2% ‘THE LAW ON NEGOTIABLE INSTRUMENTS See.2 Stated installments, within’ the meaning of this section, ‘means that: (a) the interest of each installment, and (b) the due date of each installment must be fixed in the instrument. EXAMPLE: “1 promise to pay P or order the sum of P10,000 in two installments as follows: P5,000, on or before Augu: and P5,000, on or before Septem! e But a promise to pay P10,000 in installments” does not fulfill the req. 0 installments’ ments of the law. ‘Sum to be paid by stated installments with acceleration clause. interest is not paid as agreed, the whole sh: Such a clause requires full payment of an instrument upon default on any installment. It does not make an instrument payable upon conti the time of payment EXAMPLE: “4 promise to pay P or order P10,000 with interest at 15% per annum, in four equal monthly installments beginning July, 1, 2013. in payment of any installment or interest, all become due and payable.” ‘The maker can avoid the acceleration by paying the in- stallments on their due date. The payee or holder cannot accelerate the note unless the maker fails to pay an install- ment. (2) Acceleration at option of holder. — If a note provides for acceleration at the option of the holder, the instrument is non-negotiable as where the clause (first par.) in the above Sec.2 NEGOTIABLE INSTRUMENTS IN GENERAL. a Form and Interpretation % example instead provides: “or the whole amount plus interest on September 30, 2013 at the option of the holder.” ‘Sum to be paid with exchange. Section 2(d) refers to instruments that are payable in foreign currency. The promise or order to pay “with exchange” does not destroy negotiability. (1) Meaning of exchange. — It f pense of providing funds at the place where the instrument is payable to meet the instrument which is issued at another pla ay be at a fixed rate or at the current rate, rayment in foreign currency. — A provision for payment of a sum in a foreign currency does not impair negotiability because the current rate of exchange at any given time may easily be ascertained by inquiry from the banks dealing on exchange or foreign currencies and such rate is a matter of common commercial knowledge. An instrument, whether payable “at a fixed exchange rate or at the current rate” is deemed by the law to meet the “sum certain” requirement. (3) Payment with exchange rate. —'The provision on pay- ment with exchange applies to instruments drawn in one country and payable in another. In other words, exchange is applicable only to foreign bills. (see Sec. 129.) EXAMPLES: (a) M* promises to pay P or order $1,000 with exchange at 3/4%. (b) M promises to pay P or order the sum of $1,000 with. exchange at the current rate (or “going rate,” or “market rate”). "Unless otherwise indicated, “M" refers to MAKER.