Subrogation is one of the means of modifying civil law obligations, especially when a creditor`s rights are transferred to a third party (Articles 1291(3) and 1303 of the new Civil Code of the Philippines). Subrogation can be legal or conventional. Legal subrogation is not presumed, except as expressly provided in our Code. (Article 1300, id.) The right to subrogation arises with the payment of the debt. The executor generally enjoys all the rights, privileges, priorities, remedies and judgments of the creditor and is subject only to the limitations and conditions that are binding on the creditor. However, he has no rights other than the creditor. The facts of each case determine whether or not a subrogation is applicable. In general, the remedy is broad enough to cover all cases where a party who is not simply a volunteer pays a debt for which a second party is primarily responsible and which, in fairness and conscience, should have been settled by the second party. Subrogation is a very popular remedy that the courts are happy to expand and apply generously. Note that if the borrower used the loan proceeds to meet a previous unrelated charge, this is not a sufficient reason to allow the new lender to subcontract. There should be sufficient evidence that the new loan was made by the subrogator for the correct purpose.
Gower v. State Tax Com., 207 Ore. 288 (Or. 1956) However, courts may grant rights under the doctrine of subrogation even if one or more factors are missing. Hicks v. London, 125 pp.3d 452 (Colorado. 2005). The court deciding whether fair subrogation applies to a mortgage must review the creditor`s actions.
The level of knowledge attributable to a subroge of the existence of the intermediary hypothec may void the subrogation on an equitable basis. Wells Fargo Bank, N.A. v. Nat`l Lumber Co., 76 Mass. App. Ct. 1 (Mass. App. Ct. 2009) „There are recognized exceptions to this rule. For example, if the insured, on his own initiative, exonerates the author or third party liable for the loss or damage from liability, the insurer`s right of subrogation is infringed [Phoenix Ins. Co.
of Brooklyn v. Erie & Western Transport, Co., 117 US 312, 29 L. Ed. 873 (1886); Insurance Company of North America v. Elgin, Joliet & Eastern Railway Co., 229 F 2d 705 (1956). Even if the insurer pays the insured the value of the lost property without notifying the carrier that settled the insured`s claim in good faith, the settlement binds both the insured and the insurer, and the insurer cannot sue the carrier for its right of subrogation [McCarthy v. Barber Steamship Lines, Inc., 45 phil. 488 (1923)]. And if the insurer pays the insured damages that do not represent a risk covered by the policy, thus making a „voluntary payment”, the insurer does not have the right to subcontract the third party responsible for the damage [Sveriges Angfartygs Assurans Forening v. Qua Chee Gan, G.R. No.
L-22146, 5 September 1967, 21 SCRA 12]. Legal subrogation takes place on an equitable basis, with or without agreement. The right to statutory subrogation may be modified or extinguished by contractual agreement. It cannot be used to replace a contract agreed by the parties. Traditional subrogation occurs when a person discharges the debt of another person under a contractual arrangement that provides that all claims or liens that exist as security for the debt are kept alive for the benefit of the party paying the debt. It is necessary that the agreement be supported by counterparts; However, it does not have to be written and can be explicit or implicit. Guarantee and insurance: In addition, when it comes to insurance or guarantees in general, there is no right to subrogation in favour of a guarantee until the guarantor has fulfilled his own contractual obligation. See below for more information. The subrogation of a guarantor does not exceed the extent necessary to reimburse itself for the costs incurred by the guarantor in fulfilling its security obligations. In the case of construction bonds, which are frequently used in construction projects and may include mechanical privileges, the surety`s rights to claim performance bonds from a contractor begin on the date the warranty is enforced. In order to maintain an appropriate request for subrogation, a guarantor must take over the service contract.
In addition, a guarantee may finance the conclusion of the defaulting contract under the performance bond. A volunteer, stranger or intruder is someone who throws himself into a situation on his own initiative. The doctrine of subrogation does not apply to a stranger or a volunteer who has paid someone else`s debt. The volunteer making the payment has no rights or interests of their own to protect. A volunteer cannot rely on the help of subrogation, since such a person cannot prove fairness. BMW Fin. Servs., NA, LLC v. Bill Heard enters.
