28-5-117. 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.
(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 a 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 the 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 and the rights in subsection (3) of this section do not arise until the nominated person pays or otherwise gives value. Until then, 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.
History:
[28-5-117, added 1996, ch. 7, sec. 2, p. 18.]
Structure Idaho Code
Title 28 - COMMERCIAL TRANSACTIONS
Chapter 5 - UNIFORM COMMERCIAL CODE — LETTERS OF CREDIT
Section 28-5-101 - SHORT TITLE.
Section 28-5-102 - DEFINITIONS.
Section 28-5-104 - FORMAL REQUIREMENTS.
Section 28-5-105 - CONSIDERATION.
Section 28-5-106 - ISSUANCE, AMENDMENT, CANCELLATION, AND DURATION.
Section 28-5-107 - CONFIRMER, NOMINATED PERSON, AND ADVISER.
Section 28-5-108 - ISSUER’S RIGHTS AND OBLIGATIONS.
Section 28-5-109 - FRAUD AND FORGERY.
Section 28-5-110 - WARRANTIES.
Section 28-5-112 - TRANSFER OF LETTER OF CREDIT.
Section 28-5-113 - TRANSFER BY OPERATION OF LAW.
Section 28-5-114 - ASSIGNMENT OF PROCEEDS.
Section 28-5-115 - STATUTE OF LIMITATIONS.
Section 28-5-116 - CHOICE OF LAW AND FORUM.
Section 28-5-117 - SUBROGATION OF ISSUER, APPLICANT, AND NOMINATED PERSON.
Section 28-5-118 - APPLICABILITY.
Section 28-5-119 - SAVINGS CLAUSE.
Section 28-5-120 - SECURITY INTEREST OF ISSUER OR NOMINATED PERSON.