57A-3-419. 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), 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 §57A-3-605, 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 (i) execution of judgment against the other party has been returned unsatisfied, (ii) the other party is insolvent or in an insolvency proceeding, (iii) the other party cannot be served with process, or (iv) 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.
Source: SL 1994, ch 367, §3-419.
Structure South Dakota Codified Laws
Title 57A - Uniform Commercial Code
Chapter 03 - Negotiable Instruments
Section 57A-3-101 - Short title.
Section 57A-3-102 - Subject matter.
Section 57A-3-103 - Definitions.
Section 57A-3-104 - Negotiable instrument.
Section 57A-3-105 - Issue of instrument.
Section 57A-3-106 - Unconditional promise or order.
Section 57A-3-107 - Instrument payable in foreign money.
Section 57A-3-108 - Payable on demand or at definite time.
Section 57A-3-109 - Payable to bearer or to order.
Section 57A-3-110 - Identification of person to whom instrument is payable.
Section 57A-3-111 - Place of payment.
Section 57A-3-113 - Date of instrument.
Section 57A-3-114 - Contradictory terms of instrument.
Section 57A-3-115 - Incomplete instrument.
Section 57A-3-116 - Joint and several liability--Contribution.
Section 57A-3-117 - Other agreements affecting instrument.
Section 57A-3-118 - Statute of limitations.
Section 57A-3-119 - Notice of right to defend action.
Section 57A-3-201 - Negotiation.
Section 57A-3-202 - Negotiation subject to rescission.
Section 57A-3-203 - Transfer of instrument--Rights acquired by transfer.
Section 57A-3-204 - Indorsement.
Section 57A-3-205 - Special indorsement--Blank indorsement--Anomalous indorsement.
Section 57A-3-206 - Restrictive indorsement.
Section 57A-3-207 - Reacquisition.
Section 57A-3-301 - Person entitled to enforce instrument.
Section 57A-3-302 - Holder in due course.
Section 57A-3-303 - Value and consideration.
Section 57A-3-304 - Overdue instrument.
Section 57A-3-305 - Defenses and claims in recoupment.
Section 57A-3-306 - Claims to an instrument.
Section 57A-3-307 - Notice of breach of fiduciary duty.
Section 57A-3-308 - Proof of signatures and status as holder in due course.
Section 57A-3-309 - Enforcement of lost, destroyed, or stolen instrument.
Section 57A-3-310 - Effect of instrument on obligation for which taken.
Section 57A-3-311 - Accord and satisfaction by use of instrument.
Section 57A-3-312 - Lost, destroyed, or stolen cashier's check, teller's check or certified check.
Section 57A-3-401 - Signature.
Section 57A-3-402 - Signature by representative.
Section 57A-3-403 - Unauthorized signature.
Section 57A-3-404 - Impostors--Fictitious payees.
Section 57A-3-405 - Employer's responsibility for fraudulent indorsement by employee.
Section 57A-3-406 - Negligence contributing to forged signature or alteration of instrument.
Section 57A-3-407 - Alteration.
Section 57A-3-408 - Drawee not liable on unaccepted draft.
Section 57A-3-409 - Acceptance of draft--Certified check.
Section 57A-3-410 - Acceptance varying draft.
Section 57A-3-411 - Refusal to pay cashier's checks, teller's checks, and certified checks.
Section 57A-3-412 - Obligation of issuer of note or cashier's check.
Section 57A-3-413 - Obligation of acceptor.
Section 57A-3-414 - Obligation of drawer.
Section 57A-3-415 - Obligation of indorser.
Section 57A-3-416 - Transfer warranties.
Section 57A-3-417 - Presentment warranties.
Section 57A-3-418 - Payment or acceptance by mistake.
Section 57A-3-419 - Instruments signed for accommodation.
Section 57A-3-420 - Conversion of instrument.
Section 57A-3-421 - Collection costs and expenses--Liability of issuer of dishonored check.
Section 57A-3-501 - Presentment.
Section 57A-3-503 - Notice of dishonor.
Section 57A-3-504 - Excused presentment and notice of dishonor.
Section 57A-3-505 - Evidence of dishonor.
Section 57A-3-601 - Discharge and effect of discharge.
Section 57A-3-603 - Tender of payment.
Section 57A-3-604 - Discharge by cancellation or renunciation.
Section 57A-3-605 - Discharge of indorsers and accommodation parties.