McIntyre v. Harris
Illinois Court of Appeals
709 N.E.2d 982 (1999)
Brian McIntyre (plaintiff), whose company Total Home was to repair Sandra Bennett's roof, gave Bennett a $2,000 postdated check she could cash only if the work wasn't done by a certain date, while she wrote him a $2,000 check for the repair up front; McIntyre deposited her check into his account at Twin Oaks Savings Bank (Bank) (defendant). When the roof wasn't finished on time, McIntyre nonetheless ordered the Bank to stop payment on his own check to Bennett, but the Bank mistakenly paid it anyway. After McIntyre complained the mistaken payment would overdraw his account, he signed a written agreement letting the Bank keep the $2,000 in his account as long as he repaid the Bank that amount plus interest by a set date — which he never did. McIntyre sued the Bank and its vice president, Robert Harris (defendant), claiming he was coerced into signing the agreement despite his valid stop-payment order; the Bank counterclaimed for the $2,000, and the trial court ruled the Bank was properly subrogated to Bennett's rights and could recover from McIntyre. McIntyre appealed.
Whether, to prevent unjust enrichment when a bank pays out a check over a demand to stop payment, the Uniform Commercial Code permits the payor bank to subrogate itself to the rights of a proper party.