We shall first examine the instructions of which complaint is made. It must be noted that the suit is upon an account stated, that both the answer and the testimony admit that the account was correct at the time it was made, and that the correctness of the account has never been impeached in any manner. The theory of the defense apparently was that the plaintiffs at the time the account was stated and as a part of the same transaction, agreed to remedy certain alleged defects in the systems installed by them; that they failed to do so; that defendant suffered damage because of such defects, and because of the failure of the plaintiffs to perform their agreement to remedy the alleged deficiencies. Fraud or misrepresentation anterior to the

Accounts

effect of fraud.

settlement of the account, and pertaining to the modification of the plans and specifications, does not tend to establish a right in behalf of defendant to defeat the plaintiffs' cause of action upon an account stated, unless they tend to show that the defendant agreed to the correctness of the account, because of fraud or misrepresentation. There was no fraud or misrepresentation alleged or proved as an inducing cause for the making of this stated account be tween the parties, except the allegation that the promise to remedy the defects was fraudulently made, without intention to perform, and for the sole purpose of inducing the defendant to agree to the account.

After summarizing the allegations in the complaint and in the defendant's answers, the court said to the jury: "The foregoing allegations by the plaintiffs and defendant constitute an issue as to whether or not the account stated shall stand between the plaintiffs and the defendant."

Again: "In order to set aside the account stated, the defendant must prove by a fair preponderance of the evidence that the representations made by plaintiffs were false,

that the plaintiffs making such representations knew the representations were false at the time they were made, and were made by the plaintiffs for the purpose of deceiving the defendant, and that it was the false representations that induced the defendant to agree to the account stated."

Trial-instruc

tions.

The foregoing instruction is clearly correct and appropriate, when it is sought to impeach an account stated upon the ground of fraud; that is to say, when it is sought to show that the defendant was induced to agree to the account by fraudulent representations. Again the court said: "If the jury decides that the defendant has borne the burden of proof in this particular, and if you find that the defendant's agreement to the account stated was through such fraud as I have heretofore defined to you, then you would not consider the account stated as binding upon the defendant, but would find for the defendant for a dismissal of plaintiffs' cause of action."

Further: "Upon the foregoing instructions it will be your duty to return two verdicts in this case; that is, for or against the plaintiff on his account stated, as set out in plaintiffs' complaint, a verdict for or against the defendant on her counterclaim. Four forms

of verdict will be submitted to you, two of which you will sign and return as I have heretofore charged you."

It is contended that the foregoing instructions are erroneous, that only two forms of verdict should have been submitted, and that the court confused the jury and misled it into error by failing to distinguish between representation of an existing fact and a mere promise to do something in the future. As heretofore stated, the theory of the defense as developed in the testimony is not that the items of the account are incorrect in any particular, but that she would not have

agreed to pay the balance at that time existing, and conceded to have been correct but for the promise of the plaintiffs to do something thereafter; that is, to remedy the alleged defects in the construction, which promise they had no present intention of performing. The theory of the instructions is that the testimony of the defendant, if believed, was sufficient to destroy the account stated, and to justify a verdict dismissing the plaintiffs' cause of action. It is this instruction of which the appellant principally and most strenuously complains.

Accounts-setting aside for fraud.

The rule seems to be well settled that an account stated, or a settled account, can be impeached or set aside only on the ground of mistake or fraud. Montgomery v. Fritz, 7 N. D. 349, 75 N. W. 266; Lay v. Emery, 8 N. D. 515, 79 N. W. 1053; Behrens v. Kruse, 132 Minn. 69, 155 N. W. 1065, 156 N. W. 1; 1 C. J. 709; 1 R. C. L. 17. See also Kenyon Co. v. Johnson, 144 Minn. 48, 174 N. W. 436; Parsons v. Segno, 187 Cal. 260, 201 Pac. 580.

Appeal-instructions

scope.

It is elementary that instructions should be confined to the issues presented by the evidence (Pease v. Magill, 17 N. D. 166, 115 N. W. 260), and instructions on issues or matters not raised by the evidence are erroneous (Grandin Invest. Co. v. Hartung, 49 N. D. 364, 191 N. W. 783; 38 Cyc. 1618). It seems also to be settled that if an instruction is not warranted by the evidence, and is calculated to mislead the jury, the giving thereof constitutes reversible error. Grandin Invest. Co. v. Hartung, supra; 38 Cyc. 1621.

