FIRST DIVISION

[G.R. No. 16936. June 13, 1922. ]

WARNER, BARNES & CO., LTD., Plaintiff-Appellee, v. DIONISIO INZA, Defendant-

Appellant.

Wm. J. Rohde & Jose Lopez Vito for Appellant.

Montinola, Montinola & Hontiveros for Appellee.

1. PERFECTION OF CONTRACT OF PURCHASE AND SALE; CIVIL CODE. — The

contract of purchase and sale is perfected upon the parties having agreed as to the thing which is
the subject matter of the contract and the price. (Art. 1450, Civil Code.)

2. PURCHASE AND SALE; TIME FOR PAYMENT; DUTY OF VENDOR; CIVIL AND
MERCANTILE SALE. — As to whether or not delivery of the thing sold should be made before
payment, even regarding the sale as civil and not mercantile, it must not be overlooked that in the
case under consideration a term for the payment has been stipulated, which brings the case
within the exception provided in article 1466 of the Civil Code, that is, that the thing which is the
object of the sale must be delivered even before the price is paid. If the sale is held mercantile, it
is still the duty of the vendor, before he can demand payment of the price, to deliver the thing
sold to the buyer or have it at the letter’s disposal within the twenty-four hours following the
making of the contract, and only after such delivery, or in default thereof, its judicial deposit
does the obligation of the buyer to pay the price begin. (Arts. 337 and 339, Code of Commerce.)

3. RESCISSION OF SALE; DEFAULT OF PAYMENT WITHIN THE TIME STIPULATED.

— The mere default on the part of the buyer to pay the price within the period stipulated is no
ground for the rescission of the sale, where such period was not coupled with the condition that
the default of payment will operate to rescind the contract.

About April 9, 1220, the firm of Figueras Hermanos, acting as agent of Dionisio Inza, sold
through its manager, E. Sunyer, to the partnership of Warner, Barnes & Co., Ltd., the latter
acting through its agent I. Robinson, 4,000 piculs of centrifugal sugar of 96 degrees, belonging to
said Dionisio Inza, at P37.50 per picul. Neither delivery of the sugar, nor payment of its price,
was then made.

Two days later, that is, on the 12th of the same month, in pursuance to the contract, Dionisio Inza
handed to Warner, Barnes & Co., Ltd., several quedans covering 2,862.23 piculs of the sugar
sold, together with his bill, which is Exhibit 1. On that same day the partnership of Warner,
Barnes & Co., Ltd., through its agent Robinson, proposed to Dionisio Inza to pay the price of the
sugar at a future date but not later than the 15th day of the following month of May, with interest
at the rate of 8 per cent per annum on the price of the sale.

According to Warner, Barnes & Co., Ltd., this proposition was accepted in its entirety by
Dionisio Inza. The latter, however, claims that while it is true that such term was agreed upon,
yet he imposed the condition that if no payment was made to him before the 15th day of May,
the date stipulated, he would be free to dispose of the sugar.

About the 13th day of that same month of April, Dionisio Inza took back from Warner, Barnes &
Co., Ltd., the quedans which he had sent on the preceding day, and the quedans never again
came into the possession of Warner, Barnes & Co., Ltd.

On May 17, 1920, Warner, Barnes & Co., Ltd., sent Dionisio Inza a check for P108,286.22 in
payment of the 2,862.23 piculs of sugar covered by the aforesaid quedans, and the interest on the
price of said quantity of sugar at 9 per cent per annum, the rate having been raised by Warner,
Barnes & Co., Ltd., of its own accord in view of the fact that it was the interest then charged by
the banks at Iloilo. In the same letter of remittance of this check, Warner, Barnes & Co. asked
that said quedans be sent them.

Dionisio Inza refused to receive the check and to send the quedans, alleging that the sale was
rescinded by the failure of Warner, Barnes & Co., Ltd., to pay the price on the 15th day of May,
as stipulated.

On the 18th of that same month of May, Warner, Barnes & Co. again made demand on Dionisio
Inza for the surrender of the quedans, not only of those returned to him but of all the quedans
covering the 4,000 piculs of sugar which were sold. This Dionisio Inza again refused to do.

