Bank Deposits and Collections

ORS 74.4070
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 shall be subrogated to the rights:

(1)

Of any holder in due course on the item against the drawer or maker; and

(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. [1961 c.726 §74.4070 (Payor bank’s right to subrogation on improper payment); 1993 c.545 §109]

Notes of Decisions

In action to collect from bank funds paid on checks bearing forged drawer signatures, bank's obligation to plaintiff was primary rather than secondary and accordingly not discharged by alleged agreement of civil compromise. SCCI, Inc. v. U.S. National Bank, 78 Or App 176, 714 P2d 1113 (1986)

Source

Last accessed
Jun. 26, 2021

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