Weirton Ice & Coal Co., Div. of Starvaggi Indus., Inc. v. Weirton Shopping Plaza, Inc., 16277

• Decision Date: 11 June 1985
• Docket Number: No. 16277,16277
• Citation: 334 S.E.2d 611,175 W.Va. 473
• Court: West Virginia Supreme Court
• Parties: WEIRTON ICE & COAL CO., DIVISION OF STARVAGGI INDUS., INC. v. WEIRTON SHOPPING PLAZA, INC.

Page 611

334 S.E.2d 611

175 W.Va. 473

WEIRTON ICE & COAL CO., DIVISION OF STARVAGGI INDUS., INC. v. WEIRTON SHOPPING PLAZA, INC.

No. 16277.

Supreme Court of Appeals of West Virginia.

Submitted Jan. 17, 1985.

Decided May 10, 1985.

Rehearing Denied June 11, 1985.

Syllabus by the Court

1. "The provisions of Section 8, Article 2, Chapter 55, Code, 1931, expressly require a signed writing to constitute a new promise or an acknowledgment from which such promise may be implied and that such promise or acknowledgment be incorporated in a writing signed by the promisor or his agent; and to remove an account from the operation of the five year statute of limitations created and imposed by Section 6, Article 2, Chapter 55, Code, 1931, there must be an express promise to pay or, if there be a mere acknowledgment, it must be unqualified, without condition, importing liability and willingness to pay without reference to a future settlement, and it must be determinate and unequivocal so as to be tantamount to an express promise to pay." Syllabus Point 1, Preston County Coke Co. v. Preston County L & P Co., 146 W.Va. 231, 119 S.E.2d 420 (1961).

2. "A promise sufficient to toll the statute of limitations should be made directly to the creditor or some person acting for him, and declarations or admissions to strangers are not sufficient for that purpose." Syllabus Point 2, Preston County Coke Co. v. Preston County L & P Co., 146 W.Va. 231, 119 S.E.2d 420 (1961).

3. "If such acknowledgment or promise is contained in a letter of the defendant to the plaintiff, it is not necessary, that the amount of the debt or that its date should be specified in the letter, but the particular debt, to which the letter refers, may be identified by extrinsic evidence written or parol; and if so identified clearly, and the promise is unequivocal, or the acknowledgment is of a subsisting debt, for which the defendant is liable and willing to pay, the bar of the statute of limitations is thereby removed." Syllabus Point 5, Abrahams v. Swann, 18 W.Va. 274 (1881).

4. A notation on a debtor's check acknowledging the existence of the debt can constitute a sufficient writing to extend the statute of limitations under W.Va.Code, 55-2-8.

W. Dean De La Mater, De La Mater, Hagg & Bohach, Weirton, for appellee.

Frank Cuomo, Jr., Marc B. Chernenko, William E. Watson & Associates, Wellsburg, for appellant.

MILLER, Justice:

This appeal by Weirton Shopping Plaza, Inc., (Shopping Plaza) involves the statute of limitations on an action brought on an account which the Shopping Plaza maintained with the Weirton Ice and Coal Supply Company (Supply Company). The Circuit Court of Hancock County concluded that the action was not time barred. The Shopping Plaza argues that the court's ruling was erroneous, and that the period commenced running when the last charge was made against the account. We conclude that the circuit court did not err.

In 1960, the Shopping Plaza was formed by three individuals, two of whom were officers of the Supply Company, for the purpose of constructing a shopping plaza in Weirton. The Supply Company undertook to pay, and did pay, certain bills connected with this project. After the Supply Company had paid the bills, a Mr. Bundy, who was its vice president, and who was also a shareholder in the Shopping Plaza, prepared a memorandum directing the Supply Company to invoice the Shopping Plaza for $107,360. The invoice was issued and entered on the Supply Company's accounts receivable ledger. A short time later, the Shopping Plaza made a $7,360 payment, leaving the account's balance at $100,000 in May, 1963.

Around the same time, the Supply Company consolidated certain other payments it had made on behalf of the Shopping Plaza into a notes receivable account which after a $53,505 payment was made by the Shopping Plaza, had a net balance of $100,000. On May 23, 1963, these two accounts were combined, making a total of $200,000 owed by the Shopping Plaza. There appears to be no dispute that the officers of the two companies discussed payment of this account and agreed that the interest would be 6 percent and that annual principal payments would be made in the amount of $10,000.

In the ensuing years, the Shopping Plaza made a number of payments by check to the Supply Company. These checks carried such notations as "payment on note" and "partial payment on note--bal. $170,000.00." In 1966, Mr. Bundy took full control of the Shopping Plaza, and from January, 1966 through November, 1971, the Shopping Plaza paid interest on the debt on a regular monthly basis. On the checks, however, the debt was referred to as an account or a loan. In addition to interest payments, all scheduled principal payments were made through 1969. The result was that the notes receivable ledger of the Supply Company on August 17, 1970, showed that the Shopping Plaza owed $130,000.

