How one can protect one’s claim against an inactive (or sneaky) debtor-let’s analyze subrogation action.

In principle, creditors have no right to review or control how the debtor administers his assets. Much less, therefore, can they substitute themselves for him to exercise the rights of the powers vested in him. But is this always the case? That is, can the creditor do anything against the debtor who “cunningly” diminishes the security given by his assets?

Here we analyze one of the three tools that the legislature has made available to creditors in order not to have their rights affected.

At the base are cases in which the debtor neglects to perform acts necessary to enforce his rights; (e.g., by failing to collect a debt, or, to prevent the accrual of the usucaption of one of his assets by a third party, or even to interrupt the prescription of one of his rights). Thus, those behaviors are evaluated that are determined by the debtor’s inaction. Behaviors that in fact create an injury to creditors.

The law, therefore, allows creditors to substitute themselves, or said otherwise to subrogate themselves. Hence the name of subrogation action granted to the creditor against the debtor inactive in the exercise of his rights.

Art. 2900 Civil Code.

[I] the creditor, in order to ensure that his reasons are satisfied or preserved, may exercise the rights and actions which are due against third parties to his debtor and which the latter neglects to exercise, provided that the rights and actions have patrimonial content and are not rights or actions which, by their nature or by provision of law, cannot be exercised except by their holder.
[II]. The creditor, when taking judicial action, must also sue the debtor to whom he intends to subrogate.

What are the parties called in the subrogation action?

Thus, in the subrogation action we will have, the subrogator (the one who is substituted) who is usually is the creditor and the subrogate (the one who is substituted) who is usually the debtor who enacts activities to the detriment of the creditor. As mentioned, also activities of an omissive nature.

What are the elements that enable the subrogation action to be activated.

A) the existence of a claim.

In order to be able to intervene in the debtor’s assets, that is, changing his decisions, (a very practical example is given by the amendment to the waiver of inheritance), there is a need for the existence of a claim. This claim may also be illiquid (credit or debt not exactly determined in its amount) or not yet due, or conditional, or disputed by the subrogant against the subrogate. Therefore, it is excluded that a person who has a claim that is uncertain in its existence because it is the subject of judicial ascertainment has standing to act in subrogation.

Legitimate legitimacy to act in subrogation pertains if the claim against the third party is already enshrined in a condemnation judgment or other enforceable title, or in the case of an injunction with a provisional enforcement clause pursuant to Article 642 of the Code of Civil Procedure although said title is not final. Nevertheless, for the purposes of the legitimate exercise of subrogation action, even a claim that is not determined in its amount, or subject to a condition or term, is sufficient.

B) the debtor’s inertia

It is necessary, then, the inertia of the debtor in the exercise of the rights and actions due to him against third parties. Clearly, the hypotheses are the most varied and that in fact challenge the guarantees in favor of the creditor. Where, however, the debtor acts in a manner consistent with the management of the debt relationship and demonstrates its will in this regard, the creditor cannot replace the debtor and cannot challenge the debtor’s decisions. The creditor must find other means to protect its interests, such as revocatory action or third-party opposition. This was also the decision of the Supreme Court in the context of a 2012 case in ruling No. 5805.

How is subrogation action obtained?

Subrogation by the creditor can be obtained either by judicial or extrajudicial means. In the first case, there is another principle that is invoked and that is the principle of necessary joinder set forth in Article 102 of the Code of Civil Procedure. The same provides that “The creditor, if he acts judicially, must also sue the debtor to whom he intends to subrogate himself.” Judicially, there is no typical subrogation action but rather the creditor will bring the action due to his debtor.

Out-of-court, on the other hand, the creditor may subrogate to the debtor, for example, by sending a letter for the purpose of stopping the statute of limitations.

Translated with www.DeepL.com/Translator (free version)