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injustice and injury which would result to merchants having trade with each other, or dealing with factors, and living at a distance, if the act of limitations were to run, where their accounts were open and unsettled; where, therefore, the balance was unascertained, and where, too, the state of the accounts might be constantly fluctuating by continual dealing between the parties.

§ 159. Though merchants' accounts are not barred by the statute, yet after the lapse of twenty years, it is evident that they, like specialties, may be presumed to have been settled. And it is manifest, that where any account, with the exception of one item on the debit side, and one on the credit side, has existed more than twenty years before action brought, the item on the debit side cannot be considered as reviving and "drawing down" the account, especially if it be a small item, not apparently of a mercantile character; and more especially if the defendant has ceased to be concerned in trade.1

§ 160. Allowing that an account is such an one as concerns the trade of merchandise, between merchant and merchant, yet it must be current, and mutual or reciprocal, agreeably to the rule to be deduced from the authorities cited in the preceding chapter; and so what was advanced in that chapter in respect to the running of the statute against the balance when stated and acknowledged, will equally apply to accounts between merchants.2 The doctrine, as laid down by Mr. J. Dennison, in Cotes v. Harris,3 that the clause in the statute of limitations about merchants' accounts, extended only to cases where there were mutual accounts and reciprocal demands, will be found to lie at the foundation of all the cases.4

§ 161. As to the question, what are merchants' accounts, and what

1 Hancock v. Cook, 18 Pick. (Mass.), R. 30.

2 [Brown v. Cullen, 7 Barr (Penn.), 281; Thompson v. Fisher, 13 Penn. St. (1 Harris), 310; Breckenridge v. Baltzell, 1 Smith (Ind.), 217.]

8 Cotes v. Harris, Bull. N. P. 149.

4 Accounts between two parties do not form merchants' accounts within the exceptions, if they be not mutual as well as current, unless there be an implied agreement, that one shall be set off against the other; unless in fact, an action of account, or case for not accounting, will lie; therefore, mere cross demands between strangers are not within the exception. Browne on Actions at Law, 65, and Cottam and another v. Partridge, C. P. 4 Man. & Grang. R. 290 (Easter, 1842). And see Moore v. Strong, 1 Bing. N. C. 441.

accounts concern merchandise within the meaning of the statute, it was one upon which the decision entirely depended, in the case of Spring v. Executors of Gray, in the Supreme Court of the United States. It arose under the statute of limitations of Maine, as copied from the statute of James, 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." The case was removed from the Circuit Court of the United States, for the district of Maine,2 in which the plaintiffs had replied to the defendants' plea of non-assumpsit, that the accounts and promises mentioned in the declaration arose from such accounts as concern the trade of merchandise between merchant and merchant, their factors and servants; and issue was joined on the replication. The facts were: The master of a ship, who, with 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 indorsed." The agreement indorsed, 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, and the plaintiffs replied as above mentioned. The plaintiffs admitted that they had no other cause of action than such as arose from the bill of lading, and the contract indorsed thereon. It was 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. Marshall, Ch. J., who gave

1 6 Peters (U. S.), R. 151.
25 Mason's (Cir. Co.), R. 505.

the opinion of the court, said, that the plaintiffs and defendants were undoubtedly both merchants, but the former were likewise shipowners. 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, he said, does not change its character, because the parties happen to be merchants. It is 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 66 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 transaction, not on the book in which either party may choose to enter a memorandum or statement of it. If the court, the learned judge remarked, were to decide the case on the words of the statute, they should not think that the plaintiffs had brought themselves within the exception. They should not consider the action as founded on such an account as concerns the trade of merchandise between merchant and merchant." 1

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§ 162. Demands for money growing out of the trade of merchandise between merchants, may form a part of their mutual dealings; 2 but the exception cannot be applied to transactions between banking institutions, for they are embraced neither by the letter nor the spirit of the saving. Moreover, the interest of such institutions, as well as of the public, requires that liquidation of balances between banks, should be regular and frequent.3

1 [So an account between two joint owners of a vessel was held not to be an account between merchant and merchant, or relating to the trade of merchandise, within the meaning of the statute. Smith v. Dawson, 10 B. Mon. (Ken.), 112. Nor is an account between partners. Manchester v. Matthewson, 3 R. I. 87; Leavitt v. Gooch, 12 Texas, 95. Nor is a single transaction between two merchants within the exception. Marseilles v. Kenton, 17 Penn. St. 238. Nor is an account with several debits for goods, and one credit of cash, such an account. McCulloch v. Judd, 20 Ala. 703.]

