Cap. 16 Art. 1171Rules as to appropriation of payments.

Subject to the provisions of the foregoing articles, where no appropriation is made in the act of payment, the following rules shall be observed:

(a) the payment shall be applied to an undisputed debt in preference to a disputed debt;

(b) in case of several undisputed debts, the payment shall be applied to the debt already fallen due at the time of payment in preference to the debts not yet fallen due, unless amongst the latter debts there is a debt for which the debtor is liable to personal arrest, in which case the payment shall be appropriated to such debt, provided the time for payment was not agreed upon also in favour of the creditor;

(c) with regard to debts fallen due, the payment shall be appropriated to a debt for which the debtor is liable to personal arrest, or, in the absence of any such debt, to a debt bearing interest, in preference to other debts;

(d) the payment shall be appropriated to a debt secured by suretyship in preference to another debt not so secured; and to a privileged or hypothecary debt in preference to a debt not secured by privilege or hypothec;

(e) the payment shall be applied to the debt which the payer owed as the principal or the sole obligor in preference to a debt owing by him as surety for others or as a joint and several debtor;

(f) in any case not expressly provided for in the preceding rules, the appropriation shall be made to the debt which, at the time of payment, the debtor had the greatest interest in discharging;

(g) where the debtor has no interest in discharging a particular debt in preference to another, the appropriation shall be made to the oldest debt: and in the case of several debts contracted on the same day, and falling due at different times, the debt first fallen due shall be deemed to be the oldest;

(h) if all things are equal, the payment is applied in discharge of each debt proportionately.