Case Title: Samuel G. McKerall v. Dennis Kaiser

Citation: 

Docket Number: 1090546

State: alabama

Court: Alabama Supreme Court

Date: 2010-09-30T00:00:00Z

Document:
REL: 09/30/2010 
Notice: T h i s 
o p i n i o n i s s u b j e c t t o f o r m a l 
r e v i s i o n b e f o r e 
p u b l i c a t i o n i n 
t h e advance 
s h e e t s o f 
Southern Reporter. 
R e a d e r s a r e r e q u e s t e d t o n o t i f y t h e 
Reporter of Decisions, 
Alabama A p p e l l a t e C o u r t s , 300 D e x t e r Avenue, Montgomery, Alabama 36104-3741 
((334) 229¬
0 6 4 9 ) , o f 
any 
t y p o g r a p h i c a l o r o t h e r e r r o r s , i n 
o r d e r t h a t c o r r e c t i o n s may 
be 
made b e f o r e 
t h e o p i n i o n i s 
p r i n t e d i n 
Southern Reporter. 
SUPREME COURT OF ALABAMA 
SPECIAL TERM, 2010 
1090546 
Samuel G. M c K e r a l l 
v. 
Dennis K a i s e r 
Appeal from Baldwin C i r c u i t 
Court 
(CV-09-900066) 
SMITH, 
J u s t i c e . 
Samuel 
G. 
M c K e r a l l 
a p p e a l s 
f r o m a summary 
j u d g m e n t 
e n t e r e d i n f a v o r o f D e n n i s K a i s e r i n 
K a i s e r ' s a c t i o n 
s e e k i n g 
r e c o v e r y on a p r o m i s s o r y 
n o t e 
g u a r a n t e e d b y M c K e r a l l . 
We 
r e v e r s e a n d remand. 
1090546 
F a c t s and P r o c e d u r a l 
H i s t o r y 
On A u g u s t 28, 2 0 0 1 , G r e a t A m e r i c a n 
R a d i o N e t w o r k , I n c . , 
e x e c u t e d 
a p r o m i s s o r y 
n o t e 
i n f a v o r o f D e n n i s 
K a i s e r f o r 
$ 3 0 0 , 0 0 0 ( " t h e n o t e " ) . 
W a l t e r J . Bowen, t h e p r e s i d e n t o f 
G r e a t 
A m e r i c a n 
R a d i o 
N e t w o r k , 
and 
M c K e r a l l 
p e r s o n a l l y 
g u a r a n t e e d t h e n o t e . 
The t e r m s o f t h e n o t e r e q u i r e d a m o n t h l y 
i n t e r e s t payment o f $3,000 f o r 11 months and t h e n a b a l l o o n 
payment o f t h e p r i n c i p a l and a l l 
u n p a i d i n t e r e s t on o r b e f o r e 
A u g u s t 28, 2002. 
S p e c i f i c a l l y , t h e n o t e , i n p e r t i n e n t p a r t , 
s t a t e s : 
" [ G r e a t 
A m e r i c a n 
R a d i o 
N e t w o r k ] , 
f o r v a l u e 
r e c e i v e d , p r o m i s e [ s ] t o p a y t o t h e o r d e r o f M i d - O h i o 
S e c u r i t i e s 
C o r p . , 
f o r t h e b e n e f i t 
o f 
D e n n i s 
L. 
K a i s e r , 
t h e sum 
o f 
$ 3 0 0 , 0 0 0 . 0 0 , 
t o g e t h e r 
w i t h 
i n t e r e s t 
t h e r e o n 
f r o m 
d a t e a t t h e r a t e o f t w e l v e 
p e r c e n t ( 1 2 % ) 
p e r annum, p a y a b l e 
i n e l e v e n 
e q u a l 
m o n t h l y 
i n s t a l l m e n t s 
o f 
$ 3 , 0 0 0 . 0 0 
e a c h 
( i . e . , 
I n t e r e s t 
o n l y ) commencing one m o n t h f r o m t h e d a t e 
and 
c o n t i n u i n g on t h e same d a y o f e a c h 
s u c c e e d i n g 
m o n t h 
t h e r e a f t e r 
u n t i l 
e l e v e n 
s u c h 
p a y m e n t s 
h a v e 
b e e n made, w i t h t h e e n t i r e 
b a l a n c e , 
a l l p r i n c i p a l 
and 
a l l t h e n a c c r u e d and u n p a i d 
i n t e r e s t b e i n g due 
and 
p a y a b l e , 
i n 
f u l l , 
IN 
ONE 
F I N A L 
BALLOON 
INSTALLMENT due on o r b e f o r e 
t w e l v e 
months 
f r o m 
d a t e . " 
( C a p i t a l i z a t i o n i n o r i g i n a l . ) 
R e l e v a n t t o t h i s a p p e a l , t h e n o t e 
a l s o 
s t a t e s : "Demand, 
p r o t e s t and n o t i c e o f p r o t e s t , and a l l 
r e q u i r e m e n t s 
n e c e s s a r y 
2 
1090546 
t o h o l d them l i a b l e , a r e h e r e b y w a i v e d by e a c h and e v e r y maker 
and e n d o r s e r o f t h i s n o t e . 
