The Warehouse Receipts Law (Act No.
2137, as amended warehouseman that he has received and holds certain
Sections 1-61)
Scope
It covers all warehouses, whether public or private., bonded
or not. Thus, it has been held to be applicable to
warehousemen licensed under Act No. or the General
Bonded Warehouse Act, of special application to those
engaged in the business of receiving commodities for
storage.
When Civil Code applicable
Where the receipts are not issued by a warehouse man as
defined in Section 58(a)
Purposes
(1) To regulate the status, rights, and liabilities of the parties
in a warehousing contract;
(2) To protect those who, in good faith and for value,
acquire negotiable warehouse receipts by negotiation;
(3) To render the title to, and right of possession of,
property stored in warehouses more easily convertible;
(4) To facilitate the use of warehouse receipts as documents
of title; and
(5) In order to accomplish these, to place a much greater
responsibility on the warehouseman.
SECTION 1. Persons who may issue receipts. — Warehouse receipts
may be issued by any warehouseman.
A warehouseman is a person lawfully engaged in the
business of storing goods for profit. (Sec. 58[a].)
But a duly authorized officer or agent of a warehouseman
may validly issue a warehouse receipt.
Meaning of warehouse.
As used in the Act, warehouse means the building or place
where goods are deposited and stored for profit.
SEC. 2. Form of receipts; essential terms. — Warehouse
receipts need not be in any particular form but every
such receipt must embody within its written or printed
terms:
(a) The location of the warehouse where the goods are
stored;
(b) The date of issue of the receipt;
(c) The consecutive number of the receipt;
(d) A statement whether the goods received will be delivered to the
bearer, to a specified person or to a specified person or his order;
(e) The rate of storage charges;
(f) A description of the goods or of the packages containing them;
(g) The signature of the warehouseman which may be made by his
authorized agent;
(h) If the receipt is issued for goods of which the warehouseman is
owner, either solely or jointly or in common with others, the fact of
such ownership; and
(i) A statement of the amount of advances made and of liabilities
incurred for which the warehouseman claims as lien. If the precise
amount of such advances made or of such liabilities incurred is, at
the same time of the issue of the receipt, unknown to the
warehouseman or to his agent who issues it, a statement of the fact
that advances have been made or liabilities incurred and the
purpose thereof is sufficient.
A warehouseman shall be liable to any person injured thereby for all
damages caused by the omission from a
negotiable receipt of any of the terms herein required.
Warehouse Receipt
(1) The Act does not also define a warehouse receipt.
(a) It has been defined as a written acknowledgment by a
goods
therein described in store for the person to whom it is
issued.
(b) It has also been defined as a simple written contract
between the owner of the goods and the warehouseman to
pay the compensation for that service
A warehouse receipt is included in “document of title to.
goods” (Sales Law)
(2) A warehouse receipt is a bilateral contract. It imports
that
goods are in the hands of a warehouseman and is a
symbolical
representation of the property itself.
(3) A warehouse receipt is not a negotiable instrument
within
the meaning of the Negotiable Instruments Law in the
technical sense that a bill of exchange or promissory note is
negotiable, even though the Warehouse Receipts Act
declares it negotiable.
Form and contents of the receipt
(1) Location of warehouse
(2) Date of issue of receipt
(3) Consecutive number of receipt.
(4) Person to whom goods are deliverable
(5) Rate of storage charges
(6) Description of goods or packages.
(7) Signature of warehouseman
(8) Warehouseman’s ownership of or interest in goods.
(9) Statement of advances made and liabilities incurred.
Effect of omission of any of essential
terms.
(1) Validity of receipt not affected.
(2) Warehouseman liable for damage to those injured by his
omission
(3) Negotiability of receipt not affected.
(4) Contract converted to ordinary deposit.
SEC. 3. Form of receipts. — What terms may be inserted.
— A warehouseman may insert in a receipt, issued by
him, any other terms and conditions provided that such
terms and conditions shall not:
(a) Be contrary to the provisions of this Act;
(b) In any wise impair his obligation to exercise that
degree of care in the safekeeping of the goods entrusted
to him which a reasonably careful man would exercise in
regard to similar goods of his own.
