Subrogation is well-known to the civil law but never comfortably taken-in by the common law, which struggles to classify it as an equitable or contract law doctrine.
John Bouvier, never one to use a thousand words when twenty will suffice, defines subrogation as:
"The substitution of another person in the place of the creditor, to whose rights he succeeds in relation to the debt."
Osborne defined subrogation as:
"The substitution of one person or thing for another, so that the same rights and duties which attached to the original person or thing attach to the substituted one. If one person is subrogated to another, he is said to stand in the other's shoes."
The Civil Code of Quebec, at §1651, defines subrogation as follows:
"A person who pays in the place of a debtor may be subrogated to the rights of the creditor. He does not have more rights than the subrogating creditor."
The Civil Code of Texas, 2009, §1825:
"Subrogation is the substitution of one person to the rights of another."
In a common law case, Orakpo, Justice Diplock wrote, of subrogation:
"It is a convenient way of describing a transfer of rights from one person to another, without assignment or assent of the person from whom the rights are transferred and which takes place by operation of the law in a whole variety of different circumstances."
Subrogation can occur on a contractual basis, where interested parties agree to the transfer of the debt or liability; or it can occur by operation of the law independent of the consent of the debtor.
Three examples of subrogation in legal contexts readily come to mind.
- In bankruptcy proceedings, the bankruptcy trustee takes on the estate of the bankrupt and is subrogated in the bankrupts rights as against any person who may owe the bankrupt money.
- In insurance law, an insurer may pay off a claim and then take the subrogated rights to chase after a person who may also, in law, be liable for the tort or contractual damages.
- Finally, in the context of family law, where child support recipients are not paid their child support, they can be in receipt of social assistance (welfare) in which event, the government is usually subrogated in their rights to chase down the deadbeat or delinquent child support payor for arrears.
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