On the 26th of that same month, the attorneys, Montinola, Montinola & Hontiveros, on behalf of
Warner, Barnes & Co., made demand on Dionisio Inza who persisted in his refusal.

On June 1, 1920, Warner Barnes & Co,. filed a complaint, which was amended on the 26th
following alleging that Dionisio Inza had not fulfilled the contract, and that it suffered damages
in the sum of P66,000, which was the difference between the value of the 4,000 piculs of sugar at
fifty-four pesos (P54) per picul (the price of this commodity on June 1, 1920), and the value of
this same sugar at the agreed price of thirty-seven pesos and fifty centavos (P 37.50) per picul;
and praying that judgment be rendered in its favor and against Dionisio Inza for damages in the
said amount.

ISSUE: W/N the sale of picul between Inza and Warner Bros Inc is perfected and not deemed
rescinded?

SC: Yes, the defendant contends that the sale in question is governed by the provisions of the
Civil Code, and that under article 1171 of the said Code, the plaintiff was under the obligation to
pay the defendant the price of the sugar before the delivery thereof by the latter, the payment to
be made by the plaintiff at the domicile of the defendant.

As to whether or not the delivery of the thing sold was a condition precedent to the payment of
the price, it must not be overlooked that, even if we regard the sale as of a civil, and not of a
mercantile, nature, a period was stipulation for the making of payment, and this brings the case
with the exception provided in article 1466 of the Civil Code, that is, that the sugar should have
been delivered even before its price was paid (Florendo v. Foz, 20 Phil., 388). If we hold the sale
in question to be mercantile, still it was the duty of the plaintiff to deliver the sugar before he
could demand payment of its price, and only after such delivery, or, in default thereof, its judicial
deposit, would the plaintiff have been under the obligation to pay the price (arts. 337 and 339,
Code of Commerce).

In the case before us, the defendant was bound to place the sugar at the disposal of the plaintiff
(art. 1462, Civil Code), or have it at the latter’s disposal within twenty-four hours after the
contract (art. 337, Code of Commerce.)

The evidence shows that the defendant did not place the sugar at the disposal of the plaintiff, nor
have it at the latter’s disposal even within the twenty-four hours following April 13, 1920, the
date on which he took back from the plaintiff the quedans covering a part of the sugar sold. It
cannot be said that the sugar referred to in said quedans remained in the possession of the
plaintiff, notwithstanding that they were taken back by the defendant, who, as a matter of fact,
disposed of them without the consent of the plaintiff.

It was, therefore, incumbent upon the defendant to deliver the sugar sold to the plaintiff, and not
having done so, he was in default in the fulfillment of his obligation as vendor.

the defendant alleges that the evidence should have been held sufficient to establish the fact that
the payment of the price on or before the 15th day of May was a condition precedent to the
perfection of the sale.

Before to have been agreed upon for the payment of the price of the sugar lasted until May 15,
1920, or the end of that month, it should be noted that the sale became perfected on the day of
the making of the contract, before the delivery of the thing sold, or the payment of the price,
upon the mere fact of the parties having agreed as to the thing which was the subject-matter of
the contract and as to the price (art. 1450, Civil Code).

With reference to the term agreed upon for the payment of the price of the sugar, the defendant
says that he imposed the condition that if his bill (for the sugar covered by the quedans which he
had taken back) was not paid, he would sell the sugar where he could. This is denied by the
plaintiff’s evidence. It was incumbent upon the defendant to prove it, as it was a part of his
affirmative defense, and the record does not afford any justification for finding that such a
condition was sufficiently established.

As to whether or not the term for the payment of the price lasted until the 15th of May, or the end
of said month, the preponderance of evidence shows that it lasted until the 15th of May, 1920,
but as we have stated, such term was not coupled with the condition that default of payment
would cause the rescission of the sale

atigbak vs. Court of Appeals, No. L-16480, 4 SCRA 243 , January 31, 1962
ARTEMIO KATIGBAK, petitioner,
vs.
COURT OF APPEALS, DANIEL EVANGELISTA and V. K. LUNDBERG, respondents.

Benjamin J. Molina for petitioner.

