26 N.Y.2d 517 (1970)
A partial payment tolls a contractual statute of limitations only if it constitutes an unqualified acknowledgment of the entire debt and implies a promise to pay the remainder.
Summary
Lew Morris Demolition Co. sued the Board of Education for money owed under a demolition contract. The Board withheld payment due to a pending wrongful death lawsuit related to the work. After the lawsuit concluded, the parties stipulated to a partial settlement, but the plaintiff later sued for the remaining balance. The Board argued the suit was time-barred by a contractual limitation period. The New York Court of Appeals held that the partial settlement did not revive the limitation period because it was not an unqualified acknowledgment of the debt, affirming the dismissal of the suit.
Facts
Lew Morris Demolition Co. contracted with the Board of Education to perform demolition work. During the work, an employee of another contractor was injured, leading to a wrongful death suit against Lew Morris, the Board, and the other contractor. The Board filed a cross-claim against Lew Morris for indemnity. The Board withheld payment to Lew Morris due to the pending lawsuit and a contract clause allowing it to withhold funds against claims. In the wrongful death action, Lew Morris was exonerated, but the Board’s cross-claim initially succeeded at trial before being dismissed on appeal. Subsequently, Lew Morris filed a claim for the remaining balance and extra costs. The Board made a partial settlement payment, stipulating it was not a final payment and was without prejudice to either party’s rights.
Procedural History
The Civil Court ruled in favor of Lew Morris, finding that the partial settlement revived the one-year contractual limitation period. The Appellate Term reversed, granting summary judgment to the Board, holding that the stipulation wasn’t an acknowledgment of a debt. The Appellate Division affirmed the Appellate Term’s decision.
Issue(s)
Whether a partial settlement payment, stipulated as not a final payment and without prejudice to either party’s rights, constitutes a sufficient acknowledgment of the debt to revive a contractual statute of limitations.
Holding
No, because the stipulation did not recognize an existing debt with a clear intention to pay the remaining balance; therefore, the contractual limitations period was not tolled.
Court’s Reasoning
The Court of Appeals stated that Section 17-101 of the General Obligations Law requires a written acknowledgment of a debt that recognizes an existing debt and contains nothing inconsistent with an intention to pay it. Citing Connecticut Trust & Safe Deposit Co. v. Wead, 172 N.Y. 497, 500, the court emphasized that the writing must recognize an existing debt. Additionally, part payment only tolls the limitation period if it acknowledges more being due and implies a promise to pay the remainder. Citing Crow v. Gleason, 141 N.Y. 489, 493, the court stated that the payment must be “accompanied by circumstances amounting to an absolute and unqualified acknowledgment by the debtor of more being due, from which a promise may be inferred to pay the remainder.” Because the stipulation stated that the partial payment was “not as a final payment or payment of any character under said contract” and was made “without prejudice to the rights of either party,” it lacked the necessary unqualified acknowledgment and promise to pay. The Court found that the contractual period of limitations began to run when the Court of Appeals made a final adjudication in the wrongful death suit. The action, initiated after the one-year period, was thus time-barred.