Official Code of Georgia Annotated

Title 11. COMMERCIAL CODE · Chapter 4. · Article 4. BANK DEPOSITS AND COLLECTIONS · Part 4. RELATIONSHIP BETWEEN PAYOR BANK AND ITS CUSTOMER

11-4-407. Payor bank’s right to subrogation on improper payment.

Active

Current through: Including Acts of the 2025 Regular Session of the General Assembly.

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.#

The notes below are printed with the section but are not enacted law (O.C.G.A. § 1-1-1(c)). They are shown apart from the text.

History

Code 1933, § 109A-4-407, enacted by Ga. L. 1962, p. 156, § 1; Ga. L. 1996, p. 1306, § 13.

Law reviews

For comment on Trust Co. of Columbus v. Refrigeration Supplies, Inc., 241 Ga. 406, 246 S.E.2d 282 (1978), discussing liability of collecting and payor banks for payment of check over missing endorsement of copayee, see 13 Ga. L. Rev. 677 (1979). For article surveying recent judicial developments in commercial law, see 31 Mercer L. Rev. 13 (1979).

Read the official page (the state's PDF, opened at the page this text was read from).

Current through: Including Acts of the 2025 Regular Session of the General Assembly.

Text read from t11-(v9)-2022-pdf.pdf, Volume V9, 2022 edition, pages 535 to 536; merge action: carried; file SHA-256 ad397fccbf21.