Question

William H. Bailey, MC, executed a note payable to California Dreamstreet, a joint venture that solicited investments for a cattle breeding operation.  Bailey’s promissory note read “Dr. William H. Bailey hereby promises to pay to the order of California Dreamstreet the sum of $329,800.”  Four years later, Dreamstreet negotiated the note to Cooperatieve, a foreign bank.  A default occurred, and Cooperatieve filed suit against Bailey to recover on the note.  Is the note executed by Bailey a negotiable instrument?  Why or why not?

Answer 1

ANSWER

Case facts and data:

Lets analyse all the data/facts provided in the case and then we will answer the question asked.

• Mr. Bailey executed a note payable worth $329800($329.8K) to California dream-street.
• After 4 years of time, same California dream-street negotiated the not to a foreign bank named Co-operative central Raiffeisen Boerenleenbank .
• Then happened a default and this foreign bank Co-operative Centrale files a suit against the original owner Mr. Bailey to recover the amount/note.

Explanation:
Now we need to understand if this a negotiable instrument. The answer is “Yes”. As per the law “in order to qualify for a negotiable instrument under the requirements of UCC-3/104, a writing must possess an order to pay which doesn’t contain any condition i.e. unconditional or a promise to pay which should be un-condiional.

In this case note issued by Mr. Baileey was in proper writing and and was aslo properly signed by him which mentions a fixed amount of $329,800. So all the requirement in order to qualify for a negotiable are met .
Hence the answer is YES.

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