This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
Part payment is usually made in money. This is not, however, necessary. Anything which is given by the debtor as partial satisfaction of the debt, and which is so received by the creditor, amounts to a part payment within the meaning of does not revive the debt. this rule.1 Thus the parties to a note agreed that an indebtedness of the holder of the note to a firm, of which the maker was a member, should be credited upon the note as a part payment thereof. Corresponding entries were made upon the books of the holder of the note and of the firm. This was held to be a part payment sufficient to stop the running of the statute of limitations.2 So if after the debt has been contracted the debtor assigns to the creditor choses in action3 to be applied as far as they would go in payment of the debt, this is such part payment as to prevent the statute from running. So personal property delivered and received as part payment on a debt4 or work and labor done and accepted in partial satisfaction of a debt5 will start the statute to running anew. In order to constitute part payment within the meaning of this rule, something of value must be given by the debtor and received by the creditor. An agreement made by the debtor with the consent of the creditor to remit a part of the debt is not such part payment as prevents limitations from running.6 So the creditor's act in giving credit for a payment which the debtor claims that he has already made is not sufficient to prevent the statute from running.7 In order to amount to part payment, the thing of value given by the debtor to the creditor must be intended as a partial satisfaction of the debt. A payment of money made by the debtor to the creditor for some other specific purpose cannot be treated by the creditor, without the consent of the debtor, as a part payment on the debt, to prevent the operation of the statute of limitations.8 Thus A released a debt due from B in consideration of a contract by B to pay A an annuity for life. Subsequently A sued to recover the debt. It was held that payments of the annuity not being intended as credits on the original debt, would not prevent the operation of the statute of limitations.9 The debtor entered into an agreement with the creditor for the discontinuance of a suit upon a note, and subsequently, in pursuance of such agreement, paid the amount which he had agreed to pay to procure such discontinuance. The act of the creditor in subsequently crediting such payment as made upon the note without the consent of the debtor cannot remove the bar of the statute.10 Succession of Slaughter, 108 La. 492; 58 L. R. A. 408; 32 So. 379; Frellsen v. Gantt, 25 La. Ann. 476.
5 Lyman v. Warner, 113 Fed. 87; Topeka Capital Co. v. Merriam, 60 Kan. 397; 56 Pac. 757.
6 Spink v. Newby, 64 Kan. 883; 67 Pac. 437.
7 Copeland v. Collins. 122 N. C. 619; 30 S. E. 315.
8 Hale v. Morse, 49 Conn. 481; Weston v. Hodgkins, 136 Mass. 326; Parsons v. Clark, 59 Mich. 414; 26 N. W. 656; Crow v. Gleason. 141 N. Y. 489; 36 N. E. 497.
9 Crow v. Gleason. 141 N. Y. 4S9: 36 N. E. 497.
10 In re Somerset (1894), 1 Ch 231.
1 Loudon, etc., Bank v. Parrott, 125 Cal. 472; 73 Am. St. Rep. 64; 58 Pac. 164; Taylor v. Foster, 132 Mass. 30; Souder's Estate, 169 Pa. St. 239; 32 Atl. 417.
2 Vinson v. Palmer, - Fla. -; 34 So. 276. To the same effect, McKeon v. Byington, 70 Conn. 429; 39 Atl. 853; Peabody v. North, 161 Mass. 525; 37 N. E. 744.
4 Engel v. Brown. 69 X. H. 183; 45 Atl. 402; Young v. Alford, 118 N. C. 215; 23 S. E. 973; Rowell v. Lewis, 72 Vt. 163; 47 Atl. 783.
5 Lawrence v. Harrington. 122 N. Y. 408; 25 N. E. 406.
6 Wienberger v. Weidman, 134 Cal. 599; 66 Pac. 869.
7 Erpelding v. Ludwig, 39 Minn. 518; 40 N. W. 829.