§ II. On the Order of Restitution as Regards Creditors

Here it is necessary to deal only with the case in which the debtor is unequal to satisfying all his creditors; for otherwise no order necessarily must be observed in paying debts.

I say. In the first place satisfaction must be made to the privileged, then to mortgage creditors, and finally to common creditors. The reason is clear of itself, and is taken, as regards privileged creditors, from positive laws, and as regards mortgage creditors, from a special contract and from the very nature of the thing. - Note, however, that privileged credits are diverse according to the diversity of regions. In the case of cession of goods, among privileged debts with us by force of the law of the year 1898 and of the amendment made in the year 1903 are the salaries of workers and servants, on account of work performed within three months before the legal process was begun, provided the sum owed to each does not exceed three hundred dollars. - Cf. Kenrick, tract. 10, n. 91. - Kent, Comment., vol. 2, lect. 37, n. 419. - Wells, Every Man, etc., p. 594.

You Will Resolve. - 1st. Debts from delict are not necessarily to be paid before debts from onerous contract, because from no law is their preference clear. But both must be preferred to debts from gratuitous title, for he who promises gratuitously always places a tacit condition: if I am able to furnish it conveniently. - Cf. St. Alphonsus, nn. 688 and 689.

2nd. Neither poor creditors over rich, nor earlier creditors in time over later, are necessarily to be preferred, both because from no source is this preference of law clear, and because the person of the debtor, which alone is obligated, bears itself in an equal manner to all the said creditors. - Cf. St. Alphonsus, nn. 690 and 691. - Lugo, disp. 20, n. 161. - Vogler, n. 439.

Question. Whether a debtor knowing his own state to be unstable can satisfy some creditor not petitioning in full?

Resp. Negatively, because, since all creditors are equal in right, and none among them prosecutes his own right, and therefore by diligence no one becomes preferred in petitioning, natural equity demands that full restitution not be made to someone with prejudice to the others. - If, however, some creditor has accepted payment in this way, without having petitioned it, probably he is not held to restitution. The reason is that he could have urged payment, even outside judgment, without doing injury to the other creditors; therefore he can also accept it without their injury. - But the case in which such payment is declared invalid by law must be excepted. Moreover, among us, payment made to a creditor petitioning extrajudicially is held invalid if this creditor could have known the unstable state of the debtor and it was made within the four months preceding cession of goods; and also payment made within six months by a debtor knowing his own state to be unstable. - Cf. St. Alphonsus, n. 692. - Wells, Every Man, etc., p. 599.