Terms that cannot be included in a warehouse receipt.
(1) Exemption from liability for misdelivery
(2) Exemption from liability for negligence
SEC. 4. Definition of non-negotiable receipt. — A receipt
in which it is stated that the goods received will be
delivered to the depositor or to any other specified person,
is a non-negotiable receipt.
SEC. 5. Definition of negotiable receipt. — A receipt in
which it is stated that the goods received will be delivered
to the bearer or to the order of any person named in such
receipt is a negotiable receipt.
No provision shall be inserted in a negotiable receipt
that it is non-negotiable. Such provision, if inserted, shall
be void.
Meaning of “negotiable” under the Act.
In the passage of warehouse receipts through the channels
of commerce, the law regards the property which they
describe as following them and gives to their regular
transfer by indorsement the effect of manual delivery of the
things specified in them.
SEC. 6. Duplicate receipts must be so marked. — When
more than one negotiable receipt is issued for the same
goods, the word “duplicate” shall be plainly placed upon
the face of every such receipt, except the first one issued.
A warehouseman shall be liable for all damages caused by
his failure to do so to any one who purchased the subsequent
receipt for value supposing it to be an original, even
though the purchase be after the delivery of the goods by
the warehouseman to the holder of the original receipt.
SEC. 7. Failure to mark “not negotiable.” — A nonnegotiable
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 to
do so, 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 acknowledgment of an informal character.
Application of Sections 6 and 7.
Effect of failure to mark “negotiable”or “non-negotiable.”
(1) The word “negotiable” usually is written or printed on
the face of a negotiable warehouse receipt and the failure to
so mark it does not render it non-negotiable if it contains
words of negotiability. (Sec. 5.)
(2) In the case of non-negotiable receipts, the law imposes
upon the warehouseman the duty to mark them “non-
negotiable” or “not negotiable” otherwise they shall be
considered negotiable provided the holder of such
unmarked receipt purchased it for value supposing it to be
negotiable.
Negotiability of warehouse receipts enlarged.
Section 7 enlarges the negotiability of warehouse receipts.
It appears to give any warehouse receipt not marked
“nonnegotiable” 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.
Construction of warehouse receipts.
- liberal construction of the law in favor of the bona fi de
holders of such receipts.
- The rule has no application to actions against any party
to the transactions other than a warehouseman.
(warehouseman must be a party to transaction)
SEC. 8. Obligation of warehouseman to deliver. — A
warehouseman, in the absence of some lawful excuse
provided by this Act, is bound to deliver the goods upon
a demand made either by the holder of a receipt for the
goods or by the depositor; if such demand is accompanied
with:
(a) An offer to satisfy the warehouseman’s lien;
(b) An offer to surrender the receipt, if negotiable with
such indorsements as would be necessary for the negotiation
of the receipts; and
(c) A readiness and willingness to sign, when the
goods are delivered, an acknowledgment that they have
been delivered, if such signature is requested by the
warehouseman.
In case the warehouseman refuses or fails to deliver
the goods in compliance with a demand by the holder or
depositor so accompanied, the burden shall be upon the
warehouseman to establish the existence of a lawful excuse
for such refusal.
Principal obligations of the warehouseman.
A warehouseman is essentially a depositary with respect
to the goods received and stored by him in his warehouse.
(1) to take care of the goods entrusted to his safekeeping
(Sec. 21.); and
(2) to deliver them to the holder of the receipt or the
depositor provided the conditions under Section 8 are
fulfilled.
Necessity of demand.
Generally speaking, a demand should be made on the
warehouseman in order that the duty to deliver the goods
will arise. But where demand is evidently useless as when
the warehouseman has rendered it beyond his power to
deliver the goods, demand is dispensed with.
Offer to satisfy warehouseman’s lien.
