Allonge? Do we have to?
Here’s how Black’s Law Dictionary defines allonge, a noun: “A slip of paper sometimes attached to a negotiable instrument for the purpose of receiving further indorsements when the original paper is filled with indorsements.” (An indorsement serves to transfer or guarantee a negotiable instrument or to acknowledge payment.)
Black’s gives 1859 as the date of earliest usage; Garner’s Dictionary of Legal Usage says that “Anglo-American lawyers borrowed the word from French law in the mid-19th century.” In other words, it’s a relative newcomer. And it’s so studiously foppish and obscure that one would be performing a service by putting it out of its misery. I offer indorsement supplement, or indorsement addendum, or indorsement certificate as alternatives.
But wait, there’s more! You also see allonge used as follows:
The Demand Promissory Note dated May 8, 2002 made by the Company as Maker to the order of the Bank as Payee is hereby amended to increase the principal amount thereof to $20,000,000, which amendment shall be evidenced by an allonge to the Demand Promissory Note executed by the Company in substantially the form attached hereto as Exhibit A (the Third Allonge), which Third Allonge shall be permanently attached to the Demand Promissory Note, and which Third Allonge is hereby incorporated in the Letter Agreement by reference and made a part thereof.
In other words, allonge is also used to mean amendment; use amendment instead. By way of a second example, I’ve pasted below the complete text of another document referred to as an “allonge” that would in any other context be referred to as an amendment.
So allonge, not a great word to begin with, has escaped the reservation and is being given a broader meaning. That shouldn’t come as any surprise. After all, it’s what has happened to attorn (see this post).
I say just stop using allonge. It’s not a matter of dumbing down, but of eliminating words that are gratuitously obscure to the uninitiated.
(Incidentally, the document below is a contract, whereas a promissory note is issued by one party. When it comes to applying principles of contract drafting, that distinction is meaningless.)
FIRST ALLONGE TO PROMISSORY NOTE
This FIRST ALLONGE dated as of October 2, 2012 between AccelPath, Inc., a Delaware corporation (the successor to Technest Holdings, Inc., a Nevada corporation) (the ” Maker “), and Albert Friesen (the ” Payee “), to the Promissory Note dated as of February 10, 2012 in the amount of Fifty Thousand Dollars ($50,000.00) (as the same may be further amended, modified or supplemented from time to time, the ” Note “), payable to the order of the Payee and made by the Maker.
RECITALS
WHEREAS, the Maker has already paid $5,000 of the outstanding principal of the Note to the Payee;
WHEREAS, the Maker and the Payee have agreed to amend the Maturity Date of the Note from August 10, 2012 to November 10, 2012 for an additional payment by the Maker of $2,000 and the issuance of a warrant to purchase 250,000 shares of the Maker’s Common Stock;
NOW, THEREFORE, for valuable consideration, the receipt and adequacy of which are acknowledged, the Maker and the Payee hereby agree, with effect from the date first set forth above, as follows:
1. As of the date hereof, the Maker has paid the Payee a total of $5,000 of the principal amount of the Note, with the remaining outstanding principal amount of the Note being $45,000.
2. As consideration for the extension of the Maturity Date, the Maker hereby agrees to pay the Payee $2,000.
3. The Note is hereby amended as follows:
3.1 The first paragraph of the Note is hereby deleted and replaced with the following:
1. For Value Received, the undersigned, AccelPath, Inc., a Delaware corporation (the ” Maker “), hereby promises to pay to the order of Albert Friesen (the ” Payee “), on November 10, 2012 (the ” Maturity Date “) or as otherwise set forth in Section 1.4 of that certain Loan Agreement (as defined below), in lawful money of the United States of America, the principal amount of Forty-Five Thousand Dollars ($45,000.00) , together with interest on the unpaid balance of said principal amount from time to time remaining outstanding, from the date hereof until maturity (howsoever such maturity shall occur), in like money, at said office, at a rate per annum equal to the Interest Rate and in accordance with that certain Loan Agreement (as defined below).
4. The Maker and the Payee acknowledge that the Maker is not in breach or default in the performance of any of its obligations under the Note, and that there is no fact or circumstance which, with the giving of notice or the passage of time or both, would constitute such a breach or default.
5. The Note is, and shall continue to be, in full force and effect as modified hereby, and is hereby in all respects ratified and confirmed. The Payee is hereby authorized to attach this Allonge to the Note.
IN WITNESS the execution hereof under seal as of the day and year first above written.
[Signature blocks omitted]
While we’re at it, can we abandon the fusty and unnecessary “indorse” variation on “endorse”? Go look at the back of your checks (even in this digital age, you must still have some) and see what your bank thinks the word ought to be.
I’ll be sitting on allonge chair (in the Abram Chayes Lounge at Harvard Law School) while you’re looking.
That would get my vote!
Its allonge way to Tiperary…
How about abolishing codicil as well?
There you go again. Trying to take away yet another of our secret handshakes.
I like allonge. It has a specific meaning and usage (broader than Black’s, I’d say), that is useful. Most instruments are never amended or e/indorsed so as to need an allonge, but in the narrow community in which they are, what’s wrong with using it? The key to an allonge is that it be physically (and not just stated to be) attached to the underlying intrument so that it is binding on future holders and yet remains an “instrument” under UCC Article 3. See, e.g., 3-106(1)(c).
Like it or not, “indorse” is the official UCC term, and is the established term used throughout Article 3. So let’s amend the UCC in every state to change one letter, and while we’re at it, could we please amend every occurrence of “subpena” thoughout the California statutes to add the “o” back in?
Andy: You say that “allonge” has a specific meaning, but use of “I’d say” in your comment suggests that you’re not certain. And your meaning differs from the one offered by Black’s. That specific meaning is starting to look unspecific.
The problem with “allonge” is that there’s no need to use such a foppish word. It raises two problems.
First, any legal document will have a readership that’s broader than just the initiated who put it together, and nothing is gained by inflicting an obscure word on readers. I, for one, hadn’t heard of “allonge” until a couple of weeks ago.
And second, using an obscure word can result in its meaning morphing over time, as practitioners feel free to have it mean whatever it would be convenient to have it mean. Hence use of “allonge” instead of “amendment.”
Ken
Ken,
While I’ve admired your work for years, I disagree with you about this one. “Allonge” has a particular meaning under Article 3 of the UCC. An allonge can be used to indorse a negotiable instrument from one beneficiary to another without the consent of the maker of the note.
That meaning is different from an “amendment.” An amendment is generally considered to alter the terms of the original deal, but an allonge often has the effect of an “assignment,” not an “amendment.” I would consider the use of “amendment” improper if applied to an allonge that indorses a note from one person to another. The terms of the deal have not changed.
Hugh: But the UCC doesn’t use the word “allonge”; instead, section 3-204(a) just refers to “a paper affixed to the instrument.” The law is what it is; it doesn’t hinge on what word you use. No consequences follow from using a term clearer than “allonge.”
And I’m aware than the original meaning of “allonge” relates only to indorsements. But it has acquired an additional meaning, “amendment.” To make it clearer that the post refers to two different meanings, I’ve added the word “also” in two places.
Ken