A California Promissory Note Gets Six Years, Not Four
A promissory note is a written contract, so the four-year statute at Code of Civil Procedure section 337 applies. That sentence does not survive contact with the Commercial Code, and on September 28, 2026 the Fourth District, Division One published an opinion that says why, and then spells out how a Code of Civil Procedure tolling rule reaches a Commercial Code limitations period.
The case is MLA Capital, LLC v. Keagle (Sept. 28, 2026, D086592). It reverses a summary judgment that had killed a lender's claim as untimely. Two holdings matter to anyone holding, buying, or defending against a carryback note, a hard-money note, or a private family loan.
One. A note payable at a definite time gets six years under California Uniform Commercial Code section 3118, subdivision (a), not four under section 337.
Two. The partial-payment provision in Code of Civil Procedure section 360 — which stops the running of the period and starts a new one each time a payment is made — applies to a section 3118 claim, even though section 3118 lives in the Commercial Code and says nothing about tolling.
The second point is where the opinion does its real work. The first has been on the books since 2006.
What happened?
On November 30, 2007, Linda Keagle and her late husband Charles executed a promissory note with MLA Capital, LLC for $250,000 plus interest, with a maturity date of December 31, 2012 — the opinion calls it Note One. The following year they executed a second note, Note Two, for $200,000, to Encarnacion Alvarez and her late husband Frank, with annual interest payments starting May 15, 2009 and repayment due May 15, 2013. Both loans financed a restaurant venture in Corona. Neither was repaid at maturity.
Between August 2018 and March 2020, monthly checks went to the lenders from an entity called the C&C Organization, "a company related to the Keagles and their restaurant businesses." Linda had an ownership interest in that company at all times relevant to the lawsuit, and the checks kept coming after Charles died, leaving Linda the sole surviving debtor.
The lenders filed suit on February 16, 2022. The San Bernardino County Superior Court (Judge Charlie L. Hill, Jr.) granted summary judgment for Linda, holding the suit untimely as a matter of law. The Court of Appeal reversed and directed entry of an order denying the motion.
Why six years and not four?
Section 337, subdivision (a), covers "[a]n action upon any contract, obligation or liability founded upon an instrument in writing," within four years. A promissory note is such an instrument, so, as the court put it, the four-year period "by its terms alone, would seemingly apply."
Commercial Code section 3118, subdivision (a), is narrower and says something different:
"Except as provided in subdivision (e), an action to enforce the obligation of a party to pay a note payable at a definite time shall be commenced within six years after the due date or dates stated in the note or, if a due date is accelerated, within six years after the accelerated due date."
There was "no dispute between the parties that the promissory notes at issue are negotiable instruments and notes payable at a definite time," which is what brought section 3118 into play at all. The court then resolved the overlap the ordinary way, on the "well-settled principle that a more recent and more specific statute controls over an earlier and more general one" (David M. v. Beverly Hospital (2005) 131 Cal.App.4th 1272, 1279):
"Here, the six-year statute of limitations set forth in California Uniform Commercial Code section 3118, subdivision (a), is unquestionably more specific than the general four-year statute of limitations provided by Code of Civil Procedure section 337, subdivision (a), as the former applies only to an action to enforce a particular type of contract—a note payable at a definite time. The six-year statute of limitations is also the more recent of the two enactments."
The dates make the second point vivid. The four-year period has existed since the first legislative session in 1850 and was codified when the Legislature adopted the Code of Civil Procedure in 1872. Division 3 of the Commercial Code, containing section 3118, was repealed and added by Statutes 1992, chapter 914, section 6.
This was not new ground. Cadle Co. v. World Wide Hospitality Furniture, Inc. (2006) 144 Cal.App.4th 504 had already applied section 3118's six-year period to a note, and had applied tolling to it as well. What MLA Capital adds is the explicit route by which section 360's partial-payment rule reaches a Commercial Code claim. Cadle's footnote 8 applied the written-waiver provision at Code of Civil Procedure section 360.5, which is a different mechanism. We found no earlier published California decision setting the partial-payment route out expressly, but we could not run a citator, so we state that as a research result rather than a fact.
