MARIN MANDEL, Governor

171

drawee the existence of the payee and his then capacity
to indorse.

3—414. Contract of indorser; order of liability.

(1)   Unless the indorsement otherwise specifies (as
by such words as "without recourse") every indorser
engages that upon dishonor and any necessary notice of
dishonor and protest he will pay the instrument according
to its tenor at the time of his indorsement to the holder
or to any subsequent indorser who takes it up, even
though the indorser who takes it up was not obligated to
do so.

(2)    Unless they otherwise agree indorsers are
liable to one another in the order in which they indorse,
which is presumed to be the order in which their
signatures appear on the instrument.

3-415. Contract of accommodation party.

(1)    in accommodation party is one who signs the
instrument in any capacity for the purpose of lending his
name to another party to it.

(2)   When the instrument has been taken for value
before it is due the accommodation party is liable in the
capacity in which he has signed even though the taker
knows of the accommodation.

(3)   As against a holder in due course and without
notice of the accommodation oral proof of the
accommodation is not admissible to give the accommodation
party the benefit of discharges dependent on his
character as such. In other cases the accommodation
character may be shown by oral proof.

(4)   An indorsement which shows that it is not in
the chain of title is notice of its accommodation
character.

(5)   An accommodation party is not liable to the
party accommodated, and if he pays the instrument has a
right of recourse on the instrument against such party.

3—416. Contract of guarantor.

(1)   "Payment guaranteed" or equivalent words added
to a signature mean that the signer engages that if the
instrument is not paid when due he will pay it according
to its tenor without resort by the holder to any other
party.

(2)   "Collection guaranteed" or equivalent words