They are conventional subrogation and legal subrogation. The distinction relates to the factsgiving rise to the substitution of rights. Legal or equitable subrogation, on the other hand, is a creature of equity, and not dependent upon contract, but rather dependent upon the equities of the parties. It arises by operation of law. Whether by agreement or by operation of law, the very concept of subrogation is of equitable origin.
Subrogation is a doctrine steeped in equity and generally governed by equitable principles.
Rubber Co. v. Welch argues that based upon subrogation's equitable origin, the equities between Welch and Chicago Title must be compared before a trial court could grant subrogation as a remedy. However, Franklin is distinguishable from the instant case on its facts, and it does not stand for the general proposition that conventional and legal subrogation will be treated the same under all circumstances. In Franklin , the majority refused to enforce an express subrogation clause in favor of the insurance company where the insured had not been made fully whole. By so holding , Franklin thus reaffirmed the holding in the case of Shelter Mut.