It was described by Lord Hoffmann as: [A] principle for doing equity between two or more creditors, each of whom are owed debts by the same debtor, but one of whom can enforce his claim against more than one security or fund and the other can resort to only one.
[6] While quite similar to the doctrine of subrogation, the two are quite distinct equitable remedies:[7] US jurisprudence has expanded upon the British and Commonwealth authorities, declaring that the requirement for a common debtor means that marshalling is not available where the two funds in question consist of an interest in estate property and an interest in property of a non-debtor, subject to certain exceptions:[8] In certain circumstances, that jurisprudence has also held that, while subrogation may normally render payment of a debt by a guarantor outside the scope of marshalling, equitable subordination may bring the assets of a guarantor within its reach.
Scots law possesses the equivalent doctrine of "catholic securities", and Lord Reed, in a 2013 judgment of the United Kingdom Supreme Court described its effect as being similar to marshalling: 83.
The doctrine of catholic securities can therefore operate to the prejudice of unsecured creditors, but it cannot affect the interests of the debtor.
Where later ranking creditors are secured by a hypothec on only one of the properties charged in favour of one and the same creditor, his hypothec is spread among them, where two or more of the properties are sold under judicial authority and the proceeds still to be distributed are sufficient to pay his claim, proportionately over what remains to be distributed of their respective prices.Recent jurisprudence has suggested that this provision produces a result equivalent to marshalling.