
    Peck, Plaintiff and Respondent, v. The New York and Liverpool United States Mail Steamship Company, Defendant and Appellant.
    1. A cause of action for extra work and materials alleged to have been done and furnished in enlarging the Capacity of and completing a vessel, originally contracted to be built for an agreed sum, where no time of payment for such extra work is stipulated, accrues when such extra work has been completed.
    2. The presentation of a bill, containing items of alleged extra work, within six years before suit brought, and the payment of such bill, with the exception of one item, the accuracy of which and liability for which is promptly denied, will not prevent the statute barring all right' of action for such item at the end of six years from the time when the alleged service was fully performed.
    3. The items of debit for the contract price of the vessel, and for extra work alleged to have been done, and of credits for payments made, do not make a case of “ reciprocal demands,” within the meaning of section 95 of the Code.
    4. To make payments on account of extra work done save all items of work actually done from the operation of the statute, such payments must have been made generally on account, so that they may be properly applied, as well on account of the work which is the subject of the action as of that the liability for which does not subsequently become a matter of dispute. But payments made on account, accompanied with a denial of any liability and refusal to pay for a particular item, do not operate to prevent the running of the statute as to that item.
    (Before Hoffman, Woodruff and Pierrepont, J. J.)
    Heard, May 10;
    decided, July 28th, 1859.
    This is an appeal by tbe New York and Liverpool United States-Mail Steamship Company, the defendant, from a judgment against it in favor of Zachary Peck, the plaintiff, for $14,237.17, entered March 4, 1858, on the report of Hon. William Kent, as Referee..
    The action was commenced on the 2d of February, 1856, by the plaintiff as general assignee of William H. Brown, (under an assignment alleged to have been made and to be dated October 24, 1855,) to- recover $25,639.75 for extra work and materials alleged to-have been done and furnished by Brown in completing the steamer Atlante, “ from on or about the 1st of May, 1848, to on or about the 8th of March, 1850and also the further sum. of $10,166.69 for extra work and materials done and furnished in completing the steamer Arctic, from about the 8th of May, 1850, to on or about the 8th of March, 1851. The answer puts at issue all the allegations of the complaint, pleads payment in full for all extra work done, and the statute of limitations “ to so much of the plaintiff’s demand as relates to the said steamer Atlantic.”
    When the testimony was concluded, the plaintiff admitted that it was “ proved that all the items specified in the bill of particulars of the plaintiff’s demand had been paid prior to the commencement of this action, except that specified in the said bill of particulars, as extra tonnage of ship (Atlantic) more than contract, $9,473.68.” The plaintiff'claimed to- recover this sum, with interest from the 1st of April, 1851.
    The Referee, by a report dated February 22, 1858, reported in favor of the plaintiff,, allowing said item and interest thereon to the amount in the aggregate of $14,050.63, and therein stated his conclusions of fact and of law as follows, viz.:
    “ 1st. That the work for which the said charge for enlargement of the said ship Atlantic was made, was fully proved to have been performed, and that such charge was made according to the usual mode of calculating for such work, and there was no contradictory evidence upon this point.
    “ 2d. That the said William H. Brown built the steamships Atlantic and Arctic for what is usually called the ‘ Collins’ line; that the act of incorporation of ‘The New York and Liverpool United States Mail Steamship Company’ was passed April 11th, 1849. That the building of the said ship Atlantic was commenced sometime in the year 1848, and of the Arctic soon after-wards, but both the said ships passed into the possession of the said Company on the formation thereof, and were built under the sole direction of E. K. Collins, who has continued the.agent of the said Company up to the present time.
    “ 3d. That large amounts became due to the said William H. Brown for extra work on the said ships, and that in March, 1851, bills or accounts for the said extra work, including the item in question, were rendered by the said Brown to the said defendant, or to its agent, E. K. Collins; that on the rendering of the said accounts as aforesaid, the Secretary of the said Company, in the office of the said agent, undertook to adjust the same with the said Brown ; that the whole of the said bills were allowed, with the exception of the item in question, which was disputed, and one other item for the Atlantic which appeared to be included in the contract.
    “ 4th. That there was a large running account between the said William H. Brown and the said E. K. Collins, (as agent of the said Company,) coming down to March, 1851, and the receipts given by the said Brown to the said Company for the said extra work, (and which were produced by the defendant,) stated that it was ‘on account of extra work,’ but there was no receipt in full, and it was admitted on the part of the defendant'that the item in question had not been paid for; and it was admitted on the part of the plaintiff that all the other extra work had been paid for; and I think it right to infer, and I do conclude, that the item in question was, at the adjustment aforesaid, reserved for further consideration, and being now proved and admitted not to have been paid, must be allowed, unless there are other grounds for rejecting it.
    “5th. It was urged on the part of the defendant that they were not liable, because this particular item of work must have been done before the said Company was organized. But I think it evident, and so conclude, that the Company, so soon as it was organized under the act of incorporation, recognized the previous acts of their agent, Mr. Collins, and assumed the debts and liabilities he had incurred in respect to these ships; and this view of the case is confirmed by the fact that the Company paid all the other items in the said bills for work done as well before as after this particular item.
    “-6th. Tt was also urged that this claim was barred -by the statute of limitations. I do not think this defense can prevail, as I find as a fact that the item in -question was part-of a long running mutual account between the said Brown and the said Com.pany, (by their agent, Mr. Collins,) reaching into March, 1851, whereas the suit was-commenced on the 2d of February, 1856, less than five years.
    “It appeared, moreover, from the evidence of Mr. Youle, (a witness for the defendant,) and I so find, that the -bills were rendered in March -or April, '1851, and that he and Brown then went into an adjustment, from which it would be fair to infer, and I so conclude, that that was the proper time for the presentation of the bills; but without this consideration, I think, for the reasons above stated, the statute of limitations cannot apply.
    “All which is respectfully submitted.”
    The defendant duly excepted to the several conclusions of the Referee. The references in the points and in the opinion of the Court, to the evidence, present so much of it as it is important should be stated, in order to understand the principle decided.
    The present appeal is from the judgment entered on the report of the Referee.
    
