Surety’s Rights : A Case Study of Surety’s Rights after Debt Settlement

Abstract

This research article is qualitative research and aims to study the surety’s rights after debt settlement. Pursuant to the Civil and Commercial Code B.E. 2535 (1992), Section 693, as a surety pays debt to a creditor, a surety secures the legal rights to subrogate the rights and have recourse against a debtor. The research focuses on a case study of surety’s subro gation and recourse against the debtor without filing for a separate case.

The study found that the surety’s subrogation and recourse against the debtor had 2 issues. Firstly, the creditor did not bring a case against the debtor and the surety. In case the surety pays debt to the creditor, the surety subrogates the rights and has recourse against the debtor but the surety has to bring a separate case against the debtor. Secondly, the creditor brought a case against the debtor and the surety. As the surety settles the debt. The surety subrogates the rights and has recourse against the debtor by virtue of court order automatically pursuant to the Code of Civil Procedure B.E. 2477 (1934), Section 274 without filing for a separate case.

The author suggests that the surety’s subrogation and recourse are stipulated in the Civil and Commercial Code B.E. 2535, Section 693, which is the substantive law. However, the subrogation of rights by virtue of court order is stipulated in the Civil Procedure Code B.E. 2477 (1932), Section 274, which is the procedural law with different legal conditions. Therefore, consideration on the surety’s subrogation of rights should be given as a guideline for further practice.