Nego Week 15

NEGOTIABLE INSTRUMENTS
WEEK #15
TABLE OF CONTENTS
1.
Manker v. American Savings Bank
2.
3.
4.
Enoch v. Brandon
Gregorio Araneta v. PNB
Nat'l Rice & Corn Corp v. Pan-Philippine Shipping Inc.
5.
BPI v. De Reny Fabric Industries
6.
Santamaria v. HK & Shanghai Bank Corp
7.
Delos Santos v. McGrath
8.
Roman v. Asia Bank Corp.
9.
John Hale & Co v. Beley Cotton
10. Southern Pac. Co v. Bank of America

11. W.S. Brown Mercantile v. Yielding Bros Dept Store
12. Dunagan v. Griffin
13. Luhrs v. Valley Ranch Co.
14. Siy Cong Bieng & Co v. HK and Shanghai Bank
MANKER V. AMERICAN SAVINGS BANK

131 Wash 430, 230 Pac 406 (1924)
Facts:
o
In April 1923, appellant was the owner of two local improvement bonds issued by the City of Seattle which were stolen from the appellants safety deposit box
in a bank. The bonds provide that:
the holders shall have no claim against the city, except from the special assessment made for the improvement for which bond was issued
the City of Seattle promises to pay or bearer out of the fund established by ordinance No. 36562 of said city, not otherwise
the holders or owners of this bond shall look only to said fund for the payment of either the principal or interest in this bond
Respondent bank came into possession of such bonds after purchasing the same in due course of business
The respondent City of Seattle has the funds ready to pay the bonds
ADARNA AGUILA ALFONSO ARAGONES BARTOLOME BESANES CABRALES CASIPIT CRUZ B. CRUZ D. DABAO DEL ROSARIO DE LA CRUZ FERMIN
GANZON GARCIA GO GUEVARA HADUCA HUSSIN KAW LEE MACATANGAY MELCHOR NAVALLASCA ONG PINLAC RAMOS R. RAMOS V. REAS SACDALAN
SANTOS SEGOVIA SULTAN TAGRA TORRIJOS YAN
2A
BLOCK DIGESTS | 1
WEEK #15
Issues:
1.
Whether the appellant or respondent bank is entitled to such payment
2.
Whether the bonds are negotiable instruments
Ratio:
1.
The appellant would be entitled to such payment
The appellant from whom they were stolen would be entitled to the bonds as against the respondent bank, which came into possession of them through a chain
of transfers from a thief
2.
The bonds are NOT negotiable instruments
An instrument to be negotiable must contain an unconditional promise or order to pay a sum certain in money
An unqualified order or promise to pay is unconditional though coupled with an indication of a particular fund out of which reimbursement is to be made. But an
order or promise to pay only out of a particular fund is not unconditional
These bonds, by their terms, do not contain an unconditional promise to pay, for they explicitly state that payment is to be made only out of a particular fund
Although the bonds in controversy have all the requirements of negotiability (under Sec 3392 Rem. Compt. Stat.), the fact that they contain no unconditional
promise to pay makes them non-negotiable
The judgment is therefore reversed, and the appellant will be entitled to the amount held by the city of Seattle for the extinction of his bonds.
Maria Cecilia de la Cruz
2A
BLOCK DIGESTS | 2
WEEK #15
ENOCH V. BRANDON
New York CA; 249 N.Y. 263, 164 N.E. 45; 1928
Facts:
o
SUBJECT: series of bonds for $7,500,000 payable on Nov1, 1941 to bearer,
o
MAKER/ISSUER: The Manitoba Power Company.
o
CONTROVERSY: some of these Manitoba bonds were purchased in due course from a thief; hence, the title of the purchaser was put in issue. The lower court
(called the Trial Term) held that the bonds were negotiable hence the purchaser in due course may retain them but the Appellate Division reversed.
Issue:
WON the bonds are negotiable instruments, hence, a purchaser in due course from a thief may retain them.
Ratio: YES.
o
The NIL deals with the form of the instrument with what a mere inspection of its face should disclose.
o
Reference to the paper itself said to be negotiable determines its character.
o
If in the bond or note anything appears requiring reference to another document to determine whether in fact the unconditional promise to pay a fixed sum at a
future date is modified or subject to some contingency, then the promise is no longer unconditional explicit terms.
o
The acceleration clause in case of the default, the privilege given the obligor to redeem before maturity at certain dates, the obligation to create a sinking fund
or the fact that the bonds are payable to bearer, or, if registered, to the registered holder does not affect the bonds negotiability.
Decision of the Appellate Division reversed and that of the Trial Term affirmed.
JC Go
GREGORIO ARANETA V. PNB

