Court Opinion

ID: 7810184
Source: CourtListenerOpinion
Date Created: 2022-09-07 17:11:58.068676+00
Date Added: 2024-06-11T16:30:26.938927
License: Public Domain

Hart, J'., (after stating the facts). The'court instructed the jury that if Mr. Sutton received the check . as fifty cents and disposed- of it as fifty cents neither .he nor .Allen w.as liable .to the plaintiff. This was wrong. The check, drawn ..by Fons'worth on the First National .Bank in favor of Sutton wa,s plainly written for fifty dollars, although Sutton received it for fifty cents. He endorsed the check.-Inasmuch as he was not a customer of the First National Bank and was a customer of the Plant,.ers,’.State Bank, it was supposed that he had made a mistake and used one of the blank checks of the former bank,, when he in fact intended to draw the check on the latter. The Planters’ State Bank, however, refused to pay the-check because Fonsworth did not have sufficient funds to-'¡meet it.- Under this state of facts, the plaintiff bank approached Sutton and claimed that he was liable for the ■ whole of the $50. Sutton claimed that, inasmuch as the check was drawn on the First National Bank and it had • cashed it, he was only liable on his endorsement for the sum of fifty cents, that being the amount for which he had received the check. The parties settled their dispute by the bank surrendering to Sutton the check which Fonsworth had drawn in favor of Sutton and Sutton gave. to 'the bank the check of Allen for $50, Allen being an' accommodation drawer for him. This was the settlement or compromise of a disputed claim between Sutton and the First National Bank of Mena, and it is well settled, in this State that the compromise of a disputed claim furnishes sufficient consideration to uphold the terms of a compromise even though the asserted claim is without merit and could not have been sustained in the courts. Willingham v. Jordan, 75 Ark. 266; Fender v. Helterbrandt, 101 Ark. 335, and Simonson v. Patterson, 137 Ark. 106, and eases cited. It follows that the compromise between the bank and Sutton furnished a sufficient consideration to make Sutton liable to the bank for the $50 when Allen stopped payment on his check which had been given in satisfaction of the claim of the bank. The surrender by the bank of the original cheek drawn in favor of Sutton by Fonsworth was a sufficient consideration moving from it. Allen was also liable as an accommodation party under our Negotiable Instruments Act. Acts of 1913, page 260. Section 29 reads as follows: “An accommodation party is one who has signed the instrument as a maker, drawer, acceptor or indorser, without receiving value therefor, and for the purpose of lending his name to some other person. Such a person is liable on the instrument to a holder for value, notwithstanding such holder, at the time of taking the instrument knew him to be only an accommodation party.” In construing a precisely similar section of the'Negotiable Instruments Act of the State of Massachusetts, the Supreme Court of that State said that where a defendant -for the accommodation of a debtor and without consideration gives his note or check to a creditor of the debtor in payment of, or as security for, the debt due from the debtor to the creditor, he is liable to the' creditor on’ • the note or check. Neal v. Wilson, 213 Mass. 336. In that case the court further said that the fact that the creditor knew the check was given fot the accommodation of the debtor was not a defense, for that was the purpose of the transaction. Under this decision and under the plain language of the statute just quoted, Allen was liable to the plaintiff bank. It follows that the judgment must be reversed and the cause remanded for a new trial.