Michael v. Rainier

205 N.E.2d 543, 246 Ind. 293, 1965 Ind. LEXIS 351

• Court: Indiana Supreme Court
• Decided: March 31, 1965
• Docket: 30,747
• Status: Published

Opinions

Myers, J.

This cause comes to us on petition to transfer from the Appellate Court pursuant to §4-215, Burns’ Ind. Stat., 1946 Replacement. The Appellate Court’s opinion is to be found in 197 N. E 2d 316. It is an action involving a written instrument in appellant’s handwriting which reads as follows:

“8-13-47

“I owe B. E. Rainier Seven Hundred & Fifty (750.00) of this date.

“Harley Michael”

Complaint was filed on August 1, 1955. The only question to be decided is whether the action was barred by the six-year statute of limitations on accounts and contracts not in writing, §2-601 (First.), Burns’ Ind. Stat., 1946 Replacement (Supp.), or falls within the ten-year statute of limitations applicable to promissory notes, bills of exchange and other written contracts, §2-602 (Fifth.), Burns’ Ind. Stat., 1946 Replacement (Supp.). Appellant claims the contract was verbal, with the written instrument only a memorandum of debt, so that the six-year statute applies, which would mean that the complaint was filed too late. The trial court decided otherwise and entered judgment against appellant for the total sum of $1,080, including principal and interest. On appeal to the Appellate Court, the judgment was affirmed.

Appellee testified that on or about August 13, 1947, he was asked by appellant for a loan of $750 in order to “make some money”; that the next day appellee gave him $750 in cash which he withdrew from a safe in his possession; that appellant wrote out the “IOU” in appellee’s presence and said he, appellant, would pay back the amount in a year’s time.

Appellant denied that he had received any cash at all, but claimed that he and appellee had planned on going into a joint business venture involving “cookie jars, tip books and stuff like that”; that he had no money to invest in the enterprise; that appellee said appellant’s share would be $750; that appellant wrote the instrument in question and gave it to appellee, apparently in order that appellee would advance appellant’s share; that a month later he asked to get out as the venture involved gambling; that he received no profits, money or property of any kind from the venture; that appellee never requested payment of the $750 until much later, when an attorney wrote a letter demanding payment.

The trial court found in favor of appellee’s version of the transaction and entered judgment accordingly.

The complaint was filed more than six years after the instrument was dated. There was no question about it being issued and delivered by appellant on that date. Thus, the only basis for the trial court’s decision favoring appellee was that this was a written contract which fell within the ten-year statute of limitations.

From the face of the instrument, it is apparent that it does not fall within the terms of the Indiana Uniform Negotiable Instruments Act which was in effect at the time of execution. There is no unconditional promise to pay a sum certain in money, nor is there a promise by the signer to pay any sum to any person. Section 19-101, Burns’ Ind. Stat., 1950 Replacement. It is not a negotiable instrument, therefore.

Is it a written instrument acknowledging an existing debt and containing an implied promise to pay the money so as to make it a promissory note and bring it within the ten-year statute of limitations? Appellee cites Long, Executrix v. Straus et al (1886), 107 Ind. 94, 95, 6 N. E. 123, 7 N. E. 763, as authority. There the instrument read:

" “ ‘Received of Joseph S. Long sixteen hundred dollars, on deposit, in National currency.

“ ‘STRAUS BROS.

“ ‘LIGONIER, April 27th, 1865.’ ”

This court held that this was more than a receipt in that the words “on deposit” imported a contract and the context showed that the money received by the persons with whom it was deposited was that of the depositor, who, on reasonable demand, was entitled to receive back that which belonged to him.

Kraft v. Thomas, Executor (1890), 123 Ind. 513, 514, 24 N. E. 346, is also cited. There the instrument read as follows:

“ ‘October 15th, 1864.

“ ‘For value received of C.P. Coleman three hundred dollars, in full, with use or bearer, waivin valuation and appraisement laws. Paid when kald for.

“ ‘Edward Kraft.’ ”

It was held that this was a promissory note, but this case does not seem to be in point as it involved an instrument which the court found was over twenty years’ old and concerned the question of whether a demand had to be made when it expressed no time of payment. These instruments contain words which are not found in the writing presented herein. The words “on deposit” and “Paid when kald for” or similar expressions, which so impressed this court many years ago, are missing.

In general, the mere receipt for money is not a contract and imports no promise, obligation or liability, and so is not subject to the statute of limitations governing written contracts for the payment of money. 34 Am. Jur., Limitation of Actions, §85, p. 74; 53 C. J. S., Limitations of Actions, §64, p. 1026.

The written memorandum sued upon herein was based upon a verbal agreement between the parties. Each one testified to a different version. The trial court Judge accepted appellee’s account, which was to the effect that on August 13, 1947, appellant and appellee entered into a contract whereby appellee loaned appellant the cash sum of $750 so that appellant could make some money and which appellant promised to repay in one year. We must adopt this version as we cannot weigh the evidence.

This leaves us with a contract which is partly in writing and partly oral. Under these circumstances, it has been held that such contract must be considered as wholly oral. 6 West’s Ind. Law Ency., Contracts, §51, p. 110. To ascertain the terms of this contract, parol evidence had to be introduced. So, even though the memorandum was in writing, yet because the contract rested partly in parol, the six-year statute of limitations applies as if the contract had rested entirely in parol. Hackleman v. Board of Commissioners of Henry County (1884), 94 Ind. 36, 39; Moore v. Ohl (1917), 65 Ind. App. 691, 695, 116 N. E. 9; Tomlinson et al. v. Briles (1885), 101 Ind. 538, 1 N. E. 63; Higham et al. v. Harris et al. (1886), 108 Ind. 246, 8 N. E. 255.

There is a difference in cases dealing with a mere acknowledgment in writing of a debt and those dealing with a contract in writing as our statute is worded.

We hold that there was no negotiable instrument involved herein; that the memorandum was not a promissory note; that it was merely a written receipt for money based upon a verbal agreement between the parties; that such contract rests in parol and the six-year statute of limitations applies. The decision of the trial court was, therefore, contrary to law.

Judgment reversed. Cause remanded, with instructions that the motion for new trial be sustained.

Arterburn, C. J., and Achor, J., concur.

Jackson, J., concurs in result.

Landis, J., dissents with opinion.