G.R. No. L-4633, March 31, 1954
Facts:
o
Plaintiff filed with the defendant an application for a commercial letter of credit in favor of Allied National Corporation.
Defendant granted said application and the credit line was opened.
2A
BLOCK DIGESTS | 3
o
WEEK #15
Draft was negotiated by the defendants correspondent bank (Barclays) against the plaintiffs credit
Defendant paid Barclays the amount of the draft.
On the face it matures when it matured the British pound was devaluated.
Defendant sent the plaintiff a bill (value at drafting) upon maturity, the plaintiff sent a check which was below the amount (value at maturity), which was
returned without acknowledgement.
Plaintiff retransmitted the check
Defendant issued a receipt that it was only for partial payment
Defendant debited the latters overdraft account
Plaintiff instituted the present action
Issue:
WON appellant should pay the sum of P33,727.92, representing the value of the draft for 4,031.13 pounds negotiated by the defendant's correspondent bank in
London against the plaintiff's credit on August 30, 1949, when the official parity rate was $4.0325 for every English pound (WHEN THE BANK WAS DRAWN) OR
should pay to the defendant only the sum of P23,194.37, the equivalent in Philippine Currency of 4,031.13 on December 25, 1949, the date of MATURITY of the
draft, when the rate of exchange was $2.80 3/16.
Ratio:
o
Latters obligation s determined by the rate of exchange on the date the draft was drawn and presented or negotiation.
The application provides that the draft must be drawn and presented or negotiated not later than August 31,1949; that the plaintiff promised and agreed to pay
at, maturity in Philippine currency, the equivalent of any amount that might be drawn or paid upon the faith of the plaintiff's credit;
The amount or such portion thereof as may be drawn or paid upon faith of the plaintiffs credit
2A
BLOCK DIGESTS | 4
WEEK #15
Miguel Aguila
NAT'L RICE & CORN CORP V. PAN-PHILIPPINE SHIPPING INC

(CA) 51 O.G. No. 11, 5564
FACTS
o
The parties entered into contract of purchase and sale, where Pan-Phil agreed to sell & deliver to NARIC 850 Metric tons of Ecuadorian Fortuna Canilla rice at US
$12.51, per 100 pounds net shipped weight final, CIF Manila.
o
Goods were shipped in good condition fr Ecuador.
o
Contract calls for bond of P20K by Pan-Phil in favor of Naric. In accordance w/ this, Pan-Phil, as principal, and RF Navarro w/ Julian Salgado (deceased), as
sureties, executed a bond. Appellants obligated themselves, jointly and severally, to answer for faithful performance by Pan-Phil of its obligations.
o
The contract also provides that Naric agrees to open by cable an irrevocable letter of credit (LC) against full shipping docs w/ certificate of quality issued by
representative of Naric, in favor of Nicholas Graver & Sons (agent of Pan-Phil), of California and/or assignee, for $2,579,155.42, payable in New York negotiation
of drafts to expire not later than Jan 31, 1947.
o
According to the contract, in case of non-shipment by Nov 30, 1948, except force majeure beyond control of Pan-Phil, Pan-Phil shall pay/reimburse Naric for
bank commission and miscellaneous banking charges in connection w/contract.
o
Naric applied to PNB for opening of LC.
o
PNB, on same date of contract, arranged w/ and transmitted by cable to Anglo-California Natl Bank irrevocable LC No. 25865, payable on sight against
complete shipping docs w/ certificate as to weight, quality and moisture content of the rice.
o
PNB charged Naric P12,907.77 for the opening of the LC; PNB debited Narics account. Pan-Phil failed to ship the rice.
ISSUE
WON Pan-Phil is liable
HELD: YES
o
Naric complied w/ its obligations. Pan-Phil says non shipment was due to causes beyond its control that the rice wasnt shipped bec Nicholas Graver & Sons
relinquished its interest in the LC upon alleged ground that its terms didnt conform w/ conditions of the contract. But one thing is certain. The LC is in accord
with the contract. Mere refusal of beneficiary to use LC cant be force majeur w/in meaning of the law. Pan- Phils liability to reimburse Naric for bank expenses
is inescapable.
o
Pan-Phil claims the LC was subsequently cancelled. But the LC, being irrevocable and in favor of a specified party, cant be changed by Naric or the bank w/o
consent of the beneficiary and Pan-Phil.
o
Its a banking practice for bank to collect commission & charges for its services in opening of LC irrespective of
o
WON beneficiary uses the LC. First, because services were actually rendered by bank in negotiation of LC w/ the banks addressee at San Francisco and second,
because the minute the said bank cabled the LC to its correspondent at San Francisco, the former became exposed to liability thereon until it was cancelled.
BPI V. DE RENY FABRIC INDUSTRIES

