Did the district court err in determining that Frances was an accommodation party on the promissory note?

Neb. U.C.C. § 3-419(a) (reissue 2001) provides: 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”. The Court wrote that an accommodation party is a surety and, by lending its name to the maker of a note, in a sense, guarantees that in the event of default by the principal obligor, the accommodation party will be liable.

The intent of the parties is determinative of whether a party is an accommodation maker or the principal obligor of an instrument. Whether a person is an accommodation party is a question of fact. 1.

Was the wrong standard used in determining whether Frances was an accommodation party? This was Sack Lumber’s first argument. The ...

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