Subrogation

The substitution of another person in the place of a claimant, to whose rights he succeeds in relation to the claim. That change which puts another person in the place of the creditor, and which makes the right, the mortgage, or the security which the creditor has, pass to the person who is subrogated to him, — that is to say, who enters into his right. Domat, Civ. Law, pt. i. lib. iii. tit. i. § vi. It is a legal fiction by force of which an obligation extinguished by payment made by a third party is considered as continuing to subsist for the benefit of this third person, who makes but one and the same person with the creditor in the view of the law. Subrogation is the act of putting one thing in place of another, or one person in place of another. Guyot, Rep. Univ. "Subrogation," § ii. Subrogation gives to the substitute all the rights of the party for whom he is substituted.

4 Md. Ch. 253.

Among the earlier civil-law writers, the term seems to have been used sjmonymously with "substitution;" or, rather, "substitution" included "subrogation," as well as its present more limited signification. See Domat, Civ. Law, passim; Poth. Obi. passim. The term "substitution" is now almost altogether confined to the law of devises and chancery practice. See "Substitution." The word "subrogation" is originally found only in the civil law, and has been adopted, with the doctrine itself, thence into equity. It is an equitable doctrine (3 Ired. Eq. [N. C] 386), but in the law, as distinguished from equity, it hardly appears as a through the forms of law, and those where the' distinction between legal and equitable remedies has been abolished. There the term "subrogation," adopted from the Roman law, has of late years come into quite general use.

6 Pa. St. 504.

The equitable doctrine of marshalling assets is plainly derived from the Roman law of subrogation or substitution; and although the word is, or, rather, has been, used sparingly in the common law, many of the doctrines of subrogation are familiar to the courts of common law. Subrogation differs from cession in this, that while cession only substitutes the one to whom the debt is ceded in place of the ceder, in subrogation the debt would have become extinguished but for the effect of th.e subrogation; and also because, although subrogation supposes a change in the person of the creditor, it does not imply novation; but, through the fiction of the law, the party who is subrogated is considered as making only one and the same person with the creditor, whom he succeeds. Masse, Dr. Comm. "Payment in Subrogation." It is one thing to decide that a surety is entitled, on payment, to have an assignment of the debt, and quite another to decide that he is entitled to be subrogated or substituted as to the equities and securities to the place of the creditor, as against the debtor and his cosureties.

Story, Eq. Jur. § 493, note; 2 Mc Lean (U. S.) 451; 1 Dev. (N. C.) 137.

The legal subrogation of the civilians is generally intended by the term "subrogation." Some original interest is essential to entitle one to subrogation. Thus, a surety paying the debt is subrogated to the rights of the creditor against the principal (23 Minn. 74; 28 N. Y. 271), and the holder of a lien who pays a prior lien is subrogated to the rights of the lienholder whom he pays (2 Allen [Mass.] Ill); but a mere stranger or volunteer paying a debt has no right to subrogation (93 N. Y. 235; 76 Va. 262). In the Civil Law. Subrogation of persons is of three sorts: First, the canonists understand by subrogation the succession of a priest to the rights of action of the occupant of a benefice who has died during a suit. Guyot, Rep. Univ. "Subrogation of Persons," § i. Second, the second sort arose from a local custom of the Bourbonnais, and had for its object the protection of the debtor from the effects of collusion on the part of the attaching creditor. Third, subrogation in' fact to aliens and pledgees, which is only the change of one creditor for another. See Guyot, ut supra, and, also. Masse Dr. Comm. Nearly all the instances in which the common law has adopted the doctrines of subrogation have arisen under this latter class. Subrogation is either legal or conventional. Legal subrogation is that resulting by ment has some original privilege.

14 Cal. 565.

Conventional subrogation reetilts as its name indicates, from the agreement of the parties, and can take effect only by agreement. This agreement is, of course, with the party to be subrogated, and may be either by the debtor or creditor.

Civ. Code La. 1249.

Thus, it may happen when the creditor receiving payment from the third person subrogates the payor to his right against the debtor. This must happen by express agreement; but no formal words are required. This sort of subrogation only takes place where there is a payment of the debt by a third party, — not where there is an assignment, in which case, subrogation results from the assignment. This principle is recognized by the common law in cases where, upon payment, the securities are transferred to a party having an interest in the payment. Or, in case the debtor borrows money from a third party to pay a debt, he may subrogate the lender to the rights of the creditor; for by this change the rights of the other creditors are not injuriously affected. To make this mode of subrogation valid, the borrowing and discharge must take place before a notary. In the borrowing, it must be declared that the money has been borrowed to make payment, and in the discharge, that it has been made with money furnished by the creditor. Masse, Dr. Comm. lib.

5, tit. 1, c. 5, §§ 1, 2.