Insurance – Subrogation – Group Hospital Service Organization

Plaintiff, a non-profit hospital service organization, furnished services to defendant, a member of the organization injured in an automobile accident. Defendant thereafter entered into a settlement with the third party whose negligence had caused the accident and executed a release which included the hospital bill. Plaintiff then filed a bill in equity against defendant and the third party, claiming that on common law principles of subrogation it was entitled to recover from defendant all sums received by the defendant in settlement for the hospital services and from the third party the cost of the hospital services made necessary by the latter’s negligence. On appeal from a decree dismissing the bill of complaint, held, affirmed. Where a party has assumed a primary obligation, the discharge of that obligation does not give rise to any right of subrogation. Such a right never follows an actual primary liability. Michigan Hospital Service v. Sharpe, 339 Mich. 357, 63 N.W. (2d) 638 (1954).