§ 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 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. 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 maker either 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 item with respect to the transaction out of which the item arose.
History
This law was first created in 1964. The record of its establishment is cataloged in chapter 219 of that year’s edition of “Acts of Assembly,” the annual state publication listing all changes made to the Code of Virginia in that year. Unfortunately, the 1964 “Acts” aren’t available online. It has been modified 1 time. Those modifications are cataloged by “The Acts of Assembly,” a state publication, by year and chapter. Those modifications that can be read on the General Assembly’s website will be linked accordingly. That modification is as follows: in 1992, chapter 693.
1964, c. 219; 1992, c. 693.