T h i s n o t e i s made, g i v e n , e x e c u t e d 
and d e l i v e r e d u n d e r t h e s e a l o f t h e u n d e r s i g n e d . " 
Bowen, i n 
h i s 
c a p a c i t y 
as p r e s i d e n t o f G r e a t A m e r i c a n 
R a d i o 
N e t w o r k , 
s i g n e d t h e n o t e . 
U n d e r t h a t s i g n a t u r e , t h e n o t e s t a t e s 
t h a t 
" [ t ] h i s n o t e p e r s o n a l l y e n d o r s e d and g u a r a n t e e d b y " and 
t h e n 
i n c l u d e s 
t h e 
s i g n a t u r e s o f 
M c K e r a l l 
and 
Bowen 
i n 
t h e i r 
p e r s o n a l 
c a p a c i t i e s . 
G r e a t A m e r i c a n R a d i o N e t w o r k t i m e l y made t h e 
f i r s t 
t h r e e 
i n t e r e s t p a y m e n t s on t h e n o t e , and t h e n G r e a t A m e r i c a n 
R a d i o 
N e t w o r k 
o r 
Bowen, 
p e r s o n a l l y , 
made 
s e v e r a l 
i n t e r s p e r s e d 
p a y m e n t s on t h e n o t e 
o v e r 
s e v e r a l 
y e a r s . 
I t i s u n d i s p u t e d 
t h a t t h e l a s t payment on t h e n o t e was made on May 
1, 2007, and 
t h a t t h e b a l a n c e on t h e p r i n c i p a l o f t h e n o t e i s $ 2 1 3 , 9 7 0 . 8 2 . 
On 
F e b r u a r y 
6, 
2009, 
K a i s e r 
s u e d 
G r e a t A m e r i c a n 
R a d i o 
N e t w o r k , Bowen, 
and 
M c K e r a l l i n t h e B a l d w i n 
C i r c u i t 
C o u r t 
s e e k i n g r e c o v e r y on t h e n o t e . 
K a i s e r ' s c o m p l a i n t c o n t a i n e d 
two 
c o u n t s . 
I n t h e 
f i r s t 
c o u n t , 
K a i s e r 
" c l a i m [ e d ] o f 
t h e 
D e f e n d a n t [ s ] $ 2 1 3 , 9 7 0 . 8 2 , due f r o m [ t h e m ] b y a c c o u n t on May 
1, 
2007, w h i c h sum o f money and i n t e r e s t o f $ 2 6 3 , 7 3 9 . 7 9 i s 
s t i l l 
u n p a i d . " 
I n 
t h e 
s e c o n d 
c o u n t , 
K a i s e r 
c l a i m e d 
t h a t 
" t h e 
3 
1090546 
f o l l o w i n g 
amounts 
a r e 
due 
and 
o w i n g 
u n d e r 
[ t h e 
n o t e , ] 
p r i n c i p a l $ 2 1 3 , 9 7 0 . 8 2 , i n t e r e s t o f $ 2 6 3 , 7 3 9 . 7 9 , a t t o r n e y s f e e 
o f 
$ 7 1 , 3 1 6 . 4 8 , 
f o r a 
t o t a l 
o f $ 5 4 9 , 0 2 7 . 0 9 , 
p l u s 
c o s t s 
o f 
c o u r t . " 
O n l y M c K e r a l l a n s w e r e d K a i s e r ' s c o m p l a i n t . 
A c c o r d i n g l y , 
K a i s e r moved f o r e n t r y o f a d e f a u l t j u d g m e n t 
a g a i n s t 
G r e a t 
A m e r i c a n R a d i o N e t w o r k and Bowen. 
The t r i a l c o u r t g r a n t e d t h e 
m o t i o n , 
e n t e r i n g a d e f a u l t j u d g m e n t 
a g a i n s t 
G r e a t A m e r i c a n 
R a d i o N e t w o r k f o r $555,177.54 and a d e f a u l t j u d g m e n t 
a g a i n s t 
Bowen 
f o r $ 5 5 5 , 1 7 7 . 5 4 . 
M c K e r a l l 
was 
t h e 
o n l y 
r e m a i n i n g 
d e f e n d a n t . 
K a i s e r 
and M c K e r a l l 
f i l e d 
c r o s s - m o t i o n s 
f o r a summary 
j u d g m e n t . 
