Causes of action founded upon contract shall be revived by the making of any partial or installment payment thereon or by an admission that the debt is unpaid, as well as by a new promise to pay the same; but such admission or new promise must be in writing, signed by the party to be charged therewith. Such a cause of action shall be deemed to have accrued upon the date of such partial or installment payment, admission of indebtedness or promise to pay. Provided, that no admission that the debt is unpaid or new promise to pay the same shall be effective to extend the lien of any mortgage upon real estate or any interest therein given to secure the original indebtedness, unless the payment is accompanied by an admission or promise and unless such admission that the debt is unpaid or new promise to pay the same, signed by the party to be charged therewith and acknowledged by such party in the form prescribed by law for the acknowledgments of instruments affecting real estate, shall be filed for record in the office of the county clerk where said original mortgage is of record, prior to the date when any action to foreclose said mortgage lien would otherwise be barred under existing law; and provided further, that the foregoing proviso shall not be applicable to any recorded mortgage upon real estate or any interest therein until after three months from the effective date of this act.
History: Laws 1880, ch. 5, § 13; C.L. 1884, § 1873; C.L. 1897, § 2926; Code 1915, § 3356; C.S. 1929, § 83-111; Laws 1939, ch. 71, § 1; 1941 Comp., § 27-115; 1953 Comp., § 23-1-16; Laws 1957, ch. 170, § 1.
ANNOTATIONSEffective dates. — The proviso at the end of this section first appeared in the 1939 amendatory act. Laws 1939, ch. 71, contained no effective date, but was enacted at a session which adjourned on March 11, 1939. See N.M. Const., Art. IV, § 23.
Cross references. — For form prescribed for acknowledgments, see 14-14-8 NMSA 1978.
Bankruptcy order. — An admission that the debt is unpaid contained in an agreed stay relief order entered into by a chapter 11 trustee, remains binding on the chapter 7 trustee upon conversion of the case. Such admission which is reasonably clear, unlimited, and without condition is sufficient to satisfy the New Mexico revival statute. In re Texas Reds, Inc., 52 Bankr. Ct. Dec. 196 (D.N.M. 2010).
Either admission or promise sufficient. — A debt may be revived by either an admission in writing, that the debt is unpaid, or by a new promise in writing to pay the same. Both are unnecessary, but either will suffice. Romero v. Hopewell, 1922-NMSC-037, 28 N.M. 259, 210 P. 231.
Time of admission or promise. — The provisions of this section are equally applicable to admissions and new promises made before indebtedness becomes barred and to such admissions and new promises made after statute has run. Petranovich v. Frkovich, 1945-NMSC-037, 49 N.M. 365, 164 P.2d 386.
Unconditional admission. — An admission that the debt is unpaid, which is unconditional, unlimited and reasonably certain is sufficient and operates to revive the cause of action founded upon the contract. Reymond v. Newcomb, 1900-NMSC-016, 10 N.M. 151, 61 P. 205.
Treatment of debt as subsisting. — This section does not prescribe any particular language for an acknowledgment or promise sufficient to lift its bar, but it is enough if the language shows the writer has treated the indebtedness as subsisting and one for which he is liable and willing to pay. Marine Trust Co. v. Lord, 1947-NMSC-051, 51 N.M. 323, 184 P.2d 114.
Acknowledgment sufficient to revive. — When an acknowledgment or promise in writing indicates that the writer thereof treats an indebtedness as subsisting, that he is liable for it and that he is willing to pay, it is sufficient to revive a cause of action founded on a contract. Marine Trust Co. v. Lord, 1947-NMSC-051, 51 N.M. 323, 184 P.2d 114.
New promise unnecessary for admission. — To be sufficient to revive a debt barred by statute of limitations, it is not necessary that an admission amount to a new promise to pay, express or implied. Joyce-Pruit Co. v. Meadows, 1921-NMSC-108, 27 N.M. 529, 203 P. 537.
New Mexico, unlike some other jurisdictions, permits revival by way of an admission even where the debtor's acknowledgment does not constitute a new promise, for example, where the admission is accompanied by an expression of unwillingness to pay. Joslin v. Gregory, 2003-NMCA-133, 134 N.M. 527, 80 P.3d 464, cert. denied, 2003-NMCERT-002, 134 N.M. 723, 82 P.3d 533.
