It gets "implemented" in the courts. I'm not aware of any jurisdiction that doesn't recognize equitable subrogation in some form. Typically, it arises in a foreclosure proceeding where a foreclosing lender realizes that a formerly junior lender didn't get paid and now has priority over their mortgage.
It is an equitable remedy and I'm not aware of any statute defining equitable subrogation. It sounds like this author is expressing a view that it should be codified to have it apply automatically, whenever a senior loan is paid off and a junior lien is left open. Basically changing it from an equitable remedy to a statutory remedy.
I don't like that idea at all. For my opinion see Equitable Subrogation is an Over-used Remedy for Negligence.
Best,
Robert A. Franco
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