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:
(1) Of any holder in due course on the item against the drawer or maker;
(2) 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; and
(3) 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. (1965, c. 700, s. 1; 1995, c. 232, s. 2.)
Sections: Previous 25-4-303 25-4-401 25-4-402 25-4-403 25-4-404 25-4-405 25-4-406 25-4-407 25-4-501 25-4-502 25-4-503 25-4-504 25-4A-101 25-4A-102 25-4A-103 Next
Last modified: March 23, 2014