Title: KEOTA MILLS & ELEVATOR v. GAMBLE
Citation: 2010 OK 12
Docket Number: 
State: Oklahoma
Issuer: Oklahoma Supreme Court
Date: February 16, 2010

KEOTA MILLS & ELEVATOR v. GAMBLE Annotate this Case KEOTA MILLS & ELEVATOR v. GAMBLE 2010 OK 12 Case Number: 103149 Decided: 02/16/2010 THE SUPREME COURT OF THE STATE OF OKLAHOMA NOTICE: THIS OPINION HAS NOT BEEN RELEASED FOR PUBLICATION IN THE PERMANENT LAW REPORTS. UNTIL RELEASED, IT IS SUBJECT TO REVISION OR WITHDRAWAL. KEOTA MILLS & ELEVATOR, Appellant/Plaintiff, v. OTHEL GAMBLE, JR. Appellee/Defendant. APPEAL FROM THE DISTRICT COURT OF LEFLORE COUNTY Honorable Danita G. Williams, Trial Judge ¶0 The appellant/plaintiff, Keota Mills (Keota), brought an action against the appellee/defendant, Othel Gamble, Jr. (Gamble), to recover from an alleged default on a promissory note executed in 1989. Gamble argued that the suit was time-barred by the five year limitation period of TRIAL COURT REVERSED; CAUSE REMANDED FOR PROCEEDINGS CONSISTENT WITH OUR PRONOUNCEMENT. Marc L. Brovos, Poteau, Oklahoma, for Plaintiff/Appellant. Douglas W. Sanders, Poteau, Oklahoma, dor Defendant/Appellee. KAUGER, J.: ¶1 This cause concerns an attempt to recover on a defaulted promissory note. The dispositive question presented is whether partial payment on the note extended the time within which to bring an action. The parties stipulated that the issue was whether the suit was time-barred by the five year limitation period of ¶2 However, reliance on only these statutes fails to take into consideration FACTS ¶3 The plaintiff/appellant Keota Mills and Elevator (Keota) entered into a promissory note based on an open account balance with the defendant/appellee Othel Gamble, Jr., (Gamble) on January 6, 1989. The principal sum of the loan was $100,000.00, and the interest rate was 15% per annum until paid for a total of $115,000.00. The note also included a provision for attorney fees not in excess of 15% of the unpaid debt after default. The loan was for one year, and it was secured by 300 acres of spring spinach and the 1989 soybean crops. ¶4 The parties have stipulated that Gamble made sporadic payments on the note on the following dates, in the following amounts: 2/1/1990 $20,000.00 5/10/2000 $2,000.00 3/05/1991 $20,000.00 6/12/2000 $2,000.00 10/18/1996 $25,000.00 7/5/2000 $2,000.00 5/11/1999 $2,000.00 8/25/2000 $2,000.00 6/10/1999 $2,000.00 10/10/2000 $2,000.00 7/7/1999 $2,000.00 11/22/2000 $2,000.00 8/24/1999 $2,000.00 3/29/2001 $2,000.00 4/11/2000 $2,000.00 5/22/2001 $2,000.00 6/13/2001 $2,000.00 ¶5 On September 28, 2001, three months after the last payment, Keota filed a lawsuit alleging that Gamble had defaulted on the note. Gamble responded with an answer and counter-claim, arguing, alternatively, that: 1) the payments did not toll the applicable statute of limitations; 2) if the limitations period had been tolled, there was an oral novation; and 3) in the absence of a novation, Keota, instead, owed Gamble. ¶6 On October 3, 2005, the parties stipulated that the threshold legal issue in this matter was which statute of limitations controlled -- the five years under ¶7 The trial court held a hearing on November 17, 2005. It issued an order on January 6, 2006, determining that the action was time-barred by ¶8 THE PAYMENTS MADE ON THE NOTE EXTENDED THE LIMITATIONS PERIOD. ¶9 The parties have stipulated to the facts and issues in an apparent attempt to narrow the question before the Court. However, they also stipulated that the debtor continued to make payments on the note from 1999 until 2001. The clear implication of this stipulation is that such payments were voluntary and were to apply to the balance due on the note. We construe a petition in error in its entirety, ¶10 Since 1910, the general rule of law is that voluntary, partial payments made on a contractual debt extends or revives the statute of limitations. Title In any case founded on contract, when any part of the principal or interest shall have been paid, or an acknowledgment of an existing liability, debt or claim, or any promise to pay the same shall have been made, an action may be brought in such case within the period prescribed for the same, after such payment, acknowledgment or promise; but such acknowledgment or promise must be in writing, signed by the party to be charged thereby. ¶11 Section 101 was borrowed from the 1889 statutes of the State of Kansas. The Kansas Supreme Court in Good v. Ehrlich, 67 Kan. 94, 72 P. 545, 546 (1903) addressed its version of the statute by acknowledging that pursuant to the common law and the statute, partial payment tolled the limitations period because it was an acknowledgment of an existing liability at the time the payment was made. ¶12 This Court, in Berry v. Oklahoma State Bank, ¶13 Since 1915, this Court has had numerous opportunities to discuss and apply this statutorily codified, common law rule. In 1918, the Court recognized in Ross v. Lee, ¶14 In First State Bank of Loco v. Lucas, ¶15 This partial payment rule has also been recognized in other states as well. In Johnson v. Johnson, 81 Mo. 311 (1884), the Supreme Court of Missouri, addressing the limitation period on a suit brought to foreclose a mortgage recognized that: 1) the running of the statute of limitations is suspended and its bar overcome by evidence of partial payment; and 2) partial payment on a note, after the bar of the statute has become complete will revive the cause of action upon it. Similarly, in Wadley v. Ward, 99 Ark. 212, 137 S.W. 808, 809 (1911), the Supreme Court of Arkansas, when addressing the limitations period on a defaulted mortgage stated: It is well settled that, as against the debtor, partial payments made by him to his creditor will stop the running of the statute of limitations, and mark the time from which the statute then begins to run; and the general rule is that the partial payment of a debt, which will prevent the statute of limitations from running against it, will also prevent the statute from running against the remedy on the security. . . . ¶16 We have also recognized the partial payment rule as applied to payments made on open accounts. Pitts v. Walter, ¶17 The parties reliance on only ¶18 The partial payment rule, that a voluntary partial payment on a note tolls or revives the statute of limitations, has been applied for centuries. CONCLUSION ¶19 When an issue or claim is properly before the court, the court is not limited to the particular legal theories advanced by the parties, but rather retains the independent power to identify and apply the proper construction of the governing law. "A stipulation between the parties or their counsel cannot control the action of the court in a matter of law, although they may stipulate respecting facts." Under the stipulated facts, the debtor continued to make partial payments, albeit sporadically, on a note executed in 1989 for twelve years. The effect of such payments extended or revived any limitation period which would have expired had no payments additional payments been made. It would be illogical and incongruous to foreclose a creditor from bringing an action because payments were made, then stopped, then reinstated for an extended period of time only to lull the creditor into thinking that the debt might eventually be paid without the creditor being forced to resort to legal action. The trial court is reversed, and the cause is remanded for proceedings consistent with this opinion. TRIAL COURT REVERSED; CAUSE REMANDED FOR PROCEEDINGS CONSISTENT WITH OUR PRONOUNCEMENT. TAYLOR, V.C.J., HARGRAVE, OPALA, KAUGER, WINCHESTER, REIF, JJ., concur. EDMONDSON, C.J., WATT, COLBERT, J.J., dissent. FOOT