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PIRELLI v. MIDWEST9/20/1995
able who pays an obligation is subrogated to the rights of the party who is primarily liable, see Ohio Casualty Ins. Co. v. Galvin, 222 Iowa 670, 672, 269 N.W. 254, 256 (1936); American Surety Co. v. State Trust & Sav. Bank, 218 Iowa 1, 4, 254 N.W. 338, 340 (1934). In the present case, Pirelli has released any subrogation rights that Midwest might have had against the Avitts; (2) if a party whose obligation is guaranteed by another releases security for that obligation, the guarantor is discharged, see Federal Land Bank v. Christiansen, 230 Iowa 537, 542, 298 N.W. 641, 644 (1941); Bankers' Surety Co. v. Linder, 156 Iowa 486, 496, 137 N.W. 496, 499 (1912); and (3) a party to a contract must act to mitigate damages. The third doctrine applies to all types of contracts. The first and second doctrines, although developed in the law of suretyship, also apply to indemnity situations. See 41 Am.Jur.2d Indemnity ยง 37, at 727 (1968). Either separately, or in combination, these doctrines support the conclusion that Pirelli is not entitled to any indemnity in the present action.
The judgment of the district court is reversed on Midwest's appeal. Because our decision renders the issues in Pirelli's appeal moot, it is dismissed.
REVERSED ON APPEAL; CROSS-APPEAL DISMISSED AS MOOT.
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