The Law of Subrogation The Law of Subrogation
By Henry N. Sheldon
2000/02 - Beard Books - Law Classic
1587980061 - Paperback - Reprint - 371 pp.

An early treatise covering various aspects of the law of subrogation.

Publisher Comments

Category: Law

This title is part of the Treatises list.

This early treatise sets forth the doctrines applied by the courts in the law of subrogation. Subrogation is the substitution of another person in the place of a creditor so that the person in whose favor it is exercised succeeds to the rights of the creditor in relation to the debt. Covered here are subrogation in cases: where different parties have successive claims upon the same property; of suretyship; among joint debtors; among parties to bills and notes; in the administration of estates; under contracts of insurance; and of strangers.

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Henry Newton Sheldon was born in Waterville, Maine, on the twenty-eighth of June, 1842. He was educated in the public schools of Bath and Waterville and, after spending a year at Bowdoin, entered the sophomore class at Harvard where he obtained a scholarship and, partly working his way through, graduated first scholar in the class of 1863. 

After leaving college, he taught private pupils and a school at Yarmouth for about a year, and then was commissioned a lieutenant in the Fifty-fifth Massachusetts Regiment on June 28, 1864. 

Returning to Boston at the close of the war, his regiment was discharged. Having studied law while teaching before entering the army, he entered the office of Judge Josiah G. Abbott and was admitted to the bar on the twelfth of April, 1866.  After beginning practice, he also began to write. His book on subrogation, still in use, was published in 1882. For many years he was associated with the late General Blackmar, and they practised law together until 1894, when Sheldon was appointed a judge of the Superior Court.

Upon his retirement from the Supreme Judicial Court, at the age of seventy-two, there still remained for him some memorable years of service and effectiveness. He was chosen president of the Massachusetts Bar Association in 1915, and it was largely due to his fostering care that the Massachusetts Law Quarterly was launched and began its successful work. He declined a nomination as president but served as vice-president for the Bar Association of the City of Boston, and was at the head of a committee of three, before whom were brought, in the first instance, the complaints against a prosecuting officer which afterwards reached a sensational ending. In 1919, he became the chairman of the Judicature Commission, appointed by Calvin Coolidge -- then Governor of the Commonwealth -- to " investigate the judicature of the commonwealth" and consider and report upon the proposed reforms in judicial procedure. Prior to that time, in 1898, he had been chairman of a commission on "Simplification of Criminal Pleading," which framed the statute of criminal procedure, so that his work in the Judicature Commission was merely a continuation -- upon a larger and broader field -- of his prior labors. To the work of the Judicature Commission he brought an effective combination of theory and practice, of appreciation of old methods with willingness to look forward to the new.

At the conclusion of his labors upon the Judicature Commission in 1921, his active work ended, and in the succeeding years he endured with fortitude the advances of old age, cheered, we trust, with the knowledge of the affection and respect of his colleagues and of the Bar, and of the appreciation of the standing to which his services had brought him in the community. 

Sheldon died on January 14, 1926. 

