Daniels executed a $$100,000$ note in favor of Clark, i$.$e$.$ payable to Clark and written on the note

was a restriction that the note could not be transferred or pledged without Daniel$$s consent. Daniel

did, however, sign a letter authorizing Clark to use the note as collateral for a loan. Clark pledged

the note as collateral for a $$50,000$ loan from First State Bank of Gallup.

First State also called Daniels to verify that he was in agreement that his note could be accepted

as collateral. First State attempted to collect from Daniels on Daniel's note to Clark which had

been pledged as collateral.

After making several payments, Clark defaulted on the loan. First State Bank tried to collect, but

Daniel refused to pay claiming that the note was not a negotiable instrument and therefore invalid

in the hands of the bank.

Summary: $(1)$ Was the note a negotiable instrument for purposes of Article $3$ of the Uniform

Commercial Code $($U$.$C$.$C$.)$; $(2)$ if it is$,$ did First State qualify as a holder in due course under the

U$.$C$.$C$.$; $(3)$ if Article $3$ does not apply to the instrument, was the note nevertheless negotiable as

between the parties under ordinary contract principles; and $(4)$ whether, under ordinary contract

law, Daniel is estopped to deny the note's validity.