The Societal Benefits Of Subrogation
Origins of Subrogation
Subrogation is one of the oldest legal concepts in jurisprudence, having had its roots in Roman law. Under the reign of Emperor Hadrian (A.D. 177 – A.D. 138), Roman law began to shape the building blocks of subrogation. The relation of suretyship could be created by stipulation. Suretyship was an accessory contract, and the surety was known as the fidei-jussor. Sureties had the beneficium divisionis, and enjoyed the beneficium ordinis, invented by Justinian, and the beneficium cedendarum actionum, or subrogation to the right of action of the creditor against the principal debtor, or pro-rata against the co-sureties. It came to America through civil law, and it was from the civil law that the Courts of Chancery (equity) derived both the term and the Doctrine of Subrogation. As a result, subrogation is one of the oldest concepts known to the Anglo-American common law. It seems to have been formally established in common law in the Magna Carta. The right of subrogation was established in Article 9 of the Magna Carta, which provides:
“Neither We nor Our bailiffs shall seize any land or rent for any debt so long as the debtor’s chattels are sufficient to discharge the same; nor shall the debtor’s sureties be distrained so long as the debtor is able to pay the debt. If the debtor fails to pay, not having the means to pay, then the sureties shall answer the debt, and, if they desire, they shall hold the debtor’s lands and rents until they have received satisfaction of the debt which they have paid for him, unless the debtor can show that he has discharged his obligation to them.”
Thus, subrogation under common law has its foundation in the law of suretyship – a formal engagement where one party pledges or undertakes to become legally liable for a debt or performance of a service in the event of a default or failure to perform. The Doctrine is, that a surety paying the debt for which he is bound, is not only entitled to all rights and remedies of the creditor against the principal for the whole amount, but against the other sureties for their proportional part. This is clearly the rule where the principal obligation is the payment of money or performance of a civil duty. In old England, the sureties of a debtor to the king (as for duties, taxes, excise, etc.) have always, since the Magna Carta at least, had the right, upon paying the debt, to have the benefit of prerogative process, such as extent, or other crown process adapted to the case, to aid them in coercing payment from the principal, and compelling contribution from co-sureties. Today, the once strictly and sparingly applied Doctrine of Subrogation has been liberalized and favored under the laws of most states.