      J. N. Whiting, for defendant, (appellant.)
    . The claim for enlarging the Atlantic, viz., $9,473.68, is barred by the statute of limitations.
    Cause of action accrued when the hull was made one foot deeper and six or seven feet longer. By plaintiff’s showing, this work formed part of the contract, and is estimated in the same way. The contract establishes when and how the indebtedness accrued.
    The frame was erected by 22d May, 1848. All the deck plank laid 18th September, 1848. 2d February, 1849, ship was launched. The hull was then completed. The keel of the Arctic had been laid and paid for as early as the 2d May, 1849:
    The ship was then at the wharf of the Novelty Iron Works, receiving her engines. There has been no act by the New York and Liverpool United States Mail Steamship Company to prevent the statute from attaching.
    1. No promise in writing.
    2. No payment on account of this item, but the reverse.
    3. This item was disputed by Collins.
    4. No evidence of its having been acknowledged or adopted by Mr. Collins.
    5. No mutual account. No account whatever between the plaintiff and the defendant.
    Nor between William H. Brown and the defendant.
    To constitute a mutual account, there must be reciprocal demands. (Code, § 95; 1 Sandf. S. C. R., 220; 4 id., 312; 4 Kern., 225.)
    
      There was not even an open, running mutual account between Brown and E. K. Collins, embracing the items in question.
    The account current contained no such item: it simply relates to pecuniary dealings generally between the parties.
    The bills rendered by Brown, (of which copies are in evidence,) contain no running or mutual accounts.
    The books of account in evidence on the part of plaintiff contain items on one side only—not mutual accounts.
    The allegation of the complaint is, that the defendant became a debtor for extra work, &c., on the Atlantic, from the 1st day of May, 1848, to the 8th of March, 1850. The precise time at which the indebtedness accrued is not fixed. By the evidence, it appears that the launch of the Atlantic was in the year 1849. And the extra work was among the earliest work done upon her.
    By the complaint itself, therefore, as explained by the proof, it appears that the cause of action as to the Atlantic accrued more than six years before this suit was commenced.
    The accounts were not between the defendant and Brown, but between Collins and Brown, and contained entries of notes and credit lent, with which the defendant had nothing to do.
    The action is not “ brought to recover a balance of a mutual, open and current account, where there have been reciprocal demands between the parties.” Under the facts of this case, the claim or- theory of a “balance of accounts” is an afterthought, and is wholly unsustained.
    
      Gerardus ■ Clark, for plaintiff, (respondent.)
    The claim or demand for which the judgment in this action was recovered was part of a large account of William H. Brown, the assignor of the plaintiff, against the defendant, for extra work on the steamship Atlantic, of which he was the builder.
    The ship was built by contract; and it appeared on the trial that all the account was paid by the defendants in March or April, 1851, except the item for the enlargement of the vessel. That item was disputed at the time, and left unsettled.
    I. The enlargement of the ship Atlantic, by order of E. K. Collins, the agent of the Company, was fully proved by the witness (Jennings,) and that Collins promised that it should be paid for.
    
