Wilmington daily commercial., 1873-03-18
WILMINGTON. DBL.
suav AfteFnoon, March ISs
THRI,Aw Of Acc0MMoDArIoN PAPER.

A correspondent sepds us an article clipped
from the New York Journal Of Commerce, refers
Ia ing to the Law Of Haccommodationp notes. He
says the opinion Of that paper, supported by
the quotation from Judge Story would seem,
according to my understanding, to be in conflict
% with an opinion rseantlyl given by one Of our
ointment judges" He Ssks:that we print i.
since the statements it contains are of daily i'm
Fportsnce to business mon. The journal says
IAN accommodation note in the hands Of one
who knows it to be such and has given no value
forit, is void for want OF valuable considera-
uon. An accommodation note in the hands Of
nne who knowaitto be such aud has given a
valuable consideration for it before it became
due, ia good, and can be collected OF either
drawer or endorsers. The distinction We have
made Is vital as to the binding character of the
obligation, A man draws his note and lends it
to friend for his accommodation that friend
cannot hold him for il because he has given no
consideration for II. But II that friend sells {.
in he street. or has it discountedin bank the buy
or or the discounter has good claim against the
drawer, having given consideration for u. And
1t will make no difference about the liability II
the seller reveals the fact that the drawer has
lent his name gratuitously, aud that the note is
accommodation paper. In the same manner, a
man wishing to borrow money draws up his own
note, and gets friend to endorse It as security
10 lis hands it is good for nothing against that
friend, being void for want Of valuable consid-
aration. But il he negotiAtes it, or has it dis
counted, it Is agood title againet the said In
dorssr in the hands OF any one who gives the
value Of 10 and the fact that the said endorser
has received nothing for this use Of his name,
and has written il across the note merely for the
accommodation OF his friend. will not injure
the claim against him. however widely 1t may be
known. This is equitable as well as legal. A
man who lendshis name does not mean thereby
to be bound to his friend to whom he lends It
gratuitously, and he ~ not so bound to him :
but be does mean Qf he means anything) to be
bsund to any one who may take for yalne
this note of his friend, and he is so bound 10
such third person. He puts his name on it to
accommodate his friend of what accommoda-
tion is the use of his name II 1t is not on there
az security to enable his friend to negotiate it !?
The moment that object, for which he signed lis
accomplished and the note is discounted, his OBJ
legation to pay Qf the drawer does not) begins.
and is duly binding. II the drawer does not
payit when due, and it is duly protested, it is as
good claim against him as il he had given it
for purchase OF flour to feed his family. There
is no question in regard to this matter, but il
any one seeks for confirmation of our opinion
from recognized authority, we quote the follow
ing from Judge Story
q Neither is it any defense or bar that the
note was known to the holder to be an accom-
mediation note between the other parties, il he
takes it for value, bona fide, before it has be-
come due. The reason s that the very object
of every accommodation note is to enable the
parties thereto, by a sale or other negotia-
tlon thereof, to obtAin free credit and circula-
tion, thereof, and this object would be wholly
frustrated unless the purchaser, or other holder
for value, could hold such note by as firm and
valid title as il it were founded on real bus-
ness transaction. The mere fact that an ac-
commodation note has been indorsed even after
it became due, does not Of itself, without some
other equity in the maker, defeat the rights OF
the holder. In short, the parties to every ac-
commodation note hold themselves out to the
public by their signatures, to be absolutely
bound to every person who shall take the same
for value, to the same extent il that value
were personally advanced to them, or on theii
account. and at their request"