Virginia Code 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:
Terms Used In Virginia Code 8.4-407
- Account: means any deposit or credit account with a bank including demand, time savings passbook, share draft, or like account, other than an account evidenced by a certificate of deposit;
(2) "Afternoon" means the period of a day between noon and midnight;
(3) "Banking day" means the part of a day on which a bank is open to the public for carrying on substantially all of its banking functions, but shall not include Saturday, Sunday or a legal holiday;
(4) "Clearing house" means an association of banks or other payors regularly clearing items;
(5) "Customer" means a person having an account with a bank or for whom a bank has agreed to collect items, including a bank that maintains an account at another bank;
(6) "Documentary draft" means any negotiable or nonnegotiable draft with accompanying documents, securities or other papers to be delivered against honor of the draft; or a draft to be presented for acceptance or payment if specified documents, certificated securities (§ Virginia Code 8.4-104
(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.
1964, c. 219; 1992, c. 693.