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When Subrogation Will Be Allowed


WHEN SUBROGATION WILL BE ALLOWED. In general, to be entitled to subro gation, the surety must have paid the whole debt, and a part payment will not give him the benefit of subrogation, as this would give separate interest in the same debt to surety and creditor. (Hollings worth v. Floyd, 2 Har. i Gill [Md.], 87.) And sub rogation will not be allowed when it would be inequitable, or to the prejudice of a creditor in reference to the debt for which the surety is liable. (Crump v. McMurtry, 8 Mo., 408; Henley v. Stem mons, 4 B. Monr., 131.) Though the debt is paid to the creditor, it is still regarded as subsisting so far as may be necessary to support the assignment of collateral security held by such creditor to the surety. This is regarded as an imperative excep tion to the rule that payment discharges a debt as against the co-debtors in order to make subrogation possible and practicable. If the debt was held to be entirely discharged, all the collateral securities held by the creditor would be likewise discharged, and their assignment to the surety would be defeated. (Edgerly v. Emerson, 23 N. H., 555.)' So for the purpose of obtaining indemnity from the principal, the surety after payment is regarded as at once subrogated to all the rights, remedies and securities of the creditor and entitled to all his liens, priorities and means of payment against the prin cipal. (Brandt, Sur. & Guar., Sec. 304.) By taking a separate indemnity from the prin cipal for his security with knowledge that the creditor holds a mortgage given by the principal to secure the debt, the surety is held to lose his right to subrogation. (Cooper v. Jenkins, 32 Beay., 337.) Other cases hold that the surety may be subrogated to after acquired securities by the creditor though he has taken a separate indemnity. (Brandt, Sec. 307.) A surety who becomes such during the prosecu tion of a remedy for the debt against the principal is not entitled to subrogation, at least as regards any prior surety, or prior interest in the property which he seeks to reach by subrogation. (Patter son v. Pope, 5 Dana [Ky.], 241.) Subrogation extends to enable the surety paying to enforce the rights of the creditor against a co-surety. While equity restrains a surety from col lecting more from any co-surety than his just proportion, the right of subrogation allows him to collect that much the same as the creditor might do it. (Lidderdale Robinson, 2 Brock., 159.)

surety, creditor, debt and held