APPROPRIATION1, contracts. The application of the payment of a sum of money, made by a debtor2 to his creditor3, to one of several debts.
2. When a voluntary payment is made, the law permits the debtor in the first place, or, if he make no choice, then it allows the creditor to make an appropriation of such payment to either of several debts which are due by the debtor to the creditor. And if neither make an appropriation, then the law makes the application of such payment. This rule does not apply to payments made under compulsory4 process of law. 10 Pick. 129. It will be proper to consider, 1, when the debtor may make the appropriation; 2, when the creditor may make it; 3, when it will be made by law.
3. – 1. In general the appropriation may be made by the debtor, but this must be done by his express declaration, or by circumstances from which his intentions can be inferred. 2 C. M. & R. 723; 14 East, 239; 1 Tyrw. & Gr. 137; 15 Wend. 19; 5 Taunt5. 7 Wheat. 13; 2 Ear. & Gill, 159; S. C. 4 Gill & Johns. 361; 1 Bibb, 334; 5 Watts6, 544; 12 Pick. 463; 20 Pick. 441; 2 Bailey, 617; 4 Mass. 692; 17 Mass. 575. This appropriation, it seems, must be notified to the creditor at the time; for an entry made by the debtor in his own books, is not alone sufficient to determine the application of the payment. 2 Vern. 606; 4 B. & C. 715. In some cases, in consequence of the circumstances, the presumption7 will be that the payment was made on account of one debt, in preference to another. 3 Caines, 14; 2 Stark8. R. 101. And in some cases the debtor has no right to make the appropriation, as, for example, to apply 4 partial payment to the liquidation9 of the principal, when interest is due. 1 Dall. 124; 1 H. & J. 754; 2 N. & M'C. 395; 1 Pick. 194; 17 Mass. 417.
4. – 2. When the debtor has neglected to make an appropriation, the creditor may, in general, make it, but this is subject to some exceptions. If, for example, the debtor owes a debt as executor, and one in his own right, the creditor cannot appropriate a payment to the liquidation of the former, because that may depend on the question of assets. 2 Str. 1194. See 1 M. & Malk. 40; 9 Cowen, 409; 2 Stark. R. 74; 1 C. & Mees. 33.
5. Though it is not clearly settled in England whether a creditor is bound to make the appropriation immediately, or at a subsequent time Ellis on D. and C. 406-408 yet in the United States, the right to make the application at any time has been recognized, and the creditor is not bound to make an immediate10 election. 4 Cranch, 317; 9 Cowen, 420, 436. See 12 S. & R. 301 2 B. & C. 65; 2 Verm. 283; 10 Conn. 176.
6. When once made, the appropriation cannot be changed; and, rendering11 an account, or bringing suit and declaring in a particular way, is evidence of such appropriation. 1 Wash. 128 3 Green. 314; 12 Shepl. 29; 2 N. H. Rep. 193; 2 Rawle, 316; 5 Watts, 544; 2 Wash. C. C. 47; 1 Gilp. 106; 12 S. & R. 305.
7. When no application of the payment has been made by either party, the law will appropriate it, in such a way as to do justice and equity12 to both parties. 6 Cranch, 8, 28; 4 Mason, 333; 2 Sumn. 99, 112; 5 Mason, 82; 1 Nev. & Man. 746; 5 Bligh, N. S. 1; 11 Mass. 300;1 H. & J. 754; 2 Vern. 24; 1 Bibb. 334; 2 Dea. & Chit. 534; 5 Mason, 11. See 6 Cranch, 253, 264; 7 Cranch, 575; 1 Mer. 572, 605; Burge on Sur. 126-138; 1 M. & M. 40. See 1 Bouv Inst. n. 8314. 8. In Louisiana, by statutory enactment13, Civ. Code, art. 1159, et seq., it is provided that the debtor of several debts has a right to declare, when he makes a payment, what debt he means to discharge. The debtor of a debt which bears interest or produces rents, cannot, without the consent of the creditor, impute14 to the reduction of the capital, any payment he may make, when there is interest or rent due. When the debtor of several debts has accepted a receipt, by which the creditor has imputed15 what he has received to one of the debts especially, the debtor can no longer require the imputation16 to be made to a different debt, unless there have been fraud or surprise on the part of the creditor. When the receipt bears no imputation, the payment must be imputed to the debt which the debtor had at the time most interest in discharging of those that are equally due, otherwise to the debt which has fallen due, though less burdensome than those which are not yet payable17. If the debts be of a like nature, the imputation is made to the less burdensome; if all things are equal, it is made proportionally." This is a translation of the Codo Napoleon, art. 1253-1256 slightly altered. See Poth. Obl. n. 528 translated by Evans, and the notes; Bac. Ab. Obligations, F; 6 Watts & Amer. Law Mag. 31; 1 Hare & Wall. Sel. Dec. 123-158.
APPROPRIATION, eccl. law. The setting apart an ecclesiastical benefice, which is the general property of the church, to the perpetual and proper use of some religious house, bishop18 or college, dean and chapter and the like. Ayl. Pat. 86. See the form of an appropriation in Jacob's Introd. 411.
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