Judgment in prior action as admission. — Where a stipulated judgment in a prior action specifically provided "that [the mortgagor] remains personally and individually liable to [the mortgagee] on the obligations secured by the mortgage from him to [the mortgagee] . . . ," it may be inferred from the record of the prior action that there was only one debt owed to the mortgagee by the mortgagor, and that stipulated judgment can be treated as an admission reviving the cause of action on the debt which otherwise would have been barred by the statute of limitations. Citizens Bank v. Teel, 1987-NMSC-087, 106 N.M. 290, 742 P.2d 502.
Letter as admission. — Letters written by a debtor promising to pay as soon as he could, and offering a partial payment, constitute an admission of debt to revive action. Cleland v. Hostetter, 1905-NMSC-008, 13 N.M. 43, 79 P. 801.
Letter denying indebtedness. — A letter referring to the note upon which suit was later brought, but recognizing no debt as unpaid, and claiming that there was no indebtedness, would not revive the cause of action nor defeat the bar of the statute. Gregg v. Pioneer Abstract Co., 1930-NMSC-044, 35 N.M. 11, 289 P. 71.
Letters causing forbearance to sue after running of statute. — In case where statute of limitations had already run, letters written by the maker to the payee of a check which allegedly caused payee to forbear suit did not estop the maker from successfully interposing the statute as a defense. Wilson v. Black, 1945-NMSC-038, 49 N.M. 309, 163 P.2d 267.
Voluntary partial payment revives the statute of limitations. — One way to revive an action on a contract and extend the statute of limitations is by the making of any partial payment on the contract; when a debt is revived, the statute of limitations starts anew. For a partial payment to revive an action, the partial payment must be voluntary, because only voluntary payments represent the debtor's acknowledgment of the debt, giving rise to a new promise to pay. Lea Cnty. State Bank v. Markum Ranch P'ship, 2015-NMCA-026, cert. denied, 2015-NMCERT-003.
Where debtor made partial payments on three promissory notes after the debtor's sale of collateral, the partial payments revived the lender's claims and caused the statute of limitations to run anew. Lea Cnty. State Bank v. Markum Ranch P'ship, 2015-NMCA-026, cert. denied, 2015-NMCERT-003.
Where debtors requested that the bank permit the sale of collateral resulting in partial payments of a debt, the debtors submitted settlement statements from the sale of collateral showing that the proceeds from the sale were to be paid to the bank, and the debtors did not present any evidence to create an inference that its actions regarding the partial payments to the bank were not voluntary, as a matter of law, the partial payments were voluntary. Lea Cnty. State Bank v. Markum Ranch P'ship, 2015-NMCA-026, cert. denied, 2015-NMCERT-003.
Application of payments. — Where neither the debtor nor the creditor directs how the debtor's payment should be applied, the common law rule also allows the payment to be apportioned among the debts in order to prevent the statute of limitations from running on any of those debts. Lea Cnty. State Bank v. Markum Ranch P'ship, 2015-NMCA-026, cert. denied, 2015-NMCERT-003.
Where debtor made partial payments on three promissory notes before the statute of limitations ran on any of the three debts, and where the debtor did not direct how the payments should be applied, the bank was free to distribute the payments among all the claims and thus suspend the statute of limitations as to all three debts. Lea Cnty. State Bank v. Markum Ranch P'ship, 2015-NMCA-026, cert. denied, 2015-NMCERT-003.
Partial payment must be voluntary in order to revive debt. — Partial payments may indicate acknowledgment of debt through non-verbal conduct, but only voluntary payments can trigger the revival statute, because only voluntary payments represent the debtor's acknowledgment of the debt. Joslin v. Gregory, 2003-NMCA-133, 134 N.M. 527, 80 P.3d 464, cert. denied, 2003-NMCERT-002, 134 N.M. 723, 82 P.3d 533.
Partial payments made on a debt through the sale of property, execution or other legal process, or through the application of the proceeds of a sale of property after foreclosure, are involuntary and consequently do not constitute partial payments that would restart the statute of limitations. Joslin v. Gregory, 2003-NMCA-133, 134 N.M. 527, 80 P.3d 464, cert. denied, 2003-NMCERT-002, 134 N.M. 723, 82 P.3d 533.
Payments by a third party cannot toll the statute or lift the limitations bar unless the third party had the debtor's authorization or assent to make payments on the debtor's behalf. Joslin v. Gregory, 2003-NMCA-133, 134 N.M. 527, 80 P.3d 464, cert. denied, 2003-NMCERT-002, 134 N.M. 723, 82 P.3d 533.
