Nelson v. Margetson, 88-0847

CourtCourt of Appeals of Wisconsin
Writing for the CourtBefore SCOTT, C.J., BROWN, P.J., and NETTESHEIM; BROWN
Citation441 N.W.2d 755
Docket NumberNo. 88-0847,88-0847
Decision Date22 March 1989

Circuit Court, Kenosha County.


APPEAL from a judgment of the circuit court for Kenosha county: BRUCE E. SCHROEDER, Judge.


BROWN, Presiding Judge.

Joan Nelson appeals a summary judgment dismissing her cause of action due to the statute of limitations. Because the pleadings and affidavits establish that this was an action to recover money loaned upon demand and because the law is that a cause of action based on a demand loan accrues at the time the loan is made, the trial court correctly ruled that the cause of action was barred by the statute of limitations. We affirm.

Joan Nelson's claim for relief was, inter alia, that she is entitled to recover two loans from Robert Margetson. One of the loans was made on August 7, 1979 for $17,500. The other loan was made on August 10, 1979 for $6000. Checks drawn on Nelson's personal account constitute the only evidence of the loans. On December 10, 1987, Nelson sued for repayment. The trial court held that the cause of action accrued the moment the loans were made. It dismissed the claim because the action was not commenced within six years of the contract as required by sec. 893.43, Stats. Nelson appeals.

Case law establishes that when a person loans money to another and there is no agreement as to when repayment is to be made, it is called "money loaned upon demand." The loan is due when it is made. The cause of action accrues at that point. Such is the rule of Barry v. Minahan, 127 Wis. 570, 573, 107 N.W. 488, 489 (1906). See also Accola v. Giese, 223 Wis. 431, 433, 271 N.W. 19, 20 (1937).

The pleadings and affidavits show that Nelson made the loan without any agreement regarding repayment. Thus, it was a loan that fell within the rule of Barry. Nelson tries to evade Barry on three bases, none of which is persuasive.

First, she claims that the Barry rule is limited to promissory notes. She observes that Barry and all the other cases following it dealt with written notes, or to put it another way, "instruments." She argues that this loan is not evidenced by an instrument and that, therefore, the Barry rule should not apply. She reasons that a written instrument provides a clear indication to both parties that the loan accrues immediately. She asserts that oral promises, however, have no such focal point for understanding their terms. Therefore, the law should not presume that the parties to an oral loan knew that the loan was immediately due and payable as the law supposes when a written document is executed.

We agree that the Barry line of cases all concerned promissory notes which can be termed written instruments. See sec. 403.108, Stats. However, we are convinced that the Barry rule applies to all loans, whether or not they are evidenced by an instrument. The language of the Barry case itself is not limited to written instruments, but to loans in general; the focus is on whether there are any terms for repayment. If not, then the law is that the loan is immediately due and the cause of action accrues when the loan is made. The Barry court wrote: "the cause of action to recover money loaned upon demand accrues at the time of the loan." Barry, 127 Wis. at 573, 107 N.W. at 489. Whether the loan was evidenced by a written instrument was not important to the rationale of the case. We see no reason to depart from the Barry rule simply because the loan was orally made rather than evidenced by a writing. Nelson has not offered any authority to the contrary and our independent research reveals none. We reject Nelson's initial argument.

Next, Nelson asserts that in December of 1983 or January of 1984, Nelson met with Margetson at which time Margetson acknowledged the existence of the debt. She argues that this acknowledgment tolls the statute of limitations. In support, she cites Restatement (Second) of Contracts Sec. 82(2)(a), relating to promises to pay an antecedent debt. Restatement (Second) of Contracts, sec. 82(2)(a) (1979).

We refuse to discuss the soundness of her argument other than to say that it has no application to the facts of this case. Nelson's affidavit does not allege that Margetson ever "promised to pay" all or part of the antecedent debt during this meeting. It only alleges that Margetson admitted that the debt existed. We cannot infer from this a promise to pay.

We reject Nelson's argument that this case is governed by Albright v. Weissinger, 238 Wis. 355, 298 N.W. 220 (1941). That case stands for the proposition that a cause of action does not accrue and the statute of limitations does not begin to run until any conditions precedent to...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT