“Maturity-Date Rules Supreme”: Wyoming Clarifies that Fixed-Term Promissory Notes Are Payable at Expiration Without a Separate “On-Demand” Clause

Introduction

The consolidated appeal of Jeffry v. Sheesley et al. v. AristaTek, Inc., 2025 WY 89, presented the Wyoming Supreme Court with a thorny mix of shareholder-issued loans, corporate cash-flow struggles, and competing declaratory claims. The core dispute revolved around three short-form promissory notes (collectively, “the Sheesley Notes”) executed in 2013 by AristaTek, Inc. in favour of founder-shareholder David C. Sheesley (whose interest is now held by the DCS Trust). After David Sheesley’s death, the trustees demanded payment; the corporation resisted, asserting that the notes were really capital contributions, not yet payable, or at least subordinated to newer advances made by the remaining founders, Samuel Bruce King and Thayne Routh.

The District Court for Albany County denied most corporate defences, but—significantly—held that because the notes lacked an explicit “payable on demand” clause, they were not presently due. All parties appealed portions of that ruling. The Supreme Court has now reversed on the maturity issue, declared the notes immediately enforceable (with 24-months’ interest only), and in doing so set down a clean rule of law on how Wyoming courts must treat fixed-term promissory notes that are silent as to demand.

Summary of the Judgment

Maturity & Payment: A fixed-term note automatically matures on the stated end-date; no separate “payable on demand” language is required for the lender to sue after maturity. The Sheesley Notes therefore came due 24 months after execution.
Interest Limitation: Where a note expressly limits interest “for 24 months,” interest stops accruing at that point, even if the principal remains unpaid.
Loan vs Capital Contribution: Promissory notes that, by their text, identify the advance as a “loan” remain debt instruments unless a later written amendment re-characterises them. Informal shareholder understandings are irrelevant.
No Equitable Subordination: Courts will not reorder repayment priority absent explicit contractual language; the doctrine of equitable subordination is reserved for exceptional inequity and has no application where parties have written notes with equal status.
Attorney’s Fees: A clause entitling the promisee to “all reasonable costs and expense of collection and/or suit, including… attorney fees” covers both collection actions and declaratory suits connected to enforcement. Fees are available at trial and on appeal, subject to the “lodestar” test under Wyoming law.
Justiciability: Contingent or speculative declaratory claims—such as requests to declare future repayment priorities or to enjoin collection if certain events occur—do not present a justiciable controversy.

Analysis

Precedents Cited and Their Influence

Y-O Investments v. Emken, 142 P.3d 1127 (Wyo. 2006) – Confirmed that interpretation of an unambiguous promissory note is a question of law reviewed de novo. The Court relied on this standard in overruling the District Court’s contrary interpretation.
Hurst v. Metropolitan Property & Casualty, 401 P.3d 891 (Wyo. 2017) – Reaffirmed summary-judgment principles and the requirement to enforce plain contract language. Guided the Court’s approach to the note’s maturity clause.
In re Kite Ranch, LLC, 181 P.3d 920 (Wyo. 2008) – AristaTek leaned on this case to equate loans with capital, but the Court distinguished it because Kite Ranch involved undocumented advances; here, formal notes spoke for themselves.
Statutory & Secondary Sources – Uniform Commercial Code §3-108 (codified at Wyo. Stat. §34.1-3-108) and C.J.S./Am.Jur. treatises confirmed that “maturity” means the date when a note becomes “due and demandable.”
Douglas v. Jackson Hole Land Trust, 464 P.3d 1223 (Wyo. 2020) – Cited for the principle that a declaratory action can constitute “suit” for fee-shifting purposes.
Brimmer v. Thomson, 521 P.2d 574 (Wyo. 1974) – Provided the four-part prudential standing test applied to dismiss the contingent declaratory claims.

