554.4407  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 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

a.  of any holder in due course on the item against the drawer or maker;

b.  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

c.  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.

Section History: Early form

  [C66, 71, 73, 75, 77, 79, 81, § 554.4407]

Section History: Recent form

  94 Acts, ch 1167, §112, 122

Internal References

  Referred to in § 554.3418

Previous Section 554.4406

Next Section 554.4501

© 1999 Cornell College and League of Women Voters of Iowa

Comments about this site or page? webmaster@legis.iowa.gov.
Please remember that the person listed above does not vote on bills. Direct all comments concerning legislation to State Legislators.

Last update: Thu Mar 18 15:00:31 CST 1999
URL: /DOCS/IACODE/1999/554/4407.html
jhf