Smith v. Vaughn

882 N.E.2d 941 (2007)

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Smith v. Vaughn

Ohio Court of Appeals
882 N.E.2d 941 (2007)

Facts

Fred and Martha Smith (plaintiffs) loaned Gary Vaughn (defendant) $9,900. Vaughn signed a promissory note in which he promised to repay the loan. The promissory note indicated that Vaughn would repay the loan when he could. About 18 months later, the loan remained completely unpaid. Accordingly, the Smiths sued Vaughn, in relevant part, for defaulting on the loan. The Smiths argued that the loan was a negotiable instrument that was payable on demand. That is, the Smiths argued that Vaughn was immediately liable for the entire amount of the loan but that they were willing to work out a repayment schedule with Vaughn. Conversely, Vaughn argued that he was not liable for the loan because he did not have the means to repay the loan. Both parties moved for summary judgment. The Smiths did not utilize any evidentiary materials regarding the circumstances surrounding the agreement to support their motion for summary judgment. Vaughn supported his motion for summary judgment with his own affidavit indicating that he had financial difficulties in the past, that he was presently employed, and that he attempted to repay the Smiths a small portion of the loan. The trial court denied the Smiths’ motion but granted Vaughn’s motion. The Smiths appealed.

Rule of Law

Issue

Holding and Reasoning (Hendon, J.)

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