400.4-407. Payor bank's right to subrogation or improper payment.
Payor bank's right to subrogation or improper payment.
400.4-407. If a payor bank has paid an item over the orderof the drawer or maker to stop payment, or after an account hasbeen closed, or otherwise under circumstances giving a basis forobjection by the drawer or maker, to prevent unjust enrichmentand only to the extent necessary to prevent loss to the bank byreason of its payment of the item, the payor bank is subrogatedto 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 againstthe drawer or maker either on the item or under the transactionout of which the item arose; and
(3) of the drawer or maker against the payee or any otherholder of the item with respect to the transaction out of whichthe item arose.
(L. 1963 p. 503 § 4-407, A.L. 1992 S.B. 448)