No principal payment was made in 1971, and on May 5, 1972, the Supply Company filed suit against the Shopping Plaza alleging in part in its complaint that:

"(1) The defendant owes the plaintiff on an account on which the last principal payment was made on the 17th day of August, 1970, the sum of One Hundred Thirty Thousand Dollars ($130,000.00).

"(2) The defendant owes the plaintiff as interest on said account at the rate of six percent (6%) per annum from the inception thereof through the 23rd day of April, 1972, the sum of Eighteen Thousand Sixty-five and 57/100 Dollars ($18,065.57).

"(3) Interest continues to accrue from the 23rd day of April, 1972, at the rate of Six Hundred Fifty Dollars ($650.00) per month."

In conjunction with its answer to the complaint, the Shopping Plaza moved to dismiss on the ground that "any claim which the plaintiff may have is barred on the Statute of Limitations inasmuch as there is no note or writing evidencing indebtedness and that any claims that the plaintiff had were on an open account subject to a five (5) year Statute of Limitations."

A trial without a jury was conducted in the case on August 25, 1980, September 30, 1981, January 27, 1982, and January 28, 1982. After the conclusion of the trial, the circuit court issued an opinion in the case, in which it found that:

"8. No one was able to testify to the existence of a promissory note; nor was a promissory note found among any of the records of the plaintiff corporation.

"9. The last payment shown on the ledger sheet (Plaintiff's Exhibit Number 1) was made on August 1, 1970. Mr. Bundy, as Secretary of the Defendant corporation, also made certain prior payments to the Plaintiff corporation under the direction of other officers of the Defendant. The last payment he made was in 1970.

"10. The records of the Defendant corporation contained an 'accounts payable' or 'notes payable' item due to the Plaintiff in the amount of One Hundred Thirty Thousand Dollars ($130,000.00). This entry is carried into financial statements and in connection with income tax returns of the Defendants."

Although the parties have invited us to explore several issues, we believe that only one of them needs to be answered to resolve this case: Did the checks issued by the Shopping Plaza, in partial payment of its debt, and bearing notations to that effect, constitute written acknowledgments of indebtedness sufficient to revive a time-barred cause of action under W.Va.Code, 55-2-8? ¹ This statute essentially provides that if a debtor acknowledges his debt, in writing, such acknowledgment extends the original statute of limitations on the claim by a like period from the date of the acknowledgment. In construing this section, we said in Syllabus Point 1 of Preston County Coke Co. v. Preston County L & P Co., 146 W.Va. 231, 119 S.E.2d 420 (1961), that:

"The provisions of Section 8, Article 2, Chapter 55, Code, 1931, expressly require a signed writing to constitute a new promise or an acknowledgment from which such promise may be implied and that such promise or acknowledgment be incorporated in a writing signed by the promisor or his agent; and to remove an account from the operation of the five year statute of limitations created and imposed by Section 6, Article 2, Chapter 55, Code, 1931, there must be an express promise to pay or, if there be a mere acknowledgment, it must be unqualified, without condition, importing liability and willingness to pay without reference to a future settlement, and it must be determinate and unequivocal so as to be tantamount to an express promise to pay."

See also Findley v. Cunningham, 53 W.Va. 1, 44 S.E. 472 (1903); Stiles v. Laurel Fork Oil & Coke Co., 47 W.Va. 838, 35 S.E. 986 (1900); Abrahams v. Swann, 18 W.Va. 274 (1881). We also stated in Syllabus Point 2 of Preston County Coke Co. that:

"A promise sufficient to toll the statute of limitations should be made directly to the creditor or some person acting for him, and declarations or admissions to strangers are not sufficient for that purpose."

It is important to note that our statute does not require any special language. The only condition expressly imposed by the statute is the requirement that the new promise or acknowledgment shall be in writing and signed by the debtor or his agent. Hill v. Ringgold, 112 W.Va. 374, 375, 164 S.E. 412, 413 (1932).

Such writing need not contain an express promise to pay, or even an affirmative statement of willingness or intent to pay, because a willingness to pay can be inferred from an unqualified admission of indebtedness, as we said in Stansbury v. Stansbury's Adm'rs, 20 W.Va. 23, 29 (1882):

"The current of modern authority establishes, that the burden of removing the statutory bar rests upon the plaintiff, and that the acknowledgement or admission must not only be unqualified in itself, but that there must be nothing in the attendant acts or declarations of the defendant to modify it, or rebut the inference of willingness to pay, which naturally and prima facie arises from an...