Negotiable

Promissory Note

By: Mr. Josefino M.

Cinco

Promisory note defined and

its characteristics
A negotiable promissory note is an unconditional
promise in writing made by one person to another,
signed by the maker, engaging to pay on demand at
a fixed or determinable time.
There are two (2) parties in a Promissory Note:
1. Maker- the one making the instrument.
2. Payee- to whom the instrument is payable.

Example of promissory note

P10,000

Manila Philippines
January 1, 2011

For value received, I promise to pay P order Ten

Thousand Pesos (P10,000) on or before December 20,
2011 at the Security Bank, Espaa Branch.
(Sgd.) M

P10,000

Manila Philippines
January 1, 2011

For value received, I promise to pay P order Ten

Thousand Pesos (P10,000) on or before December 20,
2011 at the Security Bank, Espaa Branch.
(Sgd.) M

1. The figures appearing at the upper left hand

corner of the instrument, P10,000, is the
amount of the note to be paid and can easily be
determined if written in words.

P10,000

Manila Philippines
January 1, 2011

For value received, I promise to pay P order Ten

Thousand Pesos (P10,000) on or before December 20,
2011 at the Security Bank, Espaa Branch.
(Sgd.) M

2. The place, Manila Philippines, is the place

where the tract to pay was executed.

P10,000

Manila Philippines
January 1, 2011

For value received, I promise to pay P order Ten

Thousand Pesos (P10,000) on or before December 20,
2011 at the Security Bank, Espaa Branch.
(Sgd.) M

3. The date, January 1, 2011, is usually

inserted either to determine when the note is
due or to fix the time when interest is to run,
when the payment of interest is stipulated,
whether or not the collection of the instrument
is barred by the statute of limitations, or when
the note was made.

P10,000

Manila Philippines
January 1, 2011

For value received, I promise to pay P order Ten

Thousand Pesos (P10,000) on or before December 20,
2011 at the Security Bank, Espaa Branch.
(Sgd.) M

4. The date of maturity, on or before December

20, 2011, indicates the time when the
promise to pay is to be fulfilled. Where,
however, the date of maturity is not stated, the
instrument is payable on demand. (Sec. 7,
N.I.L.)

P10,000

Manila Philippines
January 1, 2011

For value received, I promise to pay P order Ten

Thousand Pesos (P10,000) on or before December 20,
2011 at the Security Bank, Espaa Branch.
(Sgd.) M

5. The promise, I promise to pay. It consists of

an absolute promise to do something, that is,
to pay. It is not subject to the fulfillment of a
condition.

P10,000

Manila Philippines
January 1, 2011

For value received, I promise to pay P order Ten

Thousand Pesos (P10,000) on or before December 20,
2011 at the Security Bank, Espaa Branch.
(Sgd.) M

6. The words to the order of. It means that the

promise is to pay as ordered or commanded by
the payee. But an instrument may be payable
to bearer.

P10,000

Manila Philippines
January 1, 2011

For value received, I promise to pay P order Ten

Thousand Pesos (P10,000) on or before December 20,
2011 at the Security Bank, Espaa Branch.
(Sgd.) M

7. The name, P. He is the person to whose

order or command the money is promised to be
paid. He is known as the payee.

P10,000

Manila Philippines
January 1, 2011

For value received, I promise to pay P order Ten

Thousand Pesos (P10,000) on or before December 20,
2011 at the Security Bank, Espaa Branch.
(Sgd.) M

8. The name, M is the maker of the note. He is

the one who promises to pay at the first
instance. A note maybe signed by more than
one person either jointly, or jointly and
severally

P10,000

Manila Philippines
January 1, 2011

For value received, I promise to pay P order Ten

Thousand Pesos (P10,000) on or before December 20,
2011 at the Security Bank, Espaa Branch.
(Sgd.) M

9. The place of payment, at the Security

Bank. It indicates where the note is to be
paid. However, that is not necessary. An
instrument may be made payable at any other
place agreed upon by the parties.

P10,000

Manila Philippines
January 1, 2011

For value received, I promise to pay P order Ten

Thousand Pesos (P10,000) on or before December 20,
2011 at the Security Bank, Espaa Branch.
(Sgd.) M

10. The amount, Ten Thousand Pesos. It

indicates, as the figures do, the sum promised
to be paid. As it is written in words, it cannot
be easily altered and, since it takes longer to
write the words than the figures, the words are
more likely to be accurate.

P10,000

Manila Philippines
January 1, 2011

For value received, I promise to pay P order Ten

Thousand Pesos (P10,000) on or before December 20,
2011 at the Security Bank, Espaa Branch.
(Sgd.) M

11. The consideration, for value received. This

indicates that a consideration was given for the
note. The consideration may be specified. But
the words for value received may be
omitted and if the consideration not specified,
consideration is presumed under Sec. 24 of the
Negotiable Instruments Law.