and moneys drawn to that date; that this continuation was a carbon copy of the prior statement which had been handed to McPhee; that on May 28, 1908, the bookkeeper prepared a further statement as to two buildings-the Borel Bank and Pacific Union Club-just completed; that this statement was pinned to the prior statement, the two constituting what is referred to as plaintiff's exhibit 7; the carbon copy of the February account with its continuations, being the portion referred to as "second page," and the subsequent account constituting what is referred to as the "first page." He testified that on May 30, 1908, he gave McPhee "the carbon copy of that same paper and the extension brought down and the other business pinned onto it." "Q. Were they attached together with a pin? A. At that time; yes, sir. Q. And the papers were in the same condition then as they are now, as to figures, totals, etc.? A. Yes, sir. Q. Was that written in lead pencil on that second page 'O.K. McPhee?' A. He placed that on there that day."

As to what occurred at that time, he testified: "I handed the paper to Mr. McPhee, and told him that was a statement of the profits and losses on the jobs, and the moneys that I had drawn, and what was due me to date, and that Mrs. Goodspeed did not want to put this amount to my credit on the books without he first O.K.'ed the statement. . . . Mr. McPhee took the paper and he looked it over for a little while and O. K.'ed the paper and signed his name to it and handed it to Mrs. Goodspeed, and told her that was all right, to place it in the books."

Mrs. Goodspeed testified, "I saw Mr. Fee on that occasion hand this paper to Mr. McPhee; that paper, plaintiff's exhibit 7, as near as I can remember, was, at that time, in its present condition and I think both pinned together. As near as I can remember, Mr. Fee said: 'Mr. McPhee,' he says, 'here is a statement of the profits and losses and the balance due me as far as I know.' . . . The Court: Q. Did Mr. McPhee look at the paper? A. Yes, sir. Mr. Aitken: Q. Then what? A. He looked at it quite a few minutes, and then he said: "That is all right, Grant.' Q. Did he sign it? A. I saw him sign it. . . . Q. Did he say to you, asking about putting it in the books to Mr. Grant Fee's credit? A. I turned around to Mr. McPhee, and I said: 'Mr. McPhee, will I put this in the books?' and he said, 'Yes.'"

She testified that McPhee handed the paper to her with this instruction and that later she gave it to plaintiff.

Both before and after this account was stated as plaintiff testified, he had been demanding from McPhee money on account for the purpose of building a house and also to make a contemplated trip east, and these demands amounted to nine thousand dollars; that McPhee made frequent promises to meet his demands, but put him off to await a payment due or soon to become due on the Call Building. "The Court: Q. At that time he had in his possession, and there was due you, you claim, eleven-odd thousand dollars? A. Yes, sir. The Court: Q. But you were only asking a certain sum on account? A. Yes, sir."

After plaintiff commenced the action, plaintiff met McPhee at the latter's request. Plaintiff testified: "Mr. McPhee wanted to know why I had brought suit. I told him I was unable to get the money that was due me; he had promised repeatedly and I could not succeed in getting any of it, and I brought suit to protect myself; that I needed the money and wanted it. . . . He said he owed me the money, but he did not have the money just then. . . . There was no question about his owing me the money. . . . He and I conceded. that there was this amount due me of $13,000 and some odd dollars." Later they met me in the office of John R. Aitken, one of plaintiff's attorneys, to talk over the matter. Mr. Aitken testified quite fully to what was said in his office by the parties. Among other things, he testified: "Mr. Fee used words like these: 'You owe me this money; why don't you pay it? Why don't you keep your word?'. Mr. McPhee said: 'Well, I owe the money, I know I owe you the money,' or words to that effect, substantially that he owed the amount of money we had sued for. I am trying to give you almost the exact words used by Mr. Fee and Mr. McPhee. . . . Substantially it was this: Mr. Fee said: 'You owe me this money;' and Mr. McPhee said he owed the amount of money that we had sued for. . . . I used the words, stating the amount, $13,649, and Mr. McPhee said that he owed the amount but that he did not have the money and would give his notes at fifteen, thirty, and sixty days for it without security, and I advised Mr. Fee not to accept the offer. . . . The Court: Q. Was the amount mentioned in the

conversation, or was the claim mentioned? A. The amount was mentioned in the conversation, I know."

It is not necessary to state more of the testimony to show that McPhee knew the contents of the exhibit 7 and the amount therein stated as the balance due plaintiff and the amount plaintiff claimed to be due him.

We think, also, that this exhibit 7 was what the law regards as an account stated. In Mercantile Trust Co. v. Doe, 26 Cal. App. 246, 256, [146 Pac. 692], we had occasion to say: "To turn an account into an account stated, it must have been rendered with a view of ascertaining the balance and making a final adjudication of the matter involved in the account; or, in other words, to bring about a meeting of the minds of the parties." That this is precisely what was effected in the case here seems to us plain enough.

