Example
• A is indebted to B. Below are the debts of A to B with their due
dates:
1.Nov 3 – 5,000
2.Nov 15– Give a specific dog (not the same kid)
3.Nov 16 – 10,000 with 6% annual interest
4.Nov 29 – 20,000 secured by mortgage
5.Dec 3 - 12,000 (not yet due)
• On Nov 30, A is ready to pay but only up to 25,000
Example
• A is indebted to B. Below are the debts of A to B with their due
dates:
1.Nov 3 – 5,000
2.Nov 15– Give a specific dog (not the same kid)
3.Nov 16 – 10,000 with 6% annual interest
4.Nov 29 – 20,000 secured by mortgage
5.Dec 3 - 12,000 (not yet due)
Only 1-4 are due
2 cannot be applied by the payment since it is of a different kind (To
deliver a specific cat)
5 will not be applied since it is not yet due
Example
Then this are the ff debts that will be applied by the payment
1.Nov 3 – 5,000
2.Nov 16 – 10,000 with 6% annual interest
3.Nov 29 – 20,000 secured by mortgage
• According to 1254. The payment shall be applied to the most onerous debt, ASSUMING
THAT THE both debtor and creditor not made an application or application was not
valid
• If the debts are is the same nature and burden, to all of them proportionately
• Nov 16 is burdensome because it will earn interest of not paid
• Nov 29 is also burdensome because if not paid at all, the chattel mortgage will be for closed
Debt
Example
How to apply proportionately
1.Nov 3 – 5,000
2.Nov 16 – 10,000 with 6%
annual interest
3.Nov 29 – 20,000 secured by
mortgage
Payment of 25,000
Payment
Nov 16
Nov 29
25,000 x
(10,000/30,000)
25,000 x
(20,000/30,000)
= 8,333
= 16,667
Outstanding 10,000 – 8,333
= 1,667
20,000 – 16,667
= 3,333