Law of Debtor and Creditor
In the law of debtor and creditor, appropriation of payments is the application of a particular payment for the purpose of paying a particular debt. When a creditor has two debts due to him from the same debtor on distinct accounts, the general law as to the appropriation of payments made by the debtor is that the debtor is entitled to apply the payments to such account as he thinks fit; solvitur in modum solventis. In default of appropriation by the debtor the creditor is entitled to determine the application of the sums paid, and may appropriate them even to the discharge of debts barred by the Statute of Limitations. In default of appropriation by either debtor or creditor, the law implies an appropriation of the earlier payments to the earlier debts.
Read more about this topic: Appropriation (law)
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