Imputation Of Payment

In civil law. The application of a payment made by a debtor to his creditor. The debtor may apply his payment as he pleases, with the exception that in case of a debt carrying interest it must be first applied to discharging the interest. The creditor may apply the funds by informing the debtor at the time of payment. The law imputes in the neglect of the parties to do so, and in favor of the debtor. It directs that imputation which would have been best for the debtor at the time of payment. Hence it applies the funds to obligations most burdensome to the debtor; e. g., to a mortgage rather than to a book account, and to a debt which would render the debtor insolvent if unpaid, rather than to any less important one. If nothing else appears to control it, the rule of priority prevails. In Louisiana the preceding civil law rules are in force. The statutory enactment (Civ. Code, art. 2159 et seq.) is a translation of the Code Napoleon (articles 1253-1256), slightly altered. See Poth. Obi. note 528, Translation by Evans, and the notes. Pay- (La.) 51; 5 La. Ann. 738. But if the interest was not binding, being usurious, the payment must go to the principal.

In Civil Law. The application of a payment made by a debtor to his creditor. The rules covering this subject are thus stated, substantially, in Howe, Studies in the Civil Law, 156: 1. The debtor may apply his payment as he pleases, with the exception that in case of a debt carrying interest it must be first appiied to discharging the interest. 2. If the debtor makes no application; the creditor may apply the funds by informing the debtor at the time of payment. 3. The law imputes in the neglect of the parties to do so, and It will be made by the law in favor of the debtor. It directs that imputation which would have been best for the debtor at the time of payment. Hence it applies the funds to obligations most burdensome to the debtor: c. to a debt which is not disputed, rather than to one that is; to a debt that is due rather than to one that is not; to one on which the debtor may be arrested, rather than to one on which he cannot; to a debt for which the debtor has given sureties, rather than than one of which he is merely surety; to a mortgage rather than to an unsecured debt, and to a debt which would render the debtor insolvent if unpaid, rather than to any less important one. 4. Of debts of equal grade, if there be no Imputation by the parties, the application will be to that of the longest standing. 6. To debts of the same date, and in other respects equal, the application will be pro rata. 6. As to debts bearing interest, the im putation is to interest before principal. When the creditor is 'to pay himself out of a fund realized. — for example, from the sale of property pledged, — he should apply the money to the debt secured by the pledge, rather than to some other; tq Interest before principal; to the debt of the highest rank, rather than to those of lower rank; and if there are several of equal rank then pro rata. Some of these rules have been followed in England and America, some decisions following the exact language of the Roman law. See 1 Sto. Eq. Jur. 13th ed. § 409; but see Appropriation of Payments. In Louisiana the preceding civil law rules are in force. The statutory enactment. Civ. Code, art. 2159, is a translation of the Code Napoleon, art. 1253-1256, slightly altered. See Pothier, Obi. n. 528, by Evans, and notes. Payment is Imputed first to the discharge of Interest; Hynson v; Maddens, 1 Mart. N, S, (La.) 571; Estebene v. Estebene, 5 La. Ann, 738, But If the interest was not binding, being usurious, the payment must go to the principal; Hynes v. Cobb, 2 La. Ann. 363; Compton’s Ex’rs v. Compton, 5 La. Ann. 616. The law applies a payment to the most burdensome debt; Hanse & Hepp v. Ins. Co., 10 La. 1, 29 Am, Dec. 456; Pargoud v. Griffings' Adm’r, 10 La. 357; Louisiana State Bank v. Bhrrow, 2 La. Ann, 405; Mc Elrath v. Dupuy, 2 La. Ann. 520, A creditor’s receipt is an Irrevocable imputation, except in cases of surprise or fraud; Bloodworth v. Jacobs, 2 La. Ann, 24; Adams v. Bank, 3 La. Ann. 361. See Appropriation of Payments.

In the civil law. The application of a payment made by a debtor to his creditor.