California Commercial Code Section 4407
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California Laws > Commercial Code > California Commercial Code Section 4407
4407. If a payor bank has paid an item over the order of the drawer
or maker to stop payment, or after an account has been closed, or
otherwise under circumstances giving a basis for objection by the
drawer or maker, to prevent unjust enrichment and only to the extent
necessary to prevent loss to the bank by reason of its payment of the
item, the payor bank is subrogated to the rights of all of the
following:
(a) Of any holder in due course on the item against the drawer or
maker.
(b) Of the payee or any other holder of the item against the
drawer or maker either on the item or under the transaction out of
which the item arose.
(c) Of the drawer or maker against the payee or any other holder
of the item with respect to the transaction out of which the item
arose.
Section: 4407
Last modified: February 22, 2013
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