Opinion ID: 1742786
Heading Depth: 1
Heading Rank: 3

Heading: DOES DeFOE HAVE ANY RIGHT OF SUBROGATION?

Text: Because she was beneficiary under a life insurance policy assigned as collateral security for United Petroleum's debt, the proceeds of which were applied to the debt of that corporation, is DeFoe entitled to any right of subrogation? If so, is the right of subrogation limited to Great Southern's right of recourse against United Petroleum, or may it also be extended to the bank's right against Champlin? The right of subrogation of a beneficiary under a life insurance policy is not a question frequently encountered by courts, but its infrequency does not diminish its extreme importance to the parties involved when it does arise. To answer the first question of this case, we must begin with an understanding of the doctrine of subrogation. In Robinson v. Sullivan, 102 Miss. 581, 596, 59 So. 846, 847 (1912), this Court stated: ... Subrogation is the substitution of one person in place of another, whether as a creditor or as the possessor of any rightful claim, so that he who is substituted succeeds to the rights of the other in relation to the debt or claim, and to its rights, remedies, or securities. Words and Phrases, vol. 7, page 6722. The doctrine is one of equity and benevolence, and, like contribution and other similar equitable rights, was adopted from the civil law, and its basis is the doing of complete, essential, and perfect justice between all the parties, without regard to form, and its object is the prevention of injustice. The right does not necessarily rest on contract or privity, but upon principles of natural equity, and does not depend upon the act of the creditor, but may be independent of him, and also of the debtor. 37 Cyc. 363. As was said by Chief Justice Sharkey in Blackwell v. Davis, 2 How. 812, the doctrine of subrogation is the offspring of natural justice, and courts should rather incline to extend than to restrict the operation of a principle so elevated and pure. It applies in general, wherever any person, other than a mere volunteer, pays a debt or demand which in equity or in good conscience should have been satisfied by another . .. In American Fidelity and Casualty Co. v. U.S. Fidelity and Guaranty Co., 305 F.2d 633 (5th Cir.1962), the Court of Appeals, interpreting Mississippi law, stated that the doctrine of subrogation is pure equity, founded on principles of natural justice, and includes every instance in which one who is not a volunteer pays the debt of another.    It is applied only when necessary to bring about equitable adjustment of a claim founded on right and natural justice. In Box v. Early, 181 Miss. 19, 178 So. 793, 796 (1938), this Court stated: The doctrine of subrogation is one of equity; its object is the prevention of injustice; it rests upon the principle of natural equity; and its basis is the doing of complete and essential justice between the parties without regard to form. Prestridge v. Lazar, 132 Miss. 168, 95 So. 837 ... See also: Sadler v. Glenn, 190 Miss. 112, 199 So. 305 (1940); First National Bank v. Huff, 441 So.2d 1317, 1319 (Miss. 1983).