Karlton v. Jenkins

ROBERT I.H. HAMMERMAN, Judge, Specially Assigned. Appellant, John S. Karlton (“Karlton”), and appellee, Albert E. Jenkins (“Jenkins”), had a business relationship between them in early 1985. Jenkins was employed by Karlton to act as a wholesaler for the purpose of raising money for Karlton’s real estate limited partnerships. On February 15, 1985, Jenkins approached Karlton in Karlton’s office in New York City and explained to Karlton that he was having financial problems and asked Karlton for a loan.

Karlton immediately agreed and on that day gave a check to Jenkins in the amount of $15,000.00, saying to Jenkins “pay me back when you can. It appears to me that you’re going to have a good future with us. You should be able to make money. Pay me back when you can.” Also on the same day Karlton mailed to Jenkins a promissory note dated February 15, 1985, and Jenkins executed the note on February 21, 1985.

In the space marked “Due Date” the note stated “ON DEMAND”. On June 14, 1985, Karlton sent a letter to Jenkins confirming an earlier conversation between them where Jenkins had voiced concern about his ability to pay back the note. Karlton stated in his letter that he would not ask for payment right away, and that in fact, no demand would be made prior to February of 1986. The letter stated, “We have agreed that even though the note is a demand note, no demand would be made for at least one year from the time that I lent you the money.” ⁵⁵⁸ On July 7, 1988, Karlton wrote a letter to Jenkins demanding payment.

Jenkins received this letter on July 14 and on that day wrote back to Karlton denying liability. On September 26, 1988, Karlton filed suit in the Circuit Court for Baltimore County to recover on the note, and a court trial was held before The Honorable Alfred L. Brennan, Sr. At the end of Karlton’s case on January 29, 1990, Jenkins moved to dismiss on the ground that the statute of limitations was a bar to Karlton’s claim. Judge Brennan granted the motion, stating that, viewing the case “in the light most favorable to the plaintiff”, the note was payable on demand, that suit had been filed more than three years after the making of the note, and that no facts existed which took the case out of the general rule set forth in Young v. Mayne Realty Co., 48 Md.App. 662, 666 , 429 A.2d 296 (1981), that a “note payable on demand is payable immediately without demand,” and that limitations “begin to run on the day of execution of such an instrument.” Discussion We agree with the trial judge’s statements of the general principles concerning the statute of limitations as it affects demand notes. We do not