8.4-407 - Payor bank's right to subrogation on improper payment. - Virginia Statutes

§ 8.4-407. Payor bank's right to subrogation on improper payment.

If a payor bank has paid an item over the order of the drawer or maker tostop payment, or after an account has been closed or otherwise undercircumstances giving a basis for objection by the drawer or maker, to preventunjust enrichment and only to the extent necessary to prevent loss to thebank by reason of its payment of the item, the payor bank is subrogated tothe 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 makereither 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 itemwith respect to the transaction out of which the item arose.

(1964, c. 219; 1992, c. 693.)