1302. It is assumed that there is a legal subrogation: the reader should read our article on guarantees. In finance, a surety or guarantee is a promise by a party to assume responsibility for a borrower`s debts or obligations if the borrower defaults. The person or company that makes such a promise is called a guarantor or guarantor. In case of default of payment by the customer, the guarantor will be asked to settle the debt. In the case of such a payment, the law generally grants the guarantor a right of subrogation. By subrogating, a guarantor can follow in the principal`s footsteps and use the guarantor`s contractual rights to cover payment costs. The guarantor is entitled to reimburse the costs even if no express agreement has been concluded between the guarantor and the customer. If a guarantor or guarantor compensates for the default of its principal by performing the obligation of the principal, the guarantor generally passes into the rights of a creditor or creditor. Subrogation means the replacement of one debt by another, in particular the transfer of the right to payment of a debt to a person other than the original debt. On the basis of Article 1302, the third party may pay the amount of a debtor`s obligation to the creditor even without his knowledge, in Gaysano v.
North American Insurance, Gaysano refused to pay its debts to Levis International due to a fortuitous event, but Levis International supported its claim of Gaysano`s obligation on the basis of legal subrogation alongside Article 1302. The doctrine of subrogation goes so far as to grant the guarantor the creditor`s rights and remedies against all persons liable for the debt. This applies in particular to the guarantees of a trustee, who must answer for his breach of trust vis-à-vis the trustee and the participants in the unlawful act. American Bonding Co. v. National Mechanics` Bank, 97 B. 598, 606 (Md. 1903) In Hall v Windsor Sav. Bank, 97 Vt. 125, 134 (Vt.
1923), The court stated that “whenever the guarantor of a trustee is obliged to vouch for his breach of trust, he asserts the rights of the trustee and the cestui”. 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. 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. Buyers who pay liens on a property may also be granted subrogation 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). n. a rule of law that allows a court to presume that a fact is true until there is a predominance (greater weight) of the evidence that refutes or outweighs (rebuts) the presumption. Each conjecture is based on a specific set of obvious facts, associated with established laws, logic, reasoning, or individual rights. A presumption is rebuttable to the extent that it can be rebutted by factual evidence. Facts can be presented to convince the judge that the presumption is not true. Examples: a child born to a husband and wife is considered the husband`s natural child, unless there is conclusive evidence that this is not the case; A person who has disappeared and has not been heard for seven years is presumed dead, but the suspicions could be refuted if found alive; The accused is presumed innocent until proven guilty. They are sometimes called rebuttable presumptions to distinguish them from absolute, conclusive or irrebuttable presumptions when legal and logical rules dictate that there is no way to rebut the presumption. However, if a fact is absolute, it is not real conjecture at all, but a certainty.
Real estate payments: When it comes to real estate, a person who has an interest in a property can pay the taxes and assessment owed by another person on the property. In this case, the person becomes a privilege of the state or public tax authorities. Willmon v. Koyer, 168 Cal. 369 (Cal. 1914). As a rule, such requests are granted by law. However, in order to avoid being a volunteer, if there is no written subrogation agreement, no one can pay taxes or the assessment of a property in which he has no interest.
Pacific Tel. & Tel. Co. v. Pacific Gas & Electric Co., 170 Cal. App. 2d 387 (Cal. App. 1st Dist. 1959). If there is no prior agreement, subrogation may be refused, even if the party has paid the taxes at the request of the owner of the property. Employees` Bldg.
& Loan Ass`n v. Crafton, 63 Okla. 215 (Okla. 1917). The purpose of fair subrogation is to place the burden of a loss on the party who is ultimately responsible for the debt. The burden must fall on the person who should have paid the debt. In addition, subrogation fully releases the insurer or guarantor who compensated the damage and who is not primarily responsible for the debt. Morgan Creek Residential v. Kemp, 153 Cal. App. 4th 675, 695 (Cal. App.3d Dist.
2007). Subrogation is a valuable tool for those who want to protect their economic interests by assuming or guaranteeing the obligations of others. It is part of almost all insurance contracts, including health insurance, which is provided for accidents. For those considering securing someone else`s debt, obtaining recourse rights is an essential aspect of the economic protection you should impose in your subrogation contract documents. 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. 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.
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). If a person lends money in good faith to another person to secure a mortgage to relieve property owed to them, the person lending the money may have the recourse rights that the hypothecary borrower had against the parties claiming ownership of the property. If a person with a subordinated hypothec advances money to secure a previous mortgage, that person is entitled to the recourse rights of a first mortgage. Texas Commerce Bank Nat`l Asso. v. Liberty Bank, 540 S.W.2D 554 (Tex. Civ. App.
Houston 14th Dist. 1976). However, the entire debt must be paid by the holder of the subordinated lien. (This is necessary because if there is a threat of foreclosure, a senior lien can remove a subordinated lien and, therefore, a subordinated lien holder can reinstate the loan by making a payment sufficient to remedy the default or repay the prime lien and become the rights of the first lien privilege.) 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. Subrogation is only permitted in the interest of parties who are paying someone else`s debts. There can be no right to subrogation if someone pays a debt that he is already obliged to pay. Bank of Marlinton v. McLaughlin, 123 W. Va. 608 (W. Va.
1941). Subrogation does not result from a firm rule of law. The principle derived from the doctrine of subrogation is that it is a product of justice or “equity.” Subrogation stems from natural justice, which is to put the burden where it should lie. Like other just doctrines, subrogation depends on the facts and circumstances of the individual case. Moreover, it is a means assumed or invented by equity to force the final performance of a debt or obligation of the person who should in good conscience pay the debt. Home Owners` Loan Corp.
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