Summary
Creditor subrogation is an exercise of rights for the preservation of one's own claim, and where the preserved right is not recognized, there is no standing to bring the subrogation suit.
1.1The Standard by Which the Path Opens
A reason to exercise another's rights does not arise merely from saying that one has stepped forward in that other's stead. What links this sentence to the judgment of the preceding section is that a judgment curing a defect in the capacity or authority of the same subject is distinguished from a judgment substituting a different subject. Where the preceding section dealt with the boundary between curing a defect and substituting the subject, what remains is the question of what ground the party exercising another's rights must lay in order to bring suit in its own name. The scene is a single one. Creditor A seeks to exercise the rights of debtor B but has not separately presented the basis for the creditor's own claim and the need for preservation. In such a scene, what is the standard by which the gateway to this remedy opens?
The relevant provision is Article 404 of the Civil Act. Article 404 provides: "(1) A creditor may exercise the rights of the debtor in order to preserve the creditor's own claim. However, this does not apply to rights exclusively pertaining to a person." (Civil Act Article 404). Here, the subject of the exercise is the creditor, the object of the exercise is the rights of the debtor, and the condition of the exercise is the preservation of the creditor's own claim. Paragraph (2) of the same Article requires the court's permission for an exercise before the due date arrives, while excepting preservative acts. This paragraph goes no further than confirming the subject, act, and condition of the exercise prescribed by Article 404.
The path connecting this wording to the conclusion of this section is short. The gateway to this remedy opens where the claim to be preserved for subrogation and the need for preservation, or the basis for the right to conduct litigation under selection or succession, is recognized. The case law states: "in a creditor's subrogation lawsuit, where the creditor's right against the debtor, which is to be preserved by subrogation, is not recognized, the creditor will have no party standing to become the plaintiff itself and exercise the debtor's rights against the third-party debtor; accordingly, the subrogation lawsuit is improper and shall be dismissed without prejudice" (Supreme Court Decision 2020Da300893 decided July 21, 2021). The recognition of the claim to be preserved and the recognition of the basis for conducting the suit are distinct stages of judgment here. The former concerns the existence of one's own right to be preserved by subrogation; the latter concerns the statutory basis for exercising another's rights. Unless the two are examined separately, the standard for dismissal on procedural grounds as improper becomes blurred.
The counterargument targets the inconvenience of practice. It argues that if the debtor leaves another's rights unattended by making no response, recovery becomes virtually impossible unless a creditor with an economic interest steps forward directly. This loss is not slight. The creditor bears the cost of intervention in expectation of satisfaction of its own claim, and if standing is denied at the gateway, that cost remains entirely with the creditor. The concern that collective and subrogation-based protection of rights will be blocked arises from the same place. Even so, the answer does not change. An economic interest cannot be turned into a claim to be preserved. An economic interest is not the same as a claim that someone actually holds against the debtor, and it does not satisfy the condition of preserving one's own claim required by Article 404. While not concealing the inconvenience the counterargument points out, the wording's condition cannot be replaced on account of that inconvenience.
Among the facts of this scene, one bears on this question. What was submitted among the materials on the claim to be preserved, the selection statement, the succession materials, and the application for participation, and how the legal relationship between the right holder and the person conducting the litigation was clarified, is not settled. What can therefore be determined now is narrow: the mere absence of a separately presented basis does not permit the assertion that the gateway to this remedy has opened. Because the scene contains no year, amount, or term, it is likewise not determined whether the court's permission under paragraph (2) is required. If the existence of the claim to be preserved is denied, the conclusion as to the standing in the subrogation lawsuit changes. If that condition has not been overturned, the judgment does not change either.
The conclusion this section permits takes a clear form. If there is a basis in the preservation of one's own claim, or a basis for the right to conduct litigation under selection or succession, and if the performance claimed, the parties, and the conditions are specified in the claim statement so that the right asserted in the chosen action can be defended, the gateway to this remedy opens. The conclusion it does not permit is the same. One cannot acquire standing merely by the intention to exercise another's rights without any basis, nor can an economic interest take its place. This judgment concerns the entrance to the pathway of conducting litigation, and whether the right actually exists after passing through that door remains a matter to be confirmed separately.
1.2The Conditions That Block Relief
A judgment curing a defect in the capacity or authority of the same subject is distinguished from a judgment substituting a different subject. In this scene, the questions are what statutory basis A must present in order to obtain a pathway to another's rights, and what judgment, once rendered, closes that pathway. The mere fact that the form of subrogation was chosen does not create the qualification to exercise another's rights in that other's stead.
The provision answering this question is Article 404 of the Civil Act. Its paragraph (1) reads: "A creditor may exercise the rights of the debtor in order to preserve the creditor's own claim. However, this does not apply to rights exclusively pertaining to a person." The subject this wording indicates is the creditor whose purpose is the preservation of the creditor's own claim, the act is an exercise of the rights of the debtor, and the condition is the existence of the creditor's own claim to be preserved. Unless the claim of the very person seeking to exercise another's rights is presupposed, one cannot enter the pathway opened by this Article.
This condition and the conclusion of the case law mesh in the same direction. Supreme Court Decision 2020Da300893 decided July 21, 2021 holds that "in a creditor's subrogation lawsuit, where the creditor's right against the debtor, which is to be preserved by subrogation, is not recognized, the creditor will have no party standing to become the plaintiff itself and exercise the debtor's rights against the third-party debtor; accordingly, the subrogation lawsuit is improper and shall be dismissed without prejudice." Here, the claim to be preserved means the claim of the creditor to be preserved by subrogation, and is distinguished from the other's rights that the subrogating party seeks to exercise. Where the claim to be preserved is not recognized, or where there is no statutory basis to litigate for another, if any one of the statutory requirements is not met, the pathway to the remedy is closed.