G.R. No. L-24821 October 16, 1970
2A
BLOCK DIGESTS | 5
WEEK #15
FACTS:
o
On 4 different occasions in 1961, De Reny through Aurora Carcereny (aka Aurora Gonzales), president and Aurora Tuyo, secretary of the corporation, applied to
the BPI for 4 irrevocable commercial letters of credit (L/C) to cover the purchase of goods such as dyestuffs from their supplier J. B. Distributing Co.
o
All the applications of the corporation were approved and the officers bound themselves personally as joint and solidary debtors with the corporation.
o
BPI then issued irrevocable commercial L/Cs addressed to its correspondent banks in the US with instructions for them to notify JB Distributing Co, that they
have been authorized to negotiate the latters sight drafts, if accompanied upon presentation, by full set of negotiable clean on board ocean bills of lading,
covering the merchandise appearing on the L/Cs (ie dyestuffs).
o
The corresponding banks debited the account of BPI the value of the drafts presented by the JB Dist. Co and endorsed and forwarded all documents to BPI.
o
As each of the shipments arrived, De Reny made partial payments to BPI however, further payments were discontinued subsequently it was found that the
goods that arrived in Manila were not dyestuffs but were colored chalks.
o
De Reny refused to take possession of the goods so BPI caused them to be deposited w/ a bonded warehouse and sued De Reny.
o
The lower court ordered the defendants to pay BPI w/ interest.
ISSUE:
o
WON it was the duty of the correspondent banks of BPI to take the necessary precaution to ensure that the goods shipped under the covering L/C conformed w/
the item appearing therein TF having failed to do so, no claim for recoupment could be had against the defendants
HELD:
o
NO, defendants are liable for recoupment.
o
The defendants agreed that BPI shall not be responsible for the existence, character, quality, quantity, conditions, packing, value or delivery of the property
purporting to be represented by documents; for any difference in character, quality, quantity, condition, or value of the property from that expressed in
documents, or for partial or incomplete shipment, or failure or omission to ship any or all the property referred to in the Credit, as well as for any deviation
from instructions, delay, default, or fraud by the shipper or anyone else in connection with the property the shippers or vendors and ourselves(purchasers) or
any of us. Hence they have to comply with such agreement.
o
But even w/o said stipulation, they are still liable because banks, in providing financing in international business transactions such as those entered into by the
defendants, do NOT deal with the property to be exported or shipped to the importer but deal only with documents
o
There exists a custom in international banking and financing circles negating any duty on the part of a bank to verify whether what has been described in the
L/Cs or drafts or shipping docs actually tallies with what was loaded in the ship, the defendants are bound by said established usage.
WHEREAS Disposition Judgment affirmed.
SANTAMARIA V. HSBC
89 Phil. 780 (1951)
Facts:
o
Santamaria bought 10,000 shares of the BatangasMinerals through the offices of Woo, Uy-Tioco & Naftaly,a stock brokerage firm and paid the sum of P8,014.20
o
On March 9, 1937, Mrs. Santamaria placed an order for the purchase of 10,000 shares of the Crown Mines Inc. with R.J. Campos & Co. with the understanding
that said certificate would be returned to her upon payment of the 10,000. shares.
o
At time of the delivery of Stock Certificate No. 517 to R.J. Campos & Co., Inc. this certificate was in the same condition as that when Mrs. Santamaria received it
o
Two days later, on March 11, Mrs. Santamaria went to R.J. Campos & Co., Inc. to pay for her order of 10,000 Crown Mines shares and to get back Cert. No.517.
2A
BLOCK DIGESTS | 6
o
o
WEEK #15
Coscolluela then informed her that R.J. Campos & Co., Inc. was no longer allowed to transact business due to the prohibition order from the Securities
