The plaintiff, Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A. (“the

Bank”) sued the maker of the note, William Bailey, M.D. (“Bailey”). Bailey had

executed the note in favor of “California Dreamstreet,” a cattle-breeding

operation seeking investment. California Dreamstreet negotiated the note to the

Bank. When Bailey failed to pay on the note, the Bank sued for payment. Bailey

claimed the instrument was not negotiable.

The note states in relevant part:

DR. WILLIAM H. BAILEY . . . hereby promises to pay to the order to

CALIFORNIA DREAMSTREET . . . the sum of Three Hundred Twenty

Nine Thousand Eight Hundred ($329,800.00) Dollars. . . .

The sole issue for the court to decide was whether the unusual language in the

note obliging Bailey to “pay to the order to California Dreamstreet” rendered the

note nonnegotiable.

The court held that “pay to the order to” was akin to “payable to the order of,”

and the instrument was therefore a negotiable instrument.

CASE QUESTIONS

1. Do you agree with the court that “pay to the order to” was

equivalent to “payable to the order of”? Why or why not?

2. What do you think motivated the court’s decision in this case?