O.C.G.A. § 9-3-7 (2019)

Annotations

JUDICIAL DECISIONS “Mutual account” defined. - Mutual account is one based on course of dealing wherein each party has given credit to the other, on faith of indebtedness to that party. Gunn v. Gunn, 74 Ga. 555, 1885 Ga. LEXIS 361 (1885); Reid v. Wilson Bros., 109 Ga. 424, 34 S.E. 608, 1899 Ga. LEXIS 670 (1899); Howard v. Blanchard, 29 Ga. App. 469, 116 S.E. 33, 1923 Ga. App. LEXIS 72 (1923); Turner v. Davidson, 188 Ga. 736, 4 S.E.2d 814, 1939 Ga. LEXIS 618 (1939). Basis for doctrine of mutual accounts. - Mutual accounts are based upon express or implied agreement of parties. Gunn v. Gunn, 74 Ga. 555, 1885 Ga. LEXIS 361 (1885); Mobley, Ward & Davis v. Pendergrast, 8 Ga. App. 565, 70 S.E. 18, 1911 Ga. App. LEXIS 53 (1911). Doctrine of mutual account rests not on notion that every credit in favor of one party is admission by that party of indebtedness to the other or new promise to pay, but upon mutual understanding, either express or implied from conduct of both parties, that they will continue to credit each other until one or both parties desire to terminate course of confidential dealing, at which time the balance will be ascertained, become due, and be paid by the one finally indebted. Turner v. David-

son, 188 Ga. 736, 4 S.E.2d 814, 1939 Ga. LEXIS 618 (1939). For mutual account to exist, there must be reciprocal extension of credit between the parties, so that each becomes both creditor and debtor of the other. Perry v. Laurens Hdwe. Co., 93 Ga. App. 251, 91 S.E.2d 375, 1956 Ga. App. LEXIS 707 (1956). In order to make a mutual account, there must be indebtedness on both sides; and in the absence of evidence of such mutual dealings and indebtedness, mere entries of credits of partial payments made on a debt evidenced by open account will not make it such a mutual account as will prevent the statute of limitations from beginning to run until the date of the last item thereof. Vanguard Ins. Agency & Real Estate Co. v. Walker, 157 Ga. App. 838, 278 S.E.2d 723, 1981 Ga. App. LEXIS 2028 (1981). Entry of partial payments is immaterial. Liseur v. Hitson, 95 Ga. 527, 20 S.E. 498, 1894 Ga. LEXIS 577 (1894). Mere entries of credits of partial payments made on debt evidenced by open account will not make it such a mutual account as will prevent statute of limitations from beginning to run until date of last item thereof. Williams v. Leide As-

socs., 133 Ga. App. 454, 211 S.E.2d 407, 1974 Ga. App. LEXIS 1110 (1974). If items in favor of one side are mere payments on indebtedness to the other, the account is not mutual. Turner v. Davidson, 188 Ga. 736, 4 S.E.2d 814, 1939 Ga. LEXIS 618 (1939). Presumption of law exists that agreement once proved continues. Gunn v. Gunn, 74 Ga. 555, 1885 Ga. LEXIS 361 (1885). Whether or not account is mutual is question of fact. Turner v. Davidson, 188 Ga. 736, 4 S.E.2d 814, 1939 Ga. LEXIS 618 (1939). Jury is to decide question of whether account is mutual or not. Kirven & Co. v. Thornton, 110 Ga. 276, 34 S.E. 848, 1899 Ga. LEXIS 545 (1899). Statute of limitations begins to run with respect to mutual accounts from date of last item embraced within mutual dealings. Turner v. Davidson, 188 Ga. 736, 4 S.E.2d 814, 1939 Ga. LEXIS 618 (1939). Mutual claims between shareholders and former partners. - Any mu-

tual claims in general accounting between shareholders and former partners in corporation formed from partnership, for indebtedness existing between partner and corporation, would not be barred by the running of the statute. Jones v. J.S.H. Co., 199 Ga. 755, 35 S.E.2d 288, 1945 Ga. LEXIS 368 (1945). Return of refrigerator was not transaction in which buyer extended credit to seller, absent indication that buyer did not receive credit for value of refrigerator immediately upon its return. Perry v. Laurens Hdwe. Co., 93 Ga. App. 251, 91 S.E.2d 375, 1956 Ga. App. LEXIS 707 (1956). Setoff of barred account against promissory note given in such dealings will not be permitted. Adams v. Holland, 101 Ga. 43, 28 S.E. 434, 1897 Ga. LEXIS 152 (1897).

RESEARCH REFERENCES Am. Jur. 2d. 1 Am. Jur. 2d, Accounts and Accounting, § 22. 51 Am. Jur. 2d, Limitation of Actions, § 112 et seq. C.J.S. 54 C.J.S., Limitation of Actions, § 210. ALR. Limitation of actions: acknowledgment, new promise, or payment by grantee of mortgaged premises, 18 A.L.R. 1027; 142 A.L.R. 615. Check in payment of interest or installment of principal as tolling statute of limitations, 28 A.L.R. 84; 125 A.L.R. 271. Payment on account as removing or tolling statute of limitation, 36 A.L.R. 346; 156 A.L.R. 1082.

What constitutes an open, current account within the statute of limitations, 39 A.L.R. 369; 57 A.L.R. 201. Bar of statute of limitations against action to recover principal of obligation as affecting right to recover interest, 115 A.L.R. 728. Ratification of unauthorized credit on debt or obligation as tolling, or removing bar of, statute of limitations, 124 A.L.R. 234. When is account “mutual” for purposes of rule that limitations run from last item in open, current, and mutual account, 45 A.L.R.3d 446.