Jesus B. Santos for respondent V. K. Lundberg.
Ledesma, Puno, Guytingco, Antonio and Associates for respondent Daniel Evangelista.

PAREDES, J.:

This case arose from an agreed purchase and sale of a Double Drum Carco Tractor Winch.
Artemio Katigbak upon reading an advertisement for the sale of the winch placed by V. K.
Lundberg, owner and operator of the International Tractor and Equipment Co., Ltd., went to
see Lundberg and inspected the equipment. The price quoted was P12,000.00. Desiring a
reduction of the price, Katigbak was referred to Daniel Evangelista, the owner. After the
meeting, it was agreed that Katigbak was to purchase the winch for P12,000.00, payable at
P5,000.00 upon delivery and the balance of P7,000.00 within 60 days. The condition of the sale
was that the winch would be delivered in good condition. Katigbak was apprised that the winch
needed some repairs, which could be done in the shop of Lundberg. It was then stipulated that
the amount necessary for the repairs will be advanced by Katigbak but deductible from the
initial payment of P5,000.00. The repairs were undertaken and the total of P2,029.85 for spare
parts was advanced by Katigbak for the purpose. For one reason or another, the sale was not
consummated and Katigbak sued Evangelista, Lundberg and the latter's company, for the
refund of such amount.

Evangelista, on his part, claimed that while there was an agreement between him and Katigbak
for the purchase and sale of the winch and that Katigbak advanced the payment for the spare
parts, he (Katigbak) refused to comply with his contract to purchase the same; that as a result
of such refusal he (Evangelista) was forced to sell the same to a third person for only
P10,000.00, thus incurring a loss of P2,000.00, which amount Katigbak should be ordered to
pay, plus moral damages of P5,000.00 and P700.00 for attorney's fees.

LOWER COURT

WHEREFORE, judgment is hereby rendered ordering the defendants Daniel Evangelista and V.
K. Lundberg to pay plaintiff the sum of P2,029.85, with legal interest thereon from the filing of
the complaint until fully paid, plus the sum of P300.00 as attorney's fees, and the costs." .

CA—

Notwithstanding the breach of contract committed by him, we may concede appellee's right to
a refund of the sum of P2,029.85, but equally undeniable is appellant Evangelista's right to
recover from him his loss of P2,000.00, which is the difference between the contract price for
the sale of the winch between him and appellee and the actual price for which it was sold after
the latter had refused to carry out his agreement. As held in the above-cited case of Hanlon, if
the purchaser fails to take delivery and pay the purchase price of the subject matter of the
contract, the vendor, without the need of first rescinding the contract judicially, is entitled to
resell the same, and if he is obliged to sell it for less than the contract price, the buyer is liable
for the difference. This loss, which is the subject matter of Evangelista's main counterclaim,
should therefore be set off against the sum claimed by appellee, which would leave in favor of
the latter a balance of P29.85.

Considering our finding that it was appellee who committed a breach of contract, it follows that
the present action was unjustified and he must be held liable to appellant Evangelista for
attorney's fees in the sum of P700.00.

Lastly, inasmuch as, according to the evidence appellant Lundberg was merely an agent of his
co-appellant, it is obvious that he cannot be held liable to appellee in connection with the
refund of the sum advanced by the latter.

ISSUE: W/N the buyer ( petitioner Katigbak) is liable for the balance of the winch ( 2,000) that
the vendor lost as he sold it to a third party for only 10,000?

HELD: YES

We quote from the Hanlon case:

.... In the present case the contract between Hanlon and the mining company was executory as
to both parties, and the obligation of the company to deliver the shares could not arise until
Hanlon should pay or tender payment of the money. The situation is similar to that which arises
every day in business transactions in which the purchaser of goods upon an executory contract
fails to take delivery and pay the purchase price. The vendor in such case is entitled to resell the
goods. If he is obliged to sell for less than the contract price, he holds the buyer for the
difference; if he sells for as much as or more than the contract price, the breach of contract by
the original buyer is damnum absque injuria. But it has never been held that there is any need
of an action of rescission to authorize the vendor, who is still in possession, to dispose of the
property where the buyer fails to pay the price and take delivery... (40 Phil. 815) .

