Wednesday, May 29, 2013

"instrument" under seal - statute of limitations

Osprey Portolio v. Izett – Pa. Supreme Court – May  28, 2013

A loan guaranty executed under seal by Appellant is an “instrument in writing under seal” subject to the 20-year limitation period set forth in 42 Pa. C.S  5529(b)(1) rather than the 4-years SOL applicable to an "instrument" as defined in Article 3 of the UCC.

The Judicial Code does not define the term instrument, and hence, the two statutes do not manifest a direct inconsistency. More fundamentally, Article 3 is exclusively committed
to negotiable instruments. It defines the term instrument for purposes of that division only, effectively utilizing the term as a shorthand for negotiable instrument.  There is nothing to suggest that Section 5501 was intended to import such construct into Chapter 55 of the Judicial Code, particularly as the latter expressly refers to negotiable and nonnegotiable bonds, notes and “other similar instrument[s].”  Moreover, Article 3 of the UCC has no application to this case, as the parties agree that the guaranty at the center of this controversy is not a negotiable instrument. Accordingly, Appellant cannot prevail on his assertion that the guaranty is not an instrument on the grounds that the UCC limits the term to negotiable instruments.