This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2000).
IN COURT OF APPEALS
Dakota County District Court
File No. C1989995
Paul W. Rogosheske, Thuet, Pugh, Rogosheske & Atkins, Ltd., Suite 100, 22 Grand Avenue West, South St. Paul, MN 55075 (for respondent)
John F. Bonner, III, Robert J. Borhart, Bonner & Borhart, LLP, Suite 1500, AT&T Tower, 901 Marquette Avenue, Minneapolis, MN 55402-3205 (for appellant)
Considered and decided by Kalitowski, Presiding Judge, Halbrooks, Judge, and Stoneburner, Judge.
Appellant Dennis C. Morris appeals from a judgment against him based on a promissory note. Morris asserts that the district court erred by failing to apply the statute of limitations as a bar to respondent’s action on the note and erred by concluding that the note was not usurious. We affirm.
Appellant Dennis C. Morris worked in the banking industry for more than 28 years and served as the president of First Bank of Cottage Grove. In 1988 or 1989, Morris approached respondent Larry S. Severson, an attorney, about raising approximately $1,100,000 to acquire a bank through the use of a holding company. Severson agreed to invest. As the closing date of the transaction approached, the investors were approximately $80,000 short of the capital required. Severson suggested that Morris purchase an additional 2,000 shares of the holding company stock to raise the remaining money and assisted Morris in obtaining financing for this purchase from Midway National Bank. Morris pledged his shares in the holding company as security for the loan. The holding company acquired the bank. Morris served as president of the bank until 1997, when he resigned and sold his interest in the holding company.
Approximately five months after the holding company acquired the bank, Morris told Severson that he needed assistance in making the interest payments on the Midway Bank loan. Severson agreed to lend money to Morris for the purpose of making the Midway Bank payments. A note was drawn up. It is unclear who drafted the note.
The material portion of the note provides:
FOR VALUE RECEIVED, DENNIS C. MORRIS, Hastings, Minnesota, promises to pay to the order of LARRY S. SEVERSON, the principal sum of Twenty-Five Thousand and no/100 Dollars ($25,000). The principal sum shown above is the maximum amount of principal that can be borrowed under this Note. On May 4, 1990, $2,939.16 was advanced with future principal advances contemplated. Interest on the outstanding principal shall accrue from May 4, 1990 at the rate of ten (10%) per cent per year until the principal and interest are paid in full. Principal and interest shall be payable at 14700 Dory Court, Apple Valley, Minnesota 55124.
The principal balance together with all unpaid interest on this Note are due on demand.
Severson made all payments on the Midway Bank loan directly to Midway Bank, until March 1993, when Morris took over payments on the loan. Morris made no payments on the note. Severson testified that between 1993 and 1997 he spoke with Morris about payments, but Morris said he was “financially strapped and couldn’t make payments, so nothing was done and we were friends and I didn’t push him on it.”
Severson sent a letter to Morris in 1997 proposing an amortization of outstanding interest and characterizes this letter as a demand letter. Morris did not respond and on October 13, 1998, Severson sued Morris on the note. Morris moved to dismiss on the basis that the six-year statute of limitations barred Severson’s claim, which, he asserts, began to run on the date of the note. The district court denied the motion. Morris then moved for summary judgment, which the court also denied. At the bench trial, Morris again raised the statute-of-limitations defense and asserted that recovery was barred because the note is usurious. The district court found the note enforceable and awarded Severson judgment against Morris in the amount of $57,116.57, for principal, interest, and attorney fees incurred in collection. Morris appeals.
The construction and applicability of a statute of limitations is a question of law, reviewed de novo. Benigni v. County of St. Louis, 585 N.W.2d 51, 54 (Minn. 1998). The note in this case is a negotiable instrument subject to the Uniform Commercial Code. Minn. Stat. § 336.3–104 (1) (1990) (defining negotiable instruments to include writings, signed by the maker containing an unconditional promise to pay a certain sum in money, payable on demand and payable to order).