K a i s e r , 
i n h i s m o t i o n , 
a r g u e d t h a t 
no g e n u i n e 
i s s u e s o f m a t e r i a l f a c t 
e x i s t e d a n d , t h e r e f o r e , t h a t he 
was 
e n t i t l e d t o a summary j u d g m e n t a g a i n s t M c K e r a l l . 
M c K e r a l l , i n 
h i s 
m o t i o n , 
a r g u e d 
t h a t 
K a i s e r ' s 
c l a i m s 
a g a i n s t 
h i m 
were 
b a r r e d by t h e a p p l i c a b l e s t a t u t e o f 
l i m i t a t i o n s . 
The 
t r i a l 
c o u r t 
d e n i e d M c K e r a l l ' s 
m o t i o n and e n t e r e d a 
summary 
j u d g m e n t 
i n 
f a v o r 
o f 
K a i s e r 
i n 
t h e 
amount 
o f 
$ 3 4 6 , 2 8 3 . 8 0 , p l u s c o s t s . 
M c K e r a l l a p p e a l s t h a t j u d g m e n t . 
4 
1090546 
S t a n d a r d o f R e v i e w 
" T h i s C o u r t ' s r e v i e w o f a summary j u d g m e n t i s de 
n o v o . 
W i l l i a m s 
v. 
S t a t e Farm Mut. 
A u t o . 
I n s . 
Co., 
8 8 
6 So. 
2d 
72 , 
74 
( A l a . 2 0 0 3 ) . 
We 
a p p l y 
t h e same 
s t a n d a r d 
o f 
r e v i e w 
as 
t h e 
t r i a l 
c o u r t 
a p p l i e d . 
S p e c i f i c a l l y , 
we must d e t e r m i n e w h e t h e r t h e movant 
has made a p r i m a f a c i e s h o w i n g t h a t no g e n u i n e 
i s s u e 
o f 
m a t e r i a l 
f a c t 
e x i s t s 
and 
t h a t 
t h e 
movant 
i s 
e n t i t l e d 
t o 
a j u d g m e n t 
as 
a m a t t e r 
o f 
l a w . 
R u l e 
5 6 ( c ) , A l a . R. 
C i v . P.; 
B l u e C r o s s & B l u e S h i e l d 
o f  
A l a b a m a v. 
H o d u r s k i , 
899 
So. 
2d 
949, 
952-53 
( A l a . 
2 0 0 4 ) . 
I n 
m a k i n g 
s u c h 
a 
d e t e r m i n a t i o n , 
we 
must 
r e v i e w 
t h e 
e v i d e n c e 
i n t h e 
l i g h t most f a v o r a b l e 
t o 
t h e n o n m o v a n t . 
W i l s o n 
v. Brown, 496 
So. 
2d 756, 
758 
( A l a . 
1 9 8 6 ) . 
Once t h e movant makes a p r i m a 
f a c i e 
s h o w i n g t h a t 
t h e r e 
i s no 
g e n u i n e i s s u e 
o f 
m a t e r i a l 
f a c t , 
t h e 
b u r d e n 
t h e n 
s h i f t s 
t o 
t h e 
nonmovant 
t o 
p r o d u c e ' s u b s t a n t i a l e v i d e n c e ' 
as 
t o t h e 
e x i s t e n c e 
o f 
a 
g e n u i n e 
i s s u e 
o f 
m a t e r i a l 
f a c t . 
B a s s 
v. 
 
S o u t h T r u s t Bank o f B a l d w i n C o u n t y , 
538 
So. 
2d 
794, 
797-98 
( A l a . 1 9 8 9 ) ; A l a . Code 1975, 
§ 1 2 - 2 1 - 1 2 . " 
Dow 
v. 
A l a b a m a 
D e m o c r a t i c 
P a r t y , 
897 
So. 
2d 
1035, 
1038-39 
( A l a . 
2 0 0 4 ) . 
D i s c u s s i o n 
On 
a p p e a l , 
M c K e r a l l 
r e a s s e r t s h i s a r g u m e n t t h a t 
K a i s e r ' s 
c l a i m s 
a g a i n s t 
h i m were b a r r e d 
by 
t h e 
a p p l i c a b l e s t a t u t e 
o f 
l i m i t a t i o n s 
and, 
t h e r e f o r e , 
t h a t 
t h e 
t r i a l 
c o u r t 
e r r e d 
i n 
e n t e r i n g 
a 
summary j u d g m e n t 
a g a i n s t 
h i m 
and 
i n 
f a v o r 
o f 
K a i s e r . 
M c K e r a l l 
a r g u e s 
t h a t 
t h e 
a p p l i c a b l e 
s t a t u t e 
o f 
l i m i t a t i o n s i s § 7-3-118, A l a . Code 1975. 