2 Bass v. Bass, 8 Pick. (Mass.), R. 187; M'Clellan v. Croften, 6 Greenl. (Me.), R. 308.

8 Farmers and Mechanics Bank v. Planters Bank, 10 Gill & Johns. (Md.), R. 442.

§ 163. In Foster v. Hodgdon1 (where it appears that the dealings were between merchants on the one side, and bankers on the other), Lord Eldon makes the observation: "This bill has no allegation, that the foundation of the suit is accounts between merchants relative to merchandise between merchant and merchant, unless it is considered as alleging, that, by implication, from the statement of the character in which the plaintiffs stood, and the business carried on." And his lordship considered that that inference could not be drawn. This observation was cited by the Vice-Chancellor, in Forbes v. Skelton,2 as an authority in deciding, that the account kept by the joint owners of a plantation in Java, which they worked in copartnership with certain merchants and agents at Bombay, to whom they became largely indebted, in respect of moneys advanced and paid for their use, was not a mercantile account within the meaning of the exception in the statute.

§ 164. Accounts between one partner and another, for a settlement of the partnership accounts, do not concern the trade of merchandise between merchant and merchant, and are not embraced by the exception in the statute; and it was held, in a suit in equity, by an executor of one partner against the survivor for an account, that it did not concern merchants' accounts, and so was not within the exception in the statute, respecting such accounts.1

§ 165. It seems, indeed, very clear, as it has been declared, that the parties must both be merchants at the time of action accrued ; that the account must be a mutual or reciprocal one, consisting of debts and credits; and that it must have originated in articles of merchandise.

1 Foster v. Hodgdon, 19 Ves. R. 180.

2 Forbes v. Skelton, 8 Simmons, R. 335, and 11 Eng. Con. Ch. R. 466.

3 Coalter v. Coalter, 1 Rob. (Va.), R. 7, cited in 3 Am. Law Mag. 210.

4 Codman v. Rogers, 10 Pick. (Mass.), R. 112.

5 Fox v. Fiske, 6 How. (Missis.), R. 328.

CHAPTER XVI.

TRUSTEES OF PERSONAL PROPERTY GENERALLY.

§ 166. TRUSTS, in their strict and technical sense, are known only in equity; and falling, as they do, in such a sense, within the peculiar and exclusive jurisdiction of a court of equity, the doctrine has been long established, that so long as they subsist they cannot be reached, as between trustee and cestui que trust, by the statute of limitations. The doctrine, says Mr. Justice Story, seems to be admitted ever since the great case of Cholmondeley v. Clinton.2 It will be found learnedly and elaborately discussed by Chancellor Kent, in the notable case of Kane v. Bloodgood, by which it appears that it has had the full support of Lord Macclesfield and of Lord Hardwicke and his successors, in a series of decisions. The equitable principle upon which the doctrine is founded is succinctly stated by Lord Redesdale, when Chancellor of Ireland. "If a trustee," he says, "is in possession and does not execute his trust, the possession of the trustee is the possession of the cestui que trust; and if the only circumstance is, that he does not perform his trust, his possession operates nothing as a bar, because his possession is according to his title."4 To exempt a trust from the bar of the statute, it must be first a direct trust, second, it must be of the kind belonging exclucourt of equity, and third, the question must arise between the trustee and the cestui que trust.5

sively to the jurisdiction of a

1 Baker v. Whiting, 3 Sumn. (Cir. Co.), R. 486.

2 Cholmondeley v. Clinton, 2 Jac. & Walk. Ch. R. 1.

3 Kane v. Bloodgood, 7 Johns. Ch. (N. Y.), R. 90; [Shibla v. Ely, 2 Halst. (N. J.), Ch. 181; Zacharias v. Zacharias, 23 Penn. St. 452].

4 Hovenden v. Lord Annesley, 2 Scho. & Lef. Ch. R. 607. And see post, as to the effect of possession of land, as between trustee and cestui que trust; and Trevost v. Gratz, 6 Wheat. (U. S.), R. 481.

5 Lyon v. Marclay, 1 Watts (Penn.), R. 275; [White v. White, 1 Md. Ch. Dec. 53; Thomas v. Brinsfield, 7 Ga. 154; Tinnen v. Mebane, 10 Texas, 248. But it has been recently held, in Mississippi, that the stockholder of a bank, who has not paid his sub

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