      That Collins had the entire control, as agent of the Company, to build the ship as he pleased, is proved by Youle, the Secretary of the Company, who was their witness on the trial.
    The fact of the enlargement was also proved by the-register
    of the ship, showing that she was....feet deeper and____feet
    longer than the contract called for. The mode of calculating the price or cost of such enlargement is also proved by the witness Jennings.
    II. Although the evidence of the witness Jennings as to the directions given by Collins as to the enlargement, and as to his promise to pay for it, refers to the deepening of the vessel only, yet he proves that she was increased in length also; and it must be presumed that such increase was by direction of Collins, as the ship was built under his supervision, and he, moreover, had a superintendent constantly there. Probably the increase of depth rendered necessary the increase of length.
    III. The objection urged by the defendants, that they are not liable because they were not organized under the act of incorporation at the time the work was done, cannot be sustained:
    1. It nowhere appears that the particular work in controversy was done prior to the incorporation. The account rendered for this and other work is dated March, 1851.
    2. All the evidence shows that the several individuals whose names are subscribed to the contract, with others perhaps, had projected a Steamship Company, (usually called the Collins line,) as early as the year 1847, and had probably applied for an act of incorporation in 1848: they were actually incorporated early in 1849. The ship was commenced in 1848, and was probably finished in 1850 or 1851; and, on being finished, passed into the possession of the defendants.
    3. Collins acted as their agent from the time the Company was projected until its final explosion; -and the defendants adopted his acts, recognized their liability therefor, received the ships, assumed the contracts for building the same, and paid the bills which he had contracted on account thereof—even the bills for work done before the date of the item in controversy.
    4. Youle, the witness for the defendants, and their Secretary during the whole period of their operations, states that these bills for extra work were presented in 1850 or 1851, and that they
    
      were settled in April, 1851, (except the item in controversy;) thereby showing that the Company (which had been incorporated in 1849) recognized their liability for the work done on this ship. They ratified the acts of their agent, Collins. Ratifications may be presumed from the acts or omissions of the principal, (Delafield v. State of Illinois, 26 Wend., 192;) and ratification relates back to the time of the original transaction, (Lawrence v. Taylor, 5 Hill, 107;) and a subsequent ratification is equivalent to an original authority, (id., 137;) and a ratification of a part of the transaction is an affirmation of the whole, (id.)
    IV. The only other ground of defense urged on the trial was the statute of limitations; which, for the reasons stated by the Referee in his report, cannot prevail in this case.
    1. If there was no' other reason for the statute not applying in this case, the defendant’s own account produced on the trial is sufficient to deprive them of this ground of defense—showing that there were mutual accounts between the parties to a large amount, and extending to June, 1851. The suit was commenced in 1856. (Tucker v. Ives, 6 Cow., 193; Kimball v. Brown, 7 Wend., 322; Chamberlin v. Cuyler, 9 id., 126; Sickles v. Mather, 20 id., 72; Catling v. Shoulding, 6 T. R., 189.)
    The bills (including the item in question) were rendered in March or April, 1851. It is to be presumed that they were rendered as soon as the party had a right to render them, or as soon as the period of credit expired; and, until then, no suit could be commenced; and this is the true test as to the time when the statute begins to run. (2 Parsons on Con., 370, last ed.) The exceptions taken by the defendants to the rulings of the Referee and to his report are not tenable, and the judgment entered upon the report should be affirmed.
   By the Court—Hoffman, J.

The first and important question raised for consideration is the application of the statute of limitations, which is set up in the answer as a bar to the action.

By the 2d of May, 1849, the work for which the present claim is made was fully performed. The demand consists of one separate, independent item, made up on the elements of the contract price, the contract depth and length, and the increase of the lat-. ter by a new agreement.

The action to recover this amount was commenced on the 2d of February, 1856.

When this account or item was entered on the books of the plaintiff’s assignor does nbt appear. It is not shown, and it is not probable, that the details of the item in question were entered as the work was done. Probably one general charge for the whole amount was made at one time. This account of Wm. H. Brown was simply of his charges for work done and materials supplied, without any credit or item for moneys or notes paid in liquidation, from time to time.

