336.5-117 MS 1996 [Repealed, 1997 c 11 art 1 s 20]
336.5-117 SUBROGATION OF ISSUER, APPLICANT, AND NOMINATED PERSON.
(a) 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.
(b) 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 (a).
(c) 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:
(1) 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;
(2) the beneficiary to the same extent as if the nominated person were a secondary obligor of the
underlying obligation owed to the beneficiary; and
(3) the applicant to the same extent as if the nominated person were a secondary obligor of the underlying
obligation owed to the applicant.
(d) Notwithstanding any agreement or term to the contrary, the rights of subrogation stated in subsections
(a) and (b) do not arise until the issuer honors the letter of credit or otherwise pays and the rights in subsection
(c) 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: 1997 c 11 art 1 s 17
Official Publication of the State of Minnesota
Revisor of Statutes
336.5-117MINNESOTA STATUTES 20231