Chapter I. Definition and General Nature 1
1.  Definition of Subrogation 1
2.  Definition in the Civil Law 2
3.  Who will be subrogated 3
4.  It is a Mode of Equitable Relief 4
5.  Doctrine adopted in Louisiana 5
6.  Follows the Discharge of an Obligation.  Adds Nothing to the Right 6
7.  Instances.  Subrogation of a Sheriff 7
8.  Subrogation of one who has advanced Money for the Payment of an Incumbrance 7
9.  Of one who has been compelled to pay the Debt of Another 9
10.  Of a Carrier 9
11.  General Doctrine of Subrogation 10
Chapter II. Subrogation in Cases where Different Parties have Successive Claims upon the same Property, by Mortgage, Lien, or Purchase 11
12.  Subrogation of a Junior Incumbrancer upon Payment of a Prior Incumbrance 13
13.  Subrogation will be made to serve the Purposes of Justice and the Intent of the Parties 14
14.  Subrogation upon Redemption from a Prior Incumbrance 16
15.  Subrogation of Junior Incumbrancer compelled to pay a Prior Charge 17
16.  Duty of Prior to Junior Incumbrancer 18
17.  Junior Incumbrancer's Right of Redemption 18
18.  When Junior Incumbrancer entitled to Subrogation  20
19.  Subrogations of one advancing Money for the Payment of an Incumbrance 20
20.  Where New Incumbrance given for old 23
21.  Holder under a Judgment Lien subrogated upon paying Prior Incumbrance 26
22.  Where Incumbered Lands sold under a Junior Lien 27
23.  Subrogation of an Assignee in Bankruptcy 29
24.  Subrogation of a Mortgager against a Purchase of the Equity who has assumed the Mortgage 30
25.  Rights of Mortgager against Mortgagee and such a Purchaser 31
26.  Subrogation of the Mortgagor against his Grantee subject to the Mortgage 32
27.  Rights of Co-mortgagees against each other 33
28.  Subrogation of the Purchase of an Equity of  Redemption on his Payment of a Prior Incumbrance 34
29.  Rights of such a Purchaser 35
30.  Purchaser, if his Purchase avoided, subrogate to Lien which he has paid 36
31.  Purchaser under a Mortgage subrogated its Lien 37
32.  Rights of such a Purchase in California 38
33.  Instances of such Subrogation 39
34.  Purchase ordinarily subrogated to all the Rights of his Vendor 40
35.  Where the Purchaser pays Debts with which the Property was chargeable 41
36.  Purchaser compelled to pay his Vendor's Debt subrogated to Creditor's Rights against his Vendor 42
37.  Limitation of Purchaser's Right of Subrogation 43
38.  Subrogation of the Purchaser at an Execution-sale against the Debtor 44
39.  Subrogation of such Purchaser where the Property recovered by Third Parties 45
40.  Rights of a Purchaser whose Purchase is voidable by the Creditors of his Vendor 46
41.  Waiver of the Right of Subrogation 47
42.  What is not a Waiver 47
43.  Right lost by Negligence resulting in Prejudice to others 48
44.  The Party seeking Subrogation must not be in his own Wrong 49
45.  When one entitled to be subrogated to a Lien may demand an Assignment thereof 50
46.  The Real Debtor cannot be subrogated 52
47.  Assignment to one who is bound to pay the Debt tantamount to a Discharge 53
48.  Subrogation of a Dowress who has paid a Paramount Lien on the Property 54
49.  Widow's Right of Dower against a Purchaser who ahs paid an Incumbrance to which her Dower was subject 54
50.  Dower let in if Debt paid by one bound to pay it 57
51.  The Widow may redeem. Her Rights thereupon 57
52.  The Rule in Massachusetts  58
53.  Assignment of a Mortgage to the Owner of the Equity of Redemption not necessarily an Extinguishment of its Lien 59
54.  Tests by which Merger is determined 61
55.  Incumbrance so assigned, kept alive only for a Good Purpose and to protect a Beneficial Interest 61
56.  Mortgage assigned to the Principal Debtor is extinguished 68
57.  Conveyance of Equity to the Holder of Prior Incumbrance will not extinguish it in Favor of a Junior 63
58.  Conveyance of Equity in Payment of Prior, will not advance Junior, Incumbrance 64
59.  When a conveyance of the Equity to the Mortgagee will be regarded as a Payment of the Mortgage-debt 65
60.  An Intervening Estate will prevent a Merger 67
61.  The Doctrine of Two Funds 67
62.  A Creditor whose Fund has been taken to pay a Prior Debt subrogated to the Lien of that Debt on other Funds 69
63.  Doctrine of Two Funds not applied, if it would work Injustice to Senior Creditor 69
64.  Where one of the Two Funds is itself subject to Prior Incumbrances 71
65.  Doctrine of Two Funds not applied where it would be injurious to Third Parties 71
66.  Where one of the Funds is primarily liable for the Payment of both Debts  72
67.  Junior Creditor cannot claim the Benefit of a Lien established subsequently to his own 73
68.  Creditor subrogated only to a fund which ought to have discharged the Debt his Fund had paid 73
69.  Doctrine of Two Funds applied only if debtors are the same 74
70.  Junior Creditor cannot be subrogated until Prior Creditor satisfied 75
