Open Account Definition in Texas
In McCamant v. Batsell, 59 Tex. 363 (Tex. 1883), the court applied two separate definitions of open account to the facts before it. McCamant, 59 Tex. at 368.
The first definition provided that an account is open when "nothing has occurred to bind either party by its statements; an account which is yet fully open to be disputed." Id.
The second provided that "an account is said to be open, also, when there have been running or current dealings between the parties, and the account is kept open with the expectation of further dealings." Id.
Later in the opinion, the court observed that the word "open" indicates that "there is something undetermined by contract of the parties or by application of settled rules of law, and it would seem that an account cannot be said to be open when there remains no term of the contract to be settled by agreement of the parties." Id.
Based on the language in McCamant, it is not clear whether an open term must exist for an account to be "open" for limitations purposes.
In McCamant v. Batsell, the Texas Supreme Court stated that the term "open account" in the context of the statute of limitations, albeit in dicta, "evidently has reference to dealings between persons . . . from which, by contract, express or implied, the receiver becomes the debtor." McCamant v. Batsell, 59 Tex. 363, 368 (Tex. 1883) .
In McCamant, the court first defined "account" as follows:
"As used in the statutes of this state, in act referred to, we believe that the word "account " is used in its popular sense, rather than in a technical sense, and that it applies to transactions between persons in which, by sale upon the one side and purchase upon the other, the title to personal property passes from the one to the other, and the relation of debtor and creditor is thereby created by general course of dealing. . . ." McCamant, 59 Tex. at 367-68 .
The court then noted several distinguishing characteristics of an account that is "open," but ultimately applied the following definitions to the facts before it:
An "open account" is defined to be "one in respect to which nothing has occurred to bind either party by its statements; an account which is yet fully open to be disputed." Abbott's Law Dictionary.
An account is said to be open also, when there have been running or current dealings between the parties, and the account is kept open with the expectation of further dealings. Id. at 368-69.
Although the court in McCamant was not construing any predecessor statute to Section 16.004(c), it stated in dicta that the same definitions should apply in other contexts, including limitations. Id. at 368.