A warehouseman having a lien valid against the person
demanding the goods may refuse to deliver the goods to
him until the lien is satisfied. (Sec. 31.) He loses his lien upon
the goods by surrendering possession thereof. The offer to
satisfy the warehouseman’s lien is, therefore, required
before the warehouseman is bound to deliver or return the
goods. When, however, an offer is vain or useless, a formal
tender is not required.
Offer to surrender and sign negotiable receipt.
The offer to surrender the receipt is required for the
protection of the warehouseman since the receipt
represents the goods described therein. (see Sec. 11.)
Furthermore, the warehouseman will be criminally liable if
he delivers the goods without obtaining possession of such
receipt. (Sec. 54.) The warehouseman’s right to require
production of the receipt as a condition precedent to
delivery is subject to waiver, as where he refuses to deliver
on grounds other than its non-production. If the receipt is
negotiable, the demand for the delivery of the goods must
be accompanied by an offer to surrender the receipt
properly indorsed. If the receipt issued is not negotiable, any
person lawfully entitled to the possession of the goods may
be entitled to delivery without surrender of the receipt.
Lawful excuses for refusal to deliver goods.
Even if the demand is accompanied by the three conditions
provided in Section 8, a warehouseman may still refuse
delivery of goods covered by a warehouse receipt on some
lawful excuses provided in the Act. (see Secs. 10, 16, 18, 21,
31, 36.) But the existence of a lawful excuse for such refusal
is an affirmative defense which the warehouseman must
prove. (Sec. 8, par. 2.)
The fact that the warehouseman has a claim for unpaid
storage on certain property of the person seeking delivery
does not justify him in refusing delivery of other property on
which he has no such claim.
SEC. 9. Justification of warehouseman in delivering.
— A warehouseman is justified in delivering the goods,
subject to the provisions of the three following sections,
to one who is:
(a) The person lawfully entitled to the possession of
the goods, or his agent;
(b) A person who is either himself entitled to delivery
by the terms of a non-negotiable receipt issued for the
goods, or who has written authority from the person so
entitled either indorsed upon the receipt or written upon
another paper; or
(c) A person in possession of a negotiable receipt by
the terms of which the goods are deliverable to him or order,
or to bearer, or which has been indorsed to him or in
blank by the person to whom delivery was promised by
the terms of the receipt or by his mediate or immediate
indorser.
SEC. 10. Warehouseman’s liability for misdelivery. —
Where a warehouseman delivers the goods to one who is
not in fact lawfully entitled to the possession of them, the
warehouseman shall be liable as for conversion to all having
a right of property or possession in the goods if he
delivered the goods otherwise than as authorized by subdivisions
(b) and (c) of the preceding section, and though
he delivered the goods as authorized by said subdivisions,
he shall be so liable, if prior to such delivery he had either:
(a) Been requested, by or on behalf of the person lawfully
entitled to a right of property or possession in the
goods, not to make such delivery; or
(b) Had information that the delivery about to be made
was to one not lawfully entitled to the possession of the
goods.
Warehouseman’s liability for misdelivery.
(1) Liability similar to a bank paying a forged check
(2) Liability as for conversion. —
the liability of the warehouseman for misdelivery is as for
conversion.
Conversion is unauthorized assumption and exercise of
the right of ownership over goods belonging to another
through the alteration of their condition or the exclusion of
the owner’s right.
And even if the warehouseman delivers the goods to the
persons entitled under subsections (b) and (c) of Section 9,
he may still be liable for conversion if prior to delivery, he
had been requested not to make suchdelivery (subsec. [a],
Sec. 10.) or he had received notice of the adverse claim or
title of a third person.
SEC. 11. Negotiable receipts must be cancelled when
goods delivered. — Except as provided in Section thirtysix,
where a warehouseman delivers goods for which he
had issued a negotiable receipt, the negotiation of which
would transfer the right to the possession of the goods,
and fails to take up and cancel the receipt, he shall be liable
to anyone who purchases for value in good faith such
receipt, for failure to deliver the goods to him, whether
such purchaser acquired title to the receipt before or after
the delivery of the goods by the warehouseman.
