Tepper By and Through Michelson v. Citizens Federal Sav. and Loan Ass'n, 83-2285
| Decision Date | 10 April 1984 |
| Docket Number | No. 83-2285,83-2285 |
| Citation | 448 So.2d 1138 |
| Parties | 38 UCC Rep.Serv. 528 Rose L. TEPPER, an incompetent, By and Through her Guardian Donald D. MICHELSON, Appellant, v. CITIZENS FEDERAL SAVINGS AND LOAN ASSOCIATION, Appellee. |
| Court | Florida District Court of Appeals |
David M. Garvin and Philip T. Weinstein, Miami, for appellant.
Stuzin & Camner and Barry Jay Warsch, Miami, for appellee.
Before NESBITT, DANIEL S. PEARSON and FERGUSON, JJ.
The sole question presented is when does the statute of limitations begin to run against a drawer in an action for wrongful dishonor of a check--on the date of issuance of the check or the date of presentment and dishonor?
Rose Tepper (appellant) was adjudicated an incompetent in December, 1982. On examination of her personal effects, a court-appointed guardian discovered a check for the sum of $6,068, dated January 4, 1974. The check was drawn to Rose Tepper by Citizens Federal Savings and Loan Association against its account with Jefferson National Bank. See Exhibit.
On December 20, 1982, appellant's representative presented the check to the drawee bank, Jefferson National (not a party to this action), which refused payment. The representative then advised the drawer, Citizens Federal (appellee), of the dishonor. Citizens Federal orally notified appellant's representative that it would neither honor nor refund the instrument. The guardian instituted this action against the drawer on July 12, 1983.
The trial court dismissed the guardian's complaint on appellee's motion, holding that "the statute of limitations began to run on the date of issuance of the check herein sued upon, [so the] action is barred by the applicable five year statute of limitations." We reverse upon a holding that the statute of limitations begins to run against a drawer of a check on the date of presentment and dishonor.
Although there seems to be a dearth of Florida case law on the issue presented, appellant has found all the law necessary to a correct resolution. The decision here is based upon an application of clear statutes and is supported by several treatises.
A draft is a three-party instrument whereby the drawer orders the drawee to pay money to the payee. See J. White and R. Summers, Uniform Commercial Code § 13-1 (2d ed. 1980). A draft is also called a check when the drawee is a bank and the instrument is payable on demand. § 673.104(2)(b), Fla.Stat. (1983). A drawee is not liable on the instrument until there has been an acceptance. § 673.409. The drawee may, by accepting in writing on the instrument, agree to honor it as presented. § 673.410. By contrast, a drawee may reject the instrument, as by stamping insufficient funds on a check where the drawer's deposited funds are less than the amount of the instrument. The act of accepting the instrument renders the drawee primarily liable as an acceptor. See § 673.414(1). Because there are no conditions precedent to its liability, a cause of action accrues against an acceptor in the case of a demand instrument on the date of the instrument or date of issue. § 673.122(1)(b)1.
The drawer, on the other hand, is only secondarily liable on the instrument, in that there are conditions precedent to liability. W. Hawkland, Commercial Paper 52 (2d ed. 1979). The normal conditions precedent include presentment to the drawee, dishonor, and notice of dishonor. Id. see § 673.501. Therefore, a cause of action against the drawer of a draft accrues only upon demand following dishonor of the instrument. § 673.122(3). Notice of dishonor constitutes a demand. Id. This latter section is clearly dispositive of the issue presented, as a cause of action against the drawer herein, Citizens Federal, thus did not accrue until appellant's representative received notice of dishonor from the drawee, Jefferson National Bank.
Florida case authority for the proposition that the statute of limitations begins to run against an issuing bank on a cashier's check at the moment of issuance, Atlantic National Bank of West Palm Beach v. Havens, 45 So.2d 342 (Fla.1950), is distinguishable. A cashier's check is a check on which the...
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