---
title: O.C.G.A. § 11-4-407. Payor bank’s right to subrogation on improper payment.
collection: code
id: 11-4-407
cite_as: O.C.G.A. § 11-4-407 (2025)
canonical_url: https://georgiacommons.org/code/11-4-407
md_url: https://georgiacommons.org/code/11-4-407.md
text_url: https://georgiacommons.org/code/11-4-407/text
source_url: https://www.legis.ga.gov/api/document/docs/default-source/joint-features-document-library/t11-(v9)-2022-pdf.pdf?sfvrsn=b5451bbd_0#page=535
date: 2025
status: active
corpus_version: 2025-supplement-89aa39ab3c68
license: CC0-1.0
publisher: Georgia Commons, an independent project of Georgia Civic Data. Not the State of Georgia. Not legal advice.
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version: the only printed version
in_force: true
current_through: Including Acts of the 2025 Regular Session of the General Assembly
heading_path: COMMERCIAL CODE / BANK DEPOSITS AND COLLECTIONS / RELATIONSHIP BETWEEN PAYOR BANK AND ITS CUSTOMER
---

# O.C.G.A. § 11-4-407. 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

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).