Okla. Stat. tit. 12A § 3-118

Current through Laws 2024, c. 453.

Section 3-118 - Statute of Limitations

(a) Except as provided in subsection (e) of this section, an action to enforce the obligation of a party to pay a note payable at a definite time must be commenced within six (6) years after the due date or dates stated in the note or, if a due date is accelerated, within six (6) years after the accelerated due date.

(b) Except as provided in subsection (d) or (e) of this section, 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 (6) 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 ten (10) years.

(c) Except as provided in subsection (d) of this section, an action to enforce the obligation of a party to an unaccepted draft to pay the draft must be commenced within three (3) years after dishonor of the draft or ten (10) years after the date of the draft, whichever period expires first.

(d) 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 (3) years after demand for payment is made to the acceptor or issuer, as the case may be.

(e) An action to enforce the obligation of a party to a certificate of deposit to pay the instrument must be commenced within six (6) 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) 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 (6) 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 (6) years after the date of the acceptance if the obligation of the acceptor is payable on demand.

(g) 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 (3) years after the claim for relief accrues.

Okla. Stat. tit. 12A, § 3-118

Laws 1961, p. 105, § 3-118; Amended by Laws 1991, SB 25, c. 117, § 43, eff. 1/1/1992.

Oklahoma Code Comment

1. This is a new Section, introduced as part of the 1992 UCC revisions to gain greater uniformity than was present when the statute of limitations issue was left to other local law (e.g., in Oklahoma, 12 O.S. § 95 (amended 1992)). Pre-revision Section 3-122 only specified the point at which the statute of limitations began to run; that function in current Article 3 is accomplished by the specific liability sections and the agreement. See Official Comment 1 to this Section.

For the most part, the limitations period will be longer under Section 3-118 : 6 years, rather than 5 years under 12 O.S. § 95 (First) (1992). See 12 O.S. § 92 (1910). However, in some cases, like those involving bank obligations such as cashier's checks, the limitations period is only 3 years under sub section 3-118(d) . This raises a question that is not clearly answered by the transition provision of the bill enacting the 1992 version of Articles 3 and 4 in Oklahoma, and which can be illustrated if we assume a cashier's check on which the statute of limitations began to run 3 years before sub section 3-118(d) became effective. Was the action against the issuer then barred when sub section 3-118(d) became effective, or does the holder still have time left to begin suit under 12 O.S. § 95 (First) (1992)?

The transition provision would suggest the latter answer, since it applies the 1992 versions of Articles 3 and 4 only to transactions entered into on or after January 1, 1992, the effective date of the bill. However, the statute of limitations involves remedies for transactions, not the transaction itself; 12 O.S. § 95 has been ruled to affect the remedy rather than the substantive right claimed. See In re 1973 John Deer 4030 Tractor, 816 P.2d 1126 (Okla. 1991). Presumably, Section 3-118 will be similarly treated. In Sanco Enterprises, Inc. v. Christian, 495 P.2d 404 (Okla. 1972), the court gave effect to a retroactive application of a UCC provision which altered the remedies that were available when the bans, action was entered into. Thus, no specific impediment would appear to exist to an interpretation that would apply Section 3-118 as procedural law retroactively, and Oklahoma law generally would point in that direction. See, e.g., Oklahoma Water Resources Bd. v. Central Okla. Master Cons. Dist., 464 P.2d 748 (Okla. 1968) (no one has vested right in any particular mode of procedure for enforcement or defense of rights, so general rule that statutes will be construed to be prospective only does not apply to statutes affecting procedure and such statutes, unless contrary intention is clearly expressed or implied, apply to all actions falling within their terms, whether the right of action existed before or accrued after the enactment). See also Independent Cotton Oil Co. v Beacham, 31 Okla. 384, 120 P. 969 (Okla. 1911), to the same effect.

Nonetheless, the transition provision could be said to express an intent, without exception, not to allow retroactive effect, and if doubt exists, it should be resolved against retroactive effect. See Forest Oil Corp. v. Corporation Comm'n, 807 P.2d 774 (Okla. 1990); Teel v. Public Serv. Co., 767 P.2d 391 (Okla. 1985). Moreover, in a case involving the related issue of a statute of limitations and the question of whether a judicial decision applying it should be applied retroactive, the factors relevant to that determination (e.g., reliance of parties and substantial inequity, see EEOC v. Gaddis, 733 F.2d 1373, 1376-78 (lOth Cir. 1984)) arguably would seem applicable here, even though alert counsel would have had time between the enactment of Section 3-118 and its effective date (something not present with a court decision), to learn of the new law and then to bring a timely action. On balance, while the matter is not free from doubt, the better interpretation would be to deny retroactive application of Section 3-118 .

Beyond any change in the statutory time periods, it is unlikely that the introduction of Section 3-118 will produce many significant changes in the results of the Oklahoma cases decided under the pre-revision law. For example, other Oklahoma law continues to govern questions of tolling and the like. See Official Comment I to this Section, and Annotations 768-774 to 12 O.S. § 95; 12 O.S. §§ 96-101. Compare Central Nat'l Bank & Trust Co. v. Stettnisch, 821 P.2d 1066 (Okla. Ct. App. 1987) (partial payment on demand note extends statute of limitations) with UCC § 3-118(b). Beyond that, and looking at common issues previously litigated, the application of the relevant accrual rule and sub section 3-118(a) should not produce a different result than in Oklahoma Brick Corp. v. McCall, 497 P.2d 215 (Okla. 1972), and First National Bank in Bartlesville e v. Bed, 140 Okla. 24, 282 P. 147 (1929). Also, the application of the relevant accrual rule and sub section 3-118(b) should not change the results in cases like Morgan v. Russell, 189 Okla. 653, 119 P.2d 87 (1941), and First National Bank in Bartlesville v. Bell, 140 Okla. 24, 282 P. 147 (1929). However, sub section 3-118(c) and the relevant accrual rule could produce a change in the result in cases like First National Bank & Trust Co. of Tulsa v. Price, 187 Okla. 380, 103 P.2d 103 (1940), which began the running of the statutory period against an indorser only from demand following dishonor.

2. A cause of action for conversion of an instrument under Section 3-420 accrues when the item is taken by the transferee or when a bank pays or obtains payment of the item. See Walker & Walker, Inc. v. Liberty Nat'l Bank & Trust Co., slip op., 64 Okla. B.J. 1496,1993 W.L. 150651 (Okla. May 11, 1993).