The facts of the case under consideration are identical to those of the Hanlon case. The herein
petitioner failed to take delivery of the winch, subject matter of the contract and such failure or
breach was, according to the Court of Appeals, attributable to him, a fact which We are bound
to accept under existing jurisprudence. The right to resell the equipment, therefore, cannot be
disputed. It was also found by the Court of Appeals that in the subsequent sale of the winch to
a third party, the vendor thereof lost P2,000.00, the sale having been only for P10,000.00,
instead of P12,000.00 as agreed upon, said difference to be borne by the supposed vendee who
failed to take delivery and/or to pay the price.
Of course, petitioner tried to draw a distinction between the Hanlon case and his case. The
slight differences in the facts noted by petitioner are not, however, to our mode of thinking,
sufficient to take away the case at bar from the application of the doctrine enunciated in the
Hanlon case.

Villanueva vs CA
G.R. No. 107624

Subject: Sales
Doctrine: meeting of the minds as to price is essential

Facts:
This is a petition assailing the decision of the CA dismissing the appeal of the petitioners. CA
rendered that there was no contract of sale.
– In 1985, Gamaliel Villanueva (tenant) of a unit in the 3-door apartment building owned by
defendants-spouses (now private respondents) Jose Dela Cruz and Leonila dela Cruz located at
Project 8, Quezon City.
– About February of 1986, Dela Cruz offered said parcel of land with the 3-door apartment
building for sale and plaintiffs, son and mother, showed interest in the property.
– Because said property was in arrears(overdue) in the payment of the realty taxes, dela Cruz
approached Irene Villanueva and asked for a certain amount to pay for the taxes so that the
property would be cleared of any incumbrance.
– Irene Villanueva gave P10,000.00 on two occasions. It was agreed by them that said
P10,000.00 would form part of the sale price of P550,000.00.
– Dela Cruz went to plaintiff Irene Villanueva bringing with him Mr. Ben Sabio, a tenant of one
of the units in the 3-door apartment building and requested Villanueva to allow said Sabio to
purchase one-half (1/2) of the property where the unit occupied by him pertained to which the
plaintiffs consented, so that they would just purchase the other half portion and would be paying
only P265,000.00, they having already — given an amount of P10,000.00 used for paying the
realty taxes in arrears.
– Accordingly the property was subdivided and two (2) separate titles were secured by
defendants Dela Cruz. Mr. Ben Sabio immediately made payments by installments.
– March 1987 Dela Cruz executed in favor of their co-defendants, the spouses Guido Pili and
Felicitas Pili, a Deed of Assignment of the other one-half portion of the parcel of land wherein
plaintiff Gamaliel Villanueva’s apartment unit is situated, purportedly as full payment and
satisfaction of an indebtedness obtained from defendants Pili.
– the Transfer Certificate of Title No. 356040 was issued in the name of defendants Pili on the
same day.
– The plaintiffs came to know of such assignment and transfer and issuance of a new certificate
of title in favor of defendants Pili.
– plaintiff Gamaliel Villanueva complained to the barangay captain of Bahay Turo, Quezon City,
on the ground that there was already an agreement between defendants Dela Cruz and
themselves that said portion of the parcel of land owned by defendants Dela Cruz would be sold
to him. As there was no settlement arrived at, the plaintiffs elevated their complaint to this Court
through the instant action.
– RTC rendered its decision in favor of Dela Cruz. CA affirmed.

ISSUE: WON there was a perfected sale between Villanueva and Dela Cruz.