The strongest counterargument lies in the fact that there are cases in which another's intervention is needed because the debtor makes no response. If the right holder does not step forward itself, the harm remains, and the loss targeted is that the route by which multiple interested parties together seek to vindicate rights is also blocked. It is also a considerable inconvenience that requiring the direct participation of the right holder in fact blocks collective and subrogation-based protection of rights. Yet the hardship of such circumstances cannot supply the statutory basis for subrogation in their stead. An intention to help another, or an economic interest, is not the claim of the creditor to be preserved by subrogation, and if that distinction is broken down, the very condition of party standing becomes blurred.
The facts confirmed in this scene are that A seeks to exercise the rights of B, and that A has not separately presented the basis for the creditor's own claim and the need for preservation. This fact means, regardless of whether materials on the claim to be preserved were submitted, that the materials showing whether A satisfies the statutory requirements for subrogation do not appear in the record. Accordingly, whether A's subrogation lawsuit obtains standing remains unresolved in a state where the legal relationship between the right holder and the person conducting the litigation has not been clarified. The scene shows only the intention to exercise another's rights; it supplies no basis for judging either that the requirements for subrogation have been met or, conversely, that they are definitively barred.
The conclusion permitted in this section is narrow. Where one seeks to exercise another's rights without any basis in the exercise of rights for the preservation of one's own claim, the judgment that party standing in a subrogation lawsuit cannot be recognized is unavoidable. Conversely, the pathway is not opened merely because A filled that place with economic interest alone. Materials that cannot be determined are left undetermined, and one holds only to the standard that if even one statutory requirement is wanting, the pathway to the remedy at that stage is closed.
1.3The Boundary That Remains When There Is No Data
Where the subrogating party's claim to be preserved is not recognized, or where there is no statutory basis to litigate for another, this remedy is blocked. Here, beyond the question whether one can exercise another's rights without one's own claim, one must also see together where the boundary lies that cannot be judged for want of materials. The latter is the question of what to leave as a conclusion when there are as yet no clues to determine the legal relationship between the right holder and the person conducting the litigation. It is not a matter of finding the line of prohibition, but of recognizing the place that judgment does not reach.
Article 404 (1) of the Civil Act provides: "A creditor may exercise the rights of the debtor in order to preserve the creditor's own claim. However, this does not apply to rights exclusively pertaining to a person." This wording takes the subject to be the creditor, the act to be the exercise of the rights of the debtor, and the condition to be the preservation of the creditor's own claim. That is, even though it deals with another's rights, its starting point is one's own claim, and it must be confined to the work of protecting that claim. The reason the provision presupposes the existence of a claim is that subrogation is a special pathway granted to the creditor. Even without separately setting out the requirements of the other paragraphs, the wording of this paragraph alone reveals that the claim from which subrogation begins cannot be separated from preservation.
Carrying this basis over to the case law, the relationship between the right holder and the person conducting the litigation leads to the question of standing in a subrogation lawsuit. Supreme Court Decision 2020Da300893 decided July 21, 2021 stated: "[1] In a creditor's subrogation lawsuit, where the creditor's right against the debtor, which is to be preserved by subrogation, is not recognized, the creditor will have no party standing to become the plaintiff itself and exercise the debtor's rights against the third-party debtor; accordingly, the subrogation lawsuit is improper and shall be dismissed without prejudice." Here, the claim to be preserved means the claim of the creditor to be preserved by subrogation. The preservation of the claim and the basis for entrusting the suit are separate stages of judgment. If the former is denied, one arrives at the conclusion that there is no standing, but the state in which the former does not appear in the materials and the state in which it is denied are different. In the former, the judgment must be left undetermined; in the latter, the remedy must be regarded as blocked.
If the debtor lets the rights lie and does not move, recovery is difficult unless someone with an economic interest steps forward in the debtor's stead. The inconvenience is plain, namely that requiring each creditor to demand its own claim in fact blocks collective and subrogation-based protection of rights, or makes the broad participation of interested parties difficult. Even so, an economic interest cannot be turned into a claim to be preserved. Article 404 of the Civil Act requires one's own claim to be preserved, and Supreme Court Decision 2020Da300893 decided July 21, 2021 also takes the right to be preserved by subrogation as the foundation of party standing. Efforts to reduce the loss the counterargument points out are to be sought in other statutory bases, not in a manner that alters the requirements of subrogation.
Contrasting the synthetic scene with the foregoing conditions, creditor A seeks to exercise the rights of debtor B but has not separately presented the basis for the creditor's own claim and the need for preservation. That is, no basis has been presented, which is not to say that the legal relationship between the right holder and the person conducting the litigation has been clarified. In this case, one cannot necessarily assert that there is no claim to be preserved. Where materials are wanting and no judgment can be made, the judgment is left undetermined, and this is distinguished from the case in which the remedy is blocked. Conversely, if the existence of the claim to be preserved is denied on the basis of confirmed materials, the conclusion as to the standing in the subrogation lawsuit changes. Since no year, amount, or term is fixed in the scene, a judgment resting on such values is not determined at this point.
The conclusion this section permits is narrow. When asking whether one can exercise another's rights without one's own claim, subrogation presupposes an exercise of rights for the preservation of one's own claim. Accordingly, if the claim to be preserved is not recognized, there is no standing in the subrogation lawsuit. However, one must not assert that there is no standing even up to the state in the scene, where no basis has been presented. A place where no judgment can be made for want of materials is left undetermined, and is not placed alongside the case in which the remedy is blocked. Repeating it in other words does not create a new foundation for judgment.