S e c t i o n 7 - 3 - 1 1 8 ( a ) , 
e n t i t l e d 
"Note p a y a b l e 
a t 
a 
d e f i n i t e 
t i m e , " 
p r o v i d e s 
t h a t , 
5 
1090546 
w i t h e x c e p t i o n s 
n o t 
r e l e v a n t h e r e , 
"an 
a c t i o n t o e n f o r c e 
t h e 
o b l i g a t i o n o f a p a r t y t o pay 
a n o t e p a y a b l e a t a d e f i n i t e t i m e 
must be commenced w i t h i n s i x y e a r s a f t e r t h e due d a t e o r d a t e s 
s t a t e d 
i n t h e n o t e o r , 
i f a due 
d a t e i s a c c e l e r a t e d , 
w i t h i n 
s i x 
y e a r s a f t e r t h e a c c e l e r a t e d due 
d a t e . " 
( E m p h a s i s added.) 
M c K e r a l l a r g u e s t h a t u n d e r § 7-3-118 K a i s e r ' s a c t i o n must h a v e 
b e e n commenced by A u g u s t 28, 2008, s i x y e a r s a f t e r A u g u s t 
28, 
2002, 
t h e 
due 
d a t e 
s t a t e d 
i n 
t h e 
n o t e . 
B e c a u s e 
K a i s e r ' s 
a c t i o n was 
n o t 
f i l e d 
u n t i l F e b r u a r y 6, 2009, M c K e r a l l 
a r g u e s 
t h a t K a i s e r ' s 
c l a i m s 
a g a i n s t 
h i m were b a r r e d 
by 
§ 7-3-118. 
I n r e s p o n s e , K a i s e r 
a r g u e s 
t h a t 
t h e 
n o t e 
i s a 
c o n t r a c t 
u n d e r s e a l ; t h e r e f o r e , he c o n t e n d s t h a t t h e a p p l i c a b l e s t a t u t e 
o f l i m i t a t i o n s i s § 6-2-33, A l a . Code 1975. 
S e c t i o n 6-2-33(1) 
p r o v i d e s 
t h a t " [ a ] c t i o n s f o u n d e d upon any 
c o n t r a c t o r w r i t i n g 
u n d e r s e a l " must be commenced w i t h i n 10 y e a r s a f t e r t h e 
c a u s e 
o f 
a c t i o n 
has 
a c c r u e d . 
A s s u m i n g 
t h a t 
t h e 
c a u s e 
o f 
a c t i o n 
a c c r u e d 
on 
A u g u s t 
28, 
2002, 
K a i s e r 
a r g u e s 
t h a t 
h i s 
c l a i m s 
a g a i n s t 
M c K e r a l l were 
f i l e d 
w i t h i n t h e 
a p p l i c a b l e s t a t u t e 
o f 
l i m i t a t i o n s . 
As an a l t e r n a t i v e a r g u m e n t , K a i s e r c o n t e n d s t h a t 
t h e 
a p p l i c a b l e 
s t a t u t e 
o f 
l i m i t a t i o n s 
i s § 6 - 2 - 3 4 ( 4 ) , 
A l a . 
Code 1975, 
w h i c h p r o v i d e s 
a s i x - y e a r 
s t a t u t e o f 
l i m i t a t i o n s 
6 
1090546 
f o r " [ a ] c t i o n s f o u n d e d on p r o m i s e s i n w r i t i n g n o t u n d e r 
s e a l , " 
and t h a t , u n d e r § 6-2-16, A l a . 
Code 1975, t h e p a r t i a l p a y m e n t s 
o f t h e n o t e e x t e n d e d t h e a c c r u a l o f t h e c a u s e o f a c t i o n 
u n t i l 
t h e 
d a t e 
o f t h e 
l a s t 
p a y m e n t , May 
1, 2 0 0 7 .
1 
As 
a n o t h e r 
a l t e r n a t e 
a r g u m e n t , K a i s e r 
c o n t e n d s 
t h a t 
c o u n t 
one o f h i s 
c o m p l a i n t 
a s s e r t s a c l a i m 
a g a i n s t 
M c K e r a l l 
f o r r e c o v e r y 
o f 
money due on an open a c c o u n t . 
S e c t i o n 6-2-37, A l a . 
