He who has various debts of the same kind in favor of one and the same creditor, may declare at the time of making the payment, to which of them the same must be applied.
Unless the parties so stipulate, or when the application of payment is made by the party for whose benefit the term has been constituted, application shall not be made as to debts which are not due.
If the debtor accepts from the creditor a receipt in which an application of payment is made, the former cannot complain the same, unless there is a cause for invalidating the contract.
Kapag ang isang tao na may iba’t ibang pagkakautang na may parehong uri, na pumapabor sa isang nagpautang, ay maaari na sa oras ng pagbabayad, ay sabihin kung alin sa mga utang ang kabayaran ay in-aplay. Malilban kung napagkasunduan ng partido, o kung ang pagbabayad ay ginawa ng isang partido na kung saan kung kaninong kapakinangan ang termino ay binuo, ang aplikasyon ay hindi maaari sa utang na hindi pa dapat bayaran.
Kung ang nangutang ay tinanggap mula sa nagpautang ang resibo na kung saan ang aplikasyon ng kabayaran ay naisagawa, ang unang nabanggit ay hindi maaaring magreklamo, maliban kung may kadahilanan upang ipawalang bisa ang kontrata.
Discussion:
Definition of application of payments.
It is the designation of the particular debt being paid by e debtor who has two or more debts or obligations of the same kind in favor of the same creditor to whom the payment is made.
Right to make application of payments primarily to the debtor .
The debtor has the right to choose which of the several due shall be paid. The right belongs primarily to the debtor. But, there is a proper time for the designation of the payment. It must be made at the moment of payment.
The creditor may have the right to apply to which of the several debts the payment was made by issuing receipts, if the debtor failed to exercise his right. The payment is deemed applied to the specific indebtedness mentioned in the receipt, if the debtor has accepted the receipt without objection.
Requisites for a valid application of payments by the debtor.
1. There is only one debtor and one creditor;
2. The debtor owes the creditor two or more debts which are of the same kind or identical specie;
3. All the debts are due and demandable;
4. The payment made by the debtor is not sufficient to cover or settle all the debts.
Requisites for a valid application of payments by the creditor.
1. The debtor did not make any designation on which debt should be paid when he made the payment;
2. The creditor issued a receipt expressing the application of the payment to a particular debt;
3. The debtor assented to the application of the payment to a particular debt.
Limitation of the preferential right of the debtor to choose the debt to be paid.
1. The debtor cannot apply to a debt not yet liquidated or due;
2. If the creditor is given a benefit of the period or term, which has not yet arrived, an application of payment cannot be made by the debtor;
3. If there is a specific agreement as to which debts shall be paid first, the debtor cannot vary the agreement without the consent of the creditor;
4. If there is principal obligation which bears interests, the debtor cannot pay the interest without first paying the principal;
5. A debtor cannot choose to pay a bigger debt partially, when the payment made can be applied as full payment to a smaller debt.
Case Illustration: Traders Insurance and Surety Company vs Dy Eng Giok, Pedro Lopez Dee and Pedro E. Dy-Liacco
Obligations and Contracts 