SEC. 12. Negotiable receipts must be cancelled or
marked when part of goods delivered. — Except as provided
in Section thirty-six, where a warehouseman delivers
part of the goods for which he had issued a negotiable
receipt and fails either to take up and cancel such receipt,
or to place plainly upon it a statement of what goods or
packages have been delivered, he shall be liable to any
one who purchases for value in good faith such receipt,
for failure to deliver all the goods specified in the receipt, whether
such purchaser acquired title to the receipt before
or after the delivery of any portion of the goods by the
warehouseman.
SEC. 13. Altered receipts. — The alteration of a receipt
shall not excuse the warehouseman who issued it from
any liability if such alteration was:
(a) Immaterial;
(b) Authorized; or
(c) Made without fraudulent intent.
If the alteration was authorized, the warehouseman
shall be liable according to the terms of the receipt as altered.
If the alteration was unauthorized but made without
fraudulent intent, the warehouseman shall be liable according
to the terms of the receipt as they were before alteration.
Material and fraudulent alteration of a receipt shall not
excuse the warehouseman who issued it from liability to
deliver, according to the terms of the receipt as originally
issued, the goods for which it was issued but shall excuse
him from any other liability to the person who made the alteration
and to any person who took with notice of the alteration.
Any purchaser of the receipt for value without notice
of the alteration shall acquire the same rights against
the warehouseman which such purchaser would have acquired
if the receipt had not been altered at the time of the purchase.
Effects of alteration on liability of warehouseman.
(1) Alteration immaterial. — If the alteration is immaterial
(the tenor of the receipt is not changed like the substitution
of the real name of a party), whether fraudulent or not,
authorized or not, the warehouseman is liable on the
altered receipt according to its original tenor;
(2) Alteration material. — If the alteration is material (the
tenor of the receipt is changed like the erasure of the name
of a party and the insertion of another), but authorized, the
warehouseman is liable according to the terms of the
receipt as altered;
(3) Material alteration innocently made. — If the alteration
is material but innocently made though unauthorized, the
warehouseman is liable on the altered receipt according to
its original tenor; and
(4) Material alteration fraudulently made. — If the alteration
is material and fraudulently made, the warehouseman is
liable according to the original tenor of the receipt to a
purchaser of the receipt for value without notice, and even
to the alterer and subsequent purchasers with notice except
that as regards to the last two, the warehouseman’s liability
is limited only to delivery as he is excused from any liability.
Under this section, it is clear that even a fraudulent
alteration cannot divest the title of the owner of stored
goods and the warehouseman is, therefore, liable to return
them to the owner. But a bona fi de holder acquires no right
to the goods under a negotiable receipt which has been lost
or stolen or to which the indorsement of the depositor has
been forged.
SEC. 14. Lost or destroyed receipts. — Where a negotiable
receipt has been lost or destroyed, a court of competent
jurisdiction may order the delivery of the goods upon
satisfactory proof of such loss or destruction and upon
the giving of a bond with sufficient sureties to be approved
by the court to protect the warehouseman from any liability
or expense, which he or any person injured by such delivery
may incur by reason of the original receipt remaining
outstanding. The court may also in its discretion order
the payment of the warehouseman’s reasonable costs and
counsel fees.
The delivery of the goods under an order of the court as
provided in this section, shall not relieve the warehouseman
from liability to a person to whom the negotiable receipt
has been or shall be negotiated for value without notice of
the proceedings or of the delivery of the goods.
SEC. 15. Effect of duplicate receipts. — A receipt upon
the face of which the word “duplicate” is plainly placed
is a representation and warranty by the warehouseman
that such receipt is an accurate copy of an original receipt
properly issued and uncancelled at the date of the issue of
the duplicate, but shall impose upon him no other liability.
Liability of warehouseman
as to duplicate.
When more than one negotiable receipt is issued for the
same goods, the word “duplicate” must be plainly placed by
the warehouseman upon the face of every such receipt,
except the one first issued. (Sec. 6.) In such case, the
warehouseman
warrants
(1) that the duplicate is an accurate copy of the original
receipt; and (2) such original receipt is uncancelled at the
date of the issue of the duplicate.