Three qualifications before anyone relies on six years. Section 3118, subdivision (a), applies to a note "payable at a definite time." A demand note falls under subdivision (b): six years after demand, or, if no demand is ever made, barred once neither principal nor interest has been paid for a continuous period of 10 years. The section also runs from "the due date or dates stated in the note," so on an installment note each installment carries its own due date and its own six-year period, and the analysis runs installment by installment unless the note has been accelerated. And section 3118 governs the obligation to pay a note. A separate written agreement — a loan agreement, a guaranty, a settlement — is not automatically carried along.
How does section 360 reach a Commercial Code claim?
This is the part worth reading closely, because the obvious answer is the wrong one.
Section 360 is a single sentence:
"No acknowledgment or promise is sufficient evidence of a new or continuing contract, by which to take the case out of the operation of this title, unless the same is contained in some writing, signed by the party to be charged thereby, provided that any payment on account of principal or interest due on a promissory note made by the party to be charged shall be deemed a sufficient acknowledgment or promise of a continuing contract to stop, from time to time as any such payment is made, the running of the time within which an action may be commenced upon the principal sum or upon any installment of principal or interest due on such note, and to start the running of a new period of time, but no such payment of itself shall revive a cause of action once barred."
Three features of that sentence are easy to misread.
The writing requirement attaches to the acknowledgment-or-promise branch, not to the payment proviso. An acknowledgment or promise must be in a signed writing. A payment need not be; the payment is the acknowledgment.
The payment does two things, not one. It stops the clock as the payment is made and starts a new period.
It cannot resurrect. "[B]ut no such payment of itself shall revive a cause of action once barred." A payment made after the period has run does nothing at all.
Now the bridging problem. Code of Civil Procedure section 337, subdivision (d), ends with a sentence that looks like the answer: "The period in which an action may be commenced under this section shall only be extended pursuant to Section 360." But that sentence governs the period "under this section" — section 337. It is not authority for applying section 360 to a Commercial Code claim. If anything it shows the Legislature knew how to say so when it wanted to.
The court got there through the Commercial Code's own supplementation rule. The Official Comments to the uniform version of section 3-118 state that the circumstances under which a limitations period may be tolled are left to other law, pursuant to UCC section 1-103. California's analogue, Commercial Code section 1103, subdivision (b), provides that existing "principles of law and equity" continue to "supplement" the code "[u]nless displaced by the particular provisions" of the code. The court's conclusion:
"Considered together, these authorities illustrate that, in the absence of statutory language suggesting otherwise, traditional principles of law and equity governing tolling—like those codified in the partial debt payment tolling provisions of Code of Civil Procedure section 360—apply to the statutes of limitation set forth in the California Uniform Commercial Code."
Supporting that with Cadle Co., at page 514, footnote 8, which had applied the section 360.5 written-waiver provision to a section 3118 claim.
One honest caveat about how much weight the point carries. The court went on to observe that Linda "presents us with no reasoned argument or legal authority suggesting otherwise." A conclusion reached against an unopposed position is worth less than one reached over a contest, and a future defendant who briefs the question will not be in Linda's posture.
Does the arithmetic actually change the result?
It decides it, and the sequence is worth laying out because it is the practical lesson.
Note One matured December 31, 2012. Note Two matured May 15, 2013. Neither due date was accelerated.
Under the four-year period, the claim on Note One died December 31, 2016 and the claim on Note Two died May 15, 2017. The checks that began in August 2018 would then have been payments on causes of action already barred — and section 360 says in terms that such a payment does not revive one. The lenders lose on the papers.
Under the six-year period, the court held the claims had to be brought "on or before December 31, 2018" for Note One and "on or before May 15, 2019" for Note Two. The August 2018 checks landed inside both windows.
One wrinkle follows from the third qualification above and is worth naming. Note Two also called for annual interest payments beginning May 15, 2009, and on an installment reading each of those carried its own six-year period. The court measured Note Two from its May 15, 2013 repayment date, which is the date governing the principal the lenders sued on. A claim limited to an unpaid 2009 or 2010 interest installment would have run earlier, and a noteholder recomputing an old installment note should run the installments separately before relying on a single maturity date.
A payment inside the period starts a new one. Measuring six years from the last check in March 2020, the court identified a new period expiring in March 2026. The complaint was filed February 16, 2022. The court's own summary:
"These checks were sent before the applicable six-year statute of limitations expired. Therefore, if a trier of fact ultimately finds that the checks constituted partial debt payments made on behalf of Linda, the payments will have had the effect of stopping the statute of limitations and triggering a new limitations period that expired six years after the last checks were sent—i.e., in March 2026. Because the plaintiffs filed their lawsuit before this date, there is a triable issue of material fact concerning the timeliness of the complaint."
