Nonnegotiable Instruments
![handle is hein.journals/syrlr11 and id is 21 raw text is: NONNEGOTIABLE INSTRUMENTS
WILLIAM F. WILLIER*
INTRODUcrION
Merchants created instruments to evidence intangible obligations,
especially to pay money, before they arrived at the concept of negotiability.1
Thus, the nonnegotiable instrument preceded the negotiable instrument
and, with the advent of the latter, has continued to exist. The law of
nonnegotiable instruments has developed along parallel and at times tangent
lines with that of negotiable instruments.2 The Negotiable Instruments
Law, section i, begins an instrument to be negotiable must conform to
the following requirements. Instruments which do not conform to those
requirements are nonetheless instruments, although they may not be nego-
tiable as far as the Negotiable Instruments Law is concerned.3 Once a
writing can be characterized as a mercantile instrument results attach unlike
those which attach to other writings, including those loosely called simple
contracts.'4 A nonnegotiable instrument can be defined roughly as a writing
containing a promise or order to pay money which fails to meet other
formal requisites of a negotiable instrument but which resembles a nego-
tiable instrument in form and which, by its nature, is such that the original
parties could reasonably contemplate its transfer. Many contracts are ex-
cluded from this definition because their form is wholly inconsistent with
that of a negotiable bill or note and transfer could not have been con-
templated though the chose in action may in fact be transferred.
* Assistant Professor of Law, Syracuse University College of Law, Syracuse io, New
York.
1. BRrTON, BILLs AND NOMs 2-4 (1943).
2. While [The Negotiable Instruments Law] purports to be a complete enactment
of the law relating to negotiable instruments, it by no means follows that it is separable
from and unrelated to the great body of the law on other subjects . . . The law of
negotiable instruments is inseparable in its logic from the law of nonnegotiable instru-
ments. To a large extent the principles governing each run side by side. Evans, J., con-
curring, First Nat'l Bank v. McCartan, 206 Iowa 1036, 1o56, 220 N. W. 364, 372, 373 (1928).
3. § 3-14o of the UNIFORM COMMERCIAL CODE begins Any writing to be a negotiable
instrument within this Article must . . . (emphasis supplied). Comment 1 (1958 Official
Text) states:
. . 'within this Article' in subsection (i) leaves open the possibility that some
writings may be made negotiable by other statutes or by judicial decision. The
same is true as to any new type of paper which commercial practice may develop
in the future.
Professor Britton suggests that this opens the door to uncertainty. Formal Requisites of
Negotiability, 26 ROcKY MT. L. REv. 1, 1-4 (2953).
4. The instrument in question, however, is not a promissory note, either negotiable
or non-negotiable . . . It is a mere contract to pay money, a mere chose in action.
There is no implied authority to write a contract of guaranty above the signature of a
third person appearing upon the back of such instrument. Fidelity & Deposit Co. v.
Young, 159 Ill. App. 531, 534 (191i). See also Cayuga Co. Nat'l Bank v. Purdy, 56 Mich.
6, 22 N. W. 93 (1885) and Prestenbach v. Mansur, 14 La. App. 429, 125 So. 310 (1929).
The writings in these cases were probably instruments of one kind or another; but the
cases indicate that once the court concludes otherwise, results are different. For a concise
comparison of the features of negotiable instruments and simple contracts, see BRITrON,](ViewImageLocal?handle=hein.journals/syrlr11&div=10&collection=&method=preview&ext=.png&size=3)
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