Payer bank’s right to subrogation on improper payment

Wis. Stat. § 404.407
in effect
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If a payer 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 payer bank is subrogated to the rights of all of the following: (1) Any holder in due course on the item against the drawer or maker. (2) 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. (3) 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.
Source: WI Statutes (Official Site)URL: https://docs.legis.wisconsin.gov/document/statutes/404.407Fetched: 10/7/2026