Report No. 11

64. Liability of accommodation party and position of accommodated party.-

(1) An accommodation party is liable on an instrument to a holder in due course, notwithstanding that when such holder took the instrument he knew such party to be an accommodation party.1

1. See section 28(2), BEA.

(2) An accommodation party to an instrument, if he has paid the amount thereof, is entitled to recover such amount from the party accommodated.

(3) No party for whose accommodation an instrument has been made, drawn, accepted or indorsed can, if he has paid the amount thereof, recover thereon such amount from any person who became a party to such instrument for his accommodation.

(Section 43, Exception 11