NEGOTIABLE INSTRUMENTS 6.

Bankers Acceptance – a time draft across the face of which the

drawee the word accepted *(letter may accepted)
W riting
U nconditional Promise 7. Check – a bill of exchange drawn in the bank payable on demand
P ayable on demand, or at a fixed or determinable future time
O rder or bearer (payable to) PN
A ddressed to drawee
Kinds:
1. Certificate of deposit - a form of PN which is a written
Drawer – normally the creditor
acknowledgement of a bank of its receipt of a certain sum with a
Drawee – liable in a BOE
promise to pay the same
Payee - obligee
Maker –
2. Bonds – a certificate or evidence of a debt on which the issuing
Acceptor- drawee who accepts the order to pay
company or governmental body promises to pay the bond holders
Holder – one in possession bearer of instrument or an endorsee of
at spcecify amount of interest for
an order instrument who is an
3. Debenture - a PN or bond backed by the general credit of a
BOE corporation and usually not secured by a mortgage or lien on any
Kinds: specific property
1. Draft – used synonymously with BOE although it normally refers
to a BOE used in documentary exchange like letters of credit
transactions Differences Between
PN BOE
2. Inland & Foreign Bill – an inland bill is a bill which is or on its face, 1. Unconditional Promise 1. Unconditional Order
purports to be both drawn and payable within the Philippines
2. Involves 2 persons 2. Involves 3 persons
3. Time Draft – draft that is payable at a fixed date *maker *drawer
*payee *drawee
4. Sight or Demand Draft – draft that is payable when the holder *payee
presents it for payment
3. Maker is primarily liable 3. Drawer is secondarily liable
5. Trade Acceptance – bill that is used in contracts of sale where the *primarily is the drawee
seller (drawer) orders the buyer (drawee) to pay a sum certain to
pay to the said seller (payee) 4. Only one presentments 4. Two presentments
*for payment only *acceptance
 *Payment

*conditional – non-negotiable instrument

QUESTION:
Cross Check (A PN?)
- A promissory note but could be negotiated once
Money Order (A NI?)
- No because it is very dependent on postal code
Warehouse Receipts
- Not negotiable (nonnegotiable instrument) represents a
good not money
Pawn Ticket
- Non-negotiable , it represent the pawn not money
Treasury Warrant
- Nonnegotiable because it is payable out of fund
Trust Receipts
- Nonnegotiable because it represent good not money