andExchange Commission. She was also informed that her stock certificate was in the possession of the Hongkong & Shanghai Banking Corporation (HSBC).
On March 11, 1937, as shown by Exh. G, Certificate No. 517, already indorsed by R.J. Campos & Co., Inc. to the HSBC, was sent by the latter to the office of
the Batangas Minerals, Inc. with the request that the same be cancelled and a new certificate be issued in the name of R.W. Taplin as trustee and nominee of
the banking corporation.
On June 13, 1938, the 10,000 shares of Batangas Minerals, Inc. represented by Certificate No. 715 were sold to the same bank by the Sheriff for P300.00 at the
foreclosure sale authorized by said order. R.J. Campos, the president of R.J. Campos & Co., Inc. was prosecuted for estafa and found guilty of this crime and was
sentenced by the Manila Court of First Instance in Criminal Case No. 54428, to an imprisonment and to indemnify the offended party, Mrs. Josefa Santamaria, in
the amountof P8,041.20 representing the value of the 10,000 shares of Batangas Minerals, Inc. (Exhs. I and J). The offended party and RW Taplin were
among the witnesses for the prosecution in thiscriminal case No. 54428.
When Mrs. Santamaria failed in her efforts to force the civil judgment rendered in her favor in the criminal case because the accused became insolvent, she
filed her complaint in this case on October 11, 1940.
Issue:
WON defendant bank was obligated to inquire who the real owner of the shares represented by the certificate of stock was
Ratio: NO
o
The certificate of stock in question was issued in the name of the brokerage firmWoo, Uy-Tioco & Naftaly and that said indorsement was guaranteed by R.J.
Campos & Co., Inc., which in turn indorsed it in blank. This certificate is what is known as street certificate. Upon its face, the holder was entitled to demand its
transfer into his name from the issuing corporation.
o
The Bank was not obligated to look beyond the certificate to ascertain the ownership of the stock at the time it received the same from R.J. Campos & Co., Inc.
for it was given to the Bank pursuant to their letter of hypothecation.
o
A mere claim of ownership does not establish the fact of ownership. The right of the plaintiff in such a case would be against the transferor. The fact that on
theright margin of said certificate the name of the plaintiff appeared written, granting it to be true, cannot be considered sufficient reason to indicate that its
owner was the plaintiff considering that said certificate was indorsed in blank by R.J. Campos & Co., Inc. and was transferred in due course by the latter to the
Bank under their letter of hypothecation.
Matthew Ong
DELOS SANTOS V. MCGRATH
96 phil. 577 (1955)
Facts:
o
SUBJECT: promissory note for $769.03, payable 12 mos. from June 28, 1921
MAKERS: Mrs. C.M. Fox as principal and J.H. Kroeger as surety
PAYEE: Levi State Bank & Trust Company
2A
BLOCK DIGESTS | 7
o
WEEK #15
Mrs. Fox as principal and Kroeger as surety executed the above note. Mrs. Fox died before its maturity. At maturity, on agreement with the payee, Kroeger
executed and delivered his own note of the same amount to the payee. The payee bank then assigned the principal note to Kroeger. More than two years later
Kroeger sued BJ Fox, executor of Mrs. Foxs estate.
Issue:
WON the payment of Kroeger as surety discharged the obligation
Ratio: No.
o
Under the Texas statute (Sec 119 and 121 taken together), the payment by the principal debtor or by the party accommodated discharges the instrument, but
payment by a party secondarily liable, other than the principal debtor or party accommodated, does not extinguish or discharge the debt. By sec 121, the party
accommodated is excluded from those secondarily liable, payment by whom does not discharge the instrument. The statute requires payment by the principal
debtor to discharge a negotiable promissory note, and that the payment thereof by the surety does not discharge the obligation.
Disposition Affirmed.
Vince Paolo L. Ramos
ROMAN V. ASIA BANKING