Except for breach of this warranty, the duplicate imposes
no other liability upon the warehouseman. It results that the
warehouseman may not be compelled to deliver the goods
by virtue of the duplicate only unless the procedure
provided for in Section 14 is followed.
SEC. 16. Warehouseman cannot set up title in himself.
— No title or right to the possession of the goods, on
the part of the warehouseman, unless such title or right
is derived directly or indirectly from a transfer made by
the depositor at the time of or subsequent to the deposit
for storage, or from the warehouseman’s lien, shall excuse
the warehouseman from liability for refusing to deliver the
goods according to the terms of the receipt.
Ownership not a defense for refusal
to deliver.
The warehouseman cannot refuse to deliver the goods on
the ground that he has acquired title or right to the
possession of the same unless such title or right is derived
(1) directly or indirectly from a transfer made by the
depositor at the time of the deposit for storage or
subsequent thereto; or (2) from the warehouseman’s lien.
Section 16 is based on estoppel.
SEC. 17. Interpleader of adverse claimants. — If more
than one person claims the title or possession of the
goods, the warehouseman may, either as a defense to an
action brought against him for non-delivery of the goods,
or as an original suit, whichever is appropriate, require all
known claimants to interplead.
SEC. 18. Warehouseman has reasonable time to determine
validity of claims. — If someone other than the depositor
or person claiming under him has a claim to the
title or possession of the goods, and the warehouseman
has information of such claim, the warehouseman shall
be excused from liability for refusing to deliver the goods,
either to the depositor or person claiming under him or
to the adverse claimant, until the warehouseman has had
a reasonable time to ascertain the validity of the adverse
claim or to bring legal proceedings to compel all claimants
to interplead.
Duty of warehouseman where there are several claimants.
If there are several claimants to the goods, the
warehouseman must determine within a reasonable time
the validity of the conflicting claims (Sec. 18.), and deliver to
the person whom he finds is entitled to the possession of
the goods. However, he is not excused from liability in case
he makes a mistake. (see Sec.10.) For his own protection,
the warehouseman must bring a complaint in interpleader
(Sec. 1, Rule 62, Rules of Court.) and require the different
claimants to litigate among themselves. (Sec. 17.) In such
case, the warehouseman will be relieved from liability in
delivering the goods to the person whom the court finds to
have a better right.
Liability of warehouseman to rightful claimant.
Where a warehouseman does not compel interpleader in a
case requiring it, he is liable for refusal to deliver to the
rightful claimant, and where he neither interpleads nor
investigates, he will, after lapse of a reasonable time, be
held guilty of conversion as of the date of original demand
for the goods. The question of what constitutes a
reasonable time is one of fact for determination in
accordance with the circumstances of the particular case.
Section 18 does not apply to cases where the
warehouseman himself makes a claim to the goods.
SEC. 19. Adverse title is no defense except as above
provided. — Except as provided in the two preceding sections
and in sections nine and thirty-six, no right or title
of a third person shall be a defense to an action brought by the
depositor or person claiming under him against the
warehouseman for failure to deliver the goods according
to the terms of the receipt. Adverse title of third person not a
defense for refusal to deliver.
The warehouseman cannot set up title in himself as an
excuse for his failure or refusal to deliver the goods. (Sec.
16.) Neither can the warehouseman, as a depositary for
hire, set up an adverse title in another as an excuse for his
failure to deliver property to his bailor on demand. The
exceptions to the above rule are the cases provided for in
Sections 9, 17, 18, and 36.
SEC. 20. Liability of warehouseman for non-existence
or misdescription of goods. — A warehouseman shall be
liable to the holder of a receipt for damages caused by the
non-existence of the goods or by the failure of the goods
to correspond with the description thereof in the receipt at
the time of its issue. If, however, the goods are described
in a receipt merely by a statement of marks or labels upon
them, or upon packages containing them or by a statement
that the goods are said to be goods of a certain kind, or
that the packages containing the goods are said to contain
goods of a certain kind, or by words of like import, such
statements, if true, shall not make liable the warehouseman
issuing the receipt, although the goods are not of the
kind which the marks or labels upon them indicate, or of
the kind they were said to be by the depositor.