Code 1975, 
p r o v i d e s 
t h a t 
" [ a ] c t i o n s t o r e c o v e r 
money due b y open o r 
u n l i q u i d a t e d a c c o u n t " must be commenced w i t h i n t h r e e y e a r s o f 
" t h e 
d a t e o f t h e l a s t 
i t e m o f t h e a c c o u n t o r f r o m t h e t i m e 
when, b y 
c o n t r a c t 
o r u s a g e , 
t h e a c c o u n t 
i s d u e . " 
K a i s e r 
c o n t e n d s t h a t , u n d e r § 6-2-37, h i s c l a i m a g a i n s t M c K e r a l l d i d 
n o t 
a c c r u e 
u n t i l 
May 
1, 
2007, 
a n d , 
t h e r e f o r e , 
t h a t 
t h e 
a p p l i c a b l e s t a t u t e o f l i m i t a t i o n s f o r 
c o u n t one d i d 
n o t e x p i r e 
u n t i l May 1, 2010. 
1 S e c t i o n 6-2-16, A l a . 
Code 1975, 
p r o v i d e s : 
"No a c t , p r o m i s e o r a c k n o w l e d g m e n t 
i s s u f f i c i e n t 
t o 
remove 
t h e b a r t o an 
a c t i o n 
c r e a t e d 
by t h e 
p r o v i s i o n s o f t h i s c h a p t e r , 
n o r i s s u c h e v i d e n c e o f 
a 
new 
and 
c o n t i n u i n g 
c o n t r a c t , 
e x c e p t 
a 
p a r t i a l 
p a y m e n t , made upon t h e c o n t r a c t by t h e p a r t y 
s o u g h t 
t o 
be 
c h a r g e d 
b e f o r e 
t h e b a r i s c o m p l e t e 
o r an 
u n c o n d i t i o n a l p r o m i s e i n w r i t i n g s i g n e d b y t h e p a r t y 
t o be c h a r g e d 
t h e r e b y . " 
7 
1090546 
F i r s t , we must 
c o n s i d e r w h e t h e r t h e n o t e 
c o n s t i t u t e s a 
n e g o t i a b l e 
i n s t r u m e n t , 
b e c a u s e § 6 - 2 - 2 ( e ) , 
A l a . Code 
1975, 
p r o v i d e s 
t h a t p r o v i s i o n s w i t h i n C h a p t e r 
2 o f T i t l e 
6 
" s h a l l 
n o t 
a p p l y 
t o n e g o t i a b l e 
i n s t r u m e n t s 
w h i c h a r e g o v e r n e d 
b y 
S e c t i o n s 7-3-118 and 7-4-11." 
S e c t i o n 7 - 3 - 1 0 4 ( a ) , A l a . Code 
1975, 
d e f i n e s a " n e g o t i a b l e i n s t r u m e n t " as 
f o l l o w s : 
" [ A ] n u n c o n d i t i o n a l p r o m i s e o r o r d e r t o p a y a 
f i x e d 
amount o f money, w i t h o r w i t h o u t 
i n t e r e s t o r o t h e r 
c h a r g e s 
d e s c r i b e d i n t h e p r o m i s e o r o r d e r , i f i
t
: 
" ( 1 ) I s p a y a b l e t o b e a r e r o r t o o r d e r 
a t t h e t i m e 
i t i s i s s u e d o r 
f i r s t 
comes 
i n t o p o s s e s s i o n o f a h o l d e r ; 
" ( 2 ) 
I s p a y a b l e 
on demand 
o r a t a 
d e f i n i t e t i m e ; and 
" ( 3 ) 
Does 
n o t 
s t a t e 
any 
o t h e r 
u n d e r t a k i n g 
o r 
i n s t r u c t i o n by t h e 
p e r s o n 
p r o m i s i n g o r o r d e r i n g payment t o do any a c t 
i n 
a d d i t i o n t o t h e payment o f money, b u t 
t h e 
p r o m i s e 
o r o r d e r 
may 
c o n t a i n 
( i ) an 
u n d e r t a k i n g o r power t o g i v e , m a i n t a i n , o r 
p r o t e c t 
c o l l a t e r a l t o s e c u r e p a y m e n t , 
( i i ) 
an a u t h o r i z a t i o n o r power t o t h e h o l d e r t o 
c o n f e s s j u d g m e n t o r r e a l i z e on o r d i s p o s e 
o f 
c o l l a t e r a l , 
o r 
( i i i ) 
a w a i v e r 
o f t h e 
b e n e f i t 
o f 
any 
l a w 
i n t e n d e d 
f o r t h e 
a d v a n t a g e o r p r o t e c t i o n o f an 
o b l i g o r . " 
We 
c o n c l u d e 
t h a t 
t h e 
n o t e 
c o n s t i t u t e s a 
n e g o t i a b l e 
i n s t r u m e n t 
b e c a u s e 
i t meets 
a l l t h e 
c h a r a c t e r i s t i c s 
o f 
n e g o t i a b l e 
i n s t r u m e n t s 
i n § 7 - 3 - 1 0 4 ( a ) . 
