Supreme Court rules partial repayment interrupts statute of limitations on all debts

The Supreme Court ruled that a debtor's partial repayment interrupts the statute of limitations for all outstanding debts owed to the same creditor if the debtor does not specify which obligation the money covers.

In a civil judgment delivered Feb. 26 in case 2025Da215255 regarding loan money, the high court stated that such a payment serves as an acknowledgment of every debt, resetting the clock on the legal time limit for collection under Article 168 of the Civil Act.

The court reasoned that debtors are typically aware of multiple contracts with a creditor, so making a payment without designating a specific target implies recognition of the entire liability. This principle applies even when the payment amount is insufficient to cover the total sum owed.

The justices rejected the argument that a debt with a longer remaining time before expiration offers greater benefit to the debtor or matures later than one nearing its deadline. They noted that the remaining duration alone does not determine repayment value, as statutes of limitations can be interrupted or waived by subsequent actions.

Citing Article 477 of the Civil Act, the judgment emphasized that the law prioritizes the due date of performance over the remaining duration of the limitation period when determining the order of legal repayment allocation. The court found no logical basis to assume a debtor intends to pay off debts with longer remaining periods first simply because those periods are longer.

The ruling also clarified procedural rules under Article 415 of the Civil Procedure Act for appeals where a defendant challenges only part of a first-instance verdict that had partially rejected the plaintiff's claims. It held that while the entire claim moves to the appellate court, the scope of review is limited to the portions the defendant contested. The uncontested portions become final and conclude the litigation immediately upon the announcement of the second-instance decision.