“The instrument is dishonored by nonpayment when (1) it is duly presented for payment but payment is refused or cannot be obtained or (2) presentment is excused and the instrument is overdue and unpaid.”
Again, according to Section 7881—
“Except as herein otherwise provided, when a negotiable instrument has been dishonored by nonaсceptance or nonpayment, notice of dishonor must be given to the drawer and to each indorser,' and any drawer or indorser to whom such notice is not given is discharged.”
“Presentment for payment is not required in order to charge an indorser, where the instrument was made or accepted, for his accommodation, and he has no reason to expect that the instrument will be рaid if presented”: Section 7872.
“Notice of dishonor is not required to be given to an indorser in either of the following cases: * # (3) where the instrument was made or accepted for his accommodation”: Section 7907.
Section 7821 reads thus:
“An accommodation party is one who has signed the instrument as maker, drawer, aсceptor, 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.”
The consequence of this definition is the abolition of all previous decisions to the effect that, if the holder knew a party had signed for accommodation only, he must be treated as a surety, so that indulgence to the real debtor would in some instances discharge the accommodation party. The law now is, as laid down in this section, that an accommodation party can claim no benefit as such, but he is liable according to the face of his undertaking, the same as if he were himself financially interested in the transaction.
It is said in the complaint that the plaintiff paid to Casey $1,000 upon twо drafts, which transaction
“An essential element of аccommodation paper is that it must be loaned or signed by one party for the purpose of securing credit for another party generally or for a specific purpose.”
And after allusion to sundry sections of the negotiable instruments law of that state, identical in terms with ours, it is said, referring to an áccommodation maker or indorser:
“Under this section it is held that persons putting their names on the back of a note before delivery for the accommodation of the maker are accommodation indorsers: Deahy v. Choquet, 28 R. I. 338 (67 Atl.*341 421, 14 L. R. A. (N. S.) 847). The party accommodated need not be a party to thе note, and such accommodation may originate in the suggestion or request of a third person.”
In the instant case the evidence in the bill of exceptions shows that this transaction originated as between Summerville Lumber Company and Casey in a debt owing by the firm to the latter, for which he had drawn upon thе concern, and it had accepted his drafts. Thereupon the bank discounted them on his indorsement in blank. When the acceptances matured, the note in question was given to take them up and they were returned to Casey. In no respect was credit loaned to Casey. On the other hand, he lоaned his credit to the partners. They were the parties who could not pay, needed help, and borrowed Casey’s name and credit. Consequently, the instrument was not made or accepted for his accommodation. The ruling principle of accommodating and being accommodated, as used in the Negotiable Instruments Act, is found in the loan of credit to another. The one who loans is the accommodator. The one who receives the loan of credit is the party accommodated. In a sense, it was a favor or accommodation to Casey to collect the money on the debt owing to him by the partners. In another sense, it was an accommodation to the bank to have Casey’s name with the others on the note and thus increase its discounts of commercial paper, with its increment of interest. But in the strict legal sense, the only party for whose accommodation the instrument was made was the firm, Summerville Lumber Company. To it alone did Casey loan his credit.
In Murray v. Third Nat. Bank,
The section applies “only to cases where the in-, dor ser is the primary debtor, the reason for the rule being that no one is bound to indemnify the primary debtor, and he is thus no more entitled to presentment, demand, or notice than if his true character had appeared on the paper.”
In Overland Auto Co. v. Winter (Mo. App.),
In Geller etc. Hardware Co. v. Drozda (Mo. App.),
“The evidence offered by the plaintiff shows that the defendant was not in that sense an accommodated party; he was not one for whom anybody gratuitously executed the note. He was accommodated in the sense that he was benefited by the transaction, but he was not accommodated in the sense that there was a lending of credit to him. He wаs an ordinary indorser and therefore entitled to notice of dishonor before he could be held, and no notice was given.”
“Austin did not receive value in any sense. What he received was the payment, out of the discounted note, of the commission due him. That was only the payment of a prior debt, not the giving of value for Austin’s indorsement.”
The conclusion is, then, that Casey was liable only as an indorser, for want of words appearing upon the instrument imposing upon him a different liability; that both in the pleading and in the evidence there is an utter absence of any showing that demand was made upon the principal firm for payment and notice given to Casey, or that the latter was in such a situation as a party accommodated as to dispense with such notice of dishonor.
Both as a matter of pleading and of evidence tbe judgment was right in its result and must be affirmed. Affirmed.