57A-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.
Source: SL 1994, ch 368, ยง4-407.
Structure South Dakota Codified Laws
Title 57A - Uniform Commercial Code
Chapter 04 - Bank Deposits And Collections
Section 57A-4-101 - Short title.
Section 57A-4-102 - Applicability.
Section 57A-4-104 - Definitions and index of definitions.
Section 57A-4-106 - Payable through or payable at bank--Collecting bank.
Section 57A-4-107 - Separate office of a bank.
Section 57A-4-108 - Time of receipt of items.
Section 57A-4-110 - Electronic presentment.
Section 57A-4-111 - Statute of limitations.
Section 57A-4-202 - Responsibility for collection or return--When action timely.
Section 57A-4-203 - Effect of instructions.
Section 57A-4-204 - Methods of sending and presenting--Sending directly to payor bank.
Section 57A-4-205 - Depositary bank holder of unendorsed item.
Section 57A-4-206 - Transfer between banks.
Section 57A-4-207 - Transfer warranties.
Section 57A-4-208 - Presentment warranties.
Section 57A-4-209 - Encoding and retention warranties.
Section 57A-4-211 - When bank gives value for purposes of holder in due course.
Section 57A-4-213 - Medium and time of settlement by bank.
Section 57A-4-214 - Right of charge-back or refund; Liability of collecting bank; Return of item.
Section 57A-4-216 - Insolvency and preference.
Section 57A-4-302 - Payor bank's responsibility for late return of item.
Section 57A-4-401 - When bank may charge customer's account.
Section 57A-4-403 - Customer's right to stop payment--Burden of proof of loss.
Section 57A-4-404 - Bank not obligated to pay check more than six months old.
Section 57A-4-405 - Death or incompetence of customer.
Section 57A-4-406 - Customer's duty to discover and report unauthorized signature or alteration.
Section 57A-4-407 - Payor bank's right to subrogation on improper payment.
Section 57A-4-502 - Presentment of "on arrival" drafts.
Section 57A-4-504 - Privilege of presenting bank to deal with goods--Security interest for expenses.