Liability of warehouseman for non-existence
or misdescription of goods.
- As a general rule, the warehouseman is under
obligation to deliver the identical property stored with
him and if he fails to do so, he is liable directly to the
owner.
- As against a bona fi de purchaser of a warehouseman
receipt, the warehouseman is estopped, whether the
 receipt is negotiable or not, to deny that he has
received the goods described in it.
- But if the description consists merely of marks or labels
upon the goods or upon the packages containing them,
etc., the warehouseman is not liable even if the goods
are not of the kind as indicated in the marks or labels.
SEC. 21. Liability for care of goods. — A warehouseman shall be liable
for any loss or injury to the goods caused by his failure to exercise
such care in regard to them as a reasonably careful owner of similar
goods would exercise, but he shall not be liable, in the absence of an
agreement to the contrary, for any loss or injury to the goods which
could not have been avoided by the exercise of such care.
- The warehouseman is required to exercise “the
diligence of a good father of a family.” (Art. 1163, Civil
Code.)
- In the absence of any agreement to the contrary, the
warehouseman is not liable for any loss or injury to the
goods which could not have been avoided by the
exercise of such care. (case to case basis)
- While the warehouseman may limit his liability to an
agreed value of the property received in case of loss, he
cannot stipulate with the depositor that he would not
be responsible for any loss even if caused by his
negligence. Such stipulation is void.
SEC. 22. Goods must be kept separate. — Except as provided in the
following section, a warehouseman shall keep the goods so far
separate from goods of other depositors and from other goods of the
same depositor for which a separate receipt has been issued, as to
permit at all times the identification and redelivery of the goods
deposited.
SEC. 23. Fungible goods may be commingled if warehouseman
authorized. — If authorized by agreement or by custom, a
warehouseman may mingle fungible goods with other goods of the
same kind and grade. In such case, the various depositors of the
mingled goods shall own the entire mass in common and each
depositor shall be entitled to such portion thereof as the amount
deposited by him bears to the whole.
SEC. 24. Liability of warehouseman to depositors of commingled
goods. — The warehouseman shall be severally liable to each
depositor for the care and redelivery of his share of such mass to the
same extent and under the same circumstances as if the goods had
been kept separate.
SEC. 25. Attachment or levy upon goods for which a negotiable receipt
has been issued. — If goods are delivered to a warehouseman by the
owner or by a person whose act in conveying the title to them to a
purchaser in good faith for value would bind the owner, and a
negotiable receipt is issued for them, they cannot thereafter, while in
the possession of the warehouseman, be attached by garnishment,
or otherwise, or be levied upon under an
execution, unless the receipt be first surrendered to the
warehouseman, or its negotiation enjoined. The warehouseman shall
in no case be compelled to deliver up the actual possession of the
goods until the receipt is surrendered to him or impounded by the
court.
Attachment or levy of negotiable receipt.
- The warehouseman has the direct obligation to hold
possession of the goods for the original owner or for
the person to whom the negotiable receipt of title has
been duly negotiated.
- While in possession of such warehouseman, the goods
cannot be attached or levied upon under an execution
unless:
(1) the document be first surrendered; or
(2) its negotiation is enjoined; or
(3) the document is impounded by the court.
Delivery of goods covered by an outstanding
negotiable receipt.
- The warehouseman cannot be compelled to deliver up
the possession of the goods until the receipt is
surrendered to him or impounded by the court.
- This prohibition is for the protection of the
warehouseman since he could be made liable to a
subsequent purchaser for value in good faith.
Where depositor not owner.
- The provisions of Section 25 do not apply if the person
depositing is not the owner of the goods (like a thief) or
one who has no right to convey title to the goods
binding upon the owner.
