Reference to Another Agreement Holly Hill Acres, Ltd. (Holly Hill), purchased land from Rogers and Blythe. As part of its consideration, Holly Hill gave Rogers and Blythe a promissory note and purchase money mortgage. The note read, in part, “This note with interest is secured by a mortgage on real estate made by the maker in favor of said payee. The terms of said mortgage are by reference made a part hereof.” Rogers and Blythe assigned this note and mortgage to Charter Bank of Gainesville (Charter Bank) as security in order to obtain a loan from the bank. Within a few months, Rogers and Blythe defaulted on their obligation to Charter Bank. Charter Bank sued to recover on Holly Hill’s note and…show more content… Another reason is that Charter Bank isn’t the right enforcer of the promissory note and cannot force Holly Hill from not making the payment. Also the promissory note doesn’t have Charter Bank as the ones to pay as the party which will also make the promissory note nonnegotiable.
Business Ethics Anthony and Dolores Angelini entered into a contract with Lustro Aluminum Products, Inc. (Lustro). Under the contract, Lustro agreed to replace exterior veneer on the Angelini home with Gold Bond Plasticrylic avocado siding. The cash price for the job was $3,600, and the installment plan price was $5,363.40. The Angelinis chose to pay on the installment plan and signed a promissory note as security. The note’s language provided that it would not mature until 60 days after a certificate of completion was signed. Ten days after the note was executed, Lustro assigned it for consideration to General Investment Corporation (General), an experienced home improvement lender. General was aware that Lustro (1) was nearly insolvent at the time of the assignment and (2) had engaged in questionable business practices in the past. Lustro never completed the installation of siding at the Angelini home. General, as a holder in due course, demanded payment of the note from the Angelinis. Who wins? General Investment Corporation v. Angelini, 278 A.2d 193, Web 1971 N.J. Lexis 263 (Supreme Court of New Jersey)