(810 ILCS 5/4-407)
(from Ch. 26, par. 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
(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.
(Source: P.A. 87-582; 87-1135.)