1.4The Records Needed for Determination
Before this scene, the questions posed are whether one can exercise another's rights without one's own claim, and what records must remain in order to judge that stage. The claim of the creditor to be preserved by subrogation is called the claim to be preserved. To answer this question, one must first unfold the records that remain, not words that manufacture a basis for exercising the rights.
Article 404 of the Civil Act declares: "Article 404 (Creditor's Right of Subrogation) (1) A creditor may exercise the rights of the debtor in order to preserve the creditor's own claim. However, this does not apply to rights exclusively pertaining to a person." This wording sets the subject exercising the rights as the creditor, its act as an exercise of the rights of the debtor, and its condition as the preservation of the creditor's own claim. The condition of preserving one's own claim is no separate ornament, but corresponds to the purpose of the exercise prescribed by the wording. Accordingly, it must be possible to determine from the records whether the person seeking to exercise another's rights in that other's stead stands in the place of that creditor, and with what that person seeks to preserve the creditor's own claim. Explaining together here the restriction on rights exclusively pertaining to a person, or the restriction before maturity, lies outside the scope of this question.
The condition of preserving one's own claim prescribed by the wording of Article 404 of the Civil Act is discussed along the same path as the basis for distinguishing party standing in a subrogation lawsuit. Summary of Decision [1] of Supreme Court Decision 2020Da300893 decided July 21, 2021 states that "where the creditor's right against the debtor, which is to be preserved by subrogation, is not recognized, the creditor will have no party standing to become the plaintiff itself and exercise the debtor's rights against the third-party debtor; accordingly, the subrogation lawsuit is improper and shall be dismissed without prejudice." This judgment presupposes the existence of the claim to be preserved—that is, whether creditor A retains a right against debtor B. To confirm that presupposition, materials recorded in the materials on the claim to be preserved, the selection statement, the succession materials, and the application for participation are required. The stage judgment is made only on the settled records, and missing records are not filled by inference. This is precisely why the judgment looking to the basis for conducting the litigation, such as a selection statement, and the judgment looking to the right itself, which is the source of the right to conduct the litigation, are divided into separate stages.
There are cases in which another's intervention is needed because the debtor makes no response. In circumstances where another's rights cannot be left unattended, it may be criticized that firmly closing the door to subrogation produces a loss in which even the right holder can do nothing, and enlarges the inconvenience for many who seek to gather rights together for their protection. The claim to be preserved means the claim of the creditor to be preserved by subrogation, and monetary interest or actual necessity lies outside that definition. Accordingly, the debtor's non-response explains only the need for intervention, and does not itself create the records for the stage judgment. Even while leaving the gap in protection that the counterargument points to unaddressed, the existence of the claim shown by the records comes first.
What can be confirmed in this scene is the fact that creditor A seeks to exercise the rights of debtor B, and the circumstance that no basis for the creditor's own claim and the need for preservation has been separately presented. The scene does not determine what remains among the materials on the claim to be preserved, the selection statement, the succession materials, and the application for participation. Therefore, whether creditor A has a right against debtor B, and further whether there is a need for preservation, cannot be determined from this scene alone. However, in a state where the materials on the claim to be preserved are empty, that place cannot be filled with the debtor's non-response or good faith as an agent. If it were confirmed that the existence of the claim to be preserved is denied, the conclusion as to the standing in the subrogation lawsuit would differ, but within the scene that denial has not itself been judged.
The conclusion permitted in this section is that the stage is judged only on the materials recorded in the materials on the claim to be preserved, the selection statement, the succession materials, and the application for participation, and that missing records are not filled by inference. For creditor A to proceed by subrogation, the basis for the creditor's own claim and the need for preservation must appear in the records. A state of incomplete records remains undetermined, and that circumstance alone does not render the remedy impossible. The question is closed at the point that a mind to exercise another's rights, or an economic interest, does not take the place of that basis.
1.5Circumstances That Change the Decision
On the premise that a judgment curing a defect in the capacity or authority of the same subject is distinguished from a judgment substituting a different subject, the question is whether the existing blocking and effectiveness determinations may be left as they are. Whether a reason arises in this scene for exercising another's right on another's behalf, and whether the existing blocking and effectiveness determinations, established without such a ground, may nevertheless be left intact, are the questions here.
Civil Act Article 404 fixes the starting point of subrogation in its very terms. Under paragraph (1), "A creditor may, in order to preserve his claim, exercise the rights of his debtor: Provided, That this shall not apply to a right exclusively personal to the debtor," thereby limiting the subject of exercise to the creditor, the object to the debtor's right, and the purpose to the preservation of the creditor's own claim. Here, the claim to be preserved means the creditor's claim that subrogation seeks to preserve, and the provision binds the exercise itself to the creditor's own claim and to that purpose of preservation. Accordingly, from the terms alone it is clear that subrogation is not a general means of exercising another's right for another's benefit, but is confined to a means of preserving one's own claim. The time-limit and permission provisions of paragraph (2) of the Article are not addressed here.
The terms of Article 404 make plain that the reason the exercise of another's right is permitted at all lies in the preservation of one's own claim. Supreme Court Decision 2020Da300893 decided July 21, 2021 carries that very structure over into the stage of litigation, holding: "In a creditor subrogation lawsuit, where the creditor's right against the debtor, which is to be preserved by subrogation, is not recognized, the creditor has no party standing to become the plaintiff and exercise the debtor's right against the third-party obligor; accordingly, the subrogation lawsuit is unlawful and shall be dismissed without prejudice." Here, the recognition of the right to be preserved by subrogation, that is, the claim to be preserved, and the party standing in a subrogation lawsuit belong to different stages of judgment. The existence of the claim to be preserved is the starting condition for the qualification to exercise the right, and the standing determination is the stage that asks whether one may stand as the party conducting that suit only once that condition has been met. If the condition at the preceding stage collapses, the conclusion at the later stage cannot remain as it is.
