Twelfth Judicial District

Procedural Posture

Plaintiff, the administrator of a creditor’s estate, and defendant debtor appealed from the judgment of the District Court, Twelfth Judicial District, City and County of San Francisco (California), which entered judgment in favor of the debtor on the first instrument, finding that it was barred by the two year statute of limitations, and against the debtor on the second instrument, finding that it was under the four year statute of limitations.

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The first instrument was a receipt for money received by the debtor from the creditor. The second instrument stated that the debtor held several checks to be applied to the creditor’s account. Affirming, the court determined that the trial court properly found that the action on the first instrument was barred. An action on a contract founded upon a written instrument could be commenced within four years, but an action upon a contract or liability not found upon a writing had to be commenced within two years. The court concluded that the first instrument was merely a receipt. It did not show to whom the money belonged. It was prima facie evidence of payment or delivery, but it was not conclusive. The presumption was that money when paid was for liquidation of an antecedent debt. The two year statute of limitation applied to any action based on the first instrument. The second instrument, however, indicated to whom the money belonged and contained the debtor’s promise to apply to the creditor’s account. Since it showed a liability to account, an action could be brought to enforce that liability and the four year statute of limitations applied.

Outcome

The court affirmed the judgment of the trial court and ordered each party to pay one half the costs.

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