How long does an insurance company have to subrogate?


subrogation in the rights of the creditor by the payment of the claim, Regulation. Notion and functions. Notion. Definition. Mechanism of operation. Types of personal subrogation. Conventional subrogation. Legal subrogation. The effects of subrogation. The effects of partial subrogation.

Definition. Mechanism of operation. Types of personal subrogation.

As a means of transferring the obligations, the subrogation consists in replacing the creditor from an obligatory legal relationship (the initial creditor) with another person who, paying the debt of the debtor, becomes a creditor of the latter (subrogated, solvent or creditor by subrogation), acquiring all the rights of the creditor paid. The new creditor who replaces the paid creditor was originally a third party to the relationship between the creditor and the debtor. The definition presented, derived from the legal texts governing the types of subrogation and its effects illustrates the dual function of personal subrogation: a way of making payment and a means of transmitting obligations.

Payment by subrogation has a considerable role to play in practice. Thus, there are frequent situations when another person pays the debtor’s debt, such as a guarantor, a joint and several debtors, or even a disinterested third party. All such persons who pay the debt of another without the intention of gratifying him may subrogate to the rights of the paid creditor by becoming the holders of the respective claim. Subrogation payment has the effect of extinguishing the claim against the original creditor. However, the debtor remains obligated to the solvency, which becomes his new creditor, replacing him, in the legal relationship of obligations, the original creditor. However, it should be noted that the surrogate effect as a result of a payment made by a third party is not always an automatic consequence of a payment made by a third party.  

Subrogation payment has advantages, at the same time, for solvency, which is subrogated in the rights of the creditor, for the debtor, as well as for the paid creditor. On the other hand, the debtor is usually exempt from the threat or pressure of the original creditor and implicitly benefits from an extension of the payment term (because the debt must be due for the payment to have the usual effect and then it is assumed that the operation will cause a delay in settling the debtor’s debt).

In the absence of the subrogation, the debtor (ie in all cases where the special conditions of the subrogation are not met, but the payment is still made to the creditor) would have a right of recourse against him, as the case may be, under the mandate contract. , the loan agreement, the business management or, if none of the above assumptions are applicable, based on unjust enrichment. Whatever the basis, however, he would have the position of a simple unsecured creditor and would have to bear the insolvency of all the other creditors of the debtor, risking in case of total or partial insolvency of the debtor. These risks are removed by the effects of his subrogation instead of the creditor paid, benefiting from all the guarantees of the claim, such as a mortgage, a right of pledge,

Conventional subrogation has its source in the agreement of will between the paying third party and the paid creditor or between the paying third party and the debtor of the obligation. Therefore, the conventional subrogation can be: subrogation agreed by the creditor and subrogation agreed by the debtor. The subrogation must be expressed – that is, the subrogating effect must be expressly mentioned in the act and, to achieve the opposability towards third parties

A. Subrogation agreed by the creditor (ex parte creditoris). This subrogation operates through the agreement of will (the condition emphasizes the requirement of the creditor’s consent to make the payment by subrogation and also to make its replacement with the payer)

For this, as a rule, it is stipulated even in the payment receipt signed by the creditor. The subrogation cannot be consented to after the payment has been made because the obligation no longer exists; once it has been paid, the creditor cannot subrogate another to his right until the bond relationship has expired. Also, the subrogation that occurred before making the payment cannot operate, for the reason that, in this case, we are in the presence of a debt assignment. However, since the effects of the payment are consensual between the parties, there is nothing to prevent the parties from drafting a deed recognizing the payment and recording the payment. an omission that can create serious damages to the debtor’s creditors by the fact that a document without a certain date can be drafted practically at any time! However, proof of the subrogation agreed by the creditor must be made following the rules of common law applicable to proof of legal acts, and to prove that the subrogation was concomitant with the payment and to make it enforceable against third parties it is necessary that the document or receipt was stipulated. to have a definite date. Therefore, we conclude that, in order to avoid fraud of the other creditors of the debtor, it is necessary that the document proving the payment, in the case of the subrogation agreed by the creditor, bear a certain date.

The subrogation agreed by the debtor takes place through the agreement of will between the debtor and a third party, from which the debtor borrows to pay the creditor, subrogating the third borrower in the rights of his original creditor. No creditor consent is required. If they refuse to receive the payment, the debtor may resort to the procedure of delaying the creditor which, after its validation, has a debt-releasing effect.

a) the loan deed and the receipt of payment of the debt to take the form of the document with certcf date

b) in the loan deed to expressly stipulate that the debtor has borrowed the amount of money to pay his debt to the creditor;

c) in the payment receipt to expressly state that the payment was made with the amount borrowed by the debtor from a third party – which the legislator calls in the legal text “the new creditor”. 

Legal subrogation.

The legal subrogation operates by right, ex lege, without the need for the consent of the paid creditor or of the debtor whose debt is paid

 a) for the benefit of the one who, being himself a creditor of the same debtor, pays another creditor, who has the preference. Thus, an unsecured creditor pays a privileged or mortgage lender and subrogates to his rights. Likewise, a lower-ranking mortgage lender pays a higher-ranking mortgage lender, subrogating to the rights of the paid lender;

b) for the benefit of the person who, acquiring an asset that is the subject of a guarantee on it (privilege or movable or immovable mortgage or other guarantees), pays the holder of the claim, to prevent the pursuit of the asset, ie its sale or takeover on account of the claim and to keep it in its patrimony;

c) for the benefit of the one who, being obliged with others or for others to pay the debt, has the interest to settle the debt and pay the creditor. It falls into this category: the joint and several co-debtor, the co-debtor from an indivisible obligation, the guarantor;

d) for the benefit of the heir who pays from his property the debts of the inheritance. By accepting the succession, the heir is liable for the debts of the succession only with and within the limits of its assets – intra vires hereditatis. Sometimes, however, in order to avoid an inopportune pursuit of a good succession, the heir may have an interest in paying a certain creditor of the inheritance, thereby subrogating himself to his rights;

The effects of subrogation.

 It also benefits from all the guarantees that accompany the claim, as the legal text stipulates that 

The surrogate has, in addition to the actions of the paid creditor, an own action against the debtor arising from the mandate, business management, or enrichment without just cause, as the case may be, through which he can obtain not only what he paid to the original creditor but also any expenses incurred or damages incurred on this occasion. The discretion to choose one or the other of the actions he can exercise belongs to the surrogate, who will resort to that action that is more favorable to him. It is assumed, however, that the surrogate will always choose the actions conferred by the subrogation or, at the very least, that he will invoke the effects of the subrogation along with the benefits of the action based on the above legal figures (nothing precludes this). which gives the surrogate the guarantees associated with the initial claim.

By aamritri

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