CHAPTER 2

EXAMPLES
1. SUM CERTAIN IN MONEY. (See Sec. 2)

a. With interest
I promise to pay Kobe or bearer P100,000 after one(1) year with 20% interest per annum.
Sgd. LeBron
The instrument is negotiable. The fact that the instrument indicates interest does not destroy
negotiability. The certainty as to sum as required in Sec. 1 refers to the principal amount that is
P100,000. The interest stipulated is only an accessory to the instrument.
b. By stated installments
I promise to pay Kobe or bearer P100,000 in four monthly installments, as follows:
1st
2nd
3rd
4th

24 August 2015
24 September 2015
24 October 2015
24 November 2015

P25,000
P25,000
P25,000
P25,000

Sgd. LeBron
The instrument remains to be negotiable because the principal sum is certain. Kahit na installment pa
yan, it doesnt destroy the negotiability of the instrument.
c. By stated installments with acceleration clause
I promise to pay Kobe or bearer P100,000 in four monthly installments, as follows:
1st
2nd
3rd
4th

24 August 2015
24 September 2015
24 October 2015
24 November 2015

P25,000
P25,000
P25,000
P25,000

Upon default in payment in any of the aforesaid installments, then the whole amount payable shall
become due
Sgd. LeBron
Negotiable pa din ang instrument because of the fact that it has a provision that upon default in
payment of any installment, the whole amount shall become due. The last paragraph in the instrument
is called acceleration clause.

d. With exchange rate whether at a fixed or current rate

I promise to pay Kobe or bearer S100,000 with exchange at 1.5%
Sgd. LeBron
In this example, exchange simply means rate multiplied by the principal amount in the instrument to
cover the expenses in providing the funds since it may be drawn in one country and payable in another
country. Hence, this provision applies to foreign bill. The fact that the instrument is with exchange
doesnt destroy the instruments negotiability.
e. With cost of collection or attorneys fee
I promise to pay Kobe or bearer P100,000 on 23 August 2015 and upon default, I likewise commit to
pay the costs of collection and attorneys fees.
Sgd. LeBron
In this case, the sum of P100,000 is still certain.The additional obligation will not destroy the
negotiability of the instrument as the same is not contrary to law.
_________________
2. Must be payable on demand, or at a fixed or determinable future time. (See Sec. 7)
This requirement pertains to time or maturity of the instrument.
a. Payable on demand, or at sight or on presentation
i.e.
1. I promise to pay Kobe or bearer P100,000 on demand; or
2. I promise to pay Kobe or bearer P100,000 on presentation; or
3. I promise to pay Kobe or bearer P100,000 (No time)
b. Determinable future time (See Sec. 4)
1. I promise to pay Kobe or bearer P100,000 30 days after date; or
2. I promise to pay Kobe or bearer P100,000 30 days after sight; or
3. I promise to pay Kobe or bearer P100,000 on or before 24 August 2015.
___________________
3. Must be payable to order or bearer
a. Payable to order (See Sec. 8, letters a-f)
i.e.
a. Pay to Kobe or order P100,000
b. Pay to the order of myself P100,000

c.
d.
e.
f.

Pay to yourself or order P100,000

Pay to K1 or K2 or order P100,000
Pay to K1 or K2 or K3 or order P100,000
Pay to the order of President of Kobe Corporation P100,000

To: LeBron
Sgd. Steph Curry
b. Payable to bearer (See Sec. 9, letters a-e
i.e.
a.
b.
c.
d.
e.

Pay to bearer P100,000

Pay to Kobe or bearer P100,000
Pay to Wolverine P100,000
Pay to cash
At the back of the instrument, the payee signed his name and delivered it to another.
(endorsement in blank)