The loss arising when the denial of the claim to be preserved cannot be left alongside the existing determination is not small. There are cases where, because the debtor fails to respond, the intervention of others becomes necessary, and the disadvantage remains that, unless the right-holder is directly brought in, collective and subrogation-based protection of rights is in fact obstructed. The demand that litigation be conducted on the basis of substantial interest alone is itself strong pressure. Economic interest and the claim to be preserved are not the same thing, since Article 404 requires the condition of preserving one's own claim. One can only answer that the failure to respond and the need for protection pointed out by the counterargument are fully acknowledged, yet those circumstances do not constitute a ground capable of replacing the requirements of subrogation.
The criterion for the stage-by-stage determinations belonging to this section is, in accordance with the holding of Supreme Court Decision 2020Da300893 decided July 21, 2021, whether the claim to be preserved is recognized. Where the subrogating creditor's claim to be preserved is not recognized or there is no statutory ground for litigating on behalf of another, the subrogation lawsuit loses standing and is dismissed without prejudice as unlawful. Documents evidencing the claim to be preserved, the written selection of a party, succession documents, and applications to participate are merely records that show the ground in this determination, and what the records fail to reveal remains undetermined and does not immediately become a conclusion. If it is confirmed that the existence of the claim to be preserved is denied, the existing blocking and effectiveness determinations are discarded. Only where the subrogation claim to be preserved and the need for preservation, or the ground for the right to conduct litigation arising from selection or succession, is recognized, does the stage determination stand again, and that determination is tied to the conduct of litigation over another's right.
In the synthetic scene, Creditor A seeks to exercise Debtor B's right, but the fact alone that A did not separately present a ground for A's own claim and the need for preservation makes a final determination difficult. It is a confirmed circumstance that materials for A's own claim and a ground for the need for preservation were not separately submitted, but the existence of the claim to be preserved has not been ultimately denied. Accordingly, a definitive determination as to standing in the subrogation lawsuit may vary with the presence or absence of documents evidencing the claim to be preserved, and on this point the stated conditional distinction remains. The definition that the claim to be preserved means the creditor's claim that subrogation seeks to preserve is adopted along with it, but whether all of the debtor's rights are objects of subrogation is not addressed here. The conclusion that another's right may be exercised on another's behalf is permitted only where the condition of preserving one's own claim has been met, and subrogation is not established by economic interest alone.
The permitted conclusion is narrow. A scene in which no ground for preserving one's own claim is presented is not enough to confirm standing in a subrogation lawsuit, and if it is confirmed that the existence of the claim to be preserved is denied, the existing blocking and effectiveness determinations are discarded and the matter is judged anew from the beginning. However, because the facts of the actual case, the service, the results of performance, and the detailed facts of the reasons for the judgment have not been verified, they cannot be taken as grounds for a definitive determination.
1.6The Strongest Counterargument and the Answer
Can another's right be exercised without a claim of one's own? Against the background of that distinction, and even where, because the debtor fails to respond, the intervention of others becomes necessary, this passage considers what is required. What ground is missing in this scene, and how that vacancy bears upon the qualification to exercise another's right on another's behalf, is the present question.
It provides: "A creditor may, in order to preserve his claim, exercise the rights of his debtor: Provided, That this shall not apply to a right exclusively personal to the debtor. (2) A creditor may not exercise the right under the preceding paragraph before his claim becomes due, without permission from the court: Provided, That this shall not apply to acts of preservation." This language limits the subject of exercise to the creditor, the act to the exercise of the debtor's right, and the condition to the preservation of the creditor's own claim. That is, subrogation is depicted not as a channel for extracting another's right without purpose, but as a procedural device that opens only as a means of preserving one's own claim. The restrictions imposed by other items of the provision are not treated at this point.
The bridge connecting that language with the conclusion of this section is the claim to be preserved. Here, the claim to be preserved means the creditor's claim that subrogation seeks to preserve, and is a separate concept distinguished from the other's right exercised through subrogation. Only by viewing apart the point that the former is the creditor's own right and the latter the debtor's right does it become clear what collapses when either is absent. From here comes the judgment that creditor subrogation is an exercise of a right for the preservation of one's own claim, and that, if the right to be preserved is not recognized, there is no party standing in the subrogation lawsuit. For the position of actually exercising another's right to be maintained, one's own right, by which that right is exercised, must stand first.
The counterargument that this conclusion targets is a practical one. There are cases where, because the debtor does not respond, rights are left bound and neglected without the intervention of others, and the view is that, the more so, the creditor or an interested party must step forward lest the harm grow. At the center of the counterargument lie the loss that collective and subrogation-based protection of rights is in fact obstructed, and the value that such inconvenience must be relieved. From this vantage, the result of turning away at the threshold a person in need of relief of rights appears unjust. Yet the earlier answer is not shaken. However great interest and need may be, they cannot by themselves create a right against the debtor, nor lead to party standing in the subrogation lawsuit. The disadvantage pointed out by the counterargument does not disappear, but on account of that disadvantage the claim to be preserved cannot be newly created.
One fact is placed in this scene. That fact alone does not confirm whether the condition of exercising a right for the preservation of one's own claim has been satisfied. Nor does the scene reveal by which of the documents evidencing the claim to be preserved, the written selection of a party, the succession documents, or the application to participate the legal relationship between the right-holder and the person conducting the litigation has been made clear, so this item remains undetermined. What the scene does establish is only the fact that no ground was separately presented, and this directly meets the preceding condition of the stage of the claim to be preserved of subrogation. If it is confirmed that the existence of the claim to be preserved is denied, the conclusion as to standing in the subrogation lawsuit changes.