ARTICLE 2 SPECIFIC PERIODS OF LIMITATION Cross references. Time limitation on bringing of actions against counties, § 36-11-1. Time limitation on actions on bonds

given by person handling public funds, § 45-8-9. Time limitation on bringing of actions against railroad companies for recovery of

damages for any wrong or injury inflicted by such companies, § 46-1-2.

Time limitation on bringing of product liability actions, § 51-1-11.

JUDICIAL DECISIONS Effect of commencement and service of process statutes. - By holding that service of process does not relate back to toll statutes of limitations unless the plaintiff has acted diligently, the Georgia courts have interpreted O.C.G.A. §§ 9-

11-3 and 9-11-4 as integral parts of the state statutes of limitations. Cambridge Mut. Fire Ins. Co. v. City of Claxton, 720 F.2d 1230, 1983 U.S. App. LEXIS 14793 (11th Cir. 1983).

RESEARCH REFERENCES ALR. Statute of limitations as applied to certificate of deposit, 23 A.L.R. 7; 128 A.L.R. 157. Applicability to limitation prescribed by policy of insurance or by special statutory provision in relation to insurance of provisions of statute of limitations extending time or fixing time when action deemed commenced, 23 A.L.R. 97; 149 A.L.R. 483. Limitation of actions: availability of statute, and time when it begins to run, where one assumes and agrees to pay another’s debt, 31 A.L.R. 1056. When statute of limitations begins to run against action to recover interest, 36 A.L.R. 1085. When limitation begins to run against action to enforce stockholder’s superadded liability, 55 A.L.R. 1068; 137 A.L.R. 788. When limitation commences to run against action to enforce personal liability of bank officers or directors for receiving deposits after knowledge of bank’s unsafe condition, 78 A.L.R. 897. When statute of limitations begins to run against action to recover upon contract payable in installments, 82 A.L.R. 316. Liability insurance: limitation of time within which to sue insurer, 83 A.L.R. 748. Rendition of bank of statement of balance to depositor’s credit as starting statute of limitations in respect of amount claimed in excess of balance shown, 87 A.L.R. 344. When does statute of limitations commence to run against action for breach of covenant against encumbrances, 99 A.L.R. 1050. When cause of action between master and servant deemed to be upon a liability

created by statute within contemplation of statute of limitations, 104 A.L.R. 462. When does limitation or laches commence to run against suit to reform an instrument, 106 A.L.R. 1338. When statute of limitation commences to run against an action based on breach of duty by recording officer, 110 A.L.R. 1067. Action by one not in possession of land to cancel deed upon ground of fraud as within statute of limitations applicable to actions for relief upon ground of fraud, or statute relating to actions for recovery of real property, 118 A.L.R. 199. Statute of limitation applicable to action to enforce superadded statutory liability of stockholder of bank or other corporation, in absence of limitation provision specifically applicable to such action, 126 A.L.R. 264. Statute of limitation applicable to suit by creditor to set aside transfers of debtor’s property, 128 A.L.R. 1289. Necessity of introducing evidence dehors written contract as affecting question as to which statute of limitations applies, 129 A.L.R. 603. Commencement of running of statute of limitations against option or right in nature of option exercisable on demand, 132 A.L.R. 429. Statute of limitations in respect of action or proceeding to establish right to, or recovery of benefits of, pension, 136 A.L.R. 809. Statute of limitations as affecting suit to enforce mortgage or lien securing debt payable in installments, 153 A.L.R. 785. Constitutionality, construction, and application of statutes affecting the rights or

remedies of purchasers under antecedent executory contracts for purchase of real property, 153 A.L.R. 1209. Application of limitation statutes to nonderivative suits based upon wrongs of corporate officers or directors, 174 A.L.R. 1217. What statute of limitations governs action to reform instrument, 36 A.L.R.2d 687. What statute of limitations governs action or claim for affirmative relief against usurious obligation or to recover usurious payment, 48 A.L.R.2d 401. What statute of limitations applies to action under dramshop or civil damage act, 55 A.L.R.2d 1286. Construction, application, and effect, with reference to statutory causes of action, of statute of forum which admits bar of statute of limitations of other state, 67 A.L.R.2d 216. Limitation of action: physician’s claim for compensation for medical services or treatment, 99 A.L.R.2d 251. What statute of limitations governs action by contractee for defective or improper performance of work by private building contractor, 1 A.L.R.3d 914. Validity of contractual time period, shorter than statute of limitations, for bringing action, 6 A.L.R.3d 1197. Application of statute of limitations to damage actions against public accountants for negligence in performance of professional services, 26 A.L.R.3d 1438.

What statute of limitations covers action for indemnity, 57 A.L.R.3d 833. What statute of limitations governs action for interference with contract or other economic relations, 58 A.L.R.3d 1027. What statute of limitations applies to action for surplus of proceeds for sale of collateral, 59 A.L.R.3d 1205. When statute of limitations begins to run against action to recover money paid by mistake, 79 A.L.R.3d 754. What statute of limitations governs damage action against attorney for malpractice, 2 A.L.R.4th 284. Applicability of statute of limitations or doctrine of laches to proceeding to revoke or suspend license to practice medicine, 51 A.L.R.4th 1147. Application of statute of limitations to actions for breach of duty in performing services of public accountant, 7 A.L.R.5th 852. Application of statute of limitations in private tort actions based on injury to persons or property caused by underground flow of contaminants, 11 A.L.R.5th 438. Emotional or psychological “blocking” or repression as tolling running of statute of limitations, 11 A.L.R.5th 588. What statute of limitations applies to state law action by public sector employee for breach of union’s duty of fair representation, 12 A.L.R.5th 950. Causes of action governed by limitations period in UCC § 2-725, 49 A.L.R.5th 1.