G.R. No. L-17825, June 26, 1922
Facts:
o
There was a sale of 2777 bales of tobacco:
seller: Felisa
buyer: Umberto
price: 78k
o
Umberto issued 4 notes + 15k cash to cover the price
o
As security for a loan, Umberto issued a quedan in favor of Asia Banking Corp:
covering 576 bales of tobacco
the goods are deposited in the warehouse "por orden" instead of "a la orden" or "sujeto a la orden" of the depositor
there is no statement showing that the goods will be delivered to the bearer, to a specified person, or to a specified person or his order.
it was indorsed in blank by Umberto

o
Later Umberto became insolvent:
an insolvency proceeding was filed.
Felisa remained an unpaid seller

o
The CFI ruled in favor of Felisa, holding that:
2A
BLOCK DIGESTS | 8
WEEK #15
the vendors lien is superior to the pledge/chattel-mortgage constituted on the goods
Issues:
1. Was the quedan negotiable?
2. Who can claim a superior right over the 576 bales of tobacco?
Ratio:
1. It is a negotiable document:
o
it is quite obvious that the deposit evidenced by the receipt in this case was intended to be made subject to the order of the depositor and therefore negotiable.
o
that the words "por orden" are used instead of "a la orden" is very evidently merely a clerical or grammatical error.
o
Additionally, the indorsement in blank by Umberto at the time of issue indicated his intent to make it negotiable
o
A non-negotiable warehouse receipt must be plainly placed upon its face the words 'non-negotiable'; otherwise, the holder may treat it was a negotiable
receipt. In this case, no such words were placed.
2.
o
o
o
Asia Banking has the better right under the Warehouse Receipts Law:
Where a negotiable receipts has been issued for goods, no seller's lien or right of stoppage in transitu shall defeat the rights of any purchaser for value in good
faith to whom such receipt has been negotiated.
Before an unpaid seller can enforce his lien, the receipt must be surrendered to the warehouseman.
The warehouseman cannot be compelled to deliver the goods until the receipt is surrendered.
The order appealed from is therefore reversed without costs. So ordered.

Earl Tagra
JOHN S. HALE & CO v. BELEY COTTON CO.

154 Tenn 689, 200 SW 994 (1927)
FACTS:
o
Hale Co. sold to the Beley Cotton Co. 222 bales of cotton represented by warehouse receipts and bills of lading.
o
The documents of title were delivered by Hale to the Beley Cotton upon receipt of checks of that company, aggregating $33,738.83, drawn on Union and
Planters Bank. All these checks were dishonored.
o
In exchange for warehouse receipts thus acquired by Beley Cotton, issued by a Memphis warehouse, the Beley Co. procured clearance certificates.
o
Beley Cotton then attached these clearance certificates, the remaining warehouse receipts, and the bills of lading to drafts drawn by it on customers
o
Beley Cotton deposited these drafts to the credit of its account in defendant bank.
o
Beleys credit with the bank had been exhausted by other checks, so that, the checks for Hale were returned unpaid.
ISSUE:
W/N the bank as an innocent purchaser for value acquired the title to the goods
HELD/RATIO:
o
NO. Transferee of order bills of lading, not indorsed by person to whom goods were deliverable, took no better title than transferor. Transferee of "order"
warehouse receipts, not indorsed by person to whose order goods were deliverable, acquired no greater title than transferor.
2A
BLOCK DIGESTS | 9
o
WEEK #15
Re: FIRST LOT represented by warehouse receipts-Beley Cotton did not undertake to negotiate these receipts to the bank, but, exchanged said receipts
with the Memphis warehouse, which issued them for clearance certificates of that warehouse, and pinned the clearance certificates to the draft made on
account of this lot of cotton and deposited with the bank. The clearance certificates recited on their face that they were not negotiable. Under these
circumstances, the bank acquired no better title to this lot of cotton than the Beley Cotton Company possessed. The Beley Cotton Company, however, could not
pass a title which it did not have, except by an instrument to which the law gave negotiability, and the clearance certificates were expressly nonnegotiable.
Re: SECOND LOT represented by warehouse receipts-The bank got no better title to the cotton represented by these warehouse receipts than was
possessed by the Beley Cotton. Beley acquired no title by reason of the fact that its checks given for the cotton were dishonored. Since the receipts we are
considering had not been indorsed by the person to whose order the goods were deliverable, they could not be indorsed and negotiated by anyone else.
Although Beley Cotton did indorse the receipts, such indorsement by it was not effective for purposes of negotiation.
Re: THIRD LOT represented by bills of lading-The bills of lading in controversy had not been indorsed by Manget Bros., the persons to whom the carrier
had undertaken to deliver the goods, when they came into the hands of the bank. They were not in such shape that they might be negotiated by delivery. They
were not in negotiable form at all.
No error in CA decision; certiorari denied.
SOUTHERN PAC. CO. v. BANK OF AMERICA.

