SURETYSHIP-RIGHT OF SURETY TO SUBROGATION WHEN CREDITOR'S CLAIM NOT FULLY SATISFIED

Authors

Abstract

It may be stated as a general proposition that a surety is not entitled to subrogation until the creditor has been paid in full, and that until such time as the creditor has been completely satisfied, the right to be subrogated remains inchoate, as it was when the suretyship contract was made. A reason frequently advanced for this rule is that to allow the surety to have subrogation at once would create a hardship on the creditor. In fact, in the case of Motley v. Harris, the court permitted the surety to be subrogated to dividends of the insolvent principal's estate before the creditor had been completely satisfied, on the ground that the creditor, the only person in a position to object, had consented to the subrogation. The same principle has been applied in cases where the surety is liable for a debt payable in instalments, and seeks subrogation after having paid one or more of the instalments, but less than the full number.

Recommended Citation

SURETYSHIP-RIGHT OF SURETY TO SUBROGATION WHEN CREDITOR'S CLAIM NOT FULLY SATISFIED, 29 Mich. L. Rev. 753 (1931).
Available at: https://repository.law.umich.edu/mlr/vol29/iss6/7