APPROPRIATION OF PAYMENT
APPROPRIATION OF PAYMENT When the debtor owes several distinct debts to a creditor, and he makes some payment which is not enough to cover the payment of all the debts, the question which, in such a case, arises is as to which particular debt the payment is to be appropriated. The payment is to be appropriated according to the following rules, contained in Sections 59 to 61. (1) Appropriation as desired by the debtor Section 59: Where a debtor, owing several distinct debts to one person, makes a payment to him, with express intimation, or under circumstances, implying that the payment is to be applied to the discharge of some particular debt, the payment, if accepted, must be applied accordingly. The application of payment of debt is left entirely to the discretion of the debtor. If, however, the debtor fails to give instructions, the creditor can apply the amount to any of the debts including a time barred debt. When the debtor indicates that particula...