Oregon Statutes 75.1170 – Subrogation of issuer, applicant and nominated person
(1) An issuer that honors a beneficiary‘s presentation is subrogated to the rights of the beneficiary to the same extent as if the issuer were a secondary obligor of the underlying obligation owed to the beneficiary and of the applicant to the same extent as if the issuer were the secondary obligor of the underlying obligation owed to the applicant.
Terms Used In Oregon Statutes 75.1170
- Applicant: includes a person who requests that an issuer issue a letter of credit on behalf of another if the person making the request undertakes an obligation to reimburse the issuer. See Oregon Statutes 75.1020
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- Beneficiary: includes a person to whom drawing rights have been transferred under a transferable letter of credit. See Oregon Statutes 75.1020
- Issuer: means a bank or other person that issues a letter of credit, but does not include an individual who makes an engagement for personal, family or household purposes. See Oregon Statutes 75.1020
- Letter of credit: means a definite undertaking that satisfies the requirements of ORS § 75. See Oregon Statutes 75.1020
- Nominated person: means a person whom the issuer:
(A) Designates or authorizes to pay, accept, negotiate or otherwise give value under a letter of credit; and
(B) Undertakes by agreement or custom and practice to reimburse. See Oregon Statutes 75.1020
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Person: includes individuals, corporations, associations, firms, partnerships, limited liability companies and joint stock companies. See Oregon Statutes 174.100
- Presentation: means delivery of a document to an issuer or nominated person for honor or giving of value under a letter of credit. See Oregon Statutes 75.1020
- Presenter: means a person making a presentation as or on behalf of a beneficiary or nominated person. See Oregon Statutes 75.1020
(2) An applicant that reimburses an issuer is subrogated to the rights of the issuer against any beneficiary, presenter or nominated person to the same extent as if the applicant were the secondary obligor of the obligations owed to the issuer and has the rights of subrogation of the issuer to the rights of the beneficiary stated in subsection (1) of this section.
(3) A nominated person who pays or gives value against a draft or demand presented under a letter of credit is subrogated to the rights of:
(a) The issuer against the applicant to the same extent as if the nominated person were secondary obligor of the obligation owed to the issuer by the applicant;
(b) The beneficiary to the same extent as if the nominated person were a secondary obligor of the underlying obligation owed to the beneficiary; and
(c) The applicant to same extent as if the nominated person were a secondary obligor of the underlying obligation owed to the applicant.
(4) Notwithstanding any agreement or term to the contrary, the rights of subrogation stated in subsections (1) and (2) of this section do not arise until the issuer honors the letter of credit or otherwise pays. The rights in subsection (3) of this section do not arise until the nominated person pays or otherwise gives value. Until the rights in subsections (1), (2) or (3) of this section arise, the issuer, nominated person and the applicant do not derive under this section present or prospective rights forming the basis of a claim, defense or excuse. [1961 c.726 § 75.1170; 1997 c.150 § 20]