The suit being upon an account stated, the plaintiffs must stand on

Evidencepleading-ac

count stated.

and prove the account and an unqualified assent to its correctness by a preponderance of competent evidence. 1 R. C. L. 211; 1 C. J. 722; Martin v. Heinze, 31 Mont. 68, 77 Pac. 427. The

plaintiffs rely upon the new cause of action arising from the obligation created, in the nature of a stated account, when the plaintiffs and the defendant and her architect met in the architect's office on January 23, 1918. Plaintiffs could not recover upon a quantum meruit (1 R. C. L. 220), or upon the previously existing account (1 C. J. 726). See also Cahill, S. Mfg. Co. v. Morrissey Plumbing Co. 3 Neb. (Unof.) 865, 93 N. W. 204; Mayer Coal Co. v. Stallsmith, 89 Kan. 81, 129 Pac. 831; 1 R. C. L. 220; 1 C. J. 726.

It should also be noted that the undisputed testimony of the defendant, in part corroborated by the witness Gubenhagen, who was first called as a witness for the plaintiffs, is to the effect that her promise to pay the account presented on the 23d of January, 1918, was upon the condition that the plaintiffs remedy alleged defects in the hot water system and the heating plant; neither of which was at that time giving satisfaction. The promise to pay an account stated need not be express; the law implies a promise. to pay the amount agreed to be due. Western Newspaper Union v. Segerstrom Piano Mfg. Co. 118 Minn. 230, 136 N. W. 752. The undisputed testimony of the defendant is fairly susceptible of the construction that there was an express promise to pay the stated account, but on the condition that the plaintiffs remedy the defects in the hot water and heating systems. This is not a condition which the law otherwise implies from the fact of the adjustment of the account. The result is that the implied promise is excluded. Buckeye Brewing Co. v. Eymer, 162 Mich. 294, 127 N. W. 295. The promise to pay was not unqualified or unconditional. was upon a condition which the plaintiffs never performed or fulfilled. Abbott, Trial Ev. 2 ed. p. 565; 2 Greenl. Ev. § 126. Under such circumstances the transaction does not give rise to an independent cause of action upon an account stated. Stewart v. St. Louis &

It

Suburban R. Co. 157 Mo. App. 225, 137 S. W. 46; Masters v. Walker, 99 Or. 299, 195 Pac. 381. Where the evidence tending to show an account stated is not in dispute, the question of whether there was an account stated is, as a general rule, for the court. South Side Trust Co. v. Washington Tin Plate Co. 252 Pa. 237, 97 Atl. 450.

At the time the account is alleged to have been stated between the parties there was a claim made by the defendant that the heating system was not functioning properly, and there is evidence from which a jury could find that for some reason the system was inadequate to heat the flat, and that it was necessary to use oil-heating stoves in cold weather, and that the defendant, in good faith, claimed that the heating system installed by the plaintiffs was not functioning properly. On the date when the account is alleged to have been stated, the defendant testifies, in substance, that she would not have agreed to the account, which was signed and agreed to in her presence by her architect, though not signed by herself, but for the promise of the plaintiffs to remove any defects in the heating system and to put the same in working and functioning condition. She further says that the plaintiffs agreed to do this immediately, and that if any thing was not right it would be made right. She testifies that, notwithstanding this promise, which constituted the inducement to her agreeing to the correctness of the account, the plaintiffs did nothing and made no effort whatever to remove the defects of which she had complained. The evidence further shows that a few days after the account is alleged to have been stated, plaintiffs commenced an action thereon against the defendant; that when she complained of this, she was advised by one of the plaintiffs that the suit "will not make you any further trouble." On this point defendant testifies: Connolly told me that he would see

that there was no further trouble. I did not hire anybody to defend me, and the first thing I knew there was a judgment against me."

Defendant applied to the trial court to reopen this judgment, and, as appears in 42 N. D. 319, 172 N. W. 782, where the facts are fully stated, this court ordered the judgment opened. It is largely upon the foregoing testimony that the defendant bases her contention that the promise made by the plaintiff's was made in order to induce her to agree to the account, was made in bad faith, and without any intention on their part to perform the same. Is this evidence sufficient to support a finding of such fraud or misrepresentation as would justify the jury in dismissing the action on the stated account, and setting the same aside on the ground of fraud?

promise.

That fraud may be predicated on the nonperformance of a promise, where the promise Fraud-nonis made for the performance of purpose of accomplishing fraud, seems to be established in numerous decisions. See 12 R. C. L. 257. The fact that the thing promised lies wholly in the future is not conclusive against the right of the defendant to rely upon fraud, based upon nonintention to perform. "It is very generally held that fraud may be predicated of a promise accompanied by a present intention not to perform it, and made for the purpose of deceiving the promisee and inducing him to act, where otherwise he would not have done so, and by virtue of which the promisor has procured either real or personal property from the person to whom the promise is made." 12 R. C. L. p. 261.

representation.