HELD: No
– Petitioners contend that private respondents’ counsel admitted that “P10,000 is partial or
advance payment of the property.” Necessarily then, there must have been an agreement as to
price, hence, a perfected sale. They cite Article 1482 of the Civil Code which provides that
“(w)henever earnest money is given in a contract of sale, it shall be considered as part of the
price and as proof of the perfection of the contract.”
– Private respondents contradict this claim with the argument that “(w)hat was clearly agreed
(upon) between petitioners and respondents Dela Cruz was that the P10,000.00 primarily
intended as payment for realty tax was going to form part of the consideration of the sale if and
when the transaction would finally be consummated.” Private respondents insist that there “was
no clear agreement as to the true amount of consideration.”
– Dela Cruz’ testimony during the cross-examination firmly negated any price agreement with
petitioners because he and his wife quoted the price of P575,000.00 and did not agree to reduce it
to P550,000.00 as claimed by petitioner.
– Villanueva on cross-examination: “After the Deed of Sale relative to the purchase of the
property was prepared, Mr. dela Cruz came to me and told me that he talked with one of the
tenants and he offered to buy the portion he was occupying if I will agree and I will cause the
partition of the property between us.” Villanueva said that he agreed and that the price 550,000
was to be divided into two. (Sabio and Villanueva) *The contract which the appellant is referring
to was not presented to the court and the appellant did not use all effort to produce the said
contract.
– SC: “The price of the leased land not having been fixed, the essential elements which give life
to the contract were lacking. It follows that the lessee cannot compel the lessor to sell the leased
land to him. The price must be certain, it must be real, not fictitious. A contract of sale is not
void for uncertainty when the price, though not directly stated in terms of pesos and centavos,
can be made certain by reference to existing invoices identified in the agreement. In this respect,
the contract of sale is perfected. The price must be certain, otherwise there is no true consent
between the parties. There can be no sale without a price.
– In the instant case, however, what is dramatically clear from the evidence is that there was no
meeting of mind as to the price, expressly or impliedly, directly or indirectly.
– Sale is a consensual contract. He who alleges it must show its existence by competent proof.
Here, the very essential element of price has not been proven.
– Lastly, petitioners’ claim that they are ready to pay private respondents is immaterial and
irrelevant as the latter cannot be forced to accept such payment, there being no perfected contract
of sale in the first place.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-17825 June 26, 1922

In the matter of the Involuntary insolvency of U. DE POLI.

FELISA ROMAN, claimant-appellee,
vs.
ASIA BANKING CORPORATION, claimant-appellant.

Wolfson, Wolfson and Schwarzkopf and Gibbs, McDonough & Johnson for appellant.
Antonio V. Herrero for appellee.

OSTRAND, J.:

This is an appeal from an order entered by the Court of First Instance of Manila in civil No.
19240, the insolvency of Umberto de Poli, and declaring the lien claimed by the appellee Felisa
Roman upon a lot of leaf tobacco, consisting of 576 bales, and found in the possession of said
insolvent, superior to that claimed by the appellant, the Asia Banking Corporation.

FACTS:

It is hereby stipulated and agreed by and between Felisa Roman and Asia Banking
Corporation, and on their behalf by their undersigned attorneys, that their respective
rights, in relation to the 576 bultos of tobacco mentioned in the order of this court dated
April 25, 1921, be, and hereby are, submitted to the court for decision upon the
following:

I. Felisa Roman claims the 576 bultos of tobacco under and by virtue of the instrument, a
copy of which is hereto attached and made a part hereof and marked Exhibit A.

II. That on November 25, 1920, said Felisa Roman notified the said Asia Banking
Corporation of her contention, a copy of which notification is hereto attached and made a
part hereof and marked Exhibit B.

III. That on November 29, 1920, said Asia Banking Corporation replied as per copy
hereto attached and marked Exhibit C.

IV. That at the time the above entitled insolvency proceedings were filed the 576 bultos
of tobacco were in possession of U. de Poli and now are in possession of the assignee.
 V. That on November 18, 1920, U. de Poli, for value received, issued a quedan, covering
aforesaid 576 bultos of tobacco, to the Asia Banking Corporation as per copy of quedan
attached and marked Exhibit D.

VI. That aforesaid 576 bultos of tobacco are part and parcel of the 2,777 bultos purchased
by U. de Poli from Felisa Roman.

VII. The parties further stipulate and agree that any further evidence that either of the
parties desire to submit shall be taken into consideration together with this stipulation.

Manila, P. I., April 28, 1921.

(Sgd.) ANTONIO V. HERRERO

Attorney for Felisa Roman

(Sgd.) WOLFSON, WOLFSON & SCHWARZKOPF

Attorney for Asia Banking Corp.

Exhibit A referred to in the foregoing stipulation reads:

1.º Que la primera parte es dueña de unos dos mil quinientos a tres mil quintales de
tacabo de distintas clases, producidos en los municipios de San Isidro, Kabiaw y Gapan
adquiridos por compra con dinero perteneciente a sus bienes parafernales, de los cuales es
ella administradora.

