D.T. Dobie & Company (T) Ltd. v. Manji’s Ltd., Civ. Case 86-D-65, 7/3/68, Biron J.

D.T. Dobie & Company (T) Ltd. v. Manji’s Ltd., Civ. Case 86-D-65, 7/3/68, Biron J.

Plaintiff claimed a sum in excess of Shs. 32,000/- for goods sold and delivered. The defence was that the claim was time-barred. Plaintiff’s action is in 3 counts representing 3 “separate accounts” between the parties, though his claim is that they constitute one running account, being separated only for purposes of his internal accounting system. Of these account, one was on a cash basis, one on a 60 day credit basis and the third on a yet longer credit period basis. A receiver was appointed for plaintiff over three years before this action was filed, after which time all transactions between plaintiff and defendant were on a cash basis. Plaintiff’s contention is that although the debts be seeks to collect were incurred over three years ago, they are still collectable because there was an open and running account between the parties.

            Held: (1) The legal significance of an account being a “running” one is that “where payments are not specifically appropriated to a debit item they can be applied as payment in the principle of first-in, first-out”. (Citing Ismail’s Stores Ltd. v. M.A. Lone, Civ. App. 38-D-59, Cranshaw, Ag. C.J.) (2) Even if there at one time was a running single account between the parties, an unlikely thing in view of the separate credit arrangements, it came to an end when the receiver was appointed and he put relations on a cash basis. Consequently, it cannot be argued by plaintiff the payments in the last three years covered debts incurred earlier. Action dismissed.