1. 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.”
2. An accommodation party may sign the instrument as maker, drawer, acceptor, or
endorser and, subject to subsection 4, 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.
3. 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 endorsement 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 554.3605, 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.
4. 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 execution of judgment
against the other party has been returned unsatisfied, the other party is insolvent or in an
insolvency proceeding, the other party cannot be served with process, or it is otherwise
apparent that payment cannot be obtained from the other party.
5. 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.
94 Acts, ch 1167, §66, 121, 122; 2013 Acts, ch 30, §261
Referred to in §554.3103, 554.3116, 554.3415, 554.3605
\n
Notes of Decisions
Husker News Co. v. Mahaska State Bank, 460 N.W.2d 476 (Iowa 1990).
· cites it 20× “" Iowa Code § 554.3419 (1)(c). [2] Because the parties did not contest the matter on appeal, we assume without deciding that this section applies rather than the two-year limitation for actions based on "injuries to person" found in Iowa Code§614.”
Waukon Auto Supply v. Farmers & Merchants Sav. Bank, 440 N.W.2d 844 (Iowa 1989).
· cites it 4× “Iowa Code section 554.3419(3) provides that [sjubject to the provisions of this chapter concerning restrictive indorsements a representative, including a depositary or collecting bank, who has in good faith and in accordance with the reasonable commercial standards applicable to…”
Willey v. Riley, 541 N.W.2d 521 (Iowa 1995).
· cites it 5× “it is paid on a forged endorsement,” Iowa Code § 554.3419 (l)(c) (1989), 7 plaintiff must first prove the endorsement was a forgery.”
Froning & Deppe, Inc. v. South Story Bank & Trust Co., 327 N.W.2d 214 (Iowa 1982).
· cites it 8× “” Subsection (2) of section 554.3419 provides: In an action against a drawee under subsection (1) the measure of the drawee’s liability is the face amount of the instrument.”
Phariss v. Eddy, 478 N.W.2d 848 (Iowa Ct. App. 1991).
· cites it 10× “Iowa Code § 554.3419 (3) (1991). Security State Bank claims it acted in good faith and in accordance with reasonable commercial standards in dealing with the check.”
Van Lunen v. State Cent. Sav. Bank of Keokuk, Iowa, 751 F. Supp. 145 (S.D. Iowa 1990).
· cites it 8× “” Iowa Code § 554.3419 (l)(c) (1985). Numerous courts and commentators have noted that “payment over a missing indorsement is conversion, and is treated like payment over a forged indorsement.”
Agriliance, L.L.C. v. Runnells Grain Elevator, Inc., 272 F. Supp. 2d 800 (S.D. Iowa 2003).
· cites it 2× “1991) (applying Iowa Code § 554.3419 (3) (1991)). Moreover, the Waukon and Phar-iss cases concern reasonable commercial standards for accepting endorsed instruments, rather than the good faith standards oí fair dealing.”
Green State Credit Union v. Bowman (Iowa Ct. App. 2023).
· cites it 17× “Iowa Code § 554.3419 . So if Aucutt signed the note as an accommodation party, she is entitled to reimbursement from Bowman for amounts paid on the note.”
MidWestOne Bank v. Heartland Co-op (Iowa 2020).
· cites it 2× “, we declined to apply the discovery rule to Iowa Code section 554.3419(1)(c) (1987) because doing so would be inconsistent with fundamental policies underlying the UCC.”
— Iowa Code § 554.3419(1) — 1 case
— Iowa Code § 554.3419(1)(c) — 2 cases
Husker News Co. v. Mahaska State Bank, 460 N.W.2d 476 (Iowa 1990).
“" Iowa Code § 554.3419 (1)(c). [2] Because the parties did not contest the matter on appeal, we assume without deciding that this section applies rather than the two-year limitation for actions based on "injuries to person" found in Iowa Code§614.”
MidWestOne Bank v. Heartland Co-op (Iowa 2020).
“, we declined to apply the discovery rule to Iowa Code section 554.3419(1)(c) (1987) because doing so would be inconsistent with fundamental policies underlying the UCC.”
— Iowa Code § 554.3419(2) — 1 case
— Iowa Code § 554.3419(3) — 2 cases
Waukon Auto Supply v. Farmers & Merchants Sav. Bank, 440 N.W.2d 844 (Iowa 1989).
“Iowa Code section 554.3419(3) provides that [sjubject to the provisions of this chapter concerning restrictive indorsements a representative, including a depositary or collecting bank, who has in good faith and in accordance with the reasonable commercial standards applicable to…”
Phariss v. Eddy, 478 N.W.2d 848 (Iowa Ct. App. 1991).
“Iowa Code § 554.3419 (3) (1991). Security State Bank claims it acted in good faith and in accordance with reasonable commercial standards in dealing with the check.”
— Iowa Code § 554.3419(5) — 1 case
Green State Credit Union v. Bowman (Iowa Ct. App. 2023).
“Iowa Code § 554.3419 . So if Aucutt signed the note as an accommodation party, she is entitled to reimbursement from Bowman for amounts paid on the note.”
— Iowa Code § 554.3419(l)(c) — 2 cases
Husker News Co. v. Mahaska State Bank, 460 N.W.2d 476 (Iowa 1990).
“" Iowa Code § 554.3419 (1)(c). [2] Because the parties did not contest the matter on appeal, we assume without deciding that this section applies rather than the two-year limitation for actions based on "injuries to person" found in Iowa Code§614.”
Phariss v. Eddy, 478 N.W.2d 848 (Iowa Ct. App. 1991).
“Iowa Code § 554.3419 (3) (1991). Security State Bank claims it acted in good faith and in accordance with reasonable commercial standards in dealing with the check.”
Annotations are extracted automatically from the opinions in the
Syfert caselaw corpus and ranked by authority, recency, and
treatment. Dots show Syfertize treatment of the citing case itself.