Courtney v. First Nat. Bank of Eastern Arkansas

• Citation: 780 S.W.2d 536,300 Ark. 498
• Decision Date: 04 December 1989
• Docket Number: No. 89-248,89-248
• Parties: . FIRST NATIONAL BANK OF EASTERN ARKANSAS, Appellee. Supreme Court of Arkansas
• Court: Supreme Court of Arkansas

Page 536

780 S.W.2d 536

300 Ark. 498

David COURTNEY, Appellant, v. FIRST NATIONAL BANK OF EASTERN ARKANSAS, Appellee.

No. 89-248.

Supreme Court of Arkansas.

Dec. 4, 1989.

James W. Smith, Little Rock, for appellant.

John D. Bridgforth, Forrest City, for appellee.

PURTLE, Justice.

The circuit court dismissed the appellant's counterclaim because it was not filed within the time permitted by the statute of limitations. The sole argument on appeal is that the court erroneously applied the three-year statute of limitations, Ark.Code Ann. § 16-56-105 (1987), to this cause of action. We hold that the trial court correctly applied the three-year statute.

This action commenced on December 8, 1987, when the appellee, First National Bank of Eastern Arkansas, filed a foreclosure suit against Rodney, Incorporated, and the appellant, David Courtney. The appellant filed an answer and a counterclaim against the appellee, alleging negligence in the issuance of a certificate of deposit. The appellee issued a certificate of deposit on October 13, 1982, in the amount of $10,000, in the names of Richard or David Courtney. Richard Courtney, the appellant's father, died intestate on April 21, 1986.

A dispute arose over the claim of ownership to the certificate of deposit. David Courtney claimed that it was his property and that it should be payable to him upon his father's death. The probate court, however, held that the certificate of deposit belonged to the estate of Richard Courtney. The decision of the probate court was appealed to this court and was affirmed in Courtney v. Courtney, 296 Ark. 91, 752 S.W.2d 40 (1988).

The counterclaim in the foreclosure action was filed on January 19, 1988. The appellee filed an amended answer to the counterclaim, alleging the affirmative defense of the three-year statute of limitations set forth in Ark.Code Ann. § 16-56-105.

The counterclaim was transferred from chancery to circuit court for trial. The circuit court found as a matter of law that the counterclaim was based on the tort of negligence, which arose from the bank's failure on October 13, 1982, to obtain a separate writing concerning the payable-on-death clause of the certificate of deposit. Therefore, the court held, the three-year statute of limitations had expired before the counterclaim was filed.

The sole issue in this appeal is whether the trial court erred in holding that the three-year statute applied. We held in Hunter v. Connelly, 247 Ark. 486, 446 S.W.2d 654 (1969), that a cause of action accrues the moment the right to commence an action comes into existence, and the statute of limitations commences to run from that time. See also Holloway v. Morris, 182 Ark. 1096, 34 S.W.2d 750 (1931), where we stated: "The statute of limitations begins to run when there is a complete and present cause of action."

The appellant relies on the case of The Corning Bank v. Rice, 278 Ark. 295, 645 S.W.2d 675 (1983). There is, however, a distinction between Corning Bank and the present case. In Corning Bank, Melvin Rice owned several certificates of deposit payable on death to his brother, Marlin Rice. The controversy arose between Marlin, the third party beneficiary, and Bobby Rice, the administrator of Melvin's estate. In that case we quoted with approval the words of the trial court:

"In this instance, Melvin Rice clearly intended that at his death his brother was to have the proceeds and the bank by the testimony of its own employees and former employees admits that it attempted to comply with his wishes. Unfortunately, the bank simply did not comply with the provisions of Section 67-552, Arkansas Statutes Annotated, and it is not incumbent upon the depositor to insist that the provisions of that statute are complied with because the average layman has absolutely no knowledge of the statute."

Clearly, the negligent acts complained of in Corning Bank occurred after the death of the purchaser of the certificates of deposit. In the present case, when Richard and David Courtney purchased the certificates of deposit, the instruments were made payable to Richard or David Courtney. The father and son did not sign a separate document providing for the proceeds to go to David at Richard's death or vice versa.

The appellant's brief contends that his cause of action did not accrue until this court affirmed the decision of the probate court. Our opinion was not issued until June 20, 1988. The counterclaim, which was filed on...