## Facts

- Anderson Development Corporation (a Florida corporation) loaned \$67,500 to shareholder Stephen J. Anderson in 1988.
- The loan was oral, with no written terms, no interest term, and no specified time for repayment.
- The corporation made no demand for repayment before later collection efforts.
- Robert T. Mosher obtained a judgment against the corporation for about \$77,732 and, unable to collect, sought a writ of garnishment in November 1995 targeting Stephen Anderson’s debt to the corporation.
- The parties agreed Mosher, as judgment creditor, could enforce the corporation’s claim only to the extent the corporation could, making accrual and the statute of limitations dispositive.

## Issues

1. For an oral loan with no specified time for repayment (treated as payable on demand), does the cause of action accrue when the money is advanced or when demand for repayment is made for statute of limitations purposes?

## Decision

- The Florida Supreme Court quashed the decision of the Fourth District Court of Appeal.
- The Court held that a cause of action on an oral loan payable on demand accrues when demand for payment is made, not when the loan is made.
- The Court approved the rule applied by the Second District in Mason v. Yarmus and disapproved the contrary approach that starts the limitations period at disbursement.
- Applying the rule, because no demand was made before the November 1995 garnishment proceedings, the statute of limitations had not begun to run and the debt was enforceable through garnishment.

## Legal Principles

- An oral loan with no stated repayment date is treated as a demand obligation payable upon the lender’s demand.
- Under Florida accrual principles, a cause of action accrues when the last element occurs; for demand obligations, demand and nonpayment after demand are required to complete the claim.
- The statute of limitations for an oral demand loan begins to run upon demand for repayment; absent demand, the limitations period does not start.

## Conclusion

The court held that an oral loan without a repayment date is payable on demand, so the claim accrues and the statute of limitations begins only when demand is made; because demand had not been made before garnishment, the creditor could garnish the shareholder’s debt to satisfy the corporate judgment.


Mosher v. Anderson, 817 So. 2d 812 (Fla. 2002)