously posted.

Under the above law and facts we cannot say that the entry of the balance at the time of the submission of the bill and specifications necessarily prevented the account kept in the Dibold ledger from being a book account subject to the four-year statute. The debit items in the Dibold ledger were, of course, in terms of money. When the parties started to

Appellant’s grievance that the amount of the judgment does not correspond with the balance according to. the account but is some $15,000 less is wholly without merit. Evidently, the fact that the plaintiff cannot prove the total amount due according to the book account does not prevent all recovery, but judgment will be given for the lesser amount proved. (Moore v. Teel, 6 Cal.App.2d 696 , 698 [ 45 P.2d 412 ]; 1 C.J.S. p. 622.) In this case the trial court disallowed one major item and reduced others. Its decision is supported by substantial evidence and must be affirmed.

Judgment affirmed.

Dooling, Acting P. J., concurred.

A petition for a rehearing was denied December 26, 1956, and appellant’s petition for a hearing by the Supreme Court was denied January 23, 1957.