- Neither does it apply to actions for recovery or manual
delivery of goods by the real owner nor to cases where
the attachment is made before the issuance of the
negotiable receipt of title.
- The rights acquired by attaching creditors cannot be
defeated by the issuance of a negotiable receipt of title
thereafter.
SEC. 26. Creditor’s remedies to reach negotiable receipts. — A creditor
whose debtor is the owner of a negotiable receipt shall be entitled to
such aid from courts of appropriate jurisdiction, by injunction and
otherwise, in attaching such receipt or in satisfying the claim by
means thereof as is allowed at law or in equity in these Islands in
regard to property which cannot readily be attached or levied upon
by ordinary legal process.
SEC. 27. What claims are included in the warehouseman’s lien. —
Subject to the provisions of Section thirty, a warehouseman shall have
a lien on goods deposited or on the proceeds thereof in his hands, for
all lawful charges for storage and preservation of the goods; also for
all lawful claims for money advanced, interest, insurance,
transportation, labor, weighing, cooperating and other charges and
expenses in relation to such goods, also for all reasonable charges and
expenses for notice and advertisements of sale, and for sale of the
goods where default had been made in satisfying the
warehouseman’s lien.
SEC. 28. Against what property the lien may be enforced. — Subject
to the provisions of Section thirty, a warehouseman’s lien may be
enforced:
(a) Against all goods, whenever deposited, belonging to the person
who is liable as debtor for the claims in regard to which the lien is
asserted; and
(b) Against all goods belonging to others which have been deposited
at any time by the person who is liable as debtor for the claims in
regard to which the lien is asserted if such person had been so
entrusted with the possession of the goods that a pledge of the same
by him at the time of the deposit to one who took the goods in good
faith for value would have been valid.
Goods subject to lien.
(1) Goods belonging to depositor or his principal
(2) Goods stored in fraud of true owner’s rights
SEC. 29. How the lien may be lost. — A warehouseman loses his lien
upon goods:
(a) By surrendering possession thereof; or
(b) By refusing to deliver the goods when a demand is made with
which he is bound to comply under the provisions of this Act.
Loss and waiver of lien upon goods.
(1) By surrendering possession of goods.
(2) By wrongfully refusing to deliver goods
Valid reasons for refusing to deliver goods.
(1) that the holder of the receipt does not satisfy the
conditions prescribed in Section 8;
(2) that the warehouseman has legal title in himself on the
goods, such title or right being derived directly or indirectly
from a transfer made by the depositor at the time of or
subsequent to the deposit for storage, or from the
warehouseman’s lien
(3) that the warehouseman has legally set up the title or
right of third persons as lawful defense for nondelivery of
the goods as follows:
(a) Where the warehouseman has been requested
by or on behalf of the person lawfully entitled to a
right of property of or possession in the goods, not
to make such delivery (Sec. 10.), in which case, the
warehouseman may, either as a defense to an
action brought against him for nondelivery of the
goods, or as an original suit, whichever is
appropriate, require all known claimants to
interplead.
(b) Where the warehouseman had information that
the delivery about to be made was to one not
lawfully entitled to the possession of the goods
(Sec. 10.), in which case, the warehouseman shall
be excused from liability for refusing to deliver the
goods, either to the depositor or person claiming
under him or to the adverse claimant, until the
warehouseman has had a reasonable time to
ascertain the
validity of the adverse claims or to bring legal
proceedings to
compel all claimants to interplead (Sec. 18.); and
(c) Where the goods have already been lawfully
sold to
third persons to satisfy a warehouseman’s lien, or
have been
lawfully sold or disposed of because of their
perishable or
hazardous nature (Sec. 36.);
(4) that the warehouseman having a lien valid against the
person demanding the goods refuses to deliver the goods to
him until the lien is satisfi ed (Sec. 31.); and
(5) that the failure was not due to any fault on the part of
the warehouseman, as by showing that, prior to demand for
delivery and refusal, the goods were stolen or destroyed by
fi re, flood, etc., without any negligence on his part, unless
he has contracted so as to be liable in such case, or that the
goods have been taken by the mistake of a third person
without the knowledge or implied assent of the
warehouseman, or some other justifiable ground for non-
delivery.
