Amason v. First State Bank of Lineville

• Decision Date: 06 April 1979
• Citation: 369 So.2d 547
• Parties: Charles W. AMASON, v. FIRST STATE BANK OF LINEVILLE et al. 77-666.
• Court: Alabama Supreme Court

Page 547

369 So.2d 547

Charles W. AMASON, v. FIRST STATE BANK OF LINEVILLE et al.

77-666.

Supreme Court of Alabama.

April 6, 1979.

Harold O. McDonald of Baddley & McDonald, Birmingham, for appellant.

Thomas Reuben Bell, Sylacauga, for appellees.

BEATTY, Justice.

This is an appeal from rulings entered by the trial court adversely to the plaintiff, Charles Amason, on motions for summary judgment. We affirm in part, reverse in part and remand.

The case stems from a series of loan transactions between Amason and defendant, First State Bank of Lineville, Alabama (hereinafter the Bank). The first three of these loans were transacted in 1972 and 1973:

1. August 8, 1972 Plaintiff Amason borrows $3,900 and gives the Bank a secured note.

2. September 11, 1972 Plaintiff Amason borrows $1,400 and gives the Bank a secured note.

3. February 6, 1973 Amason borrows $8,000 and gives the Bank a secured note.

Payments on each of these three debts were delinquent on September 26, 1974. On that date, and thereafter the following events occurred:

4. September 26, 1974 Amason pays the Bank $10,500 and gives a new note for the balance. The notes of August 8, 1972 and September 11, 1972 were thereupon Cancelled. The note of February 6, 1973 was "renewed."

5. October 3, 1974 Amason borrows $2,200 and gives the Bank a secured note.

6. April 2, 1975 The debts of September 26, 1974, and October 3, 1974 are "combined" into a new note.

On November 20, 1975, George T. DeVore, the newly appointed President of the Bank, wrote Amason that he was expecting full payment of the April 2, 1975 note when it fell due on December 3, 1975. Thereafter both parties consulted counsel. On January 15, 1976 Amason paid the Bank $5,440.00 and executed a new note for the balance of his indebtedness to the Bank. This note was paid in full by Amason on November 16, 1976.

On January 14, 1977 this action commenced against the Bank and its president, George T. DeVore. Amason, as the nominal representative of a class of bank debtors, and as an individual, alleged violations of the "Minicode," Tit. 5, § 316, Et seq., Code of Ala. (1973 Supp.) (presently Code of 1975, § 5-19-19, Et seq.), and fraud. Among other defenses the defendant's answer set up that of the statute of limitations.

On April 14, 1977 the lower court entered an order ruling that a class action could not be maintained and granting defendant's motion for summary judgment as to that aspect of the complaint. Subsequently Amason amended his complaint to delete the class action paragraphs and to add additional defendants to his individual action, Integon Life Insurance Corporation, and Irby Seawell Company. In a further amendment, Amason alleged fraud by those parties and the Bank in the overcharge of credit life and non-recording insurance. Motions for summary judgment were filed by all the defendants, and by Amason as well on a limited number of issues. After briefs were submitted and oral arguments heard on April 5, 1978 the court entered summary judgment in favor of Amason on that aspect of his complaint alleging an excessive finance charge on the January 15, 1976 note, but in favor of the defendants on all other grounds of the complaint as amended. Amason's motion to set aside or vacate the judgment was overruled on June 1, 1978. Notice of appeal was timely filed thereafter.

Plaintiff/appellant Amason contends that the lower court erred in granting summary judgment on April 14, 1977 for the defendants/appellees on the class action aspects of the complaint. That order stated "(t)he court is of the opinion that the prerequisites to a class action as provided in Rule 23(a) do not exist, and that the facts in this case do not support an order that a class action be maintained."

Rule 23(a), ARCP inherently mandates that the person bringing the action must be a member of the class he seeks to represent. Bailey v. Patterson, 369 U.S. 31, 82 S.Ct. 549, 7 L.Ed.2d 512 (1962); Huff v. N. D. Cass Co. of Alabama, 468 F.2d 172 (5th Cir. 1972); 7 Wright & Miller, Federal Practice and Procedure: Civil § 1761 (1972). Amason's complaint states that:

Plaintiff brings this action on behalf of himself and all members of a class composed of persons entering into consumer loan transactions with Defendant (Bank) . . . since July 20, 1972, . . . And whose indebtedness to the Defendant (Bank), as a result of said transactions Is still owing, . . . . (emphasis added)

However, it appears from the affidavit of defendant, George T. DeVore, that Amason had no indebtedness still owing to the Bank at the time the action commenced, and in fact had not been indebted to the Bank since November 16, 1976. These facts were not controverted by Amason in his affidavit. Therefore, because it was established from the affidavits introduced on the defendants' motion that Amason was not a member of the class which he sought to represent, we hold that the court did not err when it ruled that the class action could not be maintained. Amason contends, however, that this ruling was premature because there was no opportunity for an evidentiary hearing or discovery on the class action issue. Rule 23(c)(1), ARCP requires that:

As soon as practicable after the commencement of an action brought as a class action, the court shall determine by order whether it is to be so maintained. An order under this subdivision may be conditional, and may be altered or amended before the decision on the merits.

