Promissory Note vs. Bill of Exchange (Secs.

126, 184, 185 and 130)

Examples of Promissory Note:
a. Certificate of Deposit
b. Bonds
Bonds are evidences of indebtedness of the issuer and are usually sold to raise
capital. They are really elaborate promissory notes. The following are distinctions
between an ordinary promissory note and a bond: (1) a bond is more formal in
character than the ordinary promissory note; (2) a bond runs for a longer period of
time than an ordinary promissory note; and (3) a bond is issued under different
legal circumstances.
c. Bank Notes
Bank notes are the promissory notes of the issuing bank payable to bearer on
demand and intended to circulate as money. They are regarded as cash ansd pass
from hand to hand without any evidence of title in the holder than that which arises
from possession. However, they are not money.
d. Due Bills
due bill is an instrument whereby one person acknowledges his indebtedness to
another
Examples of bill of exchange
a. Drafts
A common term for all bills of exchange and they used synonymously. In bank
drafts, drawer and drawee bank are liable to purchaser of draft for not complying
with his instructions.
b. Trade Acceptance
(1) A bill of exchange payable to order and at a certain maturity, drawn by a seller
against the purchaser of goods as drawee, for a fixed sum of money, showing on its
face the acceptance of the purchaser of goods and that it has arisen out of a
purchase of goods by the acceptor; (2) A draft or bill of exchange drawn by the
seller on the purchaser of goods sold and accepted by such purchaser.
c. Bankers Acceptance
A draft or bill of exchange of which the acceptor is a bank or banker engaged
generally in the business of granting bankers acceptance credit. A bankers
acceptance is similar to a trade acceptance, the fundamental difference being that
the bankers acceptance is drawn against a bank instead of the buyer.

d. Trust Receipts
e. Treasury Warrant
f. Money Orders
A species of draft drawn by the post office upon another for an amount money
deposited at the first office by the person purchasing the money order and payable
at the second office to a payee named in the order. They are of limited negotiability
because they may only be indorsed once.
g. Clean and Documentary Bill of Exchange
Clean bill of exchange: is one to which are not attached documents of title to be
delivered to the person against whom the bill is drawn when he either accepts or
pays the bill.
Documentary bill of exchange is one to which are attached documents of title to
be delivered and surrendered to the drawee when he accepts or pays the bill.
h. D/P and D/A Bills of Exchange
Documents against payment bill (D/P Bill) is a sight or time bill to which are
attached to documents to be delivered and surrendered to the drawee when he has
paid the corresponding bill. Documents against acceptance bill (D/A Bill) is a time
bill to which are attached to documents to be delivered and surrendered to the
drawee when he accepts the bill.
i.

Time or Usance Bills

Sight bills are bills which are payable upon presentation or at sight or on demand.
Time or usance bills are bills which are payable at a fixed future time or at a
determinable future time.
j. Bills in Set
k. Inland and Foreign Bills