2.º Que ha convenido la venta de dichos dos mil quinientos a tres mil quintales de tabaco
mencionada con la Segunda Parte, cuya compraventa se regira por las condiciones
siguientes:

(a) La Primera Parte remitira a la Segunda debidamente enfardado el tabaco de que ella
es propietaria en bultos no menores de cincuenta kilos, siendo de cuenta de dicha Primera
Parte todos los gastos que origine dicha mercancja hasta la estacion de ferrocarril de
Tutuban, en cuyo lugar se hara cargo la Segunda y desde cuyo instante seran de cuenta de
esta los riesgos de la mercancia.

(b) El precio en que la Primera Parte vende a la Segunda el tabaco mencionada es el de

veintiseis pesos (P26), moneda filipina, por quintal, pagaderos en la forma que despues se
establece.

(c) La Segunda Parte sera la consignataria del tabaco en esta Ciudad de Manila quien se
hara cargo de el cuando reciba la factura de embarque y la guia de Rentas Internas,
trasladandolo a su bodega quedando en la misma en calidad de deposito hasta la fecha en
que dicha Segunda Parte pague el precio del mismo, siendo de cuenta de dicha Segunda
Parte el pago de almacenaje y seguro.
 (d) LLegada la ultima expedicion del tabaco, se procedera a pesar el mismo con
intervencion de la Primera Parte o de un agente de ella, y conocido el numero total de
quintales remitidos, se hara liquidacion del precio a cuenta del cual se pagaran quince mil
pesos (P15,000), y el resto se dividira en cuatro pagares vencederos cada uno de ellos
treinta dias despues del anterior pago; esto es, el primer pagare vencera a los treinta dias
de la fecha en que se hayan pagado los quince mil pesos, el segundo a igual tiempo del
anterior pago, y asi sucesivamente; conviniendose que el capital debido como precio del
tabaco devengara un interes del diez por ciento anual.

Los plazos concedidos al comprador para el pago del precio quedan sujetos a la condicion
resolutoria de que si antes del vencimiento de cualquier plazo, el comprador vendiese
parte del tabaco en proporcion al importe de cualquiera de los pagares que restasen por
vencer, o caso de que vendiese, pues se conviene para este caso que desde el momento en
que la Segunda Parte venda el tabaco, el deposito del mismo, como garantia del pago del
precio, queda cancelado y simultaneamente es exigible el importe de la parte por pagar.

Leido este documento por los otorgantes y encontrandolo conforme con lo por ellos
convenido, lo firman la Primera Parte en el lugar de su residencia, San Isidro de Nueva
Ecija, y la Segunda en esta Ciudad de Manila, en las fechas que respectivamente al pie de
este documento aparecen.

(Fdos.) FELISA ROMAN VDA. DE MORENO

U. DE POLI

Firmado en presencia de:

(Fdos.) ANTONIO V. HERRERO

T. BARRETTO

("Acknowledged before Notary")

Exhibit D is a warehouse receipt issued by the warehouse of U. de Poli for 576 bales of tobacco.
The first paragraph of the receipt reads as follows:

Quedan depositados en estos almacenes por orden del Sr. U. de Poli la cantidad de
quinientos setenta y seis fardos de tabaco en rama segun marcas detalladas al margen, y
con arreglo a las condiciones siguientes:

In the left margin of the face of the receipts, U. de Poli certifies that he is the sole owner of the
merchandise therein described. The receipt is endorced in blank "Umberto de Poli;" it is not
marked "non-negotiable" or "not negotiable."

Exhibit B and C referred to in the stipulation are not material to the issues and do not appear in
the printed record.
Though Exhibit A in its paragraph (c) states that the tobacco should remain in the warehouse of
U. de Poli as a deposit until the price was paid, it appears clearly from the language of the exhibit
as a whole that it evidences a contract of sale and the recitals in order of the Court of First
Instance, dated January 18, 1921, which form part of the printed record, show that De Poli
received from Felisa Roman, under this contract, 2,777 bales of tobacco of the total value of
P78,815.69, of which he paid P15,000 in cash and executed four notes of P15,953.92 each for the
balance. The sale having been thus consummated, the only lien upon the tobacco which Felisa
Roman can claim is a vendor's lien.