See Bagley v. City of Mobile, 352 So.2d 1115 (Ala.1977). We hold that Rule 23(c)(1), ARCP was complied with in this case when the court entered its order of April 14, 1977. Further, no cases cited to us by the plaintiff mandate a postponement of the determination by the court for further discovery and an evidentiary hearing when the uncontroverted facts show affirmatively that the plaintiff does not share the identity of interest required by Rule 23(a), ARCP.

Amason next contends the court erred in its April 5, 1978 grant of summary judgment for the defendants by holding that the statute of limitations (Code of 1975, § 5-19-19 (Minicode)) barred all of Amason's claims except those stemming from the note of January 15, 1976.

Amason's arguments are essentially two-pronged. On the one hand he argues that the note of August 8, 1972 as well as the note of January 15, 1976 fell within the statute of limitations found within the "Minicode," Code of 1975, § 5-19-19. On the other hand Amason contends that even if the August 8, 1972 note falls outside the above time limit, it and all the other transactions complained of, are resurrected by virtue of Code of 1975, § 6-2-3. We will discuss these arguments Seriatim.

Code of 1975, § 5-19-19 provides Inter alia that "(N)o action . . . may be brought more than one year after due date of the last scheduled payment of the agreement pursuant to which the (excess) charge was made . . ." In this instance the only transaction unquestionably within the statute's terms is that of January 15, 1976. Amason's contention that the note of August 8, 1972 falls within the statute's limits is bottomed on the fact that the note was originally scheduled to run for 60 months. However, it appears without question that the note of August 8, 1972 was cancelled by agreement of the parties on September 26, 1974 and thus ran only 26 months. Thus the statute of limitations of Code of 1975, § 5-19-19 began to run from the date of the last scheduled payment of the agreement immediately prior to the time in which the agreement ceased to legally exist. In this case the action was brought on January 14, 1977, more than one year from the time of the last scheduled payment under the cancelled instrument and as such is barred by Code of 1975, § 5-19-19.

Amason's second contention would have us resurrect both the agreement of August 8, 1972 and the other transactions as well under the statutory fraud provisions. Code of 1975, § 6-2-3 provides that:

In actions seeking relief on the ground of fraud where the statute has created a bar, the claim must not be considered as having accrued until the discovery by the aggrieved party of the fact constituting the fraud, after which he must have one year within which to prosecute his action.

This provision would in effect stay the running of the general statute of limitations for torts (one year) until such time as Amason discovered, or ought to have discovered, the fraud. Of course the burden is upon he who claims the benefit of § 6-2-3 to show that he comes within it. Tarlton v. Tarlton, 262 Ala. 67, 77 So.2d 347 (1955); King Homes, Inc. v. Roberts, 46 Ala.App. 257, 240 So.2d 679 (1970); Mann v. Adams Realty Co., 556 F.2d 288 (5th Cir. 1977). In this case it is clear that Amason does not, as the trial court in effect held when it found that the fraud charges were barred by the statute of limitations. The case law amply supports the trial court. In Johnson v. Shenandoah Life Insurance Co., 291 Ala. 389, 281 So.2d 636 (1973) the defendant also pleaded the statute of limitations. The plaintiff by replication embraced Tit. 7, § 42, Code of 1940 (presently Code of 1975, § 6-2-3). The defendants' demurrer to that replication was sustained and on appeal upheld because

the replication failed (1) to aver with precision the facts and circumstances which allegedly were not discovered and to which appellants allegedly were defrauded, (2) to aver how or when these facts were discovered, (3) to aver what prevented these facts from being discovered before the bar of the statute became complete and (4) failed to aver facts acquitting appellants of all knowledge of facts which ought to have put them on inquiry.

Though replications are no longer necessary it is still incumbent upon one whose complaint on its face shows that some or all of its claims are barred by the statute of limitations to show that he falls within the saving graces of § 6-2-3. See Associates Financial Services Co. v. First National Bank, 292...