Question: Is an accommodation party liable for the full amount of a note when she received only a small portion of the proceeds? Is an accommodation

Is an accommodation party liable for the full amount of a note when she received only a small portion of the proceeds? Is an accommodation party liable even though the check was altered?

Kathy J. Couchot and her mother-in-law, Jean Couchot, borrowed $6,317.48 from Star Bank to pay the funeral expenses of Kathy’s husband. Jean executed a note to the bank, and Kathy signed as an accommodation party. To disburse the proceeds of the loan, Star Bank issued a check payable to “Kathy and Jean Couchot.” Somehow this check was altered to read “Kathy or Jean Couchot.” Jean cashed the check and used the loan proceeds to pay her son’s funeral expenses and some of Kathy’s back taxes and insurance premiums. Jean did not repay the loan to the bank; Kathy made six payments before defaulting.

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