Correction: Statute of Limitation - Credit / Debt
Rickie
looking for the Statue of Limitation on Credit Cards and Debt for the State
of New York. On some website that I have found, it says 4 years from date
of last
activity and on others it says 6 years from date of last activity.
Where could I find this information ? and If you know, what is the Statue of
Limiation on Credit and Debt for New York State. Thanks.
Rickie
jcm3
Rickie wrote in message ...
Dr. Nick
your local (law) library for questions.
RELEVANT AUTHORITY
1. STATUTES:
NY UCC § 2-725
S 2-725. Statute of Limitations in Contracts for Sale
1) An action for breach of any contract for sale must be commenced within
four years after the cause of action has accrued. By the original agreement
the parties may reduce the period of limitation to not less than one year
but may not extend it.
(2) A cause of action accrues when the breach occurs, regardless of the
aggrieved party's lack of knowledge of the breach. A breach of warranty
occurs when tender of delivery is made, except that where a warranty
explicitly extends to future performance of the goods and discovery of the
breach must await the time of such performance the cause of action accrues
when the breach is or should have been discovered.
(3) Where an action commenced within the time limited by subsection (1) is
so terminated as to leave available a remedy by another action for the same
breach such other action may be commenced after the expiration of the time
limited and within six months after the termination of the first action
unless the termination resulted from voluntary discontinuance or from
dismissal for failure or neglect to prosecute.
(4) This section does not alter the law on tolling of the statute of
limitations nor does it apply to causes of action which have accrued before
this Act becomes effective.
2. ANNOTATIONS:
NY CPLR § 203:
. . .
Wife was not "united in interest" with her coborrower husband in respect to
bank's action on credit card and, hence, could assert defense of statute of
limitations in later action when not served in first action; had wife been
served when her husband was served, she could have asserted defense of
statute of limitations to any portion of collective indebtedness incurred by
her severally more than six years prior to commencement of action.
Manufacturers and Traders Trust Co. v. Lindauer, 1987, 135 Misc.2d 132, 513
N.Y.S.2d 629.
3. COMMENTARY
The following article is cited by the NY commercial code, despite the
jurisdictional scope of the article.
American Law Reports
ALR4th
Volume 2 (1980) Current through the September, 1999 Supplement
WHAT STATUTE OF LIMITATIONS GOVERNS ACTION ARISING OUT OF TRANSACTION
CONSUMMATED BY USE OF CREDIT CARD
Debra T. Landis, J.D.
TABLE OF JURISDICTIONS REPRESENTED
ILLINOIS
Harris Trust & Sav. Bank v McCray (1974) 21 Ill App 3d 605, 316 NE2d 209, 14
UCCRS 1338, 2 ALR4th 671§
LOUISIANA
Carte Blanche Corp. v Pappas (1968, La App) 216 So 2d 917§
ARTICLE
This annotation collects and analyzes the state and federal cases in which
the courts have discussed or decided the applicable statute of limitations
governing a civil action to recover an amount allegedly owed from a
transaction in which a credit card [FN1] was used. Cases involving both the
3-party type of credit card commonly used by banks and the 2-party type of
credit card commonly used by department stores are within the scope of this
annotation.
Since relevant statutes are included only to the extent that they are
reflected in the reported cases within the scope of this annotation, the
reader is advised to consult the latest enactments of pertinent
jurisdictions.
The use of credit cards is a comparatively recent development of major
commercial significance. Surprisingly, there is little case law on the
statute of limitations which applies to an action to collect a balance due
on a credit card account, either by the credit card issuer or an assignee of
the account. In accordance with the general view that the nature of the
cause of action, or of the rights sued on, and not the form of the action,
is the test to determine the applicable statute of limitations, [FN2] the
courts in cases involving credit card use have analyzed the nature of the
cause of action, viewing it as either a loan based on a contractual
obligation or as a sale. Furthermore, the language used in the credit card
agreement between the issuer and the cardholder may be significant in the
determination.
In the following case the payments made by an issuer of a credit card to
participating merchants were viewed as a loan of money to the cardholder,
and the applicable statute of limitations in an action for the balance due
on the credit card account was held governed and not barred by the statute
of limitations applicable to written contracts, including promises to pay
money, rather than the statute governing contracts for the sale of goods.
Construing payments made to participating merchants by a bank-credit card
issuer pursuant to an agreement with the cardholder as a loan of money to
the cardholder, the court, in Harris Trust & Sav. Bank v McCray (1974) 21
Ill App 3d 605, 316 NE2d 209, 14 UCCRS 1338, 2 ALR4th 671, held that a
bank's action for the amount of money due on the credit card account was
governed by the 10-year limitation applicable to written contracts,
including promises to pay money, and that the action was not barred by the
4-year statute of limitations governing contracts for the sale of goods
under Uniform Commercial Code § 2-725. Thus, the court affirmed a judgment
in the bank's favor and denying the cardholder's motion to dismiss the
action filed more than 4 years after the cause of action accrued. Concluding
that the payments constituted a loan, the court noted that the cardholder
promised to repay the bank for money it paid to the merchant for her
benefit; the credit card allowed her to make use of the resources of the
issuer bank; the merchant was in the same financial position as if he were
receiving cash from the bank at a small discount for its service; and the
bank, which had no recourse against the merchant, assumed the risk that the
cardholder would not pay the debt. The court rejected the cardholder's
argument that, since the agreement recognized a difference between a cash
advance made directly to her and payment for merchandise purchased through
use of the credit card, the former was a loan and the latter was an
assignment of a retail installment sales contract from the merchant to the
bank. The court concluded that the statutory definition of a retail
installment sales contract, in effect at the time of the transaction in
question, did not include the tripartite agreement involved, noting that
title to the goods passed to her when she signed the sales slip and took
possession of them, no lien was retained thereon, and the payment of the
purchase price did not involve two or more installments.