What this section permits is narrow. Only where the creditor's claim that subrogation seeks to preserve, that is, the claim to be preserved, is confirmed does the channel for conducting litigation over another's right open, and only then can the standing of the position exercising that debtor's right be judged. What is not permitted is clear. Economic interest or the need for preservation alone cannot take the place of the claim to be preserved, and another's right cannot be exercised without separately presenting a ground. An item that remains without the legal relationship between the right-holder and the person conducting the litigation being made clear is undetermined, and the mere fact that there are no materials does not immediately convert into an inability to obtain relief. What remains is the question of which rights are subject to subrogation.
1.7The Link to the Application and the Dispositive Part
At issue in this scene is whether another's right can be exercised without a claim of one's own. The point treated immediately above, that economic interest cannot be converted into a claim to be preserved, has already been confirmed. On the basis of that confirmation, it examines what ground the exercise of a right by subrogation must rest upon.
Civil Act Article 404 declares: "A creditor may, in order to preserve his claim, exercise the rights of his debtor: Provided, That this shall not apply to a right exclusively personal to the debtor." In this language, the subject of creditor subrogation is the creditor, the act is an act in respect of the debtor's right, and the condition is the preservation of the creditor's own claim. To exercise another's right, one's own claim and the need for its preservation must first be in place. The reason it is distinguished from arbitrary agency or random intervention lies precisely in this language.
The same Article opens the door to the exercise of the right, but before that door it demands the creditor's own claim. Where the creditor's right against the debtor, which is to be preserved by subrogation, that is, the claim to be preserved, is not recognized, there is no party standing in the subrogation lawsuit (Supreme Court Decision 2020Da300893 decided July 21, 2021). The stage of conducting litigation over another's right and the stage of recognizing the creditor's own right must be distinguished. Even if the framework of conduct has been formed, without the claim to be preserved, the ground that holds that framework together, the subrogation lawsuit is simply unlawful and dismissed without prejudice.
The counterargument that, owing to the debtor's failure to respond, the intervention of others is absolutely necessary is realistic. In disputes where interests are entangled, if the right-holder does not come forward, no one may assert that right, and this causes the creditor great loss and inconvenience. The concern that collective and subrogation-based protection of rights may in fact be obstructed cannot be ignored either. Even so, the grammar of subrogation does not change. However great economic interest may be, economic interest cannot be converted into a claim to be preserved, and the difficulty pointed out by the counterargument cannot be made a ground for voluntary participation in another's right.
In the synthetic scene, Creditor A seeks to exercise Debtor B's right. A has not, however, separately presented a ground concerning the existence of A's own claim and the need for its preservation. This fact alone does not make clear whether A's claim to be preserved is recognized, nor can it be confirmed whether the conditions for conducting litigation by subrogation are met. Accordingly, whether party standing is recognized for A's subrogation lawsuit exercising B's right remains undetermined.
The conclusion permitted by this section is clear: only when the grounds for one's own claim and the need for preservation are in place can another's right be exercised, and if that ground is missing, the subrogation lawsuit loses standing. That A's subrogation lawsuit is dismissed without prejudice is, however, different from A's economic interest being disregarded, and the need for intervention pointed out by the counterargument does not disappear. What this section does not permit is the conclusion that another's right may be exercised on another's behalf on the basis of the difficulty of non-response alone.
1.8The Scope This Section Undertakes
A judgment curing a defect in the capacity or authority of the same subject and a judgment substituting a different subject are to be distinguished, but the independent ground required by the latter judgment cannot be supplied by the former. Now, where the right-holder and the person conducting the lawsuit differ, it is at issue to which right-holder the relief reaches, and what determines the scope within which such conduct is permitted. No year or amount is set in the scene. The scope of this section is formed by the question whether, in this scene, A may exercise B's right on B's behalf, and the question what determines the scope of the person conducting litigation over another's right.
Civil Act Article 404 provides: "A creditor may, in order to preserve his claim, exercise the rights of his debtor." In this language, 'the creditor' is the subject of exercise, and 'his claim' is the claim that the subject already holds; 'in order to preserve' is the purpose of the exercise, and 'may exercise the rights of his debtor' means that the debtor's right may be exercised on the debtor's behalf. The same Article adds, however: "Provided, That this shall not apply to a right exclusively personal to the debtor." Here attention is directed only to the linkage among the subject, purpose, and object of exercise prescribed by Article 404; matters dealt with by other paragraphs of the provision fall outside the scope of this section. Accordingly, creditor subrogation exercises another's right but takes the form of an exercise of a right for the preservation of one's own claim. If the purpose of preserving the claim held for oneself is lacking, the ground for the establishment of that exercise disappears.
Supreme Court Decision 2020Da300893 decided July 21, 2021 holds: "In a creditor subrogation lawsuit, where the creditor's right against the debtor, which is to be preserved by subrogation, is not recognized, the creditor has no party standing to become the plaintiff and exercise the debtor's right against the third-party obligor; accordingly, the subrogation lawsuit is unlawful and shall be dismissed without prejudice." This judgment directly links the recognition of the creditor's right against the debtor to be preserved, that is, the claim to be preserved, with the standing to conduct litigation. The claim to be preserved means the creditor's claim that subrogation seeks to preserve, and if that claim is not recognized, no qualification to exercise another's right is conferred on the party who stepped forward under the guise of subrogation. Accordingly, whether the claim to be preserved is recognized is a stage of judgment as to party standing in the subrogation lawsuit, and the conclusion of no standing at that stage leads to the effect that the suit is unlawful and dismissed without prejudice. Beyond that, if the person seeking to exercise another's right asserts no claim of his own whatsoever, no room remains for the claim to be preserved of subrogation to be recognized at all.