Legal Reasoning Step-by-Step

Textual primacy. The Court began, as Wyoming doctrine requires, with the four corners of each note. Using ordinary meanings (“loan,” “24 months,” “written amendment”), it found no ambiguity.
Maturity without demand. Applying U.C.C. §3-108 and treatise definitions, the Court held that when a note states a definite term (“shall end 24 months from that date”), it automatically becomes due on that date. A demand clause is superfluous.
No implied interest beyond bargain. Because paragraph 1 promised 6 % interest “for 24 months,” the Court refused to tack on interest for the post-maturity period; to do so would rewrite the contract.
Rejecting re-characterisation. Turning to AristaTek’s “capital contribution” theory, the Court contrasted these written notes with the undocumented contribution in Kite Ranch. Under basic contract principles, explicit language labelling the sum a “loan” controls.
Equitable subordination denied. The Court emphasised freedom of contract: absent fraud or special statutory policy (e.g., bankruptcy), courts will not override plain priorities expressed (or omitted) by the parties.
Attorney fees triggered. Because DCS Trust’s suit was one “of collection and/or suit,” the fee clause applied. The lodestar method and §1-14-126 factors govern the eventual amount, so the case was remanded for calculation.
Non-justiciability of contingent claims. Applying Brimmer, the Court found that Third-Party Defendants’ claims depended on hypothetical future insolvency and unspecified shareholder agreements. Such speculation did not clear the first Brimmer hurdle.

Impact on Future Cases and Corporate Practice

1. Promissory Note Drafting. Wyoming lawyers must now assume that a fixed-term note will be enforceable the day after maturity, regardless of “on demand” language, unless the parties expressly provide for automatic extensions or conditions (e.g., sale of the company). Boiler-plate phrases such as “payable on or before” may be unnecessary—but if parties wish to defer enforcement until a liquidity event, they must say so unequivocally.

2. Shareholder Loans vs Equity. The decision draws a bright line: written debt instruments will not be re-labelled as equity based on after-the-fact shareholder practice. Corporate counsel advising early-stage companies should ensure that any “bridge” advances intended as equity are documented as such (e.g., by subscription agreements) or amended in writing.

3. Limit on Equitable Subordination Outside Bankruptcy. Although the doctrine remains available, the Court signalled reluctance to disturb contractual priorities absent misconduct. Lenders cannot rely on after-the-fact equities to leapfrog earlier debt.

4. Attorney-Fee Provisions. Fee clauses covering “collection and/or suit” will be broadly enforced to include declaratory actions, encouraging creditors to pursue clarifying relief without forfeiting fees.

5. Declaratory Judgment Threshold. Parties contemplating pre-emptive declaratory relief must plead an “actual and existing” disagreement; speculative harms tied to future liquidity events will be dismissed.

Complex Concepts Simplified

Maturity Date: The calendar date when a note says the loan term ends. Once that date passes, the borrower is automatically in default if it has not paid, even if the note lacks words like “on demand.”
Equitable Subordination: A rare judicial power (mainly seen in bankruptcy) allowing a court to rank one creditor’s claim below another’s due to unfair conduct. It is not a tool for routine corporate housekeeping.
Capital Contribution vs Loan: A capital contribution increases an owner’s equity stake and is repaid only through distributions; a loan creates a debt that must be repaid regardless of profits. The difference often hinges on documentation.
Lodestar Method: A fee-assessment formula multiplying reasonable hours by a reasonable hourly rate, then adjusting for factors such as complexity, results obtained, and customary fees.
Justiciable Controversy: A real, present dispute affecting legal rights, as opposed to hypothetical or future disagreements. Courts need such a controversy to exercise declaratory jurisdiction.

Conclusion

Sheesley v. AristaTek tightens Wyoming’s doctrinal screws on promissory-note enforcement and shareholder-advance classification. By cementing the rule that a fixed-term note does not need an “on-demand” clause to be enforceable post-maturity—and by refusing to re-label written debt as equity—the Court provides certainty to lenders, shareholders, and drafters alike. It similarly underscores that equitable subordination is an extraordinary remedy, and that fee-shifting clauses will be honoured according to their breadth. Finally, the decision polices the boundaries of declaratory jurisdiction, insisting on concrete disputes. Collectively, these holdings fortify contract predictability in Wyoming’s commercial and closely-held-corporate sectors.