Chapter five

B) Legal subrogation

Article 1971 provides three situations where there could be legal subrogation. These are payment by a person bound with another or on behalf of others, i.e., subrogation as co-debtor (1909(1), 2161 of the Civil Code) or guarantor (1944 of the Civil Code); payment by a person who is owner of a property or who enjoys the rights of lien, mortgage or pledge, i.e., Subrogation as holder of sureties (legacy of mortgaged assets 1045, legatee paying debt 1059, pledge 2831 and several Articles for mortgages: 3083, 3086, 3095, 3097, 3117 of the Civil Code); and other cases of subrogation provided by law.

According to Article 1971 (a) of the Civil Code, if a payer discharges the debt of a person with whom or on behalf of whom the payer is himself bound, the payer is entitled to subrogation as a matter of law to the extent of the amount paid. Thus, this provision operates in two cases: where a co debtor who is bound with another and where there is a guarantor who is bound on behalf of another, the principal debtor. In this regard, you have to remember Articles 1909 and 1944.

Accordingly, any co-debtor who has paid in excess of his share has a right to claim contribution from the other co debtor(s). To this effect, Article 1909 clearly provides that such payer is entitled to legal subrogation. Similarly, the creditor is required to make substitution possible. In such cases, what the payer is entitled to is not indemnity but contribution as the payer himself is a co debtor. It may also apply to cases where a co-debtor in an indivisible obligation discharges the total obligation.

Coming to the second situation, if a person who is owner of a certain property or enjoys a security interest i.e. right of lien, mortgage or pledge in certain property pays a creditor who enjoys a security interest in the same property, Article 1971 (b) accords such payer legal right of subrogation to the extent of the amount paid.

This provision relates to a payer who is owner of a property or one enjoying a security interest, in certain property paying a creditor who enjoys a security interest over the same property. Where a person has given his property as security for the performance by the debtor of his obligation, the creditor is said to enjoy real security.

In such cases, the person guaranteeing the performance is not a surety. Thus, where the creditor proceeds against the property given by way of security, the owner of such property can pay the creditor and be subrogated to the rights of the creditor by virtue of Article 1971 (b). Article 1971

Apart from the specified cases under Article 1971(a) and (b), the last sub Article of this Article opens the door open for persons to be entitled to subrogation where the law so provides. There are a number of instances where the various substantive laws provide for subrogation. Such instances are: subrogation in cases of insurance of property (Article 683 of the Commercial Code), subrogation in maritime cases (Article 323 and 304 of the Maritime Code), cases of succesorial subrogation (Article 1059, 1045), subrogation in cases of warehousing (Article 2821 of the Civil Code), subrogation to the bailor (Articles 2795 of the Civil Code).

Article 1251 of the French Civil Code enumerates four classes of persons who possess a sufficient interest to effect a legal subrogation: 1) Inferior creditors who pay a fret erred creditor;