A obtains 5 different loans from B in the following manner.
month amount interest
Nov 2014 20000 20%
Dec 2014 40000 5%
Feb 2015 10000 10%
Mar 2015 10000 15%
A decides to make repay only a sum of 50000 in april,2015. please explain taking above example as how the debts shall be appropriated as per clayton's rule of appropriation of payment under the contract act.
Clayton's case explains itself in the ,UK's 1816 case (Devaynes v. Noble) which set the precedent that funds withdrawn from an account are presumed to benefits from the funds deposited first-in first out (FIFO) principle . This ruling, however, is not applicable to trustees who are presumed to draw their own money from mixed bank-accounts and not the trust money, no matter when it was deposited.