Powell & Powell v.

Greenleaf & Currier

104 vt 480, 162 Atl. 377
October 18, 1932
B. Unconditional Order or Promise to Pay: When Unconditional
FACTS: This petition is to recover the balance due on two (2)
instruments in writing that were dated July 6, 1922 and June 7,
1923. The instruments are both alike in wording and form except
for the date. The said instruments has in its introduction a
statement For and in consideration of a contract and agreement
entered into this day with us Arthur A. Bishop & Co. of Boston,
Masssuch that said instrument is dependent upon a contract.
ISSUE/S: Whether these instruments are negotiable in order for
plaintiffs to maintain this suit in their own names.
HELD: Yes, the instruments are negotiable. An instrument, in
order to be negotiable, must contain an unconditional promise to
order to pay a sum certain in money. These instruments can be
determined as negotiable upon the language unaided by an
inspection of the extrinsic agreement. The general rule is that
whenever a bill of exchange or promissory note contains a
reference to some extrinsic contract to make it a subject to the
terms of that contract, the negotiability of the paper is destroyed.
In order to destroy negotiability the reference to a collateral
contract must show the obligation to pay is burdened with the
conditions of that contract. When the promise to pay is made the
subject of some other contract then the negotiability is conditional

and it is destroyed. While using words as per terms of contract,

value received in a promissory note was held not to affect its
negotiability. The same way the same is not destroyed by a
statement that the note is part of a contract of a certain date, or
statements such as for payment under contract of even date; in
one machinery as per contract; for value received. The
instrument before this case contain two (2) references to the
extrinsic agreement and it is not apparent how the negotiability of
these instruments is affected by either these references. The
promise to pay is not subject to the extrinsic agreement nor does
it destroy the negotiability of the said instruments.