Maine Revised Statutes Title 11 Sec. 3-1419 – Instruments signed for accommodation
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(1). If an instrument is issued for value given for the benefit of a party to the instrument, in this section referred to as the “accommodated party,” and another party to the instrument, in this section referred to as the “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.
[PL 1993, c. 293, Pt. A, §2 (NEW).]
Terms Used In Maine Revised Statutes Title 11 Sec. 3-1419
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- Guarantor: A party who agrees to be responsible for the payment of another party's debts should that party default. Source: OCC
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Recourse: An arrangement in which a bank retains, in form or in substance, any credit risk directly or indirectly associated with an asset it has sold (in accordance with generally accepted accounting principles) that exceeds a pro rata share of the bank's claim on the asset. If a bank has no claim on an asset it has sold, then the retention of any credit risk is recourse. Source: FDIC
- Statute: A law passed by a legislature.
(2). An accommodation party may sign the instrument as maker, drawer, acceptor or indorser and, subject to subsection (4), 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.
[PL 1993, c. 293, Pt. A, §2 (NEW).]
(3). 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 3-1605, 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.
[PL 1993, c. 293, Pt. A, §2 (NEW).]
(4). 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:
(a). Execution of judgment against the other party has been returned unsatisfied; [PL 1993, c. 293, Pt. A, §2 (NEW).]
(b). The other party is insolvent or in an insolvency proceeding; [PL 1993, c. 293, Pt. A, §2 (NEW).]
(c). The other party can not be served with process; or [PL 1993, c. 293, Pt. A, §2 (NEW).]
(d). It is otherwise apparent that payment can not be obtained from the other party. [PL 1993, c. 293, Pt. A, §2 (NEW).]
[PL 1993, c. 293, Pt. A, §2 (NEW).]
(5). 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.
[PL 1993, c. 293, Pt. A, §2 (NEW).]
SECTION HISTORY
PL 1993, c. 293, §A2 (NEW).