Subrogation: An Unidentified Legal Object? A Proposal for a Solution to the Renowned Problem of the Legal Construction of Subrogation

Abstract

Subrogation, originating from Roman law, is an institution adopted in civil law jurisdictions with minor differences. According to the general definition and understanding, subrogation means the legal (ipso iure) transfer of the creditor’s right to claim to the third-party, who performs someone else’s debt, for granting him/her a privileged legal status in his (recourse) relationship with the debtor. The privileged legal status of the third-party, who benefits from the subrogation, lies in the legal transfer of accessory and priority rights arising out of the right to claim. Because of its exceptional feature, considerable efforts have been made to explain the legal nature of subrogation. However, because of its complexity, there is still no consensus on the issue. There are even views implying that subrogation is an unidentified legal object. The author suggests an explanation to the construction of subrogation in three main steps: (1) Parallel to the prevailing view regarding performance of the third-party, it should be accepted that the will of the third-party is decisive concerning the legal consequences of the performance. (2) Then it should be assumed that the third-party performs the debtor’s debt with the will to acquire (causa acquirendi) in addition to the will to discharge the debtor’s debt (causa solvendi) so that his performance can result in subrogation. (3) Finally, the ‘third-party’ should be redefined in the cases of subrogation. Alongside these steps, the construction of subrogation is based on the theory that a debt may only terminate when its inherent purpose is realized. Therefore, in cases of subrogation, the right to claim continues to exist even after the third-party’s performance with the purpose of serving the right to recourse. This purpose also limits the thirdparty’s powers. This article examines the subrogation’s legal construction by explaining the abovementioned concepts and determining their connections.