§ 6A-4-407 - Payor bank's right to subrogation on improper payment. - Rhode Island Statutes

SECTION 6A-4-407

   § 6A-4-407  Payor bank's right tosubrogation on improper payment. – If a payor bank has paid an item over the order of the drawer or maker to stoppayment, or after an account has been closed, or otherwise under circumstancesgiving a basis for objection by the drawer or maker, to prevent unjustenrichment and only to the extent necessary to prevent loss to the bank byreason 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 thedrawer or maker;

   (2) Of the payee or any other holder of the item against thedrawer or maker either on the item or under the transaction out of which theitem arose; and

   (3) Of the drawer or maker against the payee or any otherholder of the item with respect to the transaction out of which the item arose.