Also known as: subrogation rules · subrogation
Written by attorneys · grounded in primary & secondary sources — see below
An equitable principle by which a party who performs an obligation owed by another succeeds to the creditor's rights against the primary obligor to prevent unjust enrichment.
Seth Shapiro promised to pay a debt owed by Sebastian Santos to a third-party creditor. When the creditor sued both, Sebastian paid the full amount. Sebastian then stepped into the creditor's position to recover from Seth, enforcing the original duty without double recovery.
Sylvia Santos held a professional liability policy issued by Sentinel Security. After the insurer paid a judgment against her firm for fiduciary breach, it asserted rights against the attorney personally to recoup the amount, treating the payment as satisfying the underlying obligation.
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The promisee obtains the right when the beneficiary's claim is satisfied from the promisee's assets. This allows the promisee to step into the beneficiary's position against the promisor and enforce any remaining judgment or security.
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Satisfaction of either duty reduces the other to the same extent. Subrogation preserves the promisee's ability to recover from the promisor after the promisee has paid, avoiding unjust enrichment of the promisor.
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Yes. A transferor who pays the mortgage obligation after the transferee defaults acquires an equitable right to enforce the mortgage against the land in the transferee's hands by subrogation, treating the transferor as a secondary obligor.
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…146 A.2d 105, 110 (1958) (liability insurer having paid judgment for assault on behalf of insured partnership has a right of subrogation against the individual partner who committed the assault). Affirmed in part and reversed in part. Footnotes [^maj-1]: Judge McRae's order in Rice v. Perl , dated August 11, 1980, as…