The 
n o t e 
i s "an 
8 
1090546 
u n c o n d i t i o n a l p r o m i s e . . . t o p a y a f i x e d amount o f money" t o 
t h e o r d e r o f M i d - O h i o S e c u r i t i e s C o r p o r a t i o n f o r t h e b e n e f i t 
o f K a i s e r " a t a d e f i n i t e 
t i m e " 
w i t h o u t 
any " u n d e r t a k i n g o r 
i n s t r u c t i o n " by G r e a t A m e r i c a n R a d i o N e t w o r k t o do a n y t h i n g i n 
a d d i t i o n t o t h e o b l i g a t i o n t o make p a y m e n t s . 
§ 7 - 3 - 1 0 4 ( a ) , 
A l a . Code 1975. 
The f a c t 
t h a t t h e n o t e was made u n d e r 
s e a l 
has no e f f e c t on w h e t h e r i t i s a n e g o t i a b l e i n s t r u m e n t . 
See 
 
F o s t e r v. H a c i e n d a N i r v a n a , I n c . , 32 So. 3d 1256, 1259 
( A l a . 
2009) 
( " [ I ] f t h e p r o m i s s o r y 
n o t e i s a n e g o t i a b l e 
i n s t r u m e n t 
... § 6-2-2(e) c l e a r l y m a n d a t e s t h a t t h e s i x - y e a r s t a t u t e o f 
l i m i t a t i o n s 
o f § 7-3-118 
must 
a p p l y 
t o 
[a] c l a i m on t h e 
p r o m i s s o r y 
n o t e , 
r e g a r d l e s s o f w h e t h e r t h e n o t e 
i s a l s o a 
c o n t r a c t u n d e r s e a l . " ) . 
B e c a u s e t h i s p r e s e n t a c t i o n s e e k s t o 
e n f o r c e 
o b l i g a t i o n s u n d e r a n e g o t i a b l e 
i n s t r u m e n t 
t h a t 
was 
p a y a b l e 
a t 
a 
d e f i n i t e 
t i m e , 
t h e 
a p p l i c a b l e 
s t a t u t e 
o f 
l i m i t a t i o n s i s f o u n d i n § 7 - 3 - 1 1 8 ( a ) , A l a . 
Code 1975, and n o t 
§§ 6-2-33, 6-2-34, o r 6-2-37, A l a . 
Code 1975. See § 
6 - 2 - 2 ( e ) , 
A l a . Code 1975. 
We 
must 
n e x t 
c o n s i d e r 
when 
K a i s e r ' s 
c a u s e 
o f a c t i o n 
a g a i n s t M c K e r a l l a c c r u e d . 
K a i s e r makes no a r g u m e n t t h a t t h e 
n o t e i s n o t a n e g o t i a b l e i n s t r u m e n t ; i n s t e a d , K a i s e r 
a r g u e s 
9 
1090546 
t h a t , " [ s ] h o u l d t h e C o u r t a c c e p t t h [ e ] a r g u m e n t t h a t 
t h i s 
i s 
a n e g o t i a b l e 
i n s t r u m e n t 
g o v e r n e d by 
§ 7 - 3 - 1 1 8 , " h i s c a u s e 
o f 
a c t i o n a g a i n s t M c K e r a l l , 
as a g u a r a n t o r o f t h e n o t e , d i d 
n o t 
a c c r u e 
u n t i l 
K a i s e r made demand on 
t h e n o t e and 
t h a t he 
d i d 
n o t make demand 
on 
t h e 
n o t e 
t o 
M c K e r a l l 
u n t i l 
f i l i n g 
t h i s 
a c t i o n . 
K a i s e r ' s 
b r i e f , 
a t 
p. 
11. 
I n 
s u p p o r t 
o f 
t h i s 
a r g u m e n t , K a i s e r n o t e s t h a t t h e 
O f f i c i a l Comment t o § 7-3-118 
s t a t e s 
t h a t 
" S e c t i o n 
3-118 
does n o t 
d e f i n e when a c a u s e 
o f 
a c t i o n a c c r u e s . " 
A c c o r d i n g l y , K a i s e r a r g u e s t h a t t h e 
s i x - y e a r 
s t a t u t e o f l i m i t a t i o n s 
o f § 7 - 3 - 1 1 8 ( a ) b e g a n r u n n i n g upon 
t h e 
f i l i n g 
o f 
t h i s 
a c t i o n . 
As 
an 
a l t e r n a t i v e a r g u m e n t , K a i s e r a r g u e s t h a t , u n d e r 
§ 
7 - 3 - 1 1 8 ( b ) , 
e n t i t l e d " N o t e p a y a b l e 
on demand," h i s c a u s e 
o f 
a c t i o n a g a i n s t M c K e r a l l a c c r u e d when t h e l a s t payment was made 
on t h e n o t e . 