If, because the debtor fails to respond, no one steps forward, the result is that the right is left neglected, and preventing an interested person from intervening produces the inconvenience of in fact blocking collective and subrogation-based protection of rights. This counterargument targets the point that the distinction between situations requiring protection and the manner of protection may seem too strict. Yet the channel for exercising another's right on another's behalf does not open merely on the attitude of having stepped forward in another's stead, or on the circumstance that protection is wanting. The author's answer is settled. Economic interest is an expression of interest, whereas the claim to be preserved is defined as the creditor's claim that subrogation seeks to preserve, so the former cannot take the place of the latter. Thus the greater the need for intervention, the more distinctly the materials evidencing the claim to be preserved are demanded, and even though the loss pointed out by the counterargument remains, the conclusion does not change.
The facts that can be confirmed in the synthetic scene are only that A seeks to exercise B's right, and that A has not separately presented a ground for A's own claim and the need for preservation. Setting these facts against the foregoing conditions, although what A seeks to exercise takes the form of exercising B's right on B's behalf, no ground of the claim to be preserved to support that conduct appears in the scene. Which of the documents evidencing the claim to be preserved, the written selection of a party, the succession documents, or the application to participate has been submitted is not stated by the scene, and therefore remains undetermined. Yet the scene fact alone that both the grounds for one's own claim and the need for preservation are absent cannot be taken to mean that the claim to be preserved of subrogation is recognized. Since the scene contains no materials concerning selection, succession, or participation, whether there is a ground for the right to conduct litigation under some other legal relationship cannot be determined from this scene alone.
The conclusion permitted by this section is narrow. For litigation conduct exercising another's right on another's behalf to be established, either the person's own claim must be recognized as the claim to be preserved of subrogation to be preserved, or the ground for the right to conduct litigation arising from selection or succession must be recognized, and the materials for that ground must appear in the records. Conversely, where the claim to be preserved is not recognized or there is no statutory ground for litigating on behalf of another, the conclusion cannot go beyond that the subrogation lawsuit lacks party standing and is unlawful. Where the legal relationship between the right-holder and the person conducting the litigation is not made clear, judgment is reserved, but that undetermined state does not mean that relief is impossible. The conclusion that economic interest can take the place of the claim to be preserved, and the conclusion that another's right can be exercised without a claim of one's own, do not fall within the scope of this section.
1.9Application of the Text of the Provisions and the Holdings of Precedents
This distinction applies unchanged to the scene in which creditor A seeks to exercise debtor B's rights. A seeks to exercise B's rights but has not separately set out the basis of his own claim and of the need for preservation. Merely having stepped forward does not confer upon A the qualification to conduct the lawsuit in B's stead. The question here is on which textual provision the party entrusted with conducting the lawsuit bases its exercise of another's rights. Only that source-text provision can serve as the basis for the adjudication.
Among these provisions, Article 404 of the Civil Act provides for the creditor's right of subrogation. The party designated by this provision is the creditor, the act is the exercise of the debtor's rights, and the condition is that it be for the purpose of preserving one's own claim. Summary [1] of Supreme Court Decision 2020Da300893 decided July 21, 2021 transposes the same condition to the lawsuit, holding that if the claim to be preserved is not recognized, the subrogation lawsuit is improper and is dismissed without prejudice (Supreme Court Decision 2020Da300893 decided July 21, 2021). Both provisions require of the person exercising another's rights the basis of preservation of one's own claim.
The link connecting this provision with the conclusion of this section is the order of adjudication. First, one determines the creditor's claim that is to be preserved through subrogation, that is, the claim to be preserved. Only once the claim to be preserved stands does the conduct of the lawsuit exercising the debtor's rights come to be situated as the creditor's act of preserving his or her own claim. Summary [1] of Supreme Court Decision 2020Da300893 decided July 21, 2021 receives this order as a matter of party standing, stating that if the claim to be preserved is not recognized, the creditor does not have the standing to become the plaintiff personally (Supreme Court Decision 2020Da300893 decided July 21, 2021). If these two stages—looking first at the presence or absence of a basis and only later at the lawfulness of the conduct—are mixed together, it reads as though the right to conduct arises from the mere fact of exercising another's rights. Herein lies the reason why only that source-text provision is used as the basis for adjudicating the conduct of a lawsuit concerning another's rights.
The strongest counterargument is aimed at the loss caused by the debtor's inaction. If the debtor neglects B's rights, there is no one to protect those rights, and unless the creditor intervenes by subrogation, the path to recovery is blocked. If this inconvenience becomes severe, the charge is made that adhering to the textual requirement of preservation of one's own claim in effect prevents collective and subrogatory rights protection. Yet the provision limits the cases in which another's rights may be exercised to cases for the purpose of preserving one's own claim (Article 404 of the Civil Act). The economic interest invoked by the counterargument cannot substitute for such textual requirements. Even if the protective gap pointed out by the counterargument in fact remains, that gap does not provide a ground for going beyond the provision in question.
The facts that can be confirmed in the synthetic scene are that A sought to exercise B's rights and that A did not separately set out the basis of his own claim and of the need for preservation. Placing this fact alongside the conditions of the provision in question, neither the requirement of acting for the purpose of preserving one's own claim nor the gist that party standing is lacking where the claim to be preserved is not recognized supports A's conduct of the lawsuit (Article 404 of the Civil Act; (Supreme Court Decision 2020Da300893 decided July 21, 2021)). The scene, however, determined only the fact that no basis was separately presented; it did not go so far as to determine that A's claim to be preserved does not exist. This state, in which the legal relationship between the right-holder and the party conducting the lawsuit remains unclear, is left undetermined. That indeterminacy does not itself mean that no relief is available.
