Ranieri v. Terzano ( 1983 )

I concur in the decision of the court that a promise to pay when "able to pay" must be construed as requiring payment within a reasonable time. However, I disagree with the holding of the majority that the parol evidence rule bars oral testimony as to the due date of the negotiable instruments executed by appellants.

All four of the notes in question contain a blank space following the word "Due." It is true that an instrument which does not state a time for payment is payable on demand. R.C.1303.07. An instrument which contains no space for "due date," or which bears the legend "payable at sight" or "demand note" is unambiguous, and is payable on demand. However, a note which contains a space for the due date, and which leaves that space blank, is open to interpretation. There may arise a presumption that the instrument is a demand note, but a party must be permitted to rebut the presumption with evidence that the parties intended, but neglected to complete the note by inserting a time for payment.

The statutory provision which governs incomplete instruments is R.C. 1303.14, which states, in pertinent part:

"(A) When a paper whose contents at the time of signing show that it is intended to become an instrument is signed while still incomplete in any necessary respect it cannot be enforced until completed, but when it is completed in accordance with authority given it is effective as completed."

Official Comment No. 2 to this section indicates that if "time of payment" is left incomplete, it may indicate either that the note is payable on demand, or that the note is incomplete, and unenforceable until completed:

"* * * a complete writing which lacks an essential element of an instrument and contains no blanks or spaces or anything else to indicate that what is missing is to be supplied, does not fall within the section. ``Necessary' means necessary to a complete instrument. It will always include the promise or order, the designation of the payee, and the amount payable. It may include the time of payment where a blank is left for that time to be filled in; but where it is clear that no time is intended to be stated the instrument is complete, and is payable on demand under R.C. § 1303.07 [UCC 3-108]."

The second paragraph of the syllabus of Charles A. Burton,Inc. v. Durkee (1952), 158 Ohio St. 313 [49 Ohio Op. 174] states:

"Where parties, following negotiations, make mutual promises which thereafter are integrated into an unambiguous written contract, duly signed by them, the parol evidence rule excludes from consideration evidence as to other oral promises resulting from such negotiations."

It is my considered opinion that the instruments in question are potentially ambiguous. Appellants adduced evidence to rebut the presumption that the instruments were payable on demand. Appellants' evidence, as construed by the majority of this court, is that the notes were payable within a reasonable time. A reasonable time having elapsed as a matter of law, the trial court properly entered summary judgment in favor of appellees for the net unpaid portion of the notes.