400.3-419. Instrument signed for accommodation.
Instrument signed for accommodation.
400.3-419. (a) If an instrument is issued for value givenfor the benefit of a party to the instrument ("accommodatedparty") and another party to the instrument ("accommodationparty") signs the instrument for the purpose of incurringliability on the instrument without being a direct beneficiary ofthe value given for the instrument, the instrument is signed bythe accommodation party "for accommodation."
(b) An accommodation party may sign the instrument asmaker, drawer, acceptor, or endorser and, subject to subsection(d), is obliged to pay the instrument in the capacity in whichthe accommodation party signs. The obligation of anaccommodation party may be enforced notwithstanding any statuteof frauds and whether or not the accommodation party receivesconsideration for the accommodation.
(c) A person signing an instrument is presumed to be anaccommodation party and there is notice that the instrument issigned for accommodation if the signature is an anomalousendorsement or is accompanied by words indicating that the signeris acting as surety or guarantor with respect to the obligationof another party to the instrument. Except as provided inSection 400.3-605, the obligation of an accommodation party topay the instrument is not affected by the fact that the personenforcing the obligation had notice when the instrument was takenby that person that the accommodation party signed the instrumentfor accommodation.
(d) If the signature of a party to an instrument isaccompanied by words indicating unambiguously that the party isguaranteeing collection rather than payment of the obligation ofanother party to the instrument, the signer is obliged to pay theamount due on the instrument to a person entitled to enforce theinstrument only if (i) execution of judgment against the otherparty has been returned unsatisfied, (ii) the other party isinsolvent or in an insolvency proceeding, (iii) the other partycannot be served with process, or (iv) it is otherwise apparentthat payment cannot be obtained from the other party.
(e) An accommodation party who pays the instrument isentitled to reimbursement from the accommodated party and isentitled to enforce the instrument against the accommodatedparty. An accommodated party who pays the instrument has noright of recourse against, and is not entitled to contributionfrom, an accommodation party.
(L. 1992 S.B. 448)*No continuity with § 400.3-419 as repealed by L. 1992 S.B. 448.