Evening bulletin. [volume] (Honolulu [Oahu, Hawaii]) 1895-1912, 1909-04-21
ACCOMMODATION
PAPER Law
New Trial Is Ordered
In Famous K0na
Case


The Supreme Court rendered de-
cision this morning ordering a new
trial in the case of b. +. Dillingham;
VS.. NJ. +. Scott, Kona Development
Co., and +. d. McSticker, garnishoes.
The case is a very interesting one. as
It involves the use of accommodation
paper given by Mr.. Dillingham; in
the winding up of the affairs of the
old Kona Sugar Co.
The syllabus follows:
Bills and notes; accommodation
paper.-The payee of an accommoda-
tion note having requested its exc
cution for the purpose of paying a
debt Of third party is under no i'm
piled obligation to reimburse the ac-
commodation maker who has paid
the note. .t .rs
Bills and notes; accommodated
party. An accommodation note
having been made and endorsed for
the purpose of paying the debt of Il
third party not named on the instru-
ment. such third party is in contem-
plation of law the accommodated
party to whom the credit has been
loaned, and the testimony of the ac-
commodation maker, knowing the
use intended, that he signed at the
request and for the accommodation
of the payee cannot alter the status
of the parties.
Appeal and error; decision Of court
jury waived.-The decision of the
Judge of circuit court, jury waived,
being based upon the existence of an
implied promise, this court, upon
finding error, will not consider whe-
Their the testimony would have sus-
tanned a finding of an express prom
Use, but will order new trial.
The court in closing its decision
says:
While the case appears to be Il
novel one, we are of the opinion that
the accommodated party upon whom
the law casts the implied obligation
OF reimbursing the accommodation
party is the party who, in accord
ance with the prior understanding of
the parties, receives the direct bene-
ut from the accommodation paper or
its proceeds, and that this result fol-
lows even though. as is by no means
clear from the evidence in this case,
the motive actuating the accommo-
dalton maker was wholly desire to
accommodate some other party re-
questing the loan of credit. In the
case at bar the plaintiff was not
loaning his credit to the defendant
to be used by the defendant for his
own purposes, and II the defendant
had used the paper for any other
purpose than to pay a receivers debt
of the Kona Sugar Co. 1t would have
been a fraudulent diversion of the
paper. The letters in evidence show
that at the outset at least plaintiff
looked for repayment to the proceeds
of property of the plantation. The
defendant equally with the plaintiff
received no value in legal sense for
| the use OF his name as endorser. Ine
plaintiff and defendant were both ac-
commodation parties and the Kona
Sugar Co., Ltd, was the accommodate
ed party and the only party under
implied obligation to reimburse the
Accommodation maker.
II is true that between accommo-
dation parties, one of whom has paid
the note. parol evidence of an eX.
press contemporaneous agreement
that their liability shall be different
from that expressed on the face Of
the paper is admissible and thai
plaintiff may recover on such express
contract If proved. Phillips v. Pres
ton. How. 27S; Mansfield v. Ed
wards, 1876 Mass. IS. This is very
different from the implied contract