MARVIN MANDEL, Governor                                 205

transferring the item a claim based upon the unauthorized
signature or alteration giving rise to the customer's
claim,

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.

SUBTITLE 5. COLLECTION OF DOCUMENTARY DRAFTS.

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.

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.

4—503. Responsibility of presenting bank for documents
and goods; report of reasons for dishonor; referee in
case of need.