Opinion ID: 686812
Heading Depth: 2
Heading Rank: 3

Heading: Reasonableness of Demand

Text: 11 The district court held in the alternative that Arkansas requires a demand for payment to be made within a reasonable time. Neither the district court nor the parties have cited any authority for the proposition that Arkansas requires a demand to be made within a reasonable time. We believe the district court erred by construing Sec. 4-3-118(e) to require a demand for payment to be made within a reasonable amount of time. 12 As is evident throughout the Uniform Commercial Code, when the Arkansas legislature intends to require an action to be taken within a reasonable time, this intention is expressed within the terms of the particular statute. The Arkansas Uniform Commercial Code is replete with explicit requirements that actions be taken within a reasonable time. 3 Accordingly, under the maxim expressio unius est exclusio alterius, we will not imply a reasonableness requirement into a statute that is silent on the subject. Furthermore, Ark.Code Ann. Sec. 4-1-204 states:(1) Whenever this subtitle [U.C.C.] requires any action to be taken within a reasonable time.... 13 (2) What is a reasonable time for taking any action depends on the nature, purpose, and circumstances of such action. 14 The plain meaning of subsection (1) shows that if the Arkansas legislature wants an action to be taken in a reasonable time, they express it within the text of the statute as they have done repeatedly throughout the Uniform Commercial Code. Since Sec. 4-3-118(e) is silent, we will not imply a requirement that demand for payment be made within a reasonable time. 15 Subsection (b) of Sec. 4-3-118 also supports our decision that to trigger the statute of limitations for a CD, a demand need not be made within a reasonable time. Subsection (b) 4 bars an action on a demand note, but specifically excludes CDs, if interest or principal on the note is not paid for a period of ten continuous years. The exclusion of CDs from the bar of subsection (b) shows that the Arkansas legislature considered whether or not the statute of limitations for CDs should begin without a demand. Subsection (e) contains no similar events that will trigger the statute of limitations when a demand has not been made. Because the Arkansas legislature clearly knew how to specify events that trigger the statute of limitations in lieu of a demand, as illustrated in Sec. 4-3-118(b), the failure to enunciate any similar events triggering the statute of limitations in lieu of a demand with respect to a CD indicates that the legislature did not intend the statute to begin running until a demand for payment was made. Accordingly, we will not imply a reasonableness requirement into Sec. 4-3-118(e), and we hold that the district court erred when it did so. 16 Our holding that a demand need not be made within a reasonable time is also supported by the comments to the Uniform Commercial Code. Comment 1 to U.C.C. Sec. 3-122 (1990) 5 states that CDs are issued with the understanding that they will be held for long periods of time, which often exceed the period of the statute of limitations, and that the expectation and custom of the banking industry requires a demand for payment to be made before any liability is incurred by the bank. 17 The district court cites Whitlock v. Bank of Maryville as support that it is adopting the majority position which requires a demand to be within a reasonable time. 612 S.W.2d 481, 484 (Tenn.App.1980). However, the jurisdictions that require a demand for payment to be made to trigger the statute of limitations for a CD do not agree whether the demand must be made in a reasonable time. 10 Am.Jur.2d Banks Sec. 466 (1964). Some jurisdictions require the demand to be made within a reasonable time. 6 There appears to be a modern trend wherein jurisdictions do not require a demand to be made within any certain amount of time. 7 Accordingly, we believe that our holding is in line with the modern trend that a demand need not be made in a reasonable amount of time. 18 As such, we believe the district court erred when it determined that Arkansas would require a demand for payment on a CD to be made within a reasonable time. The plain language of Sec. 4-3-118(e) requires only a demand to trigger the statute of limitations. As illustrated in Sec. 4-3-118(b), the Arkansas legislature knew how to limit the time within which to make a demand. Consequently, we will not infer a reasonableness requirement into the statute of limitations. Under the plain language of Sec. 4-3-118(e), the six-year statute of limitations did not begin to run until a demand for payment was made. Landreth made a demand on FNBC in September 1991; suit was filed on May 27, 1992, well within the six-year statute of limitations. Accordingly, her suit is not barred by the Arkansas statute of limitations and the district court erred when it determined otherwise.