An illustration is given of a demand collateral note. The bank loans money payable on demand and accepts, in this instance, railroad stock as security. The stock is held by the bank until the note is paid, and if not paid, the stock becomes the property of the bank.

Demand Collateral Note.

Waiver of Demand and Notice. All indorsed demand notes held by a bank should start with a waiver of demand and notice by the indorser, since in time (in some states in 60 days) indorsers are lost - unless a demand for payment is made upon promisors - if this precaution has not been attended to.

A Judgment Note. Some of the states, noticeably Pennsylvania, have a form of promissory note called a judgment note. In this form of note the maker confesses judgment if the note is not paid and authorizes the court to take possess-sion of sufficient of his property immediately to satisfy the amount of the claim. It is really a very severe form of contract and should be given only under the most extreme conditions.