§ 554.3419

554.3419 Instruments signed for accommodation. 1. 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 beinga direct beneficiary of the value given for the instrument, the instrument is signed by theaccommodation party 'for accommodation.' 2. An accommodation party may sign the instrument as maker, drawer, acceptor, or endorser and, subject to subsection 4, is obliged to pay the instrument in the capacity inwhich the accommodation party signs. The obligation of an accommodation party may beenforced notwithstanding any statute of frauds and whether or not the accommodation partyreceives consideration for the accommodation. 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 ananomalous endorsement or is accompanied by words indicating that the signer is actingas surety or guarantor with respect to the obligation of another party to the instrument.Except as provided in

s ananomalous endorsement or is accompanied by words indicating that the signer is actingas surety or guarantor with respect to the obligation of another party to the instrument.Except as provided in section 554.3605, the obligation of an accommodation party to paythe instrument is not affected by the fact that the person enforcing the obligation had noticewhen the instrument was taken by that person that the accommodation party signed theinstrument for accommodation. 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 theobligation of another party to the instrument, the signer is obliged to pay the amount due onthe instrument to a person entitled to enforce the instrument only if execution of judgmentagainst the other party has been returned unsatisfied, the other party is insolvent or in aninsolvency proceeding, the other party cannot be served with process, or it is otherwiseapparent that payment cannot be obtained from the other party. 5. An accommodation party who pays the instrument is entitled to reimbursement from the accommodated party and is entitled to enforce

iseapparent that payment cannot be obtained from the other party. 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 accommodatedparty. An accommodated party who pays the instrument has no right of recourse against, andis not entitled to contribution from, an accommodation party. 94 Acts, ch 1167, §66, 121, 122; 2013 Acts, ch 30, §261Referred to in §554.3103, 554.3116, 554.3415, 554.3605 Sat Dec 23 01:57:01 2023 Iowa Code 2024, Section 554.3419 (26, 0)