Senate Bill No. 596

(By Senator Tucker)

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[Introduced February 14, 2014; referred to the Committee on Banking and Insurance; and then to the Committee on the Judiciary.]

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A BILL to amend and reenact §46-3-118 of the Code of West Virginia, 1931, as amended, relating to demand notes; and modifying the statute of limitations on the collection of demand notes.

Be it enacted by the Legislature of West Virginia:

    That §46-3-118 of the Code of West Virginia, 1931, as amended, be amended and reenacted to read as follows:

ARTICLE 3. NEGOTIABLE INSTRUMENTS.

§46-3-118. 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 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) 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 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 years. after the expiration of fifteen years from the date of the demand note.

    (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 years after dishonor of the draft or ten 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 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 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 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) 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.

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    (NOTE: The purpose of this bill is to modify the statute of limitations on the collection of demand notes.

    Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.)