The order appealed from is based upon the theory that the tobacco was transferred to the Asia
Banking Corporation as security for a loan and that as the transfer neither fulfilled the
requirements of the Civil Code for a pledge nor constituted a chattel mortgage under Act No.
1508, the vendor's lien of Felisa Roman should be accorded preference over it.

It is quite evident that the court below failed to take into consideration the provisions of section
49 of Act No. 2137 which reads:

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, whether such negotiation be prior or subsequent
to the notification to the warehouseman who issued such receipt of the seller's claim to a
lien or right of stoppage in transitu. Nor shall the warehouseman be obliged to deliver or
justified in delivering the goods to an unpaid seller unless the receipt is first surrendered
for cancellation.

The term "purchaser" as used in the section quoted, includes mortgagee and pledgee. (See
section 58 (a) of the same Act.)

In view of the foregoing provisions, there can be no doubt whatever that if the warehouse receipt
in question is negotiable, the vendor's lien of Felisa Roman cannot prevail against the rights of
the Asia Banking Corporation as the indorse of the receipt. The only question of importance to
be determined in this case is, therefore, whether the receipt before us is negotiable.

The matter is not entirely free from doubt. The receipt is not perfect: It recites that the
merchandise is deposited in the warehouse "por orden" instead of "a la orden" or "sujeto a la
orden" of the depositor and it contain no other direct statement showing whether the goods
received are to be delivered to the bearer, to a specified person, or to a specified person or his
order.

We think, however, that it must be considered a negotiable receipt. A warehouse receipt, like any
other document, must be interpreted according to its evident intent (Civil Code, arts. 1281 et
seq.) and 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. That the words "por
orden" are used instead of "a la orden" is very evidently merely a clerical or grammatical error. If
any intelligent meaning is to be attacked to the phrase "Quedan depositados en estos almacenes
por orden del Sr. U. de Poli" it must be held to mean "Quedan depositados en estos almacenes a
la orden del Sr. U. de Poli." The phrase must be construed to mean that U. de Poli was the person
authorized to endorse and deliver the receipts; any other interpretation would mean that no one
had such power and the clause, as well as the entire receipts, would be rendered nugatory.

Moreover, the endorsement in blank of the receipt in controversy together with its delivery by U.
de Poli to the appellant bank took place on the very of the issuance of the warehouse receipt,
thereby immediately demonstrating the intention of U. de Poli and of the appellant bank, by the
employment of the phrase "por orden del Sr. U. de Poli" to make the receipt negotiable and
subject to the very transfer which he then and there made by such endorsement in blank and
delivery of the receipt to the blank.

As hereinbefore stated, the receipt was not marked "non-negotiable." Under modern statutes the
negotiability of warehouse receipts has been enlarged, the statutes having the effect of making
such receipts negotiable unless marked "non-negotiable." (27 R. C. L., 967 and cases cited.)

Section 7 of the Uniform Warehouse Receipts Act, says:

A non-negotiable receipt shall have plainly placed upon its face by the warehouseman
issuing it 'non-negotiable,' or 'not negotiable.' In case of the warehouseman's failure so to
do, a holder of the receipt who purchased it for value supposing it to be negotiable may,
at his option, treat such receipt as imposing upon the warehouseman the same liabilities
he would have incurred had the receipt been negotiable.

This section shall not apply, however, to letters, memoranda, or written

acknowledgments of an informal character.

This section appears to give any warehouse receipt not marked "non-negotiable" or "not
negotiable" practically the same effect as a receipt which, by its terms, is negotiable provided the
holder of such unmarked receipt acquired it for value supposing it to be negotiable,
circumstances which admittedly exist in the present case.

We therefore hold that the warehouse receipts in controversy was negotiable and that the rights
of the endorsee thereof, the appellant, are superior to the vendor's lien of the appellee and should
be given preference over the latter.

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

Araullo, C.J., Malcolm, Avanceña, Villamor, Johns and Romualdez, JJ., concur.