The account kept by Collins embraces an account of moneys and notes lent by him to Brown for his accommodation from 1848 to 1851, and of Brown’s repayment of such advances in money or notes. In this account are also contained the successive payments made by Collins on the contract price of the vessels, and a credit to Brown of such contract price, and also for the value of the extra work and supplies, which Collins allowed, he refusing to admit the item in question. The final entries, adjusting this account and closing it, are made on the 3d of June, 1851, a small credit being given; the sum of $5,000 received from Brown in cash, and a balance to charges, closing the account, of $163.89.

The analysis of this account shows, that a balance was arrived at in May, or as of May 21, 1851, of $5,436.96 against Brown, and that it was liquidated on the 3d of June, 1851, in the manner above stated.

I do not find that Collins had authority even from the Trustees, parties to the contracts, to make the loans and advances he did make, so that, had Brown failed in repayment, the loss would have fallen on them. Still less do I find anything to warrant this part of the account to be stated as with the defendants. I do find that the defendants have recognized a liability for the contract price. Two of the payments on account of the Arctic are expressed to have been received from the defendants, viz., May 2d and May 29th, 1850; and the sums for extras, which Collins allowed to Brown, have been allowed to the former in his account with the defendants, and nothing more.

So it appears to me, we are authorized to break up this account into two parts, the one properly against the defendants acting through Collins as their agent; the other personal with Collins being exclusively between him and Brown.

And thus we find that, upon an account of the defendants with Brown for contract price, for extras admitted, for payments on account of both, and premiums paid for him which he was bound to pay, Brown was found indebted in May, 1851, in the sum of $2,646.87, and so much of the cash payment of $5,000 on the 3d of June as was necessary discharged this balance. The residue and the small credit paid Collins individually, the balance owing to him.

When, in March, 1851, Collins examined and adjusted, as stated, the bills for extras, he rejected the demand in question, and Brown, in June, 1851, pays him $5,000, which, in point of fact, discharged a balance of all transactions between them, as Collins claimed.

When did the statute of limitations begin to run ? Was it from the date of the rendering of the accounts and allowance by Collins of the principal part and rejection of this item, or from the time when, by the full performance of the work, a cause of action, did in itself, undoubtedly arise, viz., on or before the 2d of May, 1849 ?

The causé of action arises when and as soon as the party has a right to apply to the proper tribunals for relief. (Angell on Limitations, 41, and cases; The East India Co. v. Oditcburn Paul, 7 Moor Privy Council Cases, 85, 14 Jur., 253; Battley v. Faulkner, 8 Barn. & Ald., 288.)

. Ill this case, .Collins having directed the. specific extra work for which the action is brought, and nothing being agreed upon as to price or time of payments, there was a right to demand payment vested in Brown when the work was performed, and an implied undertaking in Collins to pay the value.

The Code (§ 73) has repealed the Revised Statutes as to the limitation of actions, and prescribed the rules which must govern the present case. In strictness it is the Code as in force in April 1849, by the amendments of that date. The provisions which bear upon the question are however identical.

By sections 76 and 91, an action upon a contract, obligation or liability, express -or implied, must be commenced within six years after the cause of action shall have accrued.

By section 95, in an action brought tt> recover the balance due upon a mutual, open and current account, where there have been reciprocal demands between the parties, the cause of action shall be deemed to have accrued from the time of the last item proved in the account on either side.

And by section 110, no acknowledgment or promise shall be sufficient evidence of a new or continuing contract, whereby to take the case out of the operation of this title, unless the same be contained in some writing signed by the party, to be charged thereby; but this section shall not alter the effect of any payment of principal or interest.

It may first be noticed that this last section is nearly a transcript of the enacting clause of the 1st section of the statute, (19 Geo. IV, ch. 14,) commonly called Lord Tentebden’s act. There is no such clause in any English act as that contained in the 95th section of the Code; and the result of the English enactment is, that although there is a running open account, items in it beyond six years are not saved out of the statute by items within six years. This was expressly decided by the Court of Queen’s Bench, in Cottam v. Partridge, (4 Man. & Grang., 271,) and it was held that the leading case of Catling v. Shoulding, (6 Durnf. & East, 189,) 'was no longer law since this statute.

Payment of principal or interest on a specific demand, is still retained by the statute as sufficient to keep it in force.

As the 110th section of the Code is identical with the English act; as there is no written acknowledgment of the demand in suit; as there is no part payment of principal or interest of this particular demand, it would appear as a necessary result that nothing can prevent the operation of the statute, unless the case is within the 95th section of the Code. It cannot, I think, be questioned that a perfect cause of action existed on the 2d of May, 1849.

