THE DUKE, INC.
v.
FLORIDA FARM BUREAU INSURANCE COMPANIES
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A draft containing conditional language "upon acceptance will pay" is not a negotiable instrument under the Uniform Commercial Code, and therefore a third-party holder cannot qualify as a holder in due course.
A draft bearing the language "upon acceptance will pay" fails to meet the UCC requirement of an unconditional promise to pay and therefore is not a negotiable instrument.
[1] A draft containing conditional language such as "upon acceptance will pay" does not satisfy the unconditional promise requirement of Florida Statute 673.104 and therefore…
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Language in the draft that the court found to be conditional rather than an unconditional promise to pay
The Duke, Inc. held a draft drawn by Florida Farm Bureau Insurance Companies that contained the language "upon acceptance will pay."…
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This matter coming before the court on the statement of claim filed by plaintiff, the Duke, Inc., and against defendant, Florida Farm Bureau Insurance Companies, and the court having heard argument of counsel, and considering the respective testimony of witnesses, and being otherwise fully advised in the premises, the court finds as follows —
That the instrument in question, a draft drawn by Florida Farm Bureau Insurance Companies, is governed by the Uniform Commercial Code in Florida, Chapter 673, Florida Statutes. Under Florida Statute 673.104 any writing to be a negotiable instrument must —
“(a) be signed by the maker or drawer; and
(b) contain an unconditional promise or order to pay a sum certain in money and no other promise, order, obligation or power given by the maker or drawer except as authorized by this chapter; and
(c) be payable on demand or at a definite time; and
(d) be payable to order or to bearer.”
The draft in question bears the language “upon acceptance will pay.” This language cannot be construed as an unconditional promise to pay and therefore this instrument cannot be considered a negotiable instrument under the statute herein cited above.
The plaintiff, the Duke, Inc., a third party holding this instrument, cannot be regarded as a holder in due course under Florida Statute 673.302 because it did not take a “negotiable” instrument as defined in the statute.
It is thereupon ordered and adjudged that the plaintiff recover nothing from defendant, Florida Farm Bureau Insurance Companies, and that said defendant go hence without day, costs to be bom by the respective parties.