The conclusion permitted by this section is narrow. The conduct of a lawsuit exercising another's rights is adjudicated only upon the basis of preservation of one's own claim, as fixed by the source-text provision in question. If the claim to be preserved is recognized, the qualification for subrogation stands; if it is not recognized, the conclusion is reached that party standing is lacking. Yet one may neither substitute economic interest for the claim to be preserved, nor broaden that conclusion by reasons for judgment falling outside the scope in question.
1.10Fine Distinctions Within the Stage
The question now posed is what part remains to be subdivided and adjudicated within the conduct of a lawsuit concerning another's rights. That is, taking one step beyond the preceding question of whether another's rights can be exercised without one's own claim, the inquiry seeks the points at which conditions are to be finely divided and adjudicated within a mode of conducting a lawsuit already recognized.
The provision corresponding to this question is Article 404 of the Civil Act. It provides: "A creditor may, for the purpose of preserving his or her own claim, exercise the rights of the debtor. However, this does not apply to rights that are exclusively personal." The party designated by this provision is the creditor, the exercise is an exercise of the debtor's rights, and the condition is the preservation of one's own claim. The claim to be preserved in subrogation means the creditor's claim that is to be preserved through subrogation.
The condition in paragraph (1) is distinguished from the ground on which subrogation may be exercised. The reason the preceding provision requires the preservation of one's own claim is that, although subrogation exercises another's rights, its practical benefit is placed in the creditor's preservation. In the same vein, Supreme Court Decision 2020Da300893 decided July 21, 2021 holds: "[1] In a creditor subrogation lawsuit, where the creditor's right against the debtor, which is to be preserved by subrogation, is not recognized, the creditor lacks party standing to become the plaintiff personally and exercise the debtor's rights against the third-party obligor; accordingly, such subrogation lawsuit is improper and shall be dismissed without prejudice, and". Thus the adjudication is confined to the conditions in the cases where it operates, where it is blocked, and where it is undetermined.
The inconvenience whereby, if the debtor fails properly to exercise B's rights and creditor A does not fill that place, recovery becomes difficult is real. Yet even though that is the position of creditor A, who has not separately set out the basis of his own claim and of the need for preservation, if the claim to be preserved is replaced by economic interest, the ground for subrogation changes. Such a substitution is a change that upends this determination.
The fact confirmed in the synthetic scene is that creditor A, seeking to exercise debtor B's rights, did not separately set out the basis of his own claim and of the need for preservation. Contrasting this with the foregoing conditions, one cannot categorically conclude that it falls within the case where it operates—that is, the case where the claim to be preserved in subrogation and the basis for the need for preservation are recognized. Nor were judgmental records such as materials on the claim to be preserved, a designation document, succession materials, or an application for participation confirmed in the scene. Whether, however, the matter is placed in the case where it is undetermined—that is, where the legal relationship between the right-holder and the party conducting the lawsuit is unclear—or in the case where it is blocked because the existence of the claim to be preserved is denied, cannot be adjudicated from the scene alone and remains undetermined.
What this section permits is the judgment that conducting a lawsuit is possible where the claim to be preserved in subrogation and the need for preservation, or the basis for the right to conduct a lawsuit arising from designation or succession, is recognized; the judgment that it is blocked where the subrogating party's claim to be preserved is not recognized or where there is no statutory ground to litigate for another; and the judgment that the case in which the legal relationship is unclear is left undetermined. Not permitted here is any conclusion that establishes the ground for subrogation on economic interest alone, or any conclusion that invents additional steps beyond the conditions expressly stated and adjudicates on that basis.
1.11Synthesis of Effectiveness, Blockage, and Undetermination
In this scene, the point at which the party conducting the lawsuit and the right-holder diverge is not authority but the basis for the conduct. The question the author poses is not in the form of whether one may exercise another's rights in that party's stead, but the task of setting a criterion for adjudging whether that exercise is open, blocked, or not yet determined. The question whether another's rights can be exercised without one's own claim is examined precisely upon this distinction.
The statutory basis for this question is the text of Article 404 of the Civil Act. That Article provides: "A creditor may, for the purpose of preserving his or her own claim, exercise the rights of the debtor. However, this does not apply to rights that are exclusively personal." It then adds: "Before the claim becomes due, the creditor may not exercise the right in the preceding paragraph without the court's permission. However, this does not apply to preservative acts." The party designated by this text is the creditor, the exercise is a subrogation of the debtor's rights, and the condition is bound to the purpose of preserving one's own claim. The other requirements of the Article are not addressed at this point.
The conclusion produced by this basis and the foregoing distinction is clear. Where the party conducting the lawsuit concerning another's rights adopts the form of creditor subrogation, that conduct takes as its basis the claim to be preserved—that is, the creditor's claim to be preserved through subrogation. Summary [1] of (Supreme Court Decision 2020Da300893 decided July 21, 2021) holds that "where the creditor's right against the debtor, which is to be preserved by subrogation, is not recognized, the creditor lacks party standing to become the plaintiff personally and exercise the debtor's rights against the third-party obligor; accordingly, such subrogation lawsuit is improper and shall be dismissed without prejudice." The presence or absence of a claim to be preserved and the presence or absence of the right to conduct a lawsuit are not the same question. The former asks who the right-holder is; the latter asks whether, instead of that right-holder stepping forward directly, another party may step forward. If the claim to be preserved is recognized, the path of subrogation opens; if not, it is blocked at party standing.