The parties agree that the six-year statute of limitations contained in Minn. Stat. § 541.05 applies to this note, but dispute when the cause of action accrued. Under the applicable version of the UCC, an action to enforce the obligation of a party to pay a demand note generally accrues on the date of the note, or if not, the date of issue, which in this case would have been May 1990. Minn. Stat. § 336.3–122 (1)(b) (1990). This is so because usually a demand note is considered due immediately, so the statute of limitations on the note begins to run immediately. Fljozdal v. Johnson, 188 Minn. 612, 613, 248 N.W. 215, 215 (1933). An exception to the general rule exists where the transaction shows an intent that the cause of action did not accrue until actual demand. In Re Estate of Fauskee, 497 N.W.2d 324, 327 (Minn. App. 1993) (citing Minn. Stat. Ann. § 336.3-122 Minn. Code cmt. (West 1966) (citing Andrews v. Andrews, 170 Minn. 175, 182, 212 N.W. 408, 410 (1927)), review denied (Minn. May 18, 1993). If such an intent is shown, the court will give effect to that intention. Id.
The demand, however, must be made within a reasonable time, which is ordinarily the period of the statute of limitations; but, where the parties contemplated a delay in making the demand to some indefinite time in the future, the statutory period for bringing the action is not controlling as to the question of reasonable time.
Id. (quoting Fallon v. Fallon, 110 Minn. 213, 217, 124 N.W. 994, 996 (1910)).
Here, the district court found that the parties contemplated a delay in making the demand to some indefinite time in the future and that no demand was made, so Severson’s action was timely. The note, on its face, supports this finding. The note provides for a loan of up to $25,000 in unscheduled advances. Only $2,939.16 was advanced at the time the note was made. Implied in the parties’ contract is that a demand would not be made immediately but at some indefinite time in the future. The district court implicitly found that the action was brought in a reasonable time, and there has been no argument to the contrary. The district court did not err by concluding that Severson’s action was not barred by the statute of limitations.
The determination of whether “a transaction is usurious is ordinarily a question of fact.” Negaard v. Miller Constr. Co., 396 N.W.2d 833, 835 (Minn. App. 1986) (citation omitted), review denied (Minn. Jan. 21, 1987). A reviewing court will only disturb a district court’s finding on usury if the finding “is without substantial evidentiary support or induced by an erroneous view of the law.” Id. (citation omitted).
The parties do not dispute that the highest allowable interest rate for personal loans applicable in this case is eight percent. Minn. Stat. § 334.01, subd.1 (2000). There is an exception, however, for a loan for business purposes in an amount of less than $100,000, in which case interest can be charged
at a rate of not more than 4-1/2 percent in excess of the discount rate on 90 day commercial paper in effect at the Federal Reserve bank in the Federal Reserve district encompassing Minnesota.
Minn. Stat. § 334.011, subd. 1 (2000). The statute defines “business” as “a commercial or industrial enterprise which is carried on for the purpose of active or passive investment or profit.” Id. The parties agree that the note is not usurious if it comes within the business exception. The district court found that Morris’s loan from Midway Bank was clearly for investment purposes and that the loan from Severson to facilitate Morris’s payment of this note was also for business purposes. We cannot say that this finding is without support in the record or induced by an erroneous view of the law, and therefore we will not disturb this finding.
Severson further argues that even if the loan does not come within the business exception, there is no evidence in the record to support the conclusion that he intended to evade the usury law at the inception of the transaction and therefore the note is not usurious. We agree.
A party must prove the following elements to make out a claim of usury:
1. a loan of money or forbearance of debt,
2. an agreement between the parties that the principal shall be repayable absolutely,
3. the exaction of a greater amount of interest or profit than is allowed by law, and
4. the presence of an intention to evade the law at the inception of the transaction.
Citizen’s Nat’l Bank of Willmar v. Taylor, 368 N.W.2d 913, 918 (Minn. 1985) (citations omitted). On this record, there is no evidence that would support a finding that Severson intended to evade the usury law when the note was made.
 This case is governed by the 1990 version of the UCC. In 1992, the 1990 version was repealed and the code was reenacted. See 1992 Minn. Laws ch. 565, § 14. Under the version of the UCC in effect since 1992, the statute of limitations for demand notes is set out in Minn. Stat. § 336.3-118(b) (2000), which provides that an action must be brought within six years of a demand, or, if no demand is made, within ten continuous years of non-payment of principal or interest. Under the current version of the UCC, Severson’s action is clearly timely.
 Severson argued that his 1997 letter was a demand, Morris argued it was not, and the district court apparently agreed with Morris. Characterization of the letter as a demand is not dispositive, so we do not address that finding.