Negotiable Instruments

- No Nego na Oral
- Substitute for money but not a legal tender
- Proof of Indebtedness
- Simple Contract: Object is the sum certain in money
- Accumulation of secondary contracts

Types of Nego Instruments

1. Promissory Notes
a. Parties: Maker-Debtor, Payee-Creditor

2. Bill of Exchange
a. Parties: Drawer- Debtor, Drawee-Third Party, Payee-Creditor
*Check is a special kind of BOE

Sec.1 Requirements
1. Written and Signed: Customary Signature and basta written
2. Unconditional Promise/ Unconditional Order: There must be no condition, ex. 5
days after the death of X
3. Payable on Demand:
if: Expressed
No date Stated
If indorsed/issued when overdue
*No date doesn't render the instrument non-negotiable, if wala, based from the
execution of the instrument.
if pahabol lang yung date/anti-dating or post-dating, negotiable as long as no
fraudulent intent.
4. Payable to Order: Must be delivered and Indorsed
if: Drawn payable to order of a specified person
*Indorsement with a name is called special indorsement
Payable to bearer: Mere delivery
if: Expressed
Payable to person or bearer
Payable to order of a fictitious person
Last indorsement is indorsement in blank.
5. Instrument addressed to a drawee: Must be named, or can be identified with
reasonable certainty.
Not certain example: Drawn against X or T

Example of Certain sum in money: Negotiable (N) and Non-negotiable (NN)

1. I promise to pay P or bearer P10000, N
2. I promise to pay P or bearer P10000 with interest, N (because when silent, Legal
Interest 6%/ annum)
3. I promise to pay P or bearer P10000 with 5% interest, NN (because the interest
applciation is not certain if mos./annum)
4. I promise to pay P or bearer P10000 with 5% interest per annum for 5
Installments, NN (because installments is not certain)
5. I promise to pay P or bearer P10000 with 5% interest per annum for 5 equal
monthly installments, N