23 F.2d 939 (1928)
Facts:
o
Ono & Co., shipped to Chicago certain crab meat, imported from Japan, taking a bill of lading from plaintiff, Southern Pacific Railway Company, for the delivery
of the merchandise in Chicago, to the order of the shipper, vendee to be notified.
o
The consignor sold and assigned the bill of lading for $37,000 on its Chicago vendee accompanying same, to the Pacific National Bank, who forwarded it to a
bank in Chicago for collection, with instructions to surrender the bill of lading upon payment of the draft.
o
Upon presentation, the vendee said that the goods had not arrived, and that it would not honor the draft until their arrival.
o
However, vendee, discovering the goods in Chicago in possession of plaintiff's delivering carrier, fraudulently procured their delivery by the railroad without
production of the bill of lading, and in violation of its provisions that the merchandise should not be delivered until the bill should be surrendered, and at once
deposited the goods in a public warehouse
o
Defendant, Bank of America, without notice of any infirmity in the vendee's title, at the latter's request, loaned it $34,000, taking the receipts, duly assigned, as
security. The Pacific National Bank demanded that plaintiff recognize that it, through its agent, had wrongfully, though innocently, delivered the goods, and pay
therefor. This the plaintiff did, taking an assignment of the bill of lading and draft for $37,000.
Issue:
W/N Defendant, Bank of America, is a purchaser for value
Ratio: Yes
o
Defendant had no knowledge whatever of the outstanding order bill of lading, or of any other facts or circumstances affecting the invalidity of the title of the
original vendee. It relied upon the apparent title of the warehouse receipts, and upon that reliance advanced the sum of $34,000. The fact that the borrower
was then heavily indebted to the bank is not important, in view of the fact that the loan was made upon the goods, and not the credit of the borrower.
o
The negotiation of the receipt to a purchaser for value without notice is not impaired by the fact that it is a breach of duty or that the owner of the receipt was
induced `by fraud, mistake or duress' to intrust the receipt to the person who negotiated it.
2A
BLOCK DIGESTS | 10
o
WEEK #15
By its fraudulent representations, the vendee persuaded the delivering carrier to surrender the goods. That delivery was a conscious, voluntary delivery,
induced by fraud, true it is, but none the less a delivery consciously and voluntarily made, a delivery within the apparent scope of the plaintiff's agent's
authority.
The court, therefore, finds the issues for the defendant. Judgment shall be entered for the return of the property, or, in the alternative, that the plaintiff shall pay the
defendant the amount for which the same is now rightfully held as security by the defendant, with interest thereon at the rate designated in the note held by
defendant, from the date of the receipt of the warehouse receipts by the defendant.
Carlos Mangco
W.S. BROWN MERCANTILE CO. V. YIELDING BROS. DEPT. STORE, INC.

