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LEGAL FORMS | ATTY.

MAGBANUA

ELEAZAR FIDEL
NEGOTIABLE INSTRUMENT
It is a written contract for REQUISITES:
the payment of money a. It must be in writing and
signed by the maker or
which complies with the
drawer;
requirements of Section 1 of b. Contain an unconditional
the NIL, which by its form promise to pay a sum
and on its face is intended certain in money
as a substitute for money c. Payable on demand or at
and passes from hand to fixed or determinable
hand as money so as to future
d. Payable to order or bearer;
give the holder in due
e. When addressed to a
course the right to hold the drawee, he must be
instrument free from named or otherwise
personal defenses available indicated there in with
to prior parties reasonable certainty.
PROMISSORY NOTE
 An unconditional promise in writing made by one person
to another, signed by the maker, engaging to pay on
demand, or at fixed or determinable future time, a sum
certain in money to order to bearer.
 A solemn acknowledgment of a debt and a formal
commitment to repay it on the date and under the
conditions agreed upon by the borrower and the lender.
A person who signs such an instrument is bound to honor it
as a legitimate obligation duly assumed by him through
the signature he affixes thereto as a token of his good
faith. If he reneges on his promise without cause, he
forfeits the sympathy and assistance of this Court and
deserves instead its sharp repudiation. (Sierra v CA, GR
No. 90270, July 24, 1992)
SIMPLE FORM
PROMISSORY NOTE
P20,000.00
FOR VALUE RECEIVED, I promise to pay without need
of demand to the order of __Payee__, at his office at
Azure Building, Makati, the principal amount of
PESOS: Twenty Thousand (P20,000.00), on or before
December 31, 2018.
October 21, 2019, Quezon City, Philippines.
PAPA JACK
SIMPLE FORM W/ INTEREST
PROMISSORY NOTE
P50,000.00
FOR VALUE RECEIVED, I promise to pay without need of demand to the
order of __Payee__, at his office at Gil Puyat Ave., the principal amount of
PESOS: Fifty Thousand Pesos (P50,000.00), on or before December 25,
2018. In addition to the foregoing, I promise to pay monthly interest at the
rate of Two percent (2%) percent, without need of demand, starting from
the month of October until this note is fully paid.

September, 21, 2018, Quezon City,


Philippines.
Papa Bear
JOINT OR MULTIPLE MAKERS
PROMISSORY NOTE
P100,000.00
FOR VALUE RECEIVED, I, we, either, or any of us, jointly and severally, promise to
pay __Name of Payee__ or Order the principal sum of ONE HUNDRE THOUSAND
(PHP 100,000.00), Philippine Currency, without need of demand on or before
December 31, 2019 (OR within a period of One Hundred (100)
(days/weeks/months/years), payable in equal (daily/weekly/monthly/yearly)
installment of One thousand (P1,000.00) each.

Done this September 21, 2018 at Quezon City,


Philippines.
Stuart Griffin/Bryan Griffin
HOLDER
• Active subject in the negotiable instrument
• The entity who is given the right to demand the
performance of the obligation reflected in the
WHO
negotiable instrument, that is, the obligation to
pay a sum certain in money.
• Owner of the intangible personal property
TO FILE
evidenced by the instrument – the right which
has for its object a demandable sum.
• In presentment for payment, the holder
exhibits the instrument to the maker or the
acceptor to demand payment of the amount
reflected in the negotiable instrument or
whatever balance that is due.
• Holder must exhibit the instrument to the
person whom the instrument is demanded and
upon payment must be delivered to the
person paying it.
MAKER
• Passive subject against whom the holder can
enforce the right represented by the
instrument
WHO
• Primarily liable for the promissory note
• The person who makes the promissory note
and promises to pay the amount stated
TO FILE
therein.
• Two or more persons can be joint makers.
• Where an instrument contain the words “I
promise to pay” is signed by two or more
persons, they are deemed to be jointly and
severally liable thereon.
INDORSER

WHO
• Passive subject against whom the holder
can enforce the right represented by
the instrument

TO FILE
• Secondarily liable for the promissory
note
• Promises to pay if the person primarily
refuses or fails to pay
• Steps in order to charge the Indorser

1. Presentment for payment must


be made within the required period to
the maker (Sec.70, NIL)
2. Notice of dishonor should be
given if promissory is dishonored by
non-payment by the maker. (Sec. 89,
NIL)
Presentment for payment, to
be sufficient, must be WHEN
made:
1. By the holder, or by some
person authorized to receive
TO
payment on his behalf.
2. To the person primarily liable
on the instrument, or if he is
FILE
absent or inaccessible, to any
person found at the place
where the presentment is
made.
3. At a reasonable hour on a
business day on the proper
date.
4. At the proper place.
In Section 4 of the Negotiable
Instruments Law, an instrument is payable
at a determinable future time, within the
meaning of this Act, which is expressed to
WHEN
be payable:
TO
1. At a fixed period after date or sight;
2. On or before a fixed or determinable
future time specified therein; or
FILE
3. On or at a fixed period after the
occurrence of a specified event
which is certain to happen, though
the time of happening be uncertain.

An instrument payable upon a


contingency is not negotiable, and the
happening of the event does not cure the
defect.
• Where the instrument is not payable on
demand, presentment must be made on
the day it falls due (Sec.71, NIL). WHEN
• Every instrument is payable at the time
fixed therein without grace, When the TO
day of the maturity falls upon Sunday or
a holiday, the instrument is payable on
the next succeeding business day. FILE
Instruments falling due or becoming
payable on Saturday are to be
presented for payment on the next
succeeding business day except that
instruments payable on demand may, at
the option of the holder, be presented
for payment before twelve o’clock noon
on Saturday when that entire day is not a
holiday (Sec. 85, NIL).
•When the instrument is payable at
a fixed period after date, after sight,
or after that happening of a
specified event, the time of
WHEN
payment is determined by
excluding the day from which the
TO
time is to begin to run, and by
including the date of payment
(Sec. 86, NIL).
FILE
•Acceleration Clause
•Stated Installments
Section 7 of Negotiable Instruments
Law states that an instrument is
payable on demand when it is so
expressed to be payable on
WHEN
demand, or at sight, or on
presentation; or in which no time
TO
for payment is expressed. Where
an instrument is issued, accepted,
or indorsed when overdue, it is, as
FILE
regards the person issuing,
accepting, or indorsing it, payable
on demand.
Sec. 73. Place of presentment –
Presentment for payment is made at the
proper place –

(a) Where a place of payment is specified


WHER
in the instrument and it is there presented;
(b) Where no place of payment is specified
but the address of the person to make
E TO
payment is given in the instrument and it is
there presented; FILE
(c) Where no place of payment is specified
and no address is given and the instrument
is presented at the usual place of business
or residence of the person to make
payment;
(d) In any other case if presented to the
person to make payment wherever he can
be found, or if presented at his last known
place of business or residence.
 A negotiable instrument is discharged by payment in
due course by or on behalf of the principal debtor
(Sec. 119, NIL).