SEC. 30. Negotiable receipt must state charges for
which the lien is claimed. — If a negotiable receipt is issued
for goods, the warehouseman shall have no lien thereon,
except for charges for storage of those goods subsequent
to the date of the receipt, unless the receipt expressly enumerates
other charges for which a lien is claimed. In such
case, there shall be lien for the charges enumerated so
far as they are within the terms of Section twenty-seven
although the amount of the charges so enumerated is not
stated in the receipt.
Lien where receipt negotiable.
With the exception of the charges for storage and
preservation of goods for which a negotiable receipt has
been issued, the lien exists only for the other charges
expressly enumerated in the receipt so far as they are
written within the terms of Section 27 although the amount
of the said charges is not stated. As to claims not specifi ed
in the receipt, the warehouseman shares pro rata with the
other creditors of the depositor the balance of the proceeds
of the sale for the satisfaction of said claims (Secs.
33, 34.) after deducting the charges for storage.
SEC. 31. Warehouseman need not deliver until lien is
satisfi ed. — A warehouseman having a lien valid against
the person demanding the goods may refuse to deliver the
goods to him until the lien is satisfi ed.
SEC. 32. Warehouseman’s lien does not preclude other
remedies. — Whether a warehouseman has or has not a
lien upon the goods, he is entitled to all remedies allowed
by law to a creditor against a debtor for the collection from
the depositor of all the charges and advances which the
depositor has expressly or impliedly contracted with the
warehouseman to pay.
SEC. 33. Satisfaction of lien by sale. — A warehouseman’s
lien for a claim which has become due may be satisfi
ed as follows:
The warehouseman shall give a written notice to the
person on whose account the goods are held, and to any
other person known by the warehouseman to claim an interest in
the goods. Such notice shall be given by delivery
in person or by registered letter addressed to the last
known place of business or abode of the person to be notifi
ed. The notice shall contain:
(a) An itemized statement of the warehouseman’s
claim, showing the sum due at the time of the notice and
the date or dates when it became due;
(b) A brief description of the goods against which the
lien exists;
(c) A demand that the amount of the claim as stated in
the notice, of such further claim as shall accrue, shall be
paid on or before a day mentioned, not less than ten days
from the delivery of the notice if it is personally delivered,
or from the time when the notice shall reach its destination,
according to the due course of post, if the notice is
sent by mail; and
(d) A statement that unless the claim is paid within the
time specifi ed, the goods will be advertised for sale and
sold by auction at a specifi ed time and place.
In accordance with the terms of a notice so given, a
sale of the goods by auction may be had to satisfy any
valid claim of the warehouseman for which he has a lien on
the goods. The sale shall be had in the place where the lien
was acquired, or, if such place is manifestly unsuitable for
the purpose, at the nearest suitable place. After the time
for the payment of the claim specifi ed in the notice of the
depositor has elapsed, an advertisement of the sale, describing
the goods to be sold, and stating the name of the
owner or person on whose account the goods are held,
and the time and place of the sale, shall be published once
a week for two consecutive weeks in a newspaper published
in the place where such sale is to be held. The sale
shall not be held less than fi fteen days from the time of
the fi rst publication. If there is no newspaper published in
such place, the advertisement shall be posted at least ten
days before such sale in not less than six conspicuous
places therein.
From the proceeds of such sale, the warehouseman
shall satisfy his lien, including the reasonable charges
of notice, advertisement, and sale. The balance, if any, of such
proceeds shall be held by the warehouseman, and
delivered on demand to the person to whom he would have
been bound to deliver or justifi ed in delivering the goods.
At any time before the goods are so sold, any person
claiming a right of property or possession therein may
pay the warehouseman the amount necessary to satisfy
his lien and to pay the reasonable expenses and liabilities
incurred in serving notices and advertising and preparing
for the sale up to the time of such payment. The warehouseman
shall deliver the goods