Order to Pay

Sana Travel Services, Ltd. (Sana), was a travel agency located in New York. Sana was negotiating with Al-Bank Turismo, a Brazilian company, to secure additional business in that country. To expedite negotiations, one of Sana's directors, Attaullah Paracha, made out a check for $33,000, payable to the order of "Jamil Ahmed Kahn, Al-Bank Turismo." On the check Paracha wrote "Just to hold for the security of future business." Paracha then sent the check to Kahn in Brazil. Kahn, Al-Bank's owner, indorsed the check and sold it to Jurandi Carador, a Brazilian citizen. Carador then arranged for the check to be presented to the National Bank of Pakistan, Sana's New York bank. When the bank received the check, it telephoned Sana, which directed the bank to dishonor the check. Sana claims that the notation on the check "Just to hold" rendered the instrument conditional and made it a nonnegotiable instrument. Is the check a negotiable instrument?

Carador v. Sana Travel Services, Ltd., 876 F.2d 890,

Web 1989 U.S. App. Lexis 10488 (United States Court of Appeals for the Second Circuit)

1. Is the note a negotiable instrument?

2. Who wins?