o "THE LAW ON NEGOTIABLE INSTRUMENTS Sec.5 EXAMPLES: “1 promise to pay P or order P10,000 and (or) to deliver a horse.” ; ‘The following clauses (see Beutel’s Brannan, Neg. Inst. Law, 7th Ed., pp. 285-286.) have been held to render non- negotiable the instrument in which they are stipulated: (a) “and to pay for taxes assessed upon the note or its, mortgage security.” (Hubard v. Robert Wallace Co., 201 la 1143, 208 N.W. (b) “and to kee which the value o instrument depends.” ( 828) ym encumbrance property on pledged for security of the ad v. National Salt Co, 8T At. promise to insure the property pledged as State Savings Bank v. Russel, 224 Mich. 298, ions, — The law, however, gives exceptions (a) Sale of collateral securities. EXAMPLE: “I promise to pay P of order the sum of P10,000 on November 25, 2013 secured by a ring I delivered to him by ‘way of pledge and which he could sell should I fail to pay hhim at maturity.” act is to be performed after the date {rument is no longer negotiable in. the full commercial sense. (see Sec. 2[e].) Until the date of ‘maturity, the promise is to pay money only. ‘A statement that an instrument is secured by a collat- eral, in fact, adds to the marketability or acceptability of the instrument in commerce as a substitute for money or as a credit instrument. Note that the statement in the example does not subject the promise or order to the terms and con- ditions of the pledge. See.5 NECOTIABLE INSTRUMENTS IN GENERAL a Form and Interpretation (b) Confession of ud, edgment by the deta & nt without the delay usually incident to.a lawsuit, as inates the necessity of atrial. EXAMPLE: “For value received, I promise to pay P or order sum of P10,000 with interest at 15% per enum and 1 toa, authorize my attorney-at-law to appear in any court of record after the obligation becomes due and waive the issuing and service of process and confess a judgment against me in favor of the holder of the note for such amount as may appear to be unpaid thereon, together with cost of suit and 12% attomey’s fees, and thereupon to waive all erors in any such Proceedings and waive all rights of appeal.” Warrants of attorney to confess jud igment, however, are not authorized nor contemplated by our law because under these instruments, the promissor bargains away his right to a day in court. Note that the second paragraph of Section 5 contains a proviso that nothing in said section “shall vali gree Papvisien or stipulation otherwise illegal.” invalidity of the provision as to the confession of judgment does not render the instrument non-negotiable. ; A confession of judgment given after the action ii brought to save expenses is valid’ ot ca (©) Waiver of benefit granted by lau EXAMPLE: “Pay bearer P10,000. Notice of dishonor waived.” a dishonor waived.” (see Neither does waiver of protest (Sec, 111.), presentment for payment (Sec. 70.), or demand (ibid.), destroy the nego- tiability of an instrument.