In the following case debts owed by a credit card holder to participating
merchants were viewed as open accounts of the merchants of which the credit
card issuer was the assignee and thus an action to recover the balance due
on a three-party type of credit card account was held governed by the 3-year
prescriptive period provided for open accounts rather that a 10-year
"omnibus" statute of limitations and was barred.
Thus, in an action by a credit card issuer against cardholders for amounts
allegedly due for purchases made from various business establishments, the
court held, in Carte Blanche Corp. v Pappas (1968, La App) 216 So 2d 917,
that the debt was an open account governed by the 3-year prescription
applicable thereto, rather than a personal action governed by the 10-year
prescriptive period applicable to all personal actions not otherwise
governed by other prescriptive periods. The court stated that it was
apparent from the language of the petition of the credit card issuer that;
(1) the debts originated as accounts for merchandise sold by merchants to
their customers; (2) at the time of origin they were open accounts for which
purchasers customarily received monthly statements and as such constituted
nothing more than a charge account belonging to the assignor; and (3) the
credit card issuer was the assignee of these accounts and stood in no better
position than the assignor who would necessarily had to have brought suit
within 3 years. The court found that there was insufficient evidence to
prove an oral acknowledgement of the debt to interrupt the running of the
3-year prescription and affirmed the judgment sustaining the plea of the
3-year prescription.
Attention is directed to the following cases decided after the original
publication of this annotation.
Causes of action governed by limitations period in UCC § 2-725. 49 ALR5th 1.
What statute of limitations applies to actions for personal injuries based
on breach of implied warranty under UCC provisions governing sales (UCC § 2-
725(1)). 20 ALR4th 915.
When statute of limitations commences to run on action under state deceptive
trade practice or consumer protection acts. 18 ALR4th 1340.
Application, to security aspects of sales contract, of UCC § 2-725 limiting
time for bringing actions for breach of sales contract. 16 ALR4th 1335.
Credit card issuer's liability for wrongfully refusing to honor card. 46
ALR3d 1383.
Validity and construction of revolving charge account contract or plan. 41
ALR3d 682.
Criminal liability for unauthorized use of credit card. 24 ALR3d 986.
Liability of holder of credit card or plate for purchases made thereon by
another person. 15 ALR3d 1086.
What constitutes a contract in writing within statute of limitations. 3
ALR2d 809.
What constitutes violation of 18 U.S.C.A. § 1029, prohibiting fraud or
related activity in connection with credit card or other credit access
device. 115 ALR Fed 213.
Research References
Total Client-Service Library References
The following references may be of related or collateral interest to a user
of this annotation.
Annotations
Encyclopedias and Texts
50 Am Jurisprudence 2d, Letters of Credit, and Credit Cards §§ 38 et seq..
51 Am Jurisprudence 2d, Limitation of Actions §§ 92 et seq..
67 Am Jurisprudence 2d, Sales § 306.
Practice Aids
7A Am Jur Pl & Pr Forms (Rev), Credit Cards Forms 1-4.
26 Am Jur Proof of Facts 497, Liability for Unauthorized Use of Credit Card.
3 Am Jur Proof of Facts 453, Credit.
Digests and Indexes
Quick Index Consumer Credit.
Quick Index Credit Cards.
Quick Index Limitation of Actions.
Quick Index Limitations of Actions.
Quick Index Loans.
Quick Index Sales.
Federal Quick Index Consumer Credit Protection.
Federal Quick Index Credit Cards.
Federal Quick Index Limitation of Actions.
Federal Quick Index Loans.
Federal Quick Index Sales.
Research Sources
The following are the research sources that were found to be helpful in
compiling this annotation.
Law Review Articles
Davenport, Bank Credit Cards and the Uniform Commercial Code. 1 Valparaiso U
L Rev 218, Spring, 1967.
[FNa]. September, 1999 Supplement Copyright (c) 1999 by West Group
[FN1]. Credit card, as used herein includes any card, plate, or other device
issued to be used by the holder to purchase or lease property or services or
to obtain a cash advance, loan, or credit, on the credit of the issuer or of
the holder.
[FN2]. See generally 51 Am Jurisprudence 2d, Limitation of Actions § 61.
END OF DOCUMENT
Copr. (C) West 2001 No Claim to Orig. U.S. Govt. Works
Rickie <Rick...@hotmail.com> wrote in message
news:tca34af...@corp.supernews.com...
Rickie
from what you posted that it would be 6 years. I'll look more into it, and
post the result on the newsgroup. Thanks!
If anyone else has anymore information, please do post.
Rickie
Dr. Nick <swive_...@127.0.0.1> wrote in message
news:nIyx6.964$804.5...@news.uswest.net...