70A-5-117 - Subrogation of issuer, applicant, and nominated person. - Utah Statutes

70A-5-117. Subrogation of issuer, applicant, and nominated person.
(1) An issuer that honors a beneficiary's presentation is subrogated to the rights of thebeneficiary to the same extent as if the issuer were a secondary obligor of the underlyingobligation owed to the beneficiary and of the applicant to the same extent as if the issuer were thesecondary obligor of the underlying obligation owed to the applicant.
(2) An applicant that reimburses an issuer is subrogated to the rights of the issuer againstany beneficiary, presenter, or nominated person to the same extent as if the applicant were thesecondary obligor of the obligations owed to the issuer and has the rights of subrogation of theissuer to the rights of the beneficiary stated in Subsection (1).
(3) A nominated person who pays or gives value against a draft or demand presentedunder 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 asecondary 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 obligorof the underlying obligation owed to the beneficiary; and
(c) the applicant to the same extent as if the nominated person were a secondary obligorof the underlying obligation owed to the applicant.
(4) Notwithstanding any agreement or term to the contrary, the rights of subrogationstated in Subsections (1) and (2) do not arise until the issuer honors the letter of credit orotherwise pays and the rights in Subsection (3) do not arise until the nominated person pays orotherwise gives value. Until then, the issuer, nominated person, and the applicant do not deriveunder this section present or prospective rights forming the basis of a claim, defense, or excuse.

Repealed and Re-enacted by Chapter 241, 1997 General Session