Acknowledgment of loan in letter. — Where debtor in letter indicates he borrowed specific sum from the lender and pledged stock as security, that he wanted to do whatever he could for lender's widow and the like, and will do so when able financially was a sufficient acknowledgment of the indebtedness and constitutes a promise to pay the same. Marine Trust Co. v. Lord, 1947-NMSC-051, 51 N.M. 323, 184 P.2d 114.
Answers under protest not basis for revival of lien. — Answers to interrogatories made under protest and in obedience to court order cannot be made the basis for revival of judgment lien. Pugh v. Heating & Plumbing Fin. Corp., 1945-NMSC-031, 49 N.M. 234, 161 P.2d 714.
Admission in deposition. — Cause of action on note barred by statute of limitations was revived by admission that debt was unpaid, made in deposition in answer to cross-interrogatories, taken for a different case between the same parties on the same subject. Joyce-Pruit Co. v. Meadows, 1921-NMSC-108, 27 N.M. 529, 203 P. 537.
Statute not tolled by attorney's statements. — Though attorney's letter contained acknowledgment that a judgment had not been paid, it was not sufficient to toll the statute of limitations in the absence of showing that he was authorized by his debtor-client to make the admission. Pugh v. Heating & Plumbing Fin. Corp., 1945-NMSC-031, 49 N.M. 234, 161 P.2d 714.
Statement of plaintiff's attorney in answer to counterclaim, neither admitting nor denying ownership of a judgment, but admitting that plaintiff had paid no part thereof, and specifically denying that same was justly due defendant, even if it could be treated as admission that judgment was unpaid, would not come within statute providing for revival of causes, since admission was not signed by party to be charged therewith. Pugh v. Heating & Plumbing Fin. Corp., 1945-NMSC-031, 49 N.M. 234, 161 P.2d 714.
Possession by mortgagee insufficient as admission. — Although possession by the mortgagee, with the consent of the mortgagor, may be considered as prima facie evidence that the debt is not paid, such an admission does not fall within the terms of this section. Buss v. Kemp Lumber Co., 1918-NMSC-005, 23 N.M. 567, 170 P. 54.
Request for delay insufficient. — A debtor may be estopped from pleading the statute of limitations where his conduct is such as to produce a reliance upon his acknowledgment of the obligation, but a mere request for delay or forbearance in bringing suit, absent fraudulent representations, is not enough to accomplish this result. Wilson v. Black, 1945-NMSC-038, 49 N.M. 309, 163 P.2d 267.
Verbal promise. — Verbal promise to pay an old debt in monthly installments in consideration for extension of time for paying balance due was not a new contract superseding original loan contracts and did not toll running of statute of limitations. Petranovich v. Frkovich, 1945-NMSC-037, 49 N.M. 365, 164 P.2d 386.
This section applies to acknowledgments and new promises made both during and subsequent to the running of the period of limitation, and testimony tending to show a parol promise made before the six-year period of limitation expired did not avail as a new promise. Bullard v. Lopez, 1894-NMSC-009, 7 N.M. 561, 37 P. 1103.
Representations not amounting to promises. — Representations other than promises to pay, including those made by persons in fiduciary relationships, are insufficient to deny the defense of the statute of limitations to a debtor. Wilson v. Black, 1945-NMSC-038, 49 N.M. 309, 163 P.2d 267.
Partial payment on oral loans. — Partial payments made upon indebtedness under three oral loans did not serve to revive right to litigate thereon nor avoid the bar of the statute of limitations on actions. Gentry v. Gentry, 1955-NMSC-055, 59 N.M. 395, 285 P.2d 503.
Partial payment revived loan and guarantees. — Where in 1999, plaintiff entered into an arrangement to provide a revolving line of credit to a business owned by plaintiff's siblings; plaintiff's siblings and their spouses individually guaranteed payment of the loans; at the same time, plaintiff provided the down payment for the purchase of land by the business; between 1999 and late 2000, the business borrowed from and repaid plaintiff in various transactions; between September 2000 and November 2008, no payments were made to plaintiff; in November 2008, the business paid plaintiff $20,000 and various amounts thereafter which were designated as "payment on loan"; the $20,000 payment did not reference any particular loan; in 2009, the parties entered into an oral settlement agreement in which the siblings agreed to pay plaintiff $100,000 in monthly installments of $5,000; one of the siblings acted as the agent of the business and for the other siblings in all financial matters with the approval of the other siblings who knew about and approved the $20,000 payment and the settlement agreement; the $20,000 and subsequent payments to plaintiff were equally divided among the siblings; there was no evidence that the siblings' spouses knew about or approved the $20,000 and subsequent payments or the settlement agreement; the siblings failed to pay the monthly installments pursuant to the settlement agreement; and 2010, after the statute of limitations had run on the debts, plaintiff filed suit to collect the debts, the $20,000 payment was a payment on all of the debts which revived the statute of limitations as to those debts and as to the personal guaranties of the siblings, but did not revive the statute of limitations as to the personal guaranties of the siblings's spouses. Corona v. Corona, 2014-NMCA-071.
