Also known as: equities of subrogation · equitable subrogation · subrogation
Written by attorneys · grounded in primary & secondary sources — see below
An equitable right allowing a secondary obligor who pays a debt to step into the shoes of the original creditor and enforce the creditor's remedies against the primary obligor.
GreenGrid promised to pay a planner on Ethan Evans's behalf. The planner obtained judgment against Ethan. After Ethan paid the planner in full, Ethan enforced the planner's claim against GreenGrid by subrogation to recover the sum paid.
Eva Espinosa personally guaranteed a loan secured by a factory mortgage. After the buyer defaulted, Eva paid the lender in full. She then enforced the mortgage lien against the factory in the buyer's hands to recover the amount she had paid.
Elliot Edmonds sold property subject to a mortgage without the buyer assuming personal liability. When the buyer stopped paying, Elliot satisfied the debt to prevent foreclosure. He then foreclosed the mortgage on the property now owned by the buyer.
Select any source to read its text and confirm it supports the definition.
Ezra Eastman guaranteed a partnership trade debt. After the partnership dissolved, Ezra paid the vendor from personal funds. He then asserted a claim against partnership assets ahead of other partners to recover the payment.
Emanuel Escobar signed a note as an accommodation party. After the accommodated party defaulted, Emanuel paid the holder. He then enforced the note directly against the accommodated party to obtain reimbursement.
Elise Everly transferred mortgaged land with the balance credited against the price. The transferee defaulted. Elise paid the lender to protect her secondary liability and then enforced the mortgage against the land in the transferee's possession.
When an intended beneficiary holds an enforceable claim against the promisee, the beneficiary may obtain judgment against the promisee or promisor or both. Payment by either satisfies the other duty to the same extent, after which the promisee may enforce subrogation rights against the promisor.
Supporting sources
No. Equity looks beyond the record to prevent unjust enrichment. A secondary obligor who pays the debt acquires the right to enforce the mortgage against the land even after a satisfaction is recorded.
Supporting sources
The transferor is treated as a secondary obligor and may obtain exoneration, reimbursement, restitution, or subrogation against the transferee and the mortgaged land when the transferee defaults or creates an unreasonable risk of default.
Supporting sources
A partner who satisfies a partnership obligation from personal funds becomes a creditor entitled to reimbursement from partnership assets before any surplus is distributed to the partners.
Supporting sources
…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…