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.
Since part payment extends the period of limitations only when it amounts to an admission by the debtor that more is due, it follows that a payment cannot have this effect unless it is in some way authorized by the debtor. The act of the creditor in making a credit upon the debt without the assent of the debtor1 cannot prevent the running of the statute; nor does the payment of the debt by a person having no authority to make such payment prevent limitations from running.2 To operate as a waiver of the bar of the statute a part payment must be made by the debtor3 or by his agent duly authorized.4 The agent must be authorized not only to make the payment which he makes, but to make it when he makes it in order to waive the bar of the statute as to the principal. Thus a debtor delivered money to an agent with orders to pay the creditor. The agent held the money a year and a half, and then made the payment. Such payment did not prevent the running of the statute.5 However, conduct of an agent appointed when the debt was incurred may serve to bind the principal in such cases. A borrowed money from B, gave collateral for the loan and gave X a power of attorney to sell such collateral and apply the proceeds on the note. Subsequently X did so. This was held to be a part payment which removed the bar of the statute.6 However, payment made by a third person, under some contract between himself and the debtor, is sufficient, even if such third person is not a general agent of the debtor.7 A payment made by one acting without authority from the debtor may be ratified by the debtor, and if so ratified will operate as a waiver of the bar of the statute, if it would have had such effect had it been made by the debtor himself.8 The daughter of a debtor made a payment without his knowledge or consent. Subsequently a statement of the account was exhibited to the debtor, and he approved it as correct. This was held to be a ratification of such payment, and accordingly it had the same effect in preventing the statute of limitations from running as it would have had if made by the debtor himself.9 In order to have the debtor bind himself by ratification of the payment, such payment must have been made on his behalf. A promise made by one of two joint and several debtors to pay the residue of the debt left after the other debtor had made a part payment thereon of his own behalf does not amount to a ratification of such payment. Hence if the new promise is unenforceable because, it does not comply with the statutory requirements, the debtor who did not make such payment is not liable.10
4 Lyle v. Esser, 98 Wis. 234; 73 N. W. 1008.
5 Nash v. Woodward, 62 S. C. 418; 40 S. E. 895.
1 Bay City Iron Co. v. Emery, 128 Mich. 506; 87 N. W. 652.
2 Cropley v. Eyster, 9 App. D. C. 373; Patterson v. Collier, 113 Mich. 12; 67 Am. St. Rep. 440; 71 N. W.
327; Dundee, etc., Co. v. Horner, 30 Or. 558; 48 Pac. 175.
3 Good v. Ehrlich, 67 Kan. 94; 72 Pac. 545; Mizer v. Emigh, 63 Neb. 245; 88 N. W. 479.
4 Cone v. Hyatt, 132 N. C. 810; 44 S. E. 678.
5 Sweet v. Ellis, 109 Mich. 460; 67 N. W. 535.