Miller v. Larned

Citations

• 103 Ill. 562
• 1882 Ill. LEXIS 214

Syllabus

<p>1. Accommodation paper—defined. Accommodation paper is either a negotiable or non-negotiable bill or note made by one who puts his name thereto without consideration, with the intention of lending his credit to the party accommodated. As between the party accommodated and the maker, the note or bill is not collectible.</p> <p>2. Same—what constitutes accommodation paper. Land actually belonging to A, stood of record in the name of B, who conveyed the same to 0, taking back O’s two promissory notes to B, for $6000 each, secured by deed of trust upon the land, and B, the payee, indorsed the same in blank, and delivered the same to A, with the understanding of all parties that the notes were to be used by him as he pleased, without any restrictions, the conveyance in fact not being in pursuance of any contract of sale: Held, that such notes were to be taken and treated as accommodation paper.</p> <p>3. Same—as to the use of such paper by the beneficiary—and of defences by the maker. It is a principle of general application that the beneficiary of an accommodation note without restriction as to the mode of its use, may transfer it, either in payment of his indebtedness, or as collateral security for a concurrent or even an antecedent debt, and the maker will have no defence.</p> <p>4. As to the holder of an accommodation note into whose hands it has come in the usual course of business for a valuable consideration, the maker will have no defence, and it makes no difference that the holder may have taken the note with full knowledge that it was accommodation paper.</p> <p>5. Same—sale of land for accommodation of vendor—rights of third persons. Although the sale of real estate is colorable and for the accommodation of the vendor or real owner, yet as to third persons who have in good faith acquired an interest in the notes given for the purchase money, or the property itself, the vendee or nominal purchaser will not be permitted to allege his purchase was for the mere