Page:United States Statutes at Large Volume 77.djvu/739

 77 STAT. ]

PUBLIC LAW 88-243-DEC. 30, 1963

(3) The preclusion under subsection (2) does not apply if the customer establishes lack of ordinary care on the part of the bank in paying the item (s). (4) Without regard to care or lack of care of either the customer or the bank a customer who does not within one year from the time the statement and items are made available to the customer (subsection (1)) discover and report his unauthorized signature or any alteration on the face or back of the item or does not within three years from that time discover and report any unauthorized indorsement is precluded from asserting against the bank such unauthorized signature or indorsement or such alteration. (5) If under this section a payor bank has a valid defense against n claim of a customer upon or resulting from payment of an item and waives or fails upon request to assert the defense the bank may not fissert against any collecting bank or other prior party presenting or transferring the item a claim based upon the miauthorized signature or alteration giving rise to the customer's claim. § 28:4—407. Payor bank's right to subrogation on improper payment If a payor bank has paid an item over the stop payment order of the drawer or maker 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 (a) of any holder in due course on the item against the drawer or maker; and (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; and (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. PART 5—COLLECTION OF DOCUMENTARY DRAFTS §28:4—501. Handling of documentary drafts; duty to send for presentment and to notify customer of dishonor A bank which takes a documentary draft for collection must present or send the draft and accompanying documents for presentment and upon learning that the draft has not been paid or accepted in due course must seasonably notify its customer of such fact even though it may have discounted or bought the draft or extended credit available for withdrawal as of right. § 28:4—502, Presentment of "on arrival" drafts When a draft or the relevant instructions require presentment "on arrival", "when goods arrive" or the like, the collecting bank need not present until in its judgment a reasonable time for arrival of the goods has expired. Refusal to pay or accept because the goods have not arrived'is not dishonor; the bank must notify its transferor of such refusal but need not present the draft again until it is instructed to do so or learns of the arrival of the goods. § 28:4—503. Responsibility of presenting bank for documents and goods; report of reasons for dishonor; referee in case of need Unless otherwise instructed and except as provided in article 5 a bank presenting a documentary draft

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