§ 9.7 Subrogation

LibraryGuide to South Carolina Liability and Property Insurance Law (SCBar) (2019 Ed.)

§ 9.7 Subrogation

Under South Carolina law, "[l]egal subrogation is not dependent upon contract."49 The Supreme Court of South Carolina has explained that "[t]he doctrine is an equitable one, founded not upon any fixed law, but upon principles of natural justice; its purpose is to require the ultimate discharge of a debt by the person who in equity and good conscience ought to pay it; and it is to be applied according to the dictates of equity and good conscience in the light of the actions and relationship of the parties."50 Further, "[w]here the tortious conduct of a third person is the cause of a loss covered by an insurance policy, the insurer upon payment of the loss becomes subrogated pro tanto by operation of law to whatever rights the insured may have against the wrongdoer."51 If the "insurer has paid to the insured the entire loss, it may bring action either in its own name or in that of the insured against the tort-feasor whose wrongful act caused the loss, for in such case the whole remedial right is vested in it."52 However, generally, an insurer "may not bring action against the tort-feasor where it has paid only a portion of the loss sustained by the insured, because the insured's right of action is single and indivisible."53 In that situation, the insured "may either join with the insured in bringing the action, or intervene in the action by the insured, against the tort-feasor."54 "But the "indivisibility" rule may not be invoked against the subrogee where the subrogor has parted with all beneficial interest in the right of action."55 In addition, because "the insurer's right of subrogation, being founded in equity, [the right] may be forfeited by inequitable conduct on its part; it may be lost by laches, or by conduct giving rise to waiver or estoppel."56



[49] Calvert Fire Ins. Co. v. James, 236 S.C. 431, 435, 114 S.E.2d 832, 834 (1960).

[50] James, 236 S.C. at 435, 114 S.E.2d at 834-835 (citing St. Paul-Mercury Indem. Co. v. Donaldson, 225 S.C. 476, 83 S.E.2d 159 (1954); Powers v. Calvert Fire Ins. Co., 216 S.C. 309, 57 S.E.2d 638 (1950); Am. Sur. Co. v. Hamrick Mills, 191 S.C. 362, 4 S.E.2d 308 (1939); Livingstain v. Columbian Banking & Trust Co., 77 S.C. 305, 57 S.E. 182, 22 L. R. A., N. S., 442, 122 Am. St. Rep. 568 (1907); Gadsden v. Brown & Wellsman, Speers' Eq. 37, 17 S.C. Eq. 37; 50 Am. Jur., Subrogation, Sections 5, 6)).

[51] Id. at 435, 114 S.E.2d at 835 (quoting Pringle v. Atlantic Coast Line R. Co., 212 S.C. 303...

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