(a) Note payable at a definite time. Except as provided in subsection (e), an action to enforce the obligation of a party to pay a note payable at a definite time must be commenced within six years after the due date or dates stated in the note or, if a due date is accelerated, within six years after the accelerated due date.
(b) Note payable on demand. Except as provided in subsection (d) or (e), if demand for payment is made to the maker of a note payable on demand, an action to enforce the obligation of a party to pay the note must be commenced within six years after the demand. If no demand for payment is made to the maker, an action to enforce the note is barred if neither principal nor interest on the note has been paid for a continuous period of 10 years.
(c) Unaccepted draft. Except as provided in subsection (d), an action to enforce the obligation of a party to an unaccepted draft to pay the draft must be commenced within three years after dishonor of the draft or 10 years after the date of the draft, whichever period expires first.
(d) Certified check, teller’s check, cashier’s check and traveler’s check. An action to enforce the obligation of the acceptor of a certified check or the issuer of a teller’s check, cashier’s check, or traveler’s check must be commenced within three years after demand for payment is made to the acceptor or issuer, as the case may be.
(e) Certificate of deposit. An action to enforce the obligation of a party to a certificate of deposit to pay the instrument must be commenced within six years after demand for payment is made to the maker, but if the instrument states a due date and the maker is not required to pay before that date, the six-year period begins when a demand for payment is in effect and the due date has passed.
(f) Accepted draft. An action to enforce the obligation of a party to pay an accepted draft, other than a certified check, must be commenced (i) within six years after the due date or dates stated in the draft or acceptance if the obligation of the acceptor is payable at a definite time, or (ii) within six years after the date of the acceptance if the obligation of the acceptor is payable on demand.
(g) Conversion, breach of warranty and other Article 3 actions. Unless governed by other law regarding claims for indemnity or contribution, an action (i) for conversion of an instrument, for money had and received, or like action based on conversion, (ii) for breach of warranty, or (iii) to enforce an obligation, duty, or right arising under this article and not governed by this section must be commenced within three years after the cause of action accrues.
(Acts 1995, No. 95-668, p. 1381, §1.)
Notes of Decisions
Cited in
7
cases (
1 in the last 5 years), 1998–2021 · leading case:
McKerall v. Kaiser, 60 So. 3d 288 (Ala. 2010).
McKerall v. Kaiser, 60 So. 3d 288 (Ala. 2010).
· cites it 17× “Section 7-3-118(a), entitled “Note payable at a definite time,” provides that, with exceptions not relevant here, “an action to enforce the obligation of a party to pay a note payable at a definite time must be commenced within six years after the due date or dates stated in the…”
Foster v. Hacienda Nirvana, Inc., 32 So. 3d 1256 (Ala. 2009).
· cites it 12× “The trial court noted that § 7-3-118, Ala.Code 1975, establishes a six-year statute of limitations for negotiable instruments.”
Davis v. Dorsey, 495 F. Supp. 2d 1162 (M.D. Ala. 2007).
· cites it 2× “See 1975 Ala.Code § 7-3-118(b) (ten-year statute of limitations on promissory note where debtor has paid no principal or interest and creditor has not demanded such).”
Blasco v. Money Servs. Ctr. (In Re Blasco), 352 B.R. 888 (Bankr. N.D. Ala. 2006).
· cites it 2× “replaced former Section 7-3-118(b) and (c). Former Section 7-3-118(e) provided, “[w]ords control figures except that if words are ambiguous, figures control.”
Compass Bank v. Richerson, 724 So. 2d 14 (Ala. 1998).
· cites it 2× “Yet, for more than 20 years, the Bank never sent a renewal notice to Richerson.”
Thomason v. Deutsche Bank Nat'l Trust Co. (M.D. Ala. 2020).
· cites it 5× “Plaintiff seeks this preliminary injunction to prevent foreclosure on the grounds that, pursuant to Ala. Code (1957) § 7-3-118(a), enforcement of such an obligation must be sought within six years of the accelerated debt notification.”
— Ala. Code § 7-3-118(a) — 4 cases
McKerall v. Kaiser, 60 So. 3d 288 (Ala. 2010).
“Section 7-3-118(a), entitled “Note payable at a definite time,” provides that, with exceptions not relevant here, “an action to enforce the obligation of a party to pay a note payable at a definite time must be commenced within six years after the due date or dates stated in the…”
Foster v. Hacienda Nirvana, Inc., 32 So. 3d 1256 (Ala. 2009).
“The trial court noted that § 7-3-118, Ala.Code 1975, establishes a six-year statute of limitations for negotiable instruments.”
Thomason v. Deutsche Bank Nat'l Trust Co. (M.D. Ala. 2020).
“Plaintiff seeks this preliminary injunction to prevent foreclosure on the grounds that, pursuant to Ala. Code (1957) § 7-3-118(a), enforcement of such an obligation must be sought within six years of the accelerated debt notification.”
— Ala. Code § 7-3-118(b) — 3 cases
Davis v. Dorsey, 495 F. Supp. 2d 1162 (M.D. Ala. 2007).
“See 1975 Ala.Code § 7-3-118(b) (ten-year statute of limitations on promissory note where debtor has paid no principal or interest and creditor has not demanded such).”
Blasco v. Money Servs. Ctr. (In Re Blasco), 352 B.R. 888 (Bankr. N.D. Ala. 2006).
“replaced former Section 7-3-118(b) and (c). Former Section 7-3-118(e) provided, “[w]ords control figures except that if words are ambiguous, figures control.”
McKerall v. Kaiser, 60 So. 3d 288 (Ala. 2010).
“Section 7-3-118(a), entitled “Note payable at a definite time,” provides that, with exceptions not relevant here, “an action to enforce the obligation of a party to pay a note payable at a definite time must be commenced within six years after the due date or dates stated in the…”
— Ala. Code § 7-3-118(e) — 1 case
Blasco v. Money Servs. Ctr. (In Re Blasco), 352 B.R. 888 (Bankr. N.D. Ala. 2006).
“replaced former Section 7-3-118(b) and (c). Former Section 7-3-118(e) provided, “[w]ords control figures except that if words are ambiguous, figures control.”
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