Short answer. If your several debts to the same creditor are equally burdensome and you paid without specifying which one, Article 1254 of the Civil Code applies the payment proportionately across all of them, rather than crediting one debt in full. Each debt is reduced in proportion to its share of what you owed in total.
What the law says
If the debts due are of the same nature and burden, the payment shall be applied to all of them proportionately.
Civil Code, Article 1254 — Application by Operation of Law. Read the full provision →
Why proportional application applies here
Article 1254 sets up the default rule for payments not designated to a particular debt and that cannot be worked out from the surrounding circumstances. Where several debts you owe are of the same nature and burden, meaning none is more onerous than another, no higher interest, no earlier due date, no heavier security on one than the rest, the law does not pick a winner among them. Instead of crediting one debt at the expense of the others, it spreads the payment across all of them in proportion to what is owed on each one.
How the proportion is worked out
The payment is divided according to each debt's share of the total amount due. If you owe three equal debts of the same nature, a partial payment would ordinarily reduce each of the three by an equal fraction, rather than being applied entirely to the first debt or the most recent one. No single debt is treated as fully satisfied while the others remain untouched; each simply carries a smaller outstanding balance once the proportionate share of the payment has been applied to it.
When this rule does not apply
This proportional rule is specifically for debts genuinely equal in nature and burden. If one debt is more onerous than the others, for example because it bears interest or is already overdue, Article 1254's preceding rule instead applies the whole payment to that more onerous debt rather than spreading it around. The proportional rule is reached only once the debts are found to be alike in nature and burden; where your debts differ in these respects, a different part of the same article controls the outcome 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 →
- Estanislao and Africa Sinamban vs China Banking Corporation, G.R. No. 193890, March 11, 2015 — read the decision on LawPhil →
- New Sampaguita Builders Construction, Inc., et al. vs. Philippine National Bank, G.R. No. 148753, July 30, 2004 — read the decision on LawPhil →