Sec. 4407.
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 of the following:
(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.
(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.
History: 1962, Act 174, Eff. Jan. 1, 1964 ;-- Am. 1993, Act 130, Eff. Sept. 30, 1993
Structure Michigan Compiled Laws
Chapter 440 - Uniform Commercial Code
Act 174 of 1962 - Uniform Commercial Code (440.1101 - 440.11102)
Article 4 - Bank Deposits and Collections (440.4101...440.4504)
174-1962-4-4 - Part 4 Relationship Between Payor Bank and Its Customer (440.4401...440.4407)
Section 440.4401 - Payor Bank; Charge Against Customer's Account.
Section 440.4403 - Customer's Right to Stop Payment; Lapse and Renewal; Burden of Proof of Loss.
Section 440.4404 - Payment of Checks More Than 6 Months Old.
Section 440.4405 - Death or Incompetence of Customer.
Section 440.4407 - Improper Payment; Subrogation of Payor Bank.