47-3419

47-3419. Instruments signed for
accommodation

A. If an instrument is issued for value given for the benefit of a party to the
instrument ("accommodated party") and another party to the instrument ("accommodation
party") signs the instrument for the purpose of incurring liability on the instrument
without being a direct beneficiary of the value given for the instrument, the instrument
is signed by the accommodation party "for accommodation".

B. An accommodation party may sign the instrument as maker, drawer, acceptor or
indorser and, subject to subsection D of this section, is obliged to pay the instrument
in the capacity in which the accommodation party signs. The obligation of an
accommodation party may be enforced notwithstanding any statute of frauds and whether or
not the accommodation party receives consideration for the accommodation.

C. A person signing an instrument is presumed to be an accommodation party and
there is notice that the instrument is signed for accommodation if the signature is an
anomalous indorsement or is accompanied by words indicating that the signer is acting as
surety or guarantor with respect to the obligation of another party to the
instrument. Except as provided in section 47-3605, the obligation of an accommodation
party to pay the instrument is not affected by the fact that the person enforcing the
obligation had notice when the instrument was taken by that person that the accommodation
party signed the instrument for accommodation.

D. If the signature of a party to an instrument is accompanied by words indicating
unambiguously that the party is guaranteeing collection rather than payment of the
obligation of another party to the instrument, the signer is obliged to pay the amount
due on the instrument to a person entitled to enforce the instrument only if:

1. Execution of judgment against the other party has been returned unsatisfied;

2. The other party is insolvent or in an insolvency proceeding;

3. The other party cannot be served with process; or

4. It is otherwise apparent that payment cannot be obtained from the other party.

E. An accommodation party who pays the instrument is entitled to reimbursement from
the accommodated party and is entitled to enforce the instrument against the accommodated
party. An accommodated party who pays the instrument has no right of recourse against,
and is not entitled to contribution from, an accommodation party.