(In re Bill Heard Enters.), 423 B.R. 771, 783 (Bankr. N.D. Ala. 2010). A volunteer makes payment on demand, as a guarantee or under any constraint required by the adequate protection of his own right. Payment by a volunteer acts as absolute debt relief. In addition, a person who holds an office on property of which he has no interest in paying does not become the rights of the holder of the office. In addition, lending money to satisfy a lien does not transfer the rights of the lien holder to the lender.
BMW Fin. Servs., NA, LLC v. Bill Heard enters. (In re Bill Heard Enters.), 423 B.R. 771, 783 (Bankr. N.D. Ala. 2010) Buyers who pay liens on a property may also be granted debt rights. A hypothec assignee cannot obtain subrogation rights for amounts advanced to pay off a second mortgage. Indeed, there is no relationship between the principal and the guarantor or guarantor or any other relationship between the parties that could give rise to such a right. However, subrogation does not apply to a purchaser who acquires property without prior knowledge of a lien. Taxel v Chase Manhattan Bank (In re Deuel), 361 B.R.
509 (B.A.P. 9th Cir. 2006). Above all, it is important to have a good subrogation agreement whenever possible, including clauses on the payment of costs and attorneys` fees to the prevailing party and, if necessary, arbitration to enforce recourse rights. Above all, remember that if you claim rights, your claim is no better than the rights you have assumed. Due diligence is therefore required to determine the actual level of security you will achieve. The practice of substituting one party for another in a legal framework The right of a guarantor who fulfils the obligation of his principal to make the subrogation may depend on his legal status as guarantor. An indemnified guarantor is enforced without the guarantor`s consent if the creditor-debtor relationship has been substantially altered. The modification must significantly increase the risk of guarantee. However, in the case of subrogation, it is generally not possible to distinguish between indemnified security and gratuitous security. Even if the guarantee is compensation, the guarantor is not deprived of the right of subrogation.
The right of subrogation is usually provided for in contracts between the insurance company and the insured. Contracts may contain special clauses that give the insurance company the right to initiate the process of recovering payment of the insurance claim from the party who caused the damage to the insured. In some cases, if the security provided for a loan is found to be invalid, the party advancing the money becomes the rights of the lien holder. Therefore, subrogation may also be allowed if a title fails due to a lack of authority or capacity. Subrogation is one of the just doctrines in countries with common law legal systems. The right to a guarantee of subrogation exists independently of the law. However, some laws define the law. As a rule, they declare existing rules only in equity.
King vs. Hartford Acci. & Indem. Co., 133 Cal. App. 711 (Cal. App. 1933). The guarantor is entitled to any guarantee for the performance of the principal obligation held by the creditor at the time of the conclusion of the contract of guarantee. In the case of a guarantee, the right to subrogation arises when a guarantor fulfils his contractual obligation.
The right does not depend on an assignment, lien or contract. A right of subrogation is not a security interest and therefore does not require compliance with the filing requirements of the Uniform Commercial Code. State Bank & Trust Co. v. Insurance Co., 132 F.3d 203, 206 (5th Cir. Tex. 1997). SUBROGATION, CIVIL LAW, CONTRACTS. The act of placing a person in the place of another thing or thing in the place of another thing. It is the replacement of a new creditor by a former creditor and the succession of his rights, which is called subrogation; Transfusio unius creditoris in Alium. That is exactly the opposite of delegation. (S.
A.) 2. There are three types of remedies: 1. That which the owner of a thing does of his own free will; For example, if BE assigns it voluntarily. 2. What results from the law, even without the consent of the owner; For example, if a man pays a debt that could not be properly described as his own, but which was nevertheless his interest, or which he should have paid for another, the law transfers it to all the rights of the creditor. Empty 2 Binn. Reports 382; White`s L. C. in Gl.* 60-72.
3. that resulting from the legal act connected with the act of the debtor; such as when the debtor expressly lends money to repay his debts and with the intention of putting the lender in the place of the former creditor. 7 Toull. 3, T. 3, c. 5, § 1, para. 2. Vide Civ. Louisiana Code, art. 2155-2158; Merl. Repert. H.T.; Dig.