The strongest counterargument takes aim at the point that there are cases in which another's intervention is needed because of the debtor's inaction. When the party holding the right does not move, leaving that right neglected may cause recoverable benefits to disappear, and it is cumbersome for the many interested parties each to step forward individually. The concern of the side that appeals to the debtor's inaction in this way and says that the practical benefit of collective and subrogatory rights protection is in effect blocked is not to be erased. Yet the author's answer is that economic interest cannot be turned into the claim to be preserved. The creditor's claim to be preserved through subrogation does not come into being by the magnitude of the economic interest, and no new basis for the conduct arises merely from the need for intervention.
The facts that can be confirmed in the synthetic scene are only these. A seeks to exercise B's rights, and did not separately set out the basis of his own claim and of the need for preservation. The kinds of materials one might consider from the record are materials on the claim to be preserved, a designation document, succession materials, or an application for participation, but the scene does not determine whether those materials were actually submitted. Accordingly, whether the basis for the conduct is recognized has not yet been determined on the strength of this scene. One contrast alone is possible: "If the existence of the claim to be preserved is denied, the conclusion regarding the standing of the subrogation lawsuit changes." Thereby is revealed what the axis is that separates the efficacy of the conduct from its blocking, and why a case lacking materials cannot be categorically declared a confirmed blockage.
In sum, the conduct of a lawsuit concerning another's rights is divided according to the presence or absence of its basis. If the claim to be preserved in subrogation and the need for preservation, or the basis for the right to conduct a lawsuit arising from designation or succession, is recognized, the path of conduct opens. If the subrogating party's claim to be preserved is not recognized, or if there is no statutory ground to litigate for another, that conduct is blocked at party standing and treated as improper. Meanwhile, where the legal relationship between the right-holder and the party conducting the lawsuit is unclear, neither a confirmed blockage nor a confirmed efficacy is pronounced; the matter is left undetermined. This indeterminacy is the record of a state in which materials are insufficient; what would happen if the materials were increased is not stated at this point.
1.12Conclusion Carried Over to the Next Section
Only the conclusion of the preceding section is carried forward, which distinguished the judgment that cures a defect in the capacity or authority of the same party from the judgment that substitutes a different party. If that distinction is maintained unchanged even where a subrogating party stands in the place given to another, there remains the question of what the creditor seeking to stand as subrogator must put forward as his basis. In this scene, one must ask what basis A, who seeks to stand in the place of the subrogator, must present, and, where that basis is wanting, at what point the procedure comes to a halt.
The text answering this question is found in Article 404 of the Civil Act. Article 404 paragraph (1) declares that "a creditor may, for the purpose of preserving his or her own claim, exercise the rights of the debtor," specifying the party exercising as the creditor, the purpose as the preservation of one's own claim, and the object as the debtor's rights. The proviso following the same paragraph, which carves out that "this does not apply to rights that are exclusively personal," is a limitation of an already-settled scope and is not newly addressed in this section. The condition for exercise that the Article prescribes is the point of departure for the subrogation discussed here, and whether the debtor is inactive or not is not a requirement of that point of departure.
Connecting the text of Article 404 paragraph (1) with the conclusion of this section reveals that an exercise of subrogation is established on the proviso of the purpose of preserving one's own claim, and no further. This is at once the reason why the claim to be preserved—that is to say, the creditor's claim to be preserved through subrogation—must be separately defined. For even borrowing the form of exercising another's rights, it is the creditor's own claim that serves as the basis for that exercise, and the need to preserve that claim occupies the place of the purpose of the exercise. Supreme Court Decision 2020Da300893 decided July 21, 2021, in the same direction, holds that where the creditor's right against the debtor, which is to be preserved by subrogation, is not recognized, the creditor lacks party standing to become the plaintiff personally and exercise the debtor's rights against the third-party obligor, and the subrogation lawsuit is improper and dismissed without prejudice. Leaving aside whose thing the object of the exercise of the right is, it is first adjudicated whether the exercising party has its own basis for exercising that right in the other's stead.
This adjudication meets the counterargument that there are cases in which another's intervention is needed because of the debtor's inaction. When the right-holder does not step forward personally, leaving the right alone may instead result in leaving the harm unaddressed, and the collective protection of the many parties sharing the interest is in effect blocked—such is the inconvenience. Yet the answer the author offers here is clear. If the mere existence of an interest or concern does not satisfy the requirement of preserving one's own claim, the conclusion stands that no action satisfying the standing requirements of a subrogation lawsuit can be brought. The gap in protection pointed out by the counterargument may be referred to a separate subsequent discussion, but it cannot manufacture anew the very claim that serves as the basis for the exercise.
The facts that can be confirmed in the synthetic scene are that A seeks to exercise B's rights, and that the preservation of A's own claim and the need for preservation were not separately presented as the basis for that exercise. Contrasting this scene with the conditions for exercise prescribed in Article 404 paragraph (1), A is in a state of having not yet produced the basis of the purpose of exercising for the purpose of preserving his own claim. Accordingly, whether A's exercise of subrogation had party standing in that subrogation lawsuit cannot be determined on the confirmed facts alone, and what remains is whether that basis is supplied by materials on the claim to be preserved. What the legal relationship between A and B is has not been made clear.
The line this section teaches is as follows. Standing in the place of exercising another's rights is not established by the mere fact of having stepped forward in that party's stead; the creditor's own claim that justifies that exercise, and the need to preserve it, are required as the basis. If that basis is recognized, one may proceed to an exercise satisfying the standing requirements of a subrogation lawsuit; if the basis is not recognized, or if there is no statutory ground to litigate for another, that action is improper and halts. Whether the debtor's rights can be the object of subrogation is placed after this question of the basis for the exercise. Are all of the debtor's rights subject to subrogation?