71.  Application of these Principles to a Case of Several Creditors of Joint and Several Debtors 75
72.  Release by Prior Creditor of fund primarily liable to him 76
73.  but Release of Primary Fund will not prejudice Prior Creditor if made in Good Faith and without Notice 77
74.  Purchase of a Portion of an Incumbered Estate; Rights of the Purchases 78
75.  Order of Liability of Separate Parcels of Incumbered Estate sold successively 78
76.  Rule in Iowa and Kentucky 80
77.  No Distinction between Mortgages and Judgment-lien or other Incumbrance 81
78.  Release of Estate primarily liable discharges pro facto that secondarily liable 83
79.  Release of Estate primarily liable will not exonerate Estate secondarily liable, unless in Justice it ought to have that Effect 84
80.  Release of any Remedy to which the subsequent Grantee would be subrogated releases the Lien on the latter's Property 86
81.  Prior Incumbrance not affected by Subsequent Alienations of the Premises unless notified of them 87
82.  The Mortgager may by Stipulation vary the Order of Liability 88
83.  Extent of the Right of a Subsequent Purchaser 90
84.  Instances of the Application of these Rules 91
85.  When the Purchaser of an Equity of Redemption assumes the Payment of the Mortgage 94
Chapter III. Subrogation in Cases of Suretyship 97
86.  Surety's Right of Subrogation 99
87.  It is an Equitable Assignment to the Surety 102
88.  Surety subrogated to Priority of Creditor 103
89.  Sureties of a Trustee subrogated to Rights which they have satisfied for him 104
90.  Subrogation of a Debtor's Surety against a Sheriff 105
91.  Subrogation of a Debtor's Surety against a Sheriff 106
92.  Surety subrogated to Corporation's Lien upon the Stock of its Shareholders 107
93.  Surety entitled to be subrogated, though not in Privity with his Principal 107
94.  Surety upon a Bond entitled to the Benefit of a Prior Bond for the same Debt 108
95.  Surety subrogated to the Benefit of an Agreement made by his Creditor 108
96.  Surety of a Purchaser subrogated to Vendor's Right of Rescission 109
97.  Surety of a Purchaser subrogated to a Title or Lien retained by the Vendor 109
98.  Surety for Vendor subrogated to Equitable Rights of Vendee 110
99.  Right of Vendor who becomes Surety for Vendee 111
100.  Surety entitled to Funds held for the Debt in the Hands of his Principal 112
101.  Surety may avail himself of his Principal's Right of Set-off or Defence 113
102.  The Surety is a Creditor of the Principal 115
103.  Surety doe not lose this Right by agreeing to exonerate his Co-sureties 116
104.  One who ahs pledged his Property for the Debt of another entitled to Subrogation 116
105.  Extent to which Subrogation will be carried 117
106.  Surety of Surety may be subrogated; how far 118
107.  How far Creditors of the Surety may be subrogated 119
108.  Creditor cannot discharge Security for his own Benefit after Payment by Surety 119
109.  Instances of the application of the Doctrine of Subrogation for the Protection of Sureties 120
110.  Surety's Right of Subrogation may be lost by his Waiver 122
111.  Surety's Right of Subrogation subject to Creditor's Right 124
112.  Surety indebted to his Principal not entitled to Subrogation against him 125
113.  Surety's right confined to the Contract for which he was Surety 126
114.  Surety's right to marshal Securities given to the same Creditor for Separate Debts 127
115.  Surety cannot require the Creditor to resort first to Security 128
116.  Right of Subrogation destroyed by Application of the Security upon the Debt 129
117.  Creditor's right to apply Security as needed for his own Protection 130
118.  Surety for Part of a Debt cannot be subrogated, while the other Part remains unpaid 131
119.  surety discharged by Creditor's giving up Security to which he would be subrogated 133
120.  Creditor held to Responsibilities of Trustee for Surety 134
121.  Laches of Creditor resulting in Loss of Security may discharge Surety 135
122.  Creditor's Discharge of Levy or Attachment on the Property of the Principal, how far a Discharge of the Surety 137
123.  Creditor bound to retain Money or Property of the Principal rightfully in his Hands 139
124.  Neglect of a Bank to apply Deposits of the Principal upon his note, how far a Release of the Surety  141
125.  Rights of a Surety who has paid the Debt in Ignorance of the Creditor's Discharge of a Security 141
126.  Instances where Surety discharged by Creditor's Interference with his Right of Subrogation 142
127.  Surety not entitled to Subrogation until the whole Debt is paid 146
128.  Satisfaction is Creditor's Right; it need not come wholly from Surety 147
129.  Creditor's Right to apply Security held for Several Debts until all are satisfied 148
130.  Surety may come into Equity to compel Payment of the Debt by the Principal 149
131.  Rights of Successive Sureties to Subrogation against each other 151
