Short answer. Generally yes. Article 1252 says that if the debtor accepts from the creditor a receipt in which an application of the payment is made, he cannot complain of it — unless there is a cause for invalidating the contract. By accepting the receipt without objection, you are treated as having agreed to how the creditor applied your money.
What the law says
may declare at the time of making the payment, to which of them the same must be applied
Civil Code, Article 1252 — Application of Payments. Read the full provision →
What the law says
If the debtor accepts from the creditor a receipt in which an application of the payment is made, the former cannot complain of the same, unless there is a cause for invalidating the contract.
Civil Code, Article 1252 — Application of Payments. Read the full provision →
Accepting the receipt binds you
Article 1252 governs how a payment is applied when a debtor owes the same creditor several debts of the same kind. The debtor has the first say — he may declare at the time of making the payment, to which of them the same must be applied. But the provision then adds a rule that catches many people out: if the debtor accepts from the creditor a receipt in which an application of the payment is made, the former cannot complain of the same, unless there is a cause for invalidating the contract. Accepting such a receipt without objection is treated as accepting the creditor's choice of which debt was paid.
The one way out: a cause to invalidate
Your remaining escape is narrow. You can still challenge the application only if there is a cause for invalidating the contract — the ordinary grounds that vitiate consent, such as mistake, fraud, violence, intimidation or undue influence. If, for instance, you were tricked or coerced into taking a receipt that applied your payment to a debt you did not intend to pay, the acceptance does not bind you. But mere second thoughts, or later realising a different application would have suited you better, is not a cause for invalidating the contract. The bar is genuine defective consent, not regret.
Why the timing of your choice matters
The article rewards a debtor who speaks up at the right moment. The time to direct where your payment goes is at the time of making the payment, not afterwards. If you say nothing and simply take whatever receipt the creditor issues, the law reads your silence as agreement. This is why, when you owe one creditor several debts — an old one and a new one, one with interest running and one without — you should state in writing which you are paying before you hand over the money, and check that the receipt matches. A receipt is not a neutral formality; it can decide the dispute.
What the rule does not do
Article 1252 does not let a creditor apply a payment to a debt that is not yet due against your interest. The same article provides that, unless the parties stipulate otherwise, application shall not be made as to debts which are not yet due, except where the party for whose benefit the term was set makes it. Nor does accepting a receipt turn a paid debt into an unpaid one or invent a debt that never existed — it fixes which existing obligation your payment discharged. Where no valid application was made by anyone, other rules of the Code decide the question instead.
Cases citing this provision
These Supreme Court decisions cite the provision above. We list them so you can read them yourself; the summaries of what each decided are not ours to give.
- Premiere Development Bank vs. Spouses Engracio T. Castañeda, G.R. No. 185110, August 19, 2024 — read the decision on LawPhil →
- Atty. Leonardo Florent O. Bulatao vs. Zenaida C. Estonactoc, G.R. No. 235020, December 10, 2019 — read the decision on LawPhil →
- Engr. Ricardo O. Vasquez vs. Phillippine National Bank and Notary Public, G.R. No. 228355, August 28, 2019 — read the decision on LawPhil →
- Estanislao and Africa Sinamban vs China Banking Corporation, G.R. No. 193890, March 11, 2015 — read the decision on LawPhil →