Montana § 28-1-1106 Application Of Performance When There Are Several Obligations

Montana Statutes

§ 28-1-1106 — Application Of Performance When There Are Several Obligations

Montana § 28-1-1106

Title 28CONTRACTS AND OTHER OBLIGATIONS

Ch. 1OBLIGATIONS IN GENERAL

Part 11Extinction of Obligation by Performance

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Bluebook

Mont. Code Ann. § 28-1-1106 (2026).

Text

28-1-1106 . Application of performance when there are several obligations. Whenever a debtor under several obligations to another does an act by way of performance, in whole or in part, that is equally applicable to two or more of the obligations, the performance must be applied as follows:

(1)If, at the time of performance, the intention or desire of the debtor that the performance should be applied to the extinction of any particular obligation is manifested to the creditor, it must be so applied.

(2)If no intention or desire is then manifested, the creditor, within a reasonable time after performance, may apply it toward the extinction of any obligation the performance of which was due to the creditor from the debtor at the time of the performance, except that if similar obligations w

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28-1-1106 . Application of performance when there are several obligations. Whenever a debtor under several obligations to another does an act by way of performance, in whole or in part, that is equally applicable to two or more of the obligations, the performance must be applied as follows:
(1) If, at the time of performance, the intention or desire of the debtor that the performance should be applied to the extinction of any particular obligation is manifested to the creditor, it must be so applied.
(2) If no intention or desire is then manifested, the creditor, within a reasonable time after performance, may apply it toward the extinction of any obligation the performance of which was due to the creditor from the debtor at the time of the performance, except that if similar obligations were due to the creditor, both individually and as a trustee, the creditor shall, unless otherwise directed by the debtor, apply the performance to the extinction of all obligations in equal proportion. An application once made by the creditor cannot be rescinded without the consent of the debtor.
(3) If application is not made as prescribed in subsection (1) or (2) within the time prescribed, the performance must be applied to the extinction of obligations in the following order and, if there is more than one obligation of a particular class, to the extinction of all in that class, ratably:
(a) first--interest due at the time of the performance;
(b) second--principal due at that time;
(c) third--the obligation earliest in date of maturity;
(d) fourth--an obligation not secured by a lien or collateral undertaking;
(e) fifth--an obligation secured by a lien or collateral undertaking.

Legislative History

En. Sec. 2006, Civ. C. 1895; re-en. Sec. 4928, Rev. C. 1907; re-en. Sec. 7430, R.C.M. 1921; Cal. Civ. C. Sec. 1479; Based on Field Civ. C. Sec. 705; re-en. Sec. 7430, R.C.M. 1935; R.C.M. 1947, 58-407; amd. Sec. 5, Ch. 117, L. 1979; amd. Sec. 754, Ch. 56, L. 2009.