When a promise is made, the promisor, by necessary implication, asserts a present and bona fide inten- promise-mistion to perform; if, however, notwithstanding such implied assertion of a fact, the intention to perform be not present, there is a misrepresentation of a fact upon which fraud may be

predicated. The real gist of the fraud in such a case is not the breach of the agreement to perform, but the fraudulent intent of the promisor and the false representation of an existing intention to perform, where such intent is in fact nonexistent. The promisor in such a case has represented to the promisee the existence of a fact, namely, of a present intention to perform the promise made, which is, however, contrary to the truth, in this, that an intention not to perform is in fact present. There is present an intent to deceive and mislead the promisee to do an act which, but for such representation, he would not do.

Evidence-intent to disregard promise.

It is often difficult to prove the absence of an intent to perform such a promise. To establish that fact it is necessary to prove a state of mind. The intention not to per66 form may be inferred from the fact that, after performance by the promisee, the promisor does not even make a pretense of carrying out his promise, or evades and refuses to perform it." 12 R. C. L. p. 262. Rogers v. Harris, 76 Okla. 215, 184 Pac. 459. "Fraud may be predicated on the nonperformance of a promise, in certain cases where the promise is the device to accomplish the fraud, or where a relation of trust and confidence exists between the parties. So, if through inducements held out by one person, even by means of a promise alone, another is influenced to change his position so that he cannot be placed in statu quo, and will be seriously damaged unless the promise is fulfilled, then the refusal to perform is fraud." 12 R. C. L. p. 257. The foregoing statement of the rule is approved and applied in Daniel v. Daniel, 190 Ky. 210, 226 S. W. 1070. The testimony of the defendant heretofore adverted to, as to the promises and representations made at the time the alleged account stated was made, as well as the subsequent conduct of the plaintiffs with refer

ence thereto, were matters properly submitted to the jury as bearing upon the existence of a fraudulent intent. "Evidence of defendant's subsequent conduct may be admissible to show fraudulent intent or motive for making the alleged fraudulent representations." 27 C. J. 57. See also Guild v. More, 32 N. D. 432, 155 N. W. 44.

We are not prepared to say, as a matter of law, that the evidence is insufficient to support a finding by

-sufficiency.

the jury that the promise to correct the defects alleged to exist in the hot water system and in the heating plant was not made in good faith by plaintiffs, and that they never intended to perform the same, but made the same in order to induce the defendant to agree to an account stated. We conclude therefore, upon this branch of the case, that there is sufficient evidence in the record to support a finding of fraud justifying a setting aside of the account stated, and consequently a dismissal of the plaintiffs' cause of action. This conclusion disposes of the alleged error, based on the theory that there was no evidence justifying or requiring instructions upon questions of fraud and deceit.

It is next contended that the verdicts of the jury are inconsistent and indicate confusion. Having dismissed the counterclaims and also dismissed the plaintiffs' cause of action, it is said that the jury arrived at inconsistent conclusions. We do not believe that this contention can be sustained. In dismissing plaintiffs' cause of action, which was on an account stated, that is, on a contract, the jury simply found that the account stated was procured by fraud and misrepresentation, and that the plaintiffs could not maintain an action thereon. In dismissing the counterclaims, the jury found that the defendant had failed to establish damages entitling her to an affirmative judgment for any amount. Manifestly, there

The error assigned and based upon the refusal of the trial court to grant plaintiffs' motion for judgment, notwithstanding the verdict, upon the ground that the evidence was insufficient to support the verdict dismissing the plaintiffs' case, cannot be sustained. We have pointed out heretofore that there is sufficient evidence in the record to warrant the giving of instructions upon questions of fraud and deceit in connection with the procuring of the account stated from the defendant, and to support a verdict finding such fraud. This conclusion disposes of the contention that a motion non obstante upon the ground of insufficiency of the evidence should have been granted.

While the plaintiffs do not seriously urge the error assigned upon the refusal of the trial court to grant a motion made at the opening of the trial for judgment on the

specification, and concluded that it is without merit. The answer has been summarized at some length in this opinion, and it appears clearly therefrom that, while the making of an account stated is virtually admitted, it is alleged that the same was procured by fraud and deceit, to wit, a promise by the plaintiffs to do something in the future without a present intention to perform. For reasons heretofore stated, there was no error in denying this motion.

Finding no error in the record, the judgment of the trial court is affirmed.

Christianson, Nuessle, and Birdzell, JJ., concur.

Bronson, Ch. J., concurs in result. Petition for rehearing denied September 15, 1924.

NOTE.

The question whether fraud may be predicated on promises and statements as to future events is treated in annotation following PALMETTO BANK & T. Co. v. GRIMSLEY, post, 46. On the particular questions passed on in FOSTER V. DWIRE, ante, 21, see subdivision III, also footnote 127, of that annotation.