Subbogation

T The substitution of a new for an old creditor; more generally, the act of putting, by transfer, a person in the place of another, or a thing in the place of another thing. 8 The doctrine of marshaling securities or funds was derived from the Roman law, in which it was called " subrogation" or " substitution." By that law when a surety paid the creditor he was entitled to a cession of the debt and subrogation to all the creditor's rights against the debtor.

9 See Marshal, 2.

The doctrine that w-hen one has been compelled to pay a debt which ought to have > See 3 Bl. Com. 388; R. S. §§ 716, 863-71) cases, = United States v. TUden, 10 Bened. 566, 570-^1 (1879), cases. ^ 3 Be Shepard, 18 Blatch.

286 (1880); 9 East, 473; 3 Stark. Ev. p. 1782. • 1 Whart. Ev. § 377, cases. ' 1 Whart. Ev, § 378, cases. • 1 Greenl. Ev. §§ 309-19, cases. ^ ' L. surrogare, to choose in place of another, to substitute. " Houston V. Branch Bank. 25 Ala. 267 (1854), Chilton, C. J.; Knighton u. Cui-ry, 62 id.

408 (1878), oases, been paid by another, he is entitled to a cession of all the remedies the creditor possessed against that other.'

Subrogee.

He who succeeds to the rights of the creditor in that case. To the creditor, both may have been equally liable, but if, as between themselves, there is a superior obligation resting upon one to pay the dfibt, the other, after paying it, may use the creditor's security to obtain reimbursement. It is not allowed to one partner as against his copartner, or to a joint debtor as against his co-debtor, because, as between them, there is no obligation to pay the debt resting upon one superior to that which rests upon the other. The doctrine does not depend upon privity, nor is it confined to strict cases of suretyship. It is a mode which equity adopts to compel the ultimate discharge of the debt by him who in good conscience ought to pay it, and to relieve him whom none but the creditor could ask to pay. To effect this, the latter is allowed to take the place of the creditor, and make use of all the creditor's securities, as if they were his own.' The right is not founded on contract. It is a creation of equity; is enforced for the purpose of accomplishing the ends of substantial justice; and is independent of any contractual relation between the parties.'* Subrogation is purely an equitable result. It arises only in favor of a party who on some sort of compulsion discharges a demand against a common debtor.

— The doctrine applies in all cases where a payment has been made under a legitimate and fair effort to protect the ascertained interests of the party paying, and when intervening rights are not legally jeopardized or defeated. ^ The principle does not apply where one voluntarily pays the debt of another; but only where he is surety for the debt, or is compelled to pay it to protect his own interests, or where the debt is assigned to him on payment, or where he pays it under a special agreement that he shall be substituted to the rights of the creditor.* Subrogation in equity is confined to the relation of principal and surety and guarantor;

— to cases where a pereon, to protect his lien, is compelled to remove a supssriorlien; and to cases of insurance.

One under no legal obligation to pay the debt is a volunteer.^ The doctrine requires (1) that the person seeking its benefit must have first paid a debt due to a third party; (2) that he must not act as a mere volunteer, but on compulsion, to save himself from loss by reason of a superior lien or claim on the part of the person to whom he pays the debt, as, in cases of sureties, prior mortgages, etc. The right is never accorded to one who is a mere volunteer in paying the debt of one person to another.'

1 Me Cormick v. Irwin, 35 Pa. UT C18B0), Strong, J. Approved, Beber v. Gundy, 13 F. B. 58 (1882). 2 Memphis, &c. E. Co. v. Dow, 120 U. S. 301 (1887).

3 Mosier-s Appeal, 56 Pa. 81 (1867), Thompson, C. J. ' < Clark V. Moore, 76 Va. 262 (1382), Burks, J. The surety is entitled to all the means of payment held by the creditor against the principal debtor; and the creditor has a reciprocal right to all the securities the principal debtor may have furnished for the surety's indemnity.^ But before the principle can be applied the whole debt must be paid.'* The doctrine cannot be invoked where it would work inequitably. 3 The right of an insurer, upon paying a total loss, to recover from third persons, is only such right as the assured has.^