Gabriel v. Alhabbal

• Decision Date: 18 June 1981
• Docket Number: No. 18011,18011
• Parties: Nat Aboumrad GABRIEL, Appellant, v. Walid ALHABBAL and Mosallem Alhabbal, Appellees. (1st Dist.)
• Court: Texas Court of Appeals

Page 894

618 S.W.2d 894

Nat Aboumrad GABRIEL, Appellant, v. Walid ALHABBAL and Mosallem Alhabbal, Appellees.

No. 18011.

Court of Civil Appeals of Texas, Houston (1st Dist.).

June 18, 1981.

Rehearing Denied July 23, 1981.

J. Leonard Gotsdiner and Ranseler O. Wyatt, Houston, for appellant.

Boude E. Storey, II, John D. Wittenmyer-Conway, Storey & Wittenmyer, Houston, for appellees.

Before COLEMAN, C. J., and PEDEN and SMITH, JJ.

COLEMAN, Chief Justice.

This is an appeal from a take nothing judgment rendered in a suit to recover the balance due on two promissory notes. The issue to be determined is the date upon which the Statute of Limitations begins to run on a promissory note payable in monthly installments, the first installment due upon demand.

After this cause was called for trial, Walid Alhabbal and his brother Mosallem Alhabbal, appellees, presented to the court what was denominated as being a motion for a judgment on the pleadings. The trial court sustained this motion and entered a judgment which recited:

The court, after reviewing the pleadings, considering the authorities submitted and listening to arguments of counsel, is of the opinion that there is no genuine issue of fact involved about the limitation question in this case and that defendant's (sic) motion for a judgment on the pleadings, which was presented in open court before trial, should be granted.

The appellant states in his brief that he does not contend that the court should be precluded from sustaining a motion for judgment on the pleadings, but asserts that the court erred in sustaining the motion in this case because fact issues were presented. We will consider the appeal as if the trial court had sustained a special exception on the ground that the plaintiff's petition shows on its face that the cause of action asserted was barred by the four year Statute of Limitation, Article 5527, Tex.Rev.Civ.Stat.Ann. (Vernon 1980).

Gabriel, hereinafter referred to as appellant or plaintiff, brought suit against Walid and Mosallem Alhabbal, hereinafter styled defendants or appellees, alleging that the defendants executed two notes, one dated November 25, 1973, in the sum of $6,000 and another dated November 27, 1973, in the sum of $20,000. The two notes were identical with the exception of the date, the principal sum, and the rate of interest. The first note executed by the Alhabbal brothers reads as follows:

November 25, 1973

$6,000

For Value Received, the undersigned, Walid Alhabbal and Mosallem Albabbal (hereinafter called borrower) jointly and severally, hereby promises to pay to the order of Nat Aboumrad Gabriel, the principal sum of $6,000.00 Six Thousand and no/100 dollars, together with interest thereon from date hereof until maturity at the rate of Ten per cent (10%) per annum on the unpaid principal, payable as stipulated herein.

This Note Is Due And Payable As Follows, to-wit:

In successive monthly installments of $100.00 One Hundred Dollars each, including principal and interest, the first installment due and payable on demand of Nat Aboumrad Gabriel.

It is understood that the borrower may make full payment of principal and accrued interest at any time without penalty.

In his original petition the plaintiff alleged that he demanded payment of the installments due on the two notes in November of 1974. In an instrument entitled "Plaintiff's Answer To Defendants' Motion For Instructed Verdict" the plaintiff alleged that "the uncontradicted evidence" reflects that following the execution of the notes, the defendants made several payments on each of said notes, the last payment being made in June of 1974. In this same instrument it is stated that the plaintiff demanded payment of the notes in November of 1974.

Article 5527, Texas Revised Civil Statutes Annotated (Vernon Supp.1980) provides:

There shall be commenced and prosecuted within four years after the cause of action shall have accrued, and not afterward, all actions or suits in court, of the following description:

1. Actions for debt.

Since this suit is based upon two promissory notes, it is an action upon a debt within the meaning of Article 5527, supra. Inwood National Bank of Dallas v. Hoppe, 596 S.W.2d 183 (Tex.Civ.App.-Texarkana, 1980, writ ref. n. r. e.).

A promissory note in which no time for payment is stated is payable on demand. Tex.Bus. & Comm.Code Ann. § 3.108 (Vernon 1968).

The two notes at issue in this case provide for payment in specified installments, the first installment to become due on demand. A case involving an installment note is Davis v. Dennis, 448 S.W.2d 495 (Tex.Civ.App.-Tyler 1969, no writ). In Davis the court was considering a note which provided that the interest would be payable biweekly and further provided: "this note is payable in seventy-eight (78) installments of thirty-eight dollars and forty-six cents ($38.46) each." Id. at 496. The note did not specifically state the date upon which the first installment would become due. The note was dated March 25, 1961, and the trial court found the first payment to be due on or before April 10, 1961, apparently because of the provision for the biweekly payment of the interest. Citing § 3.108, supra, the appellate court held that where no time for payment is stated in a note, it becomes a demand note and was actionable immediately without demand. It further held that the provision for biweekly interest payments did not make the note payable at a fixed time and that the provision for payment of the note in seventy-eight installments did not effect the demand character of the note because there was no maturity date or dates or fixed time of payment of any installment. It then held that the four year Statute of Limitation would begin to run from the date of its execution or delivery of the note since it was payable on demand. The note did not provide that the first installment would be payable on demand. It came within a provision of § 3.108, supra, as being a note in which no time for payment was stated.

As a general rule of contract law where a demand is an integral part of a cause of action, or a condition precedent to the right to sue, the Statute of Limitation does not begin to run until a demand is made, unless the demand is waived or unreasonably delayed. A cause of action...