132.  Rights of one who becomes Surety for the Payment of a Judgment 152
133.  Where Later Surety is Surety for Original Sureties as well as for Principal 154
134.  Exceptions to Usual rule of Subrogation between Successive Sureties 155
135.  Whether Original Obligation extinguished by Surety's Payment thereof.  Rule in England 156
136.  Present English Rule generally adopted in the United States 157
137.  Right of Surety to be substituted to the Benefit of the Original Obligation maintained 158
In New Hampshire 158
In Nebraska 159
In New York 159
In Pennsylvania 160
In Delaware 160
In Maryland 160
In Virginia 161
In North Carolina 161
In South Carolina 162
In Georgia 162
In Ohio 163
In Kentucky 163
In Tennessee 164
In Mississippi 164
In Michigan 165
In Iowa 165
In Indiana 165
In Missouri 165
In Arkansas 165
In Texas 166
In Louisiana 166
138.  Right of the Surety to be subrogated to the Benefit of the original Obligation denied 166
In Vermont 167
In Massachusetts 167
In Alabama 167
In Nevada 167
139.  Indemnity held by a Surety discharged by his Release from Liability 168
140.  Surety's Right of Subrogation against his Co-sureties 169
141.  Co-sureties entitled to the Benefit of Securities held by each other 170
142.  A Surety cannot have Contribution from his Co-sureties without accounting for such Security 172
143.  A Surety holding Security regarded as a Trustee thereof for his Co-sureties 173
144.  His rights and Liabilities towards his Co-sureties 174
145.  Surety may in Equity prevent Discharge of Security held by his Co-surety 175
146.  Security held by one who is both a Creditor and a Surety 176
147.  Surety must contribute to Cost of Security of which he seeks the Benefit. Waiver 176
148.  Right of one Surety to stipulate, on becoming such, for a Separate Indemnity to himself 177
149.  A Co-surety called upon for Contribution becomes thereby entitled to Subrogation 179
150.  Subsequent Sureties not entitled to Indemnity provided for Prior Sureties 179
151.  Extent of the Right of Subrogation among Co-sureties.  Creditor's Interference with the Right 180
152.  One Surety holding Security from the Principal holds it for the Whole Debt 182
153.  Co-sureties' Right of Subrogation subject to Legal rights of Third Parties 183
154.  The Creditor may be substituted to the Benefit of Security for the Debt held by a Surety 184
155.  Security held by a Surety regarded as a Trust for the Payment of the Debt 185
156.  Creditor's Right to Security held by a Surety who is also a Creditor of the Principal 186
157.  Creditor's Right to Security held by a Surety measured by that of Surety 188
158.  Security given merely to indemnify securities cannot be enforced after Sureties discharged 189
159.  when the Surety's Transfer of his Indemnity to the Creditor does not extinguish it 190
160.  Surety's Indemnity not available to the Creditor unless Insolvency intervenes 191
161.  Application of these Principles in Connecticut 192
162.  The Creditor is entitled to the Benefit of the Surety's indemnity when Insolvency intervenes 192
163.  Surety's Indemnity sometimes treated as a Trust for the Payment of the Debt 194
164.  Surety not to be harmed by the Substitution of the Creditor to his Indemnity 194
165.  Creditor cannot be substituted to a security created against his Debt 196
166.  Cases in which a Creditor has sought to be substituted to Securities held by a Surety or by one under a Secondary liability 197
167.  Creditor substituted to the Claim of his Debtor for Reimbursement upon the Party ultimately liable 198
168.  Substitution to the Securities held by the Sureties in a Criminal Recognizance 199
Chapter IV. Subrogation among Joint Debtors 200
169.  Right of Joint Debtor to Subrogation as against each other 200
170.  Where one Joint Debtor has assumed the Ultimate Liability 201
171.  In Cases of Partnership 2025
172.  Where Securities belonging to Different Owners are held for the same Debt 204
173.  Where Land of two or more Owners is subject to one Mortgage 205
174.  This Principle applied against one claiming under a Joint Purchases 206
175.  Applied to Mortgagees whose Estate was subject to a Prior Lien 207
176.  Not applied where Lien upon one Security is extinguished 208
177.  Where the Ultimate Liability is upon one of Several Owners of Securities held for the Same Debt 209
178.  These Principles applied to Joint Mortgagors and to the Grantees of a Mortgagor 210
179.  Extent of the Right of Subrogation 212
180.  Whether Original Obligation discharged as to all the Debtors upon Payment by one 212
Chapter V.  Subrogation among Parties to Bills and Notes 214
181.  An Indorser upon Payment subrogated to Rights of holder against Prior Parties 214
182.  The Maker of a noted not entitled to the Benefit of Payments made by Indorsers thereon 215
183.  Transferee of Bona Fide Holder substituted to his Rights, though himself chargeable with Equities 217
