UNIFORM COMMERCIAL CODE
Act 174 of 1962
440.3419 Accommodation parties.
Sec. 3419.
(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 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 (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.
(5) If the signature of a party to an instrument is accompanied by words indicating that the party guarantees payment or the signer signs the instrument as an accommodation party in some other manner that does not unambiguously indicate an intention to guarantee collection rather than payment, the signer is obliged to pay the amount due on the instrument to a person entitled to enforce the instrument in the same circumstances as the accommodated party would be obliged, without prior resort to the accommodated party by the person entitled to enforce the instrument.
(6) 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. In proper circumstances, an accommodation party may obtain relief that requires the accommodated party to perform its obligations on the instrument. An accommodated party that pays the instrument has no right of recourse against, and is not entitled to contribution from, an accommodation party.
History: 1962, Act 174, Eff. Jan. 1, 1964 ;-- Am. 1993, Act 130, Eff. Sept. 30, 1993 ;-- Am. 2014, Act 101, Imd. Eff. Apr. 10, 2014
Notes of Decisions
Matco Tools Corp. v. Pontiac State Bank, 614 F. Supp. 1059 (E.D. Mich. 1985).
· cites it 8× “MCLA § 440.3419. The first issue under this section is whether Pontiac State Bank paid the instrument over a forged endorsement.”
Ins. Co. of North Am. v. Mfrs. Bank of Southfield, NA, 338 N.W.2d 214 (Mich. Ct. App. 1983).
· cites it 4× “" Regardless of whether the "not liable in conversion or otherwise" language of ¶ 3 allows an action in contract, or not, Official UCC Comments 2 and 3 to MCL 440.3419; MSA 19.3419 indicate that payment on a forged indorsement is an injury to property: "2.”
Grosberg v. Michigan Nat'l Bank Oakland, 362 N.W.2d 715 (Mich. 1985).
· cites it 4× “Thus, the Court of Appeals discounted the partnership relationship and instead relied upon the commercial reasonableness of the bank’s conduct, under Michigan UCC provisions MCL 440.3419; MSA 19.3419 and MCL 440.4205(1); MSA 19.”
United States v. NBD Bank N.A., 922 F. Supp. 1235 (E.D. Mich. 1996).
· cites it 3× “3419 applicable to this case, which provides in part: (3) Subject to the provisions of this act concerning restrictive indorsements a representative, including a depositary or collecting bank, who has in good faith and in accordance with the reasonable commercial standards…”
Walters v. Alden State Bank, 399 N.W.2d 432 (Mich. Ct. App. 1986).
· cites it 4× “The relevant statute, MCL 440.3419; MSA 19.3419, provides: (1) An instrument is converted when * * * (c) it is paid on a forged indorsement.”
Sherriff-Goslin Co. v. Cawood, 283 N.W.2d 691 (Mich. Ct. App. 1979).
“UCC 3-419, MCL 440.3419; MSA 19.3419. Whether a payee may bring a direct action against a collecting bank in conversion for funds paid out over a forged endorsement under the UCC has not reached this Court before this case.”
Grosberg v. Mich. Nat'l Bank Oakland, 318 N.W.2d 490 (Mich. Ct. App. 1982).
“MCL 440.3419; MSA 19.3419 provides in part: "(1) An instrument is converted when "(c) it is paid on a forged indorsement.”
Duncan v. Baskin, 154 N.W.2d 617 (Mich. Ct. App. 1967).
“Production of the checks entitled the broker to recover on them without submitting further proof of damages, PA 1962, No 174, § 3419 (CL 1948, § 440.3419 [Stat Ann 1964 Rev § 19.3419]), subject to whatever proper defenses defendants raise.”
— Mich. Comp. Laws § 440.3419(1) — 1 case
Grosberg v. Michigan Nat'l Bank Oakland, 362 N.W.2d 715 (Mich. 1985).
“Thus, the Court of Appeals discounted the partnership relationship and instead relied upon the commercial reasonableness of the bank’s conduct, under Michigan UCC provisions MCL 440.3419; MSA 19.3419 and MCL 440.4205(1); MSA 19.”
— Mich. Comp. Laws § 440.3419(1)(c) — 3 cases
Ins. Co. of North Am. v. Mfrs. Bank of Southfield, NA, 338 N.W.2d 214 (Mich. Ct. App. 1983).
“" Regardless of whether the "not liable in conversion or otherwise" language of ¶ 3 allows an action in contract, or not, Official UCC Comments 2 and 3 to MCL 440.3419; MSA 19.3419 indicate that payment on a forged indorsement is an injury to property: "2.”
Walters v. Alden State Bank, 399 N.W.2d 432 (Mich. Ct. App. 1986).
“The relevant statute, MCL 440.3419; MSA 19.3419, provides: (1) An instrument is converted when * * * (c) it is paid on a forged indorsement.”
— Mich. Comp. Laws § 440.3419(2) — 1 case
Walters v. Alden State Bank, 399 N.W.2d 432 (Mich. Ct. App. 1986).
“The relevant statute, MCL 440.3419; MSA 19.3419, provides: (1) An instrument is converted when * * * (c) it is paid on a forged indorsement.”
— Mich. Comp. Laws § 440.3419(3) — 4 cases
Matco Tools Corp. v. Pontiac State Bank, 614 F. Supp. 1059 (E.D. Mich. 1985).
“MCLA § 440.3419. The first issue under this section is whether Pontiac State Bank paid the instrument over a forged endorsement.”
Grosberg v. Michigan Nat'l Bank Oakland, 362 N.W.2d 715 (Mich. 1985).
“Thus, the Court of Appeals discounted the partnership relationship and instead relied upon the commercial reasonableness of the bank’s conduct, under Michigan UCC provisions MCL 440.3419; MSA 19.3419 and MCL 440.4205(1); MSA 19.”
Walters v. Alden State Bank, 399 N.W.2d 432 (Mich. Ct. App. 1986).
“The relevant statute, MCL 440.3419; MSA 19.3419, provides: (1) An instrument is converted when * * * (c) it is paid on a forged indorsement.”
— Mich. Comp. Laws § 440.3419(5) — 1 case
— Mich. Comp. Laws § 440.3419(l)(c) — 3 cases
Matco Tools Corp. v. Pontiac State Bank, 614 F. Supp. 1059 (E.D. Mich. 1985).
“MCLA § 440.3419. The first issue under this section is whether Pontiac State Bank paid the instrument over a forged endorsement.”
Ins. Co. of North Am. v. Mfrs. Bank of Southfield, NA, 338 N.W.2d 214 (Mich. Ct. App. 1983).
“" Regardless of whether the "not liable in conversion or otherwise" language of ¶ 3 allows an action in contract, or not, Official UCC Comments 2 and 3 to MCL 440.3419; MSA 19.3419 indicate that payment on a forged indorsement is an injury to property: "2.”
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.