The provision of the Revised Statutes of 1830, (2 R. S., 296, § 23,) was, “ that in all actions of assumpsit, debt or account, brought to recover any balance due upon an open, mutual and current account, the cause of action shall be deemed to have accrued from the time of the last item proved in such account.”

We notice that the section of the Code has introduced the additional words, “ where there have been reciprocal demands between the parties.” This is nearly the language of Denison, J., in Cotes v. Harris. (Bull. N. P,, 149.) “ There must be mutual accounts and reciprocal demands.” This case has always been treated as law.

Similar language is used in Coster v. Murray, (5 Johns. Ch. R., 522,) Spring v. Gray, (6 Pet. U. S. R., 151,) and Kimball v. Brown. (7 Wend., 322.)

What, then, constitutes mutuality of accounts and reciprocity of demands? It is not a series of items on one side of the account only. “ It never was supposed that items on one side of an account only would draw down former items.” (Ch. J. Tindal, Cottam v. Partridge, ut supra; see also Palmer v. The City of New York, 2 Sandf. S. C. R., 318; Hallock v. Lozee, 1 id., 220; Coster v. Murray, 20 Johns. R., 602; Kimball v. Brown, 7 Wend., 322.)

It may, I think, be much doubted whether, under the Code; where the account consists of items of charge to one party, and nothing but credits of payments by the debtor within six years, the account is such a one as will save items beyond six years from the statute, even if the weight of authority before the Code was in favor of the position that an indefinite payment avoided the statute, so as to keep all previous items in force as of the day of such payment, a point much controverted; the introduction of the words, reciprocal demands, appears to me intended to settle this question. (Hay v. Cramer, 2 Watts & Serg., 137; Gold v. Whitcomb, 14 Pick., 188; Lowber v. Smith, 7 Barr, 381; Penniman v. Rotch, 3 Metc., 216; Abbott v. Keith, 11 Vt., 525; Hodges v. Manley, 25 id., 210; Blair v. Brew, 6 N. H. R., 235.)

I apprehend that to meet the requisition of the Code in this particular, we must have such facts as occurred in Cutling v. Shoulding, (6 T. R., 189,) Chamberlain v. Cuyler, (9 Wend., 128,) and Chambers v. Marks. (25 Penn. R., 296.) There must be cross demands, matters of set-off, or counterclaim under our Code; something upon which the other party could sustain an action.

So in Green v. Ames, (4 Kern., 225,) the facts, as between Grant and the defendant, presented a similar case. There were mutual dealings. The causes of action or transactions were distinct. Each had an independent right of action. Most of the items on each, side were within six years, and it was conceded that the statute would not bar a recovery of the balance.

And so in Catling v. Shoulding (ut supra) the plaintiff had an account for nine years’ rent, of which only the last half year was within six years, and the defendant had an account as liquor dealers, some of the last items being within six years. (Dickinson v. Williams, 11 Cush., 258.)

Even under the Revised Statutes the case of Edmondstone, v. Thomson, (15 Wend., 554,) is a strong authority to support these views.

Viewed in this aspect the account between the defendants and Brown, treating Collins as their agent for the items in question, was nothing, but his debits for building the vessels, and for doing the extra work and supplying the extra materials, and their payments on account of this demand. There was nothing on which the defendants could sustain an independent action against him.

But again, even if this view is not sufficient there is another, in my mind, of decisive importance. The principle on which the effect of an indefinite payment on a general open account depends, is acknowledgment. A specific payment directly appropriated to a specific item in such an account, leaves the statute to its operation as to the rest. But when the debtor knows that there exists against him a general account of items, and designedly pays or furnishes something to lessen the demand on such general account without discrimination, and at that time does not deny his liability for the other previous items, the law reaches an implication of his acknowledgment of the whole account.

But how can such an argument have the least force, when the debtor making a payment, at the very time, denies entirely his responsibility for a particular item claimed, disputes its legality, and thus warns his alleged creditor to sue for it?

Without any written signed admission, and with an explicit rejection of the item claimed, it seems to me that Brown was bound to sue, within the period prescribed by law after the cause of action did in fact accrue.

My conclusion is that the statute was a bar, and that the Referee erred.

Iii placing our decision upon this ground, we must not be understood as considering other points taken by the defendants’ counsel as without force. On the contrary, those which relate to the difference between the grounds of liability of the Company, and Collins and his associates, are entitled to great consideration. ■

There must be a new trial, with costs to abide the event.

Ordered accordingly.  