In Gardner v. Watson, 170 Cal. 570, [150 Pac. 994], the supreme court very recently said: "Over what in law constitutes an account there was never any question in this state, and very little uncertainty exists in other states."

Quoting from Baird v. Crank, 98 Cal. 293, 297, [33 Pac. 63], the court said: "It must appear that at the time of the accounting certain claims existed, of and concerning which an account was stated; that a balance was then struck and agreed upon, and that defendant expressly admitted that a certain sum was then due from him as a debt'"; and as was said in Coffee v. Williams, 103 Cal. 556, [37 Pac. 504]: "An account stated is a document-a writing-which exhibits the state of account between parties and the balance owing from one to the other; and when assented to, either expressly or impliedly, it becomes a new contract." (See 1 Ruling Case Law, p. 207, tit. "Accounts and Accounting.")

We need to go no further into the books to warrant the finding of the court that the document here in question was an account stated.

2. Appellants contend that the account was opened up by proof of mistakes, errors, and omissions, and hence it ceased to be an account stated. Defendants' bookkeeper testified that the account was stated from entries in what were called "Cost Books," in which were entered all the items of receipts and disbursements relating to the contracts with plaintiff, as had been done in agreements not now involved, but similar previous transactions which had been carried on by the same

parties and had been closed up in the same manner. She testified that after this account had been stated she discovered that in adding the column showing expenditures on the Fairmont Hotel, she had made a mistake of five thousand dollars which affected the profits to that extent on that contract, and made a difference in plaintiff's balance of two thousand dollars. She also discovered some other minor mistakes, both debits and credits, resulting in $46.03 more to pass to plaintiff's balance.

"In the absence of allegation and proof of fraud or mistake which taints the entire account, the court will not open and unravel it as if no accounting had been made, but the settlement will be binding except for the errors shown." Corpus Juris, p. 721.)

(1

We held in Adams v. Gerig, 25 Cal. App. 638, 640, [145 Pac. 106], that it was proper for the court, in an action for an account stated, to allow evidence of omissions and errors therein and find in favor of plaintiff in accordance with the facts.

Johnson v. Gallatin Valley Milling Co., 38 Mont. 83, [98 Pac. 883], was a case where an account was stated in relation to an invoice of wheat sold by plaintiff to defendant. A balance was struck and plaintiff signed at the bottom a receipt in full payment. He afterward discovered that there was a shortage in the number of bushels and in the true balance due, to his disadvantage, and he demanded of defendant to make the correction, which being refused, he brought the action to surcharge the account stated. Said the court: "The rules of law applicable to such cases as the present, wherein one of the parties seeks to avoid the settlement and reopen the account, are simple and of easy application. The balance ascertained from a statement of accounts was formerly held to be the result of so deliberate an act by the parties as to preclude an examination into the items for the purpose of correcting errors or mistakes; but this rule has been so far relaxed that, while the promise to pay the ascertained balance is in effect a new promise, the settlement being regarded as the consideration for it, the settlement does not create an estoppel; but furnishes a strong prima facie presumption that the result is correct." (Citing cases.)

It was held that the burden of proof is cast upon the party seeking to avoid this new promise and open up to investigation the antecedent dealings between the parties, and he must allege the error, mistake, or fraud on which he relies and establish it by clear and satisfactory evidence. (See, also, note to Jasper Trust Co. v. Lampkin, 136 Am. St. Rep. 48.)

It was in obedience to this rule that defendant sought to surcharge the account and introduced evidence of what it regarded as errors, omissions, and mistakes.

3. At this point we may dispose of defendant's contention that it was error to find against it in these particulars. The precise point urged is that the judgment rendered was for forty per cent of gross and not forty per cent of net profits, and this because it failed to take into account certain items which defendant contends should have been considered.

Defendant devotes much attention to the cases and textwriters on the question of what constitutes net profits as contradistinguished from gross profits, and the rule by which they are to be ascertained, but he deduces the conclusion that the term "net profits" used in the contracts necessarily implies that the items claimed by defendant should have been included as expenditures, thus reducing proportionately the net profits on the several contracts. Defendants' position might find support were this an accounting of the general business of the corporation between persons mutually interested in such general business, which it is not. There were six separate contracts, each referring to a particular building or buildings, or to particular work at certain places. There was no necessary connection between any two or more of them except as provided in the contracts themselves. Expressly in some and impliedly in others, there was by the terms of the contracts to be a settlement at the completion of each contract. Forty per cent of the net loss in the Deming Building (No. 2) was to be deducted from plaintiff's share of the profits on the Fairmont Hotel contract. No. 3 embraced the Newhall Building and "the net profits on repair work" at certain designated places, and plaintiff was to be allowed his profits "on settlement at completion of the contract and work." No. 4 mentions the second Newhall Building, the Pope Estate Building, and certain work on the Claus Spreckels Building, and the contract provided