184.  Acceptor of Bill supra protest substituted to the Rights of Holder from whom he takes it 218
185.  Transferees of Notes and Bills entitled to the Benefit of Security held for their Payment 218
186.  Right of a strange upon taking up a Note 220
187.  Holder of Note substituted to Benefit of Mortgage given by one to another Party to the Noted to secure its Payment 221
188.  Substitution of the Holder to the Benefit of Indemnity held by an Indorser 222
189.  Bill drawn against a Consignment of Merchandise and made a Lien upon it 224
190.  Securities held by a Banker against his Acceptances available to their Holders 225
191.  This Principle extends to all Parties to the Bill 226
192.  Property in Securities deposited by Drawer with Acceptor 227
193.  Holder not substituted to Security held by one under no Liability, unless actually appropriated 228
194.  Right of Holders to Securities held by Acceptor not a paramount one 229
195.  Holder's Right to control Securities given by drawer to Acceptor no greater than Drawer's 230
196.  holder's Right to Application of Security perished with that of its Depositor 232
197.  Taking Bill on the Credit of the Funds is not enough 232
198.  extent of Holder's Right of Substitution to Acceptor's Securities 233
199.  Rights of an Acceptor to Securities held against the Bill by Prior Parties thereto 234
200.  Acceptor's Securities to be applied upon all Acceptances alike 235
201.  Whether Suits of Judgments extinguished upon Payment by Parties secondarily liable 236
Chapter VI. Subrogation in the Administration of Estates 238
202.  Subrogation of Executor or Administrator to Debts which he has paid 238
203.  Such Subrogation must be reasonably claimed.  Its Limitations 240
204.  Subrogation in Favor of Creditors of Deceased. Marshalling of Assets 241
205.  Creditors subrogated to a Charge upon Property purchased from Funds of the Deceased Debtor 242
206.  Creditors subrogated to Rights of Executors to Reimbursement 242
207.  Where the Creditor entitled to hold Two Funds 243
208.  Subrogation in Favor of Legatees 244
209.  In Favor of a Purchaser from the Personal Representative 245
210.  Where Legatees have paid Judgments against the Estate 246
211.  Subrogation in Favor of Specific Devisees and Legatees 247
212.  Subrogation of Devisees to subsequently acquired Assets 248
213.  Rights of Heirs, Devisees, or Legatees against each other 249
214.  Specific Devise or Legacy chargeable with Expense incurred for its Protection 251
215.  Rights of Heirs among themselves 251
216.  Rights of Purchaser from Heir or Devisee 252
217.  Creditors subrogated to the Rights of Legatees 253
218.  Subrogation of Devisee of Legatee who is disappointed by the Election of another 253
219.  Extent of his Right of Substitution 254
220.  This does not extend to a Devise merely upon Condition 255
Chapter VII. Subrogation under Contracts of Insurance 258
221.  Subrogation of Marine Insurers 258
222.  Subrogation to the Remedy for a Tort Causing the Loss 259
223.  Limitations of this Subrogation 260
224.  Does not arise upon a Compromise of the Insurer's Liability 261
225.  Effect of an Abandonment 262
226.  Abandonment of Ship and Freight separately insured 263
227.  English Doctrine 264
228.  Subrogation of Insurers on Freight against the Insured 264
229.  Subrogation against a Carrier of Insured Goods 265
230.  Insurer against Fire subrogated to Remedy against Railroad 266
231.  Mode of enforcing this Right 268
232.  Subrogation against other Parties liable for a Loss by Fire 268
233.  Subrogation of Mortgagee to Insurance procured by Mortgagor 270
234.  Where a Creditor obtains Insurance obtained by Mortgagee 271
235.  Rights of Mortgagor in Insurance obtained by Mortgagee 272
236.  Insurance obtained by Mortgagor for Benefit of Mortgagee 273
237.  Where the Policy stipulates for the Subrogation of the Insurers 274
238.  Between Lessor and Lessee with Option to Purchase 275
239. Subrogation with Insurers 275
Chapter VIII. Subrogation of Strangers 278
240. Strangers or Volunteers not entitled to Subrogation 278
241. The Voluntary Payment of a Debt by a Stranger extinguishes it 279
242. Application of this Principle to the Case of one who binds himself for a Pre-existing Debt 280
243. Application of this Principle to the Case of one who loans Money to the Debtor for the Payment of his Debt 281
244. Creditor not substituted to Remedy of his Debtor against a Wrong-doer 281
245. When the Person making Payment of the Debt of another regarded as Stranger or Volunteer 282
246. Instances of the Subrogation of a Person on his paying the Debt of another 283
247. Subrogation of one paying a Debt at the Instance of the Debtor 285
248. Conventional Subrogation 285
249. Conventional Subrogation upon Payment of a Debt and a Remedy for the Payment itself, cannot coexist 287
250. Conventional Subrogation in Louisiana 287
Index 289

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