(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) of this section, 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 section 4-3-605, 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: L. 94: Entire article R&RE, p. 871, § 1, effective January 1, 1995.
Editor's note: This section is similar to former § 4-3-415 as it existed prior to 1994.
Notes of Decisions
Citizens State Bank v. Nat'l Sur. Corp., 612 P.2d 70 (Colo. 1980).
· cites it 17× “The plaintiffs pled three causes of action: (1) conversion under section 4-3-419, C.R.S. 1973; (2) moneys had and received; and (3) breach of warranty under sections 4-3-417 and 4-4-207, C.”
Bd. of Cnty. Commissions v. Park Cnty. Sportsmen's Ranch, LLP, 271 P.3d 562 (Colo. Ct. App. 2011).
· cites it 20× “) Whether a signer is an accommodation party presents a question of fact, see § 4-3-419 emt. 3, and "must be determined based upon the facts and cireumstances in existence at the time the note is signed.”
Cent., Inc. v. Cache Nat'l Bank, 748 P.2d 351 (Colo. Ct. App. 1987).
· cites it 10× “” Section 4-3-419(3), C.R.S. The effect of these statutory provisions is to create affirmative defenses which must be pleaded and proven by the defendant.”
Nat'l Sur. Corp. v. Citizens State Bank, 593 P.2d 362 (Colo. Ct. App. 1979).
· cites it 10× “Plaintiffs pleaded three claims for relief in their complaint: (1) conversion under § 4-3-419, C.R.S.1973, (2) money had and received, and (3) breach of implied warranties under §§ 4-3-417 and 4-4-207, C.”
Newport Steel Corp. v. Thompson, 757 F. Supp. 1152 (D. Colo. 1990).
· cites it 3× “1 The relevant statute for such instruments is Colorado Revised Statute § 4-3-419. It provides, in pertinent part, “(1) An instrument is converted when: (a) A drawee to whom it is delivered for acceptance refuses to return it on demand; or (b) Any person to whom it is delivered…”
Clancy Sys. Int'l, Inc. v. Salazar, 177 P.3d 1235 (Colo. 2008).
· cites it 2× “2d 70, 72 (1980) (affirming continued vitality of common law action for “moneys had and received” on alternate ground that section 4-3-419’s use of the phrase “conversion or otherwise” contemplated survival of other common law actions, rather than on court of appeals’ rationale…”
Nat'l Sur. Corp. v. Citizens State Bank, 651 P.2d 460 (Colo. Ct. App. 1982).
· cites it 5× “National Surety Corporation paid a portion of Dayco’s loss under the terms of a fidelity bond and, therefore, is a party plaintiff under its subrogation rights.”
— Colo. Rev. Stat. § 4-3-419(1) — 1 case
Newport Steel Corp. v. Thompson, 757 F. Supp. 1152 (D. Colo. 1990).
“1 The relevant statute for such instruments is Colorado Revised Statute § 4-3-419. It provides, in pertinent part, “(1) An instrument is converted when: (a) A drawee to whom it is delivered for acceptance refuses to return it on demand; or (b) Any person to whom it is delivered…”
— Colo. Rev. Stat. § 4-3-419(1)(c) — 2 cases
Nat'l Sur. Corp. v. Citizens State Bank, 593 P.2d 362 (Colo. Ct. App. 1979).
“Plaintiffs pleaded three claims for relief in their complaint: (1) conversion under § 4-3-419, C.R.S.1973, (2) money had and received, and (3) breach of implied warranties under §§ 4-3-417 and 4-4-207, C.”
— Colo. Rev. Stat. § 4-3-419(3) — 6 cases
Citizens State Bank v. Nat'l Sur. Corp., 612 P.2d 70 (Colo. 1980).
“The plaintiffs pled three causes of action: (1) conversion under section 4-3-419, C.R.S. 1973; (2) moneys had and received; and (3) breach of warranty under sections 4-3-417 and 4-4-207, C.”
Cent., Inc. v. Cache Nat'l Bank, 748 P.2d 351 (Colo. Ct. App. 1987).
“” Section 4-3-419(3), C.R.S. The effect of these statutory provisions is to create affirmative defenses which must be pleaded and proven by the defendant.”
Nat'l Sur. Corp. v. Citizens State Bank, 593 P.2d 362 (Colo. Ct. App. 1979).
“Plaintiffs pleaded three claims for relief in their complaint: (1) conversion under § 4-3-419, C.R.S.1973, (2) money had and received, and (3) breach of implied warranties under §§ 4-3-417 and 4-4-207, C.”
Nat'l Sur. Corp. v. Citizens State Bank, 651 P.2d 460 (Colo. Ct. App. 1982).
“National Surety Corporation paid a portion of Dayco’s loss under the terms of a fidelity bond and, therefore, is a party plaintiff under its subrogation rights.”
— Colo. Rev. Stat. § 4-3-419(a) — 1 case
— Colo. Rev. Stat. § 4-3-419(c) — 1 case
— Colo. Rev. Stat. § 4-3-419(e) — 1 case
— Colo. Rev. Stat. § 4-3-419(l)(c) — 3 cases
Cent., Inc. v. Cache Nat'l Bank, 748 P.2d 351 (Colo. Ct. App. 1987).
“” Section 4-3-419(3), C.R.S. The effect of these statutory provisions is to create affirmative defenses which must be pleaded and proven by the defendant.”
Citizens State Bank v. Nat'l Sur. Corp., 612 P.2d 70 (Colo. 1980).
“The plaintiffs pled three causes of action: (1) conversion under section 4-3-419, C.R.S. 1973; (2) moneys had and received; and (3) breach of warranty under sections 4-3-417 and 4-4-207, C.”
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