Money-Lent, Open Account and Account-Stated


Cadence Bank, N.A. v. Robertson, [Ms. 1190997, Apr. 2, 2021], ___ So. 3d ___ (Ala. 2021). The Court (Sellers, J.; and Bolin, Bryan, Mendheim, Stewart, and Mitchell, JJ., concur; Parker, C.J., and Shaw and Wise, JJ., dissent), reverses a summary judgment order entered by the Madison Circuit Court entered in favor of defendants in an action by Cadence Bank seeking to recover a debt on the theory that the 3-year statute of limitations imposed by Ala. Code § 6-2-37 for “open account” had expired prior to the commencement of the action. The Court rejected the contention that Cadence Bank had limited itself to an open-account theory of liability, reasoning, that as master of its complaint, its cause of action could be read to state an “account stated” theory of recovery which is subject to a 6-year statute of limitations pursuant to § 6-2-24(5). Following a de novo review of the circuit court’s order granting summary judgment in favor of the debtors, the Court agreed with Cadence Bank that it may seek to recover pursuant to a theory other than open account.

The difference between a “money lent”/“open account” claim and an “account stated” claim is showed by passages recited in Justice Shaw’s dissenting opinion. As to money lent/open account:

An action for money lent is an action at law which lies whenever there has been a payment of money from the plaintiff to the defendant as a loan.

An action for money lent is an action at law for the recovery of money, based on an allegation that there was money lent to the defendant. The three elements of a claim on money lent are that the money was delivered to the defendant, the money was intended as a loan, and the loan has not been repaid.

42 C.J.S. Implied Contracts § 2 (2007). A review of Alabama law reveals that what could be stated as a money-lent claim is perhaps more accurately stated as a claim of 'money due on an open account, which contains identical factors.

A plaintiff establishes a prima facie case in an action for money due on [an] open account by presenting evidence that money was delivered to the defendant, that it was a loan, and that it has not been repaid. 58 C.J.S. Money Lent § 7 (1948).

Livingston v. Tapscott, 585 So. 2d 839, 841 (Ala. 1991); see also Mantiply [v. Mantiply], 951 So. 2d [638,] 649 [(Ala. 2006)].

Ms. *16, quoting Stacey v. Peed, 142 So. 3d 529, 532-33 (Ala. 2013) (Shaw, J., dissenting). As to account stated:

When an account is rendered or presented to the debtor and the debtor does not object to it within a reasonable time, the failure to object is regarded as an admission that the account is correct, and it becomes an account stated.

Ms. *20, quoting Gilbert v. Armstrong Oil Co., 561 So. 2d 1078, 1081 (Ala. 1990) (Shaw, J., dissenting).

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