Ala. Code
Code of Alabama

Ala. Code § 8-3-2 (2026)

Rights of Surety Who Has Paid Debt.

✓ official Alabama Legislature (ALISON) text, current July 2026
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A surety who has paid his principal’s debt is entitled to a transfer of the original and collateral security which the creditor holds; he has all the rights to realize thereon and to reimburse himself to the same extent as the creditor might have done before the surety paid him, whether paid before or after judgment; and he shall be substituted for the creditor and subrogated to all his rights and remedies; in effect, he shall be a purchaser of the debt and all its incidents.

(Code 1907, §5385; Code 1923, §9544; Code 1940, T. 9, §78.)

Notes of Decisions
Cited in 5 cases, 1985–2002 · leading case: Am. Liberty Ins. Co. v. Amsouth Bank, 825 So. 2d 786 (Ala. 2002).
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Am. Liberty Ins. Co. v. Amsouth Bank, 825 So. 2d 786 (Ala. 2002). · cites it 7× “Ala. Code 1975, §§ 8-3-2 & 8-3-11; see Firemen's Ins.”
Nat. Am. Ins. Co. v. Boh Bros. Const. Co., 700 So. 2d 1363 (Ala. 1997). · cites it 7× “The trial court, however, appears to have overlooked Ala.Code 1975, § 8-3-2, which provides: "A surety [National American] who has paid his principal's debt, [MMA's debt] is entitled to a transfer of the original and collateral security which the creditor holds; he has all the…”
Criddle v. C.I.T. Fin. Servs. (In Re Hubbard), 89 B.R. 920 (Bankr. N.D. Ala. 1988). “384 , "Subrogation of purchaser who discharges superior lien as part of purchase price as against recorded junior lien"; Annot., 113 A.L.”
Tanton v. Morgan Distrib. Co. (In re Cauley), 50 B.R. 458 (Bankr. M.D. Ala. 1985). “The decision to avoid the transfer in the instant case is reinforced by the fact that while Morgan Distributing Company, Inc.”
Bond v. Smith, 888 F. Supp. 131 (M.D. Ala. 1995). “Section 8-3-2, Code of Alabama, 1975, provides in part that “a surety who has paid its principal’s debt is entitled to a transfer of the original and collateral security which the creditor holds____” Whether the estate pays off the plaintiffs debt in its capacity as a surety or…”
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