S e c t i o n 7 - 3 - 1 1 8 ( b ) p r o v i d e s , 
i n p e r t i n e n t p a r t , 
t h a t , w i t h e x c e p t i o n s 
n o t 
r e l e v a n t h e r e , " [ i ] f 
no demand f o r 
payment i s made t o t h e m a k e r , an a c t i o n t o e n f o r c e 
t h e n o t e i s 
b a r r e d 
i f n e i t h e r p r i n c i p a l 
n o r 
i n t e r e s t on t h e n o t e has 
b e e n 
p a i d 
f o r a c o n t i n u o u s p e r i o d 
o f 
10 
y e a r s . " 
A p p l y i n g 
§ 
7-3-
1 1 8 ( b ) 
t o 
t h e 
f a c t s o f 
t h i s 
c a s e , 
K a i s e r 
c o n t e n d s 
t h a t 
t h e 
c a u s e o f a c t i o n a c c r u e d when t h e 
l a s t payment was made, May 
1, 
10 
1090546 
2007, and t h a t t h e s i x - y e a r 
s t a t u t e o f l i m i t a t i o n s t h e r e f o r e 
d o e s n o t e x p i r e u n t i l 
May 
1, 
2013. 
C o n t r a r y 
t o 
K a i s e r ' s a r g u m e n t s , 
t h i s 
c a u s e 
o f 
a c t i o n 
a c c r u e d on t h e due d a t e o f t h e n o t e , A u g u s t 28, 2002, 
b e c a u s e , 
by 
i t s t e r m s , 
t h e 
n o t e 
was 
due 
a t 
a 
d e f i n i t e 
t i m e , 
and 
M c K e r a l l w a i v e d demand as 
a r e q u i s i t e 
f o r 
l i a b i l i t y 
on 
t h e 
n o t e . 
The n o t e s t a t e s t h a t " [ d ] e m a n d ... and a l l r e q u i r e m e n t s 
n e c e s s a r y t o h o l d them 
l i a b l e 
a r e h e r e b y 
w a i v e d 
by e a c h 
and 
e v e r y 
maker 
and 
e n d o r s e r 
o f 
t h i s 
n o t e , " 
and 
M c K e r a l l 
" p e r s o n a l l y 
e n d o r s e d 
and 
g u a r a n t e e d " 
t h e 
n o t e . 
( E m p h a s i s 
added.) 
T h e r e f o r e , u n d e r 
§ 7 - 3 - 1 1 8 ( a ) , 
K a i s e r ' s c a u s e 
o f 
a c t i o n a g a i n s t M c K e r a l l t o e n f o r c e t h e n o t e a c c r u e d on t h e 
due 
d a t e o f t h e n o t e , A u g u s t 28, 2002, and K a i s e r h a d 
s i x y e a r s 
f r o m 
t h a t d a t e 
t o commence t h e 
a c t i o n . 
See 
§ 7-3-118 
("an 
a c t i o n 
t o e n f o r c e 
t h e 
o b l i g a t i o n 
o f a p a r t y t o p a y 
a 
n o t e 
p a y a b l e a t a d e f i n i t e t i m e must be commenced w i t h i n s i x y e a r s 
a f t e r t h e due d a t e " ) ; F o s t e r , 32 So. 3d a t 1264 
( h o l d i n g 
t h a t , 
u n d e r § 7-3-118, t h e 
c l a i m o f t h e 
p l a i n t i f f s , 
who 
s o u g h t 
t o 
e n f o r c e a n o t e and 
" f i l e d 
t h e i r 
c l a i m on t h e p r o m i s s o r y 
n o t e 
... s i x y e a r s and n i n e months a f t e r t h e 
f i n a l payment was 
due 
on 
t h e 
n o t e " 
was 
b a r r e d 
by 
t h e 
s t a t u t e 
o f 
l i m i t a t i o n s ) ; 
11 
1090546 
S p r a g i n s 
v. 
M c C a l e b , 
237 
A l a . 
658 , 661, 
188 
So. 
251, 
253 
(1939) 
( h o l d i n g t h a t when an e n d o r s e r o f a n o t e w a i v e s demand 
" ' t h e 
[ e ] n d o r s e r becomes u n c o n d i t i o n a l l y l i a b l e 
f o r t h e 
d e b t 
e v i d e n c e d 
by 
t h e 
i n s t r u m e n t . ' " 
( q u o t i n g 
L i t t l e 
v. 
P e o p l e s ' 
 
Bank o f M o b i l e , 
209 
A l a . 
620, 
624, 
96 
So. 
763, 
767 
( 1 9 2 3 ) ) .
