Also known as: subrogate · subrogates · subrogated · subrogating · subrogations · subrogative · subrogee · subrogees · subrogor · subrogors
Written by attorneys · grounded in primary & secondary sources — see below
An equitable right by which one party who pays the debt or obligation of another is substituted for the original creditor. The paying party acquires the creditor's rights, remedies, and securities against the debtor to the extent of the payment. This substitution prevents unjust enrichment of the debtor or intervening parties.
Sofia Stern owed Solomon Silver $10,000 on a prior debt. Sofia contracted with Summit Bank under which the bank promised to pay Silver directly. Silver obtained a joint judgment against both. Summit Bank paid $6,000. Sofia then paid the remaining $4,000 from her own funds. Sofia steps into Silver's position against Summit Bank for the $4,000 she paid.
Sentinel Security insured Sofia Stern against property loss. After a fire caused by a third party, Sentinel paid Sofia the full policy amount. Sentinel then pursued the third party in its own name to recover the payment. The subrogation transferred Sofia's tort claim to Sentinel to the extent of its payment.
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Solomon Silver, an employee, received workers' compensation from his employer after injury on a vessel. The employer paid the benefits. The employer then asserted subrogation rights against a third-party ship owner whose negligence caused the injury. The payment allowed the employer to step into the employee's position against the ship owner.
Sydney Santos shipped goods under a bill of lading with an arbitration clause. An insurer paid Santos for cargo damage. The insurer then sought to enforce the arbitration clause against the carrier by stepping into Santos's contractual rights. Subrogation allowed the insurer to pursue the carrier's liability in arbitration.
Southland Foods held a junior lien on real property. To protect its interest, Southland paid off the senior mortgage held by Summit Bank. Southland then claimed the senior mortgage's priority position against a later lienholder. Subrogation preserved the senior lien in Southland's hands rather than extinguishing it.
Selena Singh suffered injury from a negligent act. Her health insurer paid her medical expenses. The insurer then sued the tortfeasor to recover those payments by asserting Singh's negligence claim. Subrogation transferred Singh's cause of action to the insurer up to the amount paid.
Subrogation allows the promisee who pays the beneficiary to step into the beneficiary's rights against the promisor. Reimbursement gives the promisee a direct claim against the promisor for the amount paid. Both rights arise once the promisee satisfies the beneficiary's claim from its own assets.
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A junior lienholder who pays the senior mortgage to protect its own interest succeeds to the senior mortgage and its priority. The payment does not extinguish the senior lien. The junior lienholder may enforce the senior mortgage against the property ahead of intervening creditors.
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No assignment is required. Subrogation arises by operation of law once the insurer pays the insured's loss. The insurer may sue the third party in its own name to the extent of the payment.
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The insurer recovers only to the extent of its payment to the insured. The insurer acquires no greater rights than the insured held against the third party. Any recovery beyond the payment belongs to the insured.
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…resides there, and he has candidly told us that he was retained by insurance companies interested presumably because of subrogation. His affidavits and argument are devoted to controverting claims as to defendant’s inconvenience rather than to showing that the present forum serves any convenience of his own, with one…