James Brady v. John B. Durbrow, 2 E.D. Smith 78

Daly, J. This was not a case of mutual accounts. The plaintiff claimed $249, a balance due upon the purchase of a house, and $225, a claim which a third person had against the defendant for building a tea room, and which claim he had assigned to the plaintiff. The house being unfinished at the time of its purchase, the plaintiff agreed that $500 of the purchase money should remain in the defendant’s hands, and if the plaintiff did not complete the house by a certain day, that the defendant might get the work done by others, and pay for it out of the $500.

The house was not completed by the time specified, and the defendant finished it, applying $487 67 of the money in his hands for that purpose. This was equivalent to payment of so much of the five hundred dollars, and reduced the plaintiff’s claim against him, upon this- transaction, to $12 33. The case of mutual accounts, intended by the statute, is, where each party has a claim against the other upon which either party might sue. (Ex parte Mills v.

New York Common Pleas, 10 Wend. n. 557, Cowen’s Treatise, 747.) If a payment has been made upon the claim of either, it is so far extinguished, and nothing remains outstanding and unliquidated but the balance. The defendant had no claim against the plaintiff, but the plaintiff having a claim against him for the balance of the purchase money, that claim was reduced to $12 33, by the defendant’s applying the money in his hands in the manner agreed up.on.

The money was paid to finish the building, according to the plaintiff’s agreement, and as respects the defendant, it was as much a payment of a part of the five hundred dollars as if the plaintiff had finished the building himself, and the defendant had paid the money directly to him. He left the defendant at liberty to apply the balance of the purchase money in that way, and the moment the defendant so applied any part of it, the plaintiff’s claim to it was so far extinguished.

The $487 67 having been appropriated to the finishing of the building, it was as substantially a payment of it, on the part of the defendant, as if there had been no such agreement, and the defendant had paid it, by the plaintiff’s request, to another person. It does not present the ■case of money laid out and expended by the defendant to the plaintiff’s use, which he may recover back again or set off against any claim which the plaintiff might have against him.

But it is the case of party who becomes liable to pay money to another upon a certain contingency, but who extinguishes his liability by paying or appropriating the money in a manner provided for and assented to by the other party. By paying or appropriating the money in such a case, he does not create a claim ■ for the amount paid against the other party, but simply extinguishes a liability against himself. This transaction, therefore, presents merely a claim, by the plaintiff, against the defendant, for $12 33, and not a case of mutual claims or accounts within the statute.

In the case of mutual accounts—that is, where each party has a claim against the other—a justice cannot, if the claims on both sides amount to a greater sum than four hundred dollars, proceed to adjust them, and render judgment for the balance. In such a case, the plaintiff must submit to a judgment of discontinuance, and bring his action in a court of record, setting forth, it is to be presumed, if his claim be less than fifty dollars, that he claimed a balance on mutual account, exceeding, together, in amount, four hundred dollars.

In respect to the claim of $225, assigned to the plaintiff, the same remarks will apply; $50 was paid, respecting which there' is no dispute. This reduced the claim of the tea room to $200. A horse and wagon were taken, which the assignor of the claimant agreed might be sold, and the proceeds applied in payment of the $200. They were sold and brought $132, thus reducing the claim to $68. Without going any further, it is sufficient to say, that this claim, as reduced by the payments to $68, might have been sued for, together with the $12 33, in a Justice’s Court.

The referee erred, perhaps, in charging the overplus paid to the builder of the tea room to the plaintiff, and deducting it from the $12 33; but with that we have nothing to do on this motion. The defendant having recovered a judgment for costs, was entitled, the case being difficult and extraordinary, to an extra allowance. The Code makes no distinction between a judgment recovered against the plaintiff upon the merits of the matter in controversy, and a judgment recovered against him for costs. See Ward v. Ingraham, 1 E. D. Smith’s C. P. R. 538.