California · Commercial Code

COM §4407: 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

What this law says, in plain English

A payor bank that pays an item despite a stop-payment order, closed account, or similar objectionable circumstances may be subject to liability to the drawer.

Read the full statutory text

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 of all of the following: (a) Of any holder in due course on the item against the drawer or maker. (b) 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. (c) 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.

Verify at the official source: California legislative text

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This page is legal information, not legal advice. Code text is sourced from official publications and may lag amendments — always confirm at the official source linked above. Plain-English summaries and relationship data are AI-derived and reviewed on an ongoing basis; verify with a licensed attorney before acting.