§ 9-12-07 — Performance when there are several obligations - Application

When a debtor under several obligations to another does an act by way of performance, in
whole or in part, which is applicable equally to two or more of such obligations, such
performance must be applied as follows:
1. If, at the time of the performance, the intention or desire of the debtor that such
performance should be applied to the extinction of any particular obligation is
manifested to the creditor, it must be applied in such manner.
2. If no such application is then made, the creditor, within a reasonable time after such
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 such performance, except
that if similar obligations were due to the creditor both individually and as a trustee,
unless otherwise directed by the debtor, the creditor shall apply the performance to the
extinction of all such obligations in equal proportion. An application once made by the
creditor cannot be rescinded without the consent of the debtor.
3. If neither party makes such application within the time prescribed herein, 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. Of interest due at the time of the performance.
b. Of principal due at the time of performance.
c. Of the obligation earliest in date of maturity.
d. Of an obligation not secured by a lien or collateral undertaking.

e. Of an obligation secured by a lien or collateral undertaking.