2 
B e c a u s e K a i s e r commenced h i s a c t i o n a g a i n s t M c K e r a l l more 
t h a n s i x y e a r s a f t e r t h e due d a t e o f t h e n o t e , K a i s e r ' s 
c l a i m s 
2 K a i s e r a r g u e s t h a t , u n d e r § 6-2-16, t h e payment on 
May 
1, 
2007, 
b a r r e d 
t h e 
e x p i r a t i o n o f 
t h e 
s i x - y e a r 
s t a t u t e 
o f 
l i m i t a t i o n s 
f o u n d 
i n 
§ 
7 - 3 - 1 1 8 ( a ) . 
I n 
s u p p o r t 
o f 
t h i s 
a r g u m e n t , K a i s e r n o t e s t h a t t h e A l a b a m a Comment t o § 7-3-118 
s t a t e s , 
i n p e r t i n e n t 
p a r t : 
" A l a . Code S e c t i o n 6-2-16 c o n t i n u e s 
t o a p p l y 
t o 
d e t e r m i n e t h e 
s u f f i c i e n c y o f a p a r t i a l payment o r 
a 
w r i t t e n 
p r o m i s e 
t o 
remove 
t h e 
b a r 
t o 
an 
a c t i o n . 
S e c t i o n 
6-2-16 
i s 
a p p l i c a b l e 
t o 
n e g o t i a b l e 
i n s t r u m e n t s 
as 
w e l l as 
n o n - n e g o t i a b l e 
i n s t r u m e n t s . 
S t e w a r t 
v. 
J o n e s , 
614 
So. 
2d 
1023 
( A l a . 
1 9 9 3 ) . 
S e c t i o n 
6-2-16 i s n o t 
d i s p l a c e d 
by 
S e c t i o n 
3-118, 
e x c e p t 
w i t h 
r e s p e c t 
t o 
s u b s e c t i o n 
(b) 
o f 
S e c t i o n 
3-118." 
The A l a b a m a Comment was 
a d d e d as p a r t o f a w h o l e s a l e r e v i s i o n 
o f C h a p t e r 3 o f 
T i t l e 
7 i n 1995 when t h e 
l e g i s l a t u r e 
a d o p t e d 
A r t i c l e 
3 o f t h e U n i f o r m C o m m e r c i a l Code. 
B e c a u s e S t e w a r t 
v.  
J o n e s , 
614 
So. 
2d 
1023 
( A l a . 1 9 9 3 ) , p r e d a t e s 
t h e e f f e c t i v e 
d a t e 
o f § 6-2-2(e) on 
J a n u a r y 1, 
1996, 
we 
c o n c l u d e t h a t 
t h e 
s t a t e m e n t 
t h a t 
"[§] 
6-2-16 
i s 
a p p l i c a b l e 
t o 
n e g o t i a b l e 
i n s t r u m e n t s 
as 
w e l l 
as 
n o n - n e g o t i a b l e 
i n s t r u m e n t s " 
i s 
no 
l o n g e r v a l i d . 
A c c o r d i n g l y , we p r e t e r m i t f u r t h e r d i s c u s s i o n o f 
t h e 
a p p l i c a b i l i t y 
o f § 6-2-16 t o 
t h i s 
a c t i o n . 
12 
1090546 
a g a i n s t 
M c K e r a l l 
a r e b a r r e d 
by 
t h e 
a p p l i c a b l e 
s t a t u t e 
o f 
l i m i t a t i o n s . 
See § 7-3-118, A l a . 
Code 1975. 
A c c o r d i n g l y , t h e 
t r i a l 
c o u r t e r r e d i n e n t e r i n g a summary j u d g m e n t f o r K a i s e r . 
C o n c l u s i o n 
B a s e d on t h e f o r e g o i n g , we 
r e v e r s e 
t h e j u d g m e n t o f t h e 
t r i a l 
c o u r t and remand 
t h i s c a u s e t o t h a t c o u r t f o r f u r t h e r 
p r o c e e d i n g s c o n s i s t e n t w i t h 
t h i s 
o p i n i o n . 
REVERSED AND REMANDED. 
L y o n s , W o o d a l l , P a r k e r , and Shaw, J J . , c o n c u r . 
M u r d o c k , J . , c o n c u r s i n t h e 
r e s u l t . 
13 
1090546 
MURDOCK, J u s t i c e 
( c o n c u r r i n g i n t h e 
r e s u l t ) . 
I 
c o n c u r 
i n t h e 
r e s u l t 
r e a c h e d 
by 
t h e m a i n 
o p i n i o n . 
A l s o , 
I t a k e 
t h i s 
o p p o r t u n i t y 
t o n o t e 
t h a t no a r g u m e n t i s 
p r e s e n t e d i n t h i s c a s e b a s e d on § 7 - 3 - 6 0 5 ( b ) , A l a . Code 1975, 
and t h e O f f i c i a l Comment 
t h e r e t o . 
14