Two years' difference in the statute moved the outcome by more than nine years.
Whose payment counts?
The remaining problem was that Linda did not write the checks. A company did.
The underlying principle is old: "part payment of a debt or obligation is sufficient to extend the bar of the statute. The theory on which this is based is that the payment is an acknowledgment of the existence of the indebtedness which raises an implied promise to continue the obligation and to pay the balance." (Young v. Sorenson (1975) 47 Cal.App.3d 911, 914, quoting Martindell v. Bodrero (1967) 256 Cal.App.2d 56, 59; see Eilke v. Rice (1955) 45 Cal.2d 66, 73.)
If the theory is an implied promise by the debtor, a payment made by someone else counts only if the debtor authorized it — which is a question of fact. The court found three pieces of evidence enough to raise a triable issue:
- Charles's letter to MLA Capital used the plural "we," which the court read as "indicating that he and Linda both would start repaying their debt by December 2018";
- the checks came from a company in which Linda held an ownership interest at all relevant times; and
- the company kept sending checks after Charles died, when Linda was the only remaining debtor.
"From this evidence, a reasonable factfinder could conclude that Linda authorized the C&C Organization to send the monthly checks to the plaintiffs."
Note the posture. This is a triable issue, not a finding. On remand Linda may still prove she authorized nothing.
What should a noteholder or a borrower do differently?
If you hold a note that looks stale, recompute before you write it off. Start from the stated maturity date, use six years if the note is payable at a definite time, and then look for every payment in the file — including payments from entities, relatives, escrow and successors.
If you are the one making payments on an old note, understand what the check does. On a note payable at a definite time, a payment made while the six-year period is still running stops that period and starts a fresh six-year one. Two limits cut the other way. A payment made after the period has already expired does nothing, because section 360 says no such payment "shall revive a cause of action once barred." And a payment counts against a particular obligor only if that obligor made it or authorized it. A borrower making goodwill payments on a note they believe is nearly, but not yet, time-barred is extending the lender's window every time.
Document authority in both directions. A lender wanting payments to count should have writing tying the payer to the debtor. A debtor who does not want a third party's payments attributed to them should say so in writing, contemporaneously.
Do not confuse the note's clock with the deed of trust's clock. If the note is secured, Civil Code section 882.020 governs when the lien itself expires. Unless it has already expired under section 2911, the lien expires at the later of: 10 years after the final maturity date or last date fixed for payment, if that date is ascertainable from the recorded evidence of indebtedness; 60 years after the security instrument was recorded, if it is not ascertainable or there is none; or 10 years after a notice of intent to preserve the security interest is recorded — but only if that notice was itself recorded within the 10-year or 60-year period. Subdivision (c) lets those times be extended "in the same manner and to the same extent as a waiver made pursuant to Section 360.5 of the Code of Civil Procedure," and only by an instrument "recorded before expiration of the prescribed times."
Our reading — and this is analysis, not a holding, because MLA Capital did not reach the question — is that a partial payment restarts the claim on the note without extending the recorded lien. Section 882.020's clock runs from the maturity date stated in the recorded instrument, and a payment does not change what that instrument says; subdivision (c) supplies a recording-based extension route instead, which is a different act. The consequence runs against the lender: a note claim restarted into 2026 can be secured by a deed of trust whose lien expired years earlier, leaving a money claim with no power of sale behind it. A secured noteholder near either deadline should treat them as two separate problems.
And remember the deficiency timeline is different again, and much shorter — if it exists at all. Where a lender has exercised a power of sale, Code of Civil Procedure section 337, subdivision (a), provides that an action for a money judgment on the balance due "shall not extend beyond three months after the time of sale." Whether section 3118's six years displaces that proviso is a question MLA Capital did not reach. Our reading — analysis, not a holding — is that it does not, because the proviso limits a different action, measured from the sale rather than from the note's maturity, and because reading section 3118 to override it would let a post-sale money claim outlive the limit the Legislature wrote into section 337(a) for exactly that claim. Do not assume either answer without briefing it. Before counting the three months, settle the prior question. Code of Civil Procedure section 580b bars a deficiency on a purchase-money or seller carryback obligation within its terms, and section 580d bars one on a note secured by a deed of trust where the property has been sold under the power of sale. A carryback noteholder should resolve whether a deficiency claim exists before worrying about how long it lasts.
