Notes and acceptances that are made in settlement of genuine business
transactions come under the head of regular, legitimate business
paper. An accommodation note or acceptance is one which is signed or
indorsed or accepted simply as an accommodation and not in settlement
of an account or in payment of an indebtedness. With banks
accommodation paper has a deservedly hard reputation. However, there
are all grades and shades of accommodation paper, though it represents
no actual business transaction between the parties to it and rests
upon no other foundation than that of mutual agreement. No contract is
good without a consideration, but this is only true between the
original parties to a note. The third party, or innocent receiver or
holder of a note, has a good title and can recover its value even
though it was originally given without a valuable consideration. An
innocent holder of a note which had been originally lost or stolen has
a good title to it if he received it for value, the law justly
protecting such a holder against the fault or carelessness of others.