Holly Hill Acres, Ltd., executed and delivered a promissory
note and a purchase money mortgage to Rogers and Blythe.
The note provided that it was secured by a mortgage on
certain real estate and that the terms of that mortgage “are
by this reference made a part hereof.” Rogers and Blythe
then assigned the note to Charter Bank, and the bank sought
to foreclose on the note and mortgage. Holly Hill Acres
refused to pay, claiming that the note was not negotiable and
therefore subject to the defense that Holly Hill Acres had
been defrauded by Rogers and Blythe.
a. Present the position that the note is a negotiable
instrument.
b. What is the position that the note is nonnegotiable?
c. Is the note negotiable or nonnegotiable? Explain.