What is still unsettled?
The decision itself, first. MLA Capital was filed September 28, 2026 and becomes final in the Court of Appeal 30 days later, on October 28, 2026, under California Rules of Court, rule 8.264(b)(1). A petition for review would be due within 10 days after that under rule 8.500(e)(1) — November 7, 2026 falls on a Saturday, so the window runs to Monday, November 9, 2026 (rule 1.10(a), (b)), and under rule 8.500(e)(2) that time cannot be extended. If no petition for review is filed, the Supreme Court may separately order review on its own motion within 30 days after finality, extendable to no later than 90 days after finality, which here is January 26, 2027 (rule 8.512(c)(1)); if a petition is filed, the court's own-motion window runs instead under rule 8.512(c)(2) and (b)(1), from the filing date. As of October 5, 2026 this opinion is not final and is subject to modification, rehearing, or review. Anyone citing it should check the docket for its status.
Beyond that, the opinion does not decide how far the authorization theory goes — whether a payment by an entity the debtor merely works for, or a payment by a co-obligor who has since been released, is attributable. It does not address what happens when a payment is made under protest or with a reservation of rights. And, as noted above, it does not reach the interaction between a restarted section 3118 period and the separate expiration rules for the security instrument, which is where a secured lender's real exposure usually sits.
Our article on California real estate litigation statutes of limitations collects the deadlines that come up most often in property disputes; our contract disputes page describes how we handle note, guaranty and loan enforcement matters; and our article on the notice of default and the cure period covers the clock that runs on the secured side once a note goes into default.
This article states the law as of October 5, 2026, and the decision discussed is not yet final.
Frequently asked questions
What is the statute of limitations on a California promissory note?
For a note payable at a definite time, six years from the due date or dates stated in the note, or six years from the accelerated due date if the note is accelerated. See California Uniform Commercial Code section 3118, subdivision (a). The general four-year period for written contracts at Code of Civil Procedure section 337, subdivision (a), yields to it as the more specific and more recent statute, as MLA Capital, LLC v. Keagle (Sept. 28, 2026, D086592) explains. A demand note is governed by section 3118, subdivision (b), instead. On an installment note, each installment carries its own due date and its own period.
Does a partial payment restart the clock on a note?
Yes, if it is made before the period expires. Code of Civil Procedure section 360 provides that a payment on account of principal or interest due on a promissory note made by the party to be charged stops the running of the period as the payment is made and starts a new one. The same sentence provides that no such payment of itself shall revive a cause of action once barred, so a payment made after the period has run has no effect. A payment also need not be in writing: the writing-and-signature requirement in section 360 attaches to an acknowledgment or promise, not to the payment proviso.
Can a payment made by a company or a relative count against me?
It can, if you authorized it, and that is a question of fact. In MLA Capital the court found a triable issue from a letter the co-borrower wrote using the word we, the debtor's ownership interest in the paying company, and the fact that the payments continued after the co-borrower died. The court did not find that the debtor authorized the payments, only that a reasonable factfinder could so conclude.
Does section 360 apply to Commercial Code claims at all?
MLA Capital holds it does. The route is California Uniform Commercial Code section 1103, subdivision (b), under which principles of law and equity supplement the code unless displaced by its particular provisions, together with the Official Comments to the uniform version of section 3-118 leaving tolling to other law. Note that the last sentence of Code of Civil Procedure section 337, subdivision (d), is not the authority, because it governs the period under section 337 itself.
Does a partial payment also keep my deed of trust alive?
Not by itself, in our reading, though MLA Capital did not decide the point. Civil Code section 882.020 sets separate expiration times for the lien of a mortgage or deed of trust, and subdivision (c) allows those times to be extended only by an instrument recorded before they expire, in the manner of a waiver under Code of Civil Procedure section 360.5. The claim on the note and the enforceability of the security are two different clocks with different extension rules. Separately, whether a deficiency claim exists at all is governed by Code of Civil Procedure sections 580b and 580d.
This article is general information about California law, not legal advice, and reading it does not create an attorney-client relationship. Statutes and case law change, and how they apply depends on the specific facts. Attorney advertising. Prior results do not guarantee similar outcomes. Robert B. Mobasseri, State Bar No. 193193, ROMO Law Group, Encino, California.