New cause of action. — Cause of action arising from defendant's admission in his answer filed in prior suit on a debt, which was the cause of action upon which plaintiffs brought the present suit, was a new cause of action and not the same cause upon which plaintiffs brought their prior suit, which had been dismissed by court order. Smith v. Walcott, 1973-NMSC-074, 85 N.M. 351, 512 P.2d 679.
Section is to be rigorously enforced. Petranovich v. Frkovich, 1945-NMSC-037, 49 N.M. 365, 164 P.2d 386.
Rebutting presumption of payment. — Any competent evidence tending to show that the debt was not paid is sufficient to rebut the presumption of payment. Heisel v. York, 1942-NMSC-009, 46 N.M. 210, 125 P.2d 717.
Promissory note. — The payment of interest on a promissory note does not toll the running of the statute of limitations; nor does part payment on a note already outlawed revive it. 1922 Op. Att'y Gen. No. 22-3608.
Am. Jur. 2d, A.L.R. and C.J.S. references. — 51 Am. Jur. 2d Limitation of Actions §§ 319 to 390.
General acknowledgment or promise in statement addressed to public as removing bar of limitation, 8 A.L.R. 1258.
Unaccepted offer to compromise debt as tolling or removing bar of statute of limitations, 12 A.L.R. 544.
Check in payment of interest or installment of principal as tolling statute of limitations, 28 A.L.R. 84, 125 A.L.R. 271.
Payment on account as removing or tolling statute of limitations, 36 A.L.R. 346, 156 A.L.R. 1082.
Acknowledgment or payment to one of several obligees as tolling statute of limitations in favor of others, 40 A.L.R. 29.
Part payment or acknowledgment of indebtedness on bond or note as tolling statute on mortgage securing same, 41 A.L.R. 822.
Payment, acknowledgment or new promise by one spouse as tolling statute of limitations against obligation of community, 47 A.L.R. 548.
Rendition of services, transfer of property, or similar benefits, other than money or obligation to pay money, as part payment tolling, or removing bar of statute of limitations, 139 A.L.R. 1378.
Necessity and sufficiency of identification of part payment with the particular debt in question, for purposes of tolling, or removing bar of, statute of limitations, 142 A.L.R. 389.
Subrogation of mortgagee in forged or unauthorized mortgage, proceeds of which are used to discharge valid lien, interruption of limitations, 151 A.L.R. 418.
National service life insurance, interruption of statutes in action on policy of, 155 A.L.R. 1446, 156 A.L.R. 1445, 157 A.L.R. 1445, 158 A.L.R. 1445.
Interruption of statute of limitations by realization of security, 165 A.L.R. 1400.
Collateral, giving of, as acknowledgment and new promise to pay, tolling statute of limitations, 171 A.L.R. 315.
New cause of action as stated by amendment, after limitation period, of allegations of negligence, 171 A.L.R. 1087.
Adverse possession: Mortgagee's possession before foreclosure as barring right of redemption, 7 A.L.R.2d 1131.
Entry or endorsement by creditor on note, bond or other obligation as evidence of part payment which will toll the statute of limitations, 23 A.L.R.2d 1331.
When statute of limitations commences to run against promise to pay debt "when able," "when convenient," or the like, 28 A.L.R.2d 786.
Authority of agent to make payment on behalf of principal, as regards the statute of limitations, 31 A.L.R.2d 139.
Necessity and sufficiency, in order to toll statute of limitations as to debt, of statement of amount of debt in acknowledgment or new promise to pay, 21 A.L.R.4th 1121.
When statute of limitations commences to run against promise to pay debt "when able," "when convenient", or the like, 67 A.L.R.5th 479.
54 C.J.S. Limitations of Actions §§ 252 to 268.