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. (1) of any holder in due course on the item against the drawer or maker;
2. (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. (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.

HISTORY: 1962 Code Section 10.4-407; 1966 (54) 2716; 2008 Act No. 204, Section 3, eff July 1, 2008. Definitional Cross References: "Account" Section 36-4-104(a)(1) "Drawer" Section 36-3-103(a)(5) "Holder" Section 36-1-201(20) "Holder in Due Course" Section 36-3-302(a) "Item" Section 36-4-104(a)(9) "Maker" Section 36-3-103(a)(7) "Payor Bank" Section 36-4-105(3) Part 5 Collection of Documentary Drafts