200 Ala. 412, 76 So. 4
Facts:
o
Franklin, a tenant farmer, gave a chattel mortgage on his cotton crop to Yielding bros. Dept Store, inc., which was recorded.
o
Subsequently, Franklin stored the cotton in the Warrant Warehouse Co. of Birmingham, and took a negotiable receipt therefore, which he sold for the full cash
value of the cotton to the W.S. Mercantile Co., which had no actual knowledge of the prior chattel mortgage.
o
The chattel mortgagee sued the purchaser of the warehouse receipt for $1,050, the value of the cotton.
o
Demurrer to the complaint was overruled.
Issue:
W/N the petitioner is a purchaser in good faith for not having actual notice of the previous mortagage.
Ratio: NO.
o
If the purchaser had actual notice, no one would contend that he was a purchaser in good faith.
o
However, where the purchaser had no actual knowledge, the situation is different.
o
The registration laws were enacted for the purpose of giving notice, and the mortgage here in question, having been duly recorded, gave the purchaser a
constructive notice so as to prevent him from being a purchaser in good faith.
Krissel Alfonso
DUNAGAN V. GRIFFIN
151 S.W. 2d 250, 1941
Facts:
o
H.B. Dunagan, doing business under Dunagan Brothers, sued H.G. Whitehead and Fort Worth Warehouse & Storage Co. to recover the possession of 499 cases
of beer, valued at $8.50.
o
Dunagan alleged that he employed Whitehead to haul the beer from Houston to Big Springs, Texas
He gave him a check payable to Gulf Brewing Co. with which to pay for the beer when received from the brewing company
Whitehead then hauled the beer to Fort Worth Texas and stored it in the Fort Worth Warehouse where he received a warehouse receipt in his name
o
Whitehead and Fort Worth Warehouse denied Dunagans claims
The warehouse claimed that they were informed that a certain J. Rob Griffin was the owner and holder of the receipt
2A
BLOCK DIGESTS | 11
o
o
WEEK #15
Griffin was interpleaded. He claimed that he held the endorsed warehouse receipt as a security for money that Whitehead borrowed from him.
He acquired the receipt for a valuable consideration without notice of any vice in the transaction, he alleged that he was in good faith
The note was already past due and unpaid.
Issue
1. Who was the real owner of the beer? (Dunagan)
2. What rights did Griffin acquire when he took the negotiable warehouse receipt as security in good faith?
Ratio:
o
There was no proof that Whitehead owned the beer. His possession of the beer does not automatically make him the owner. In fact, Dunagan was able to prove
how Whitehead had possession.
o
Whitehead could not, by negotiation to intervener of the warehouse receipt, pass any better title to the beer than what he had.
o
A negotiable receipt may be negotiated by the owner thereof, or by any person to whom the custody of the receipt has been entrusted by the owner.
o
Regardless of the good faith of Griffin, the owners true rights were not cut off to transfer ownership to him
LUHRS V. VALLEY RANCH CO.

Facts:
o
A certain Franklin, who a representative of the ranch of Luhrs sold to Harrison four bales of cotton. Harrison, then delivered it to Valley Ranch Co. for ginning
and storage. Valley ranch issued a negotiable warehouse receipt as a proof of such transaction.
o
Subsequently, Luhrs instituted an action for a writ of replevin to recover the possession of the bales as described by the warehouse receipt which it got from
Harrison.
o
Valley Ranch refused to surrender the bales for the reason that the Uniform Warehouse Receipts Act (Section 25 ), providing that it could not be compelled to
surrender the seized property until the receipts were either surrendered or impounded by the court
o
Luhrs argues that Sec 25 of the Uniform Warehouse Receipts Act does not cover an action of replevin by the real owner of the goods.
Issue
WON the writ of replevin by Luhrs proper to acquire the bales, keeping in mind the Universal Warehouse Receipt Act, sec 25?
Ratio: NO
o
Sec 25 of the Universal Warehouse Receipt Act has for its purpose the protection of the warehouseman who comes into possession of the property from being
liable to two parties. Franklin, in the case at bar is a representative of Luhrs for more than three years, in fact he was selling cotton for the ranch. There is no
doubt as to the authority of Franklin to sell on behalf of Luhrs.
o
His transaction with Harrison is valid. Therefore he is a purchaser in good faith. He is the owner of the cotton bales, not anymore Luhrs.
SIY CONG BIENG & CO V. HK AND SHANGHAI BANK

Siy Cong Bieng & Co v. HK and Shanghai Bank
Facts:
o
Ranft pledged to HSBC quedans from plaintiff to secure its debt from HSBC, however, Ranft died leaving the pledges to HSBC and plaintiff losing the ownership
to said quedans. Plaintiff sues HSBC to recover the quedans stating that it was the rightful owner since the quedans were merely pledged to said Bank.
2A
BLOCK DIGESTS | 12
WEEK #15
Issue:
Whether HSBC is entitled to the quedans?
Ratio: YES
o
It has been the practice of the bank in its transactions with Ranft that the value of the quedans has been entered in the current accounts between Ranft and the
bank, but there is no evidence to the effect that the bank was at any time bound to pay back to Ranft the amount of any of the quedans, and there is nothing in
the record to show that the bank has promised to pay the values of the quedans neither to Ranft nor to the herein plaintiff; on the contrary, as stated in the
stipulation of facts, the "negotiable warehouse receipts were pledged by Otto Ranft to the defendant Hongkong & Shanghai Banking Corporation secure the
payment of his preexisting debts to the latter", and taking into consideration that the quedans were negotiable in form and duly endorsed in blank by the
plaintiff and by Otto Ranft, it follows that on the delivery of the qeudans to the bank they were no longer the property of the indorser unless he liquidated his
debt with the bank. The bank had a perfect right to act as it did, and its action is in accordance with sections 47, 38, and 40 of the Warehouse Receipts Act (Act
No. 2137).
o
We regret that the plaintiff in this case has suffered the loss of the quedans, but as far as we can see, there is now no remedy available to the plaintiff. The
bank is not responsible for the loss; the negotiable quedans were duly negotiated to the bank and as far as the record shows, there has been no fraud on the
part of the defendant.
2A
BLOCK DIGESTS | 13

Nego Week 15

Enviado por

Dados do documento

Direitos autorais

Formatos disponíveis

Compartilhar este documento

Compartilhar ou incorporar documento

Opções de compartilhamento

Você considera este documento útil?

Este conteúdo é inapropriado?

Direitos autorais:

Formatos disponíveis

Nego Week 15

Enviado por

Direitos autorais:

Formatos disponíveis

NEGOTIABLE INSTRUMENTS

Manker v. American Savings Bank

BPI v. De Reny Fabric Industries

Santamaria v. HK & Shanghai Bank Corp

Delos Santos v. McGrath

Roman v. Asia Bank Corp.

John Hale & Co v. Beley Cotton

10. Southern Pac. Co v. Bank of America

MANKER V. AMERICAN SAVINGS BANK

Whether the appellant or respondent bank is entitled to such payment

Whether the bonds are negotiable instruments

The appellant would be entitled to such payment

The bonds are NOT negotiable instruments

GREGORIO ARANETA V. PNB

Defendant paid Barclays the amount of the draft.

Plaintiff retransmitted the check

Defendant issued a receipt that it was only for partial payment

Defendant debited the latters overdraft account

Plaintiff instituted the present action

NAT'L RICE & CORN CORP V. PAN-PHILIPPINE SHIPPING INC

BPI V. DE RENY FABRIC INDUSTRIES

MAKERS: Mrs. C.M. Fox as principal and J.H. Kroeger as surety

PAYEE: Levi State Bank & Trust Company

ROMAN V. ASIA BANKING

covering 576 bales of tobacco

it was indorsed in blank by Umberto

an insolvency proceeding was filed.

Felisa remained an unpaid seller

the vendors lien is superior to the pledge/chattel-mortgage constituted on the goods

The order appealed from is therefore reversed without costs. So ordered.

JOHN S. HALE & CO v. BELEY COTTON CO.

No error in CA decision; certiorari denied.

SOUTHERN PAC. CO. v. BANK OF AMERICA.

W.S. BROWN MERCANTILE CO. V. YIELDING BROS. DEPT. STORE, INC.

LUHRS V. VALLEY RANCH CO.

SIY CONG BIENG & CO V. HK AND SHANGHAI BANK

Você também pode gostar