Business / Business Law
Autor: Techone 05 April 2011
Words: 782 | Pages: 4
GM597 Week 3
22.10 Reference to another agreement
Holly Hill Acres, Ltd had purchased land from Rogers and Blythe. Holly Hill issued a promissory note for a mortgage to Rogers and Blythe a couple of months later Rogers and Blythe took out a loan from Charter Bank of Gainesville. In order for Rogers and Blythe to secure the loan from Charter Bank they had to transfer the promissory note it had created with Holly Hill. Some time later Rogers and Blythe defaulted on the loan. Charter Bank sued to recover on Holly Hill’s promissory note.
From this information gathered the mortgage in the note is nonnegotiable. Some of the reasons why Charter Bank does not have a negotiable instrument are because the initial contract from Holly Hill to Rogers and Blythe was a conditional promise to pay. Upon Rogers and Blythe transferring the rights to Charter Bank the promise became unconditional and it is not negotiable because of the risk Holly Hill not paying in full or at all would fall on Rogers and Blythe who held the instrument originally. A second reason is that Charter Bank is not the right full enforcer of the promissory note and cannot obligate Holly Hill from making the payment. I would also say that the promissory note does not have Charter Bank as the order to pay as the party which will also make the promissory note nonnegotiable.
23.8 Business Ethics
When Anthony and Dolores Angelini entered into a contract with Lustro Aluminum Products, Inc (Lustro) they had signed a promissory note as security of $5,363.40. The key point in the note’s language stated that the promissory note would not mature until 60 days after a certificate of completion was signed.
Lustro, after 10 days assigned General Investment Corporation (General) for consideration of the promissory note. The job was never completed at the Angelinis home by Lustro which meant that the note never became due as a certificate of completion was not issued or for that matter a legal certificate can...