ACT NO.

3893
Bonded Warehouse Act

SECTION 2

What is a warehouse?

When can a person engage in the business of

receiving rice for storage?
Only after a license has been secured from the
Director of the Bureau of Commerce and Industry
(DBCI).
Note: License is annual and shall expire on the
thirty-first of December.

Every building, structure, or other protected

inclosure in which rice is kept for storage.
What is rice?

SECTION 4 & 5

The term rice shall be deemed to mean either:

-

palay in bundles, or
in grains, or
clean rice, or
both.

Who is a person?
Includes corporation or partnership or two or more
persons having joint or common interest;
Who is a warehouseman?
A person engaged in the business receiving rice for
storage.

What are the requirements for a license?

1) Set forth in the application for license the ff:
o The place or places where the business and
warehouse are to be established or located;
o And, the maximum quantity of rice to be
received.
2) Attach a cash bond or a bond secured by real
estate or signed by a duly authorized bonding
company.
o

Amount of bond to be fixed by DBCI; must

not be less than thirty-three and one third
percent of the market value of the maximum
quality or rice to be received.

Bond shall be conditioned as to respond for

the market value of the rice actually
delivered and received at any time the
warehouse is unable to return the rice or to
pay its value.

Bond shall be approved by the DBC before

issuing a license:
a) to satisfy himself concerning the
sufficiency of such bond, and
b) to determine whether the warehouse for
which such license is applied for is
suitable for the proper storage of rice.

Whenever bond has become insufficient,

DBCI may require an additional bond or
bonds to be given by the warehouseman
concerned,
conforming
with
the
requirements of Section 4. S5
Additional bond or bonds must given within
the time fixed by a written demand,

What is a receipt?
Any receipt issued by a warehouseman for rice
delivered to him.
What does the business of receiving rice for
storage include?
1) Any contract or transaction wherein the
warehouseman is obligated to return the very
same rice delivered to him or pay its value;
2) Any contract or transaction wherein the rice is
delivered is to be milled for and on account of
the owner thereof;
3) Any contract or transaction wherein the rice
delivered is commingled with the rice delivered
by or belonging to other persons and the
warehouseman is obligated to return the rice of
the same kind or pay its value.

o
SECTION 3

otherwise license may be suspended or

revoked. S5

Section 6, 8 & 9

What are the offenses and penalties under this

Act?
Violation of Section 3 Guilty of misdemeanor

What are the duties of a warehouseman?

1) Insure against fire, rice received and stored. S6
2) Receive rice for storage so far as his license
and warehouses capacity permit, any rice, of
the kind customarily stored therein by him. S8
3) Keep a complete record:
o of the rice received by him;
o of the receipts issued therefor of the
withdrawals;
o of the liquidations; and
o of all the receipts returned to or cancelled
by him. S9
4) Make reports to the DBCI concerning his
warehouse and the conditions, contents,
operations and business thereof in such form
and at such time as the said Director may
require. S9
5) Conduct warehouse in all other respects in
compliance with Act No. 3893 and the rules and
regulations made in accordance therewith. S9
6) Renew license annually & secure adequate
bond. S1, S4

Section 10, 14
What are the roles of the DBCI?
Aside from issuance of license & approval of bond,
DBCI:
o Make such rules & regulations as he may deem
necessary for the efficient execution of the
provisions of this Act. S10
o Hear & metes suspension or revocation of
license for violation or failure to comply with any
provision of this Act or of the rules and
regulations made by virtue thereof. S14
Section 11, 12 & 13

Receiving a quantity of
rice greater than that is
his application and
license
Any person entering into
connivance or
combination with any
warehouseman that is
not licensed with the
purpose of evading S3
guility of misdemeanor

Imprisonment of not less

than 1 month or by a
fine of not more than
five thousand pesos, or
both
Fine double the market
value
of
the
rice
received in excess of
the quantity of rice he is
authorized to receive.
Fine of not more than
two hundred pesos or
imprisonment for not
more than 1 month or
both.

Section 7
Who can sue?
Any person injured by the breach of any obligation
to secure which a bond is given, shall be entitled to
sue on the bond in his own name in any court of
competent jurisdiction to recover damages he may
have sustained by such breach. Nothing contained
herein shall except any property or assets of any
warehouseman from being sued on in case the
bond given is not sufficient to respond for the full
market value of the rice received by such
warehouseman.
Section 15
This Act shall not be applicable to cooperative
marketing associations of rice producers organized
under Act 3425 or the Cooperative Marketing Law,
provided such associations shall not receive, for
storage, rice from non-members which is greater in
quantity than one-half of the total quantity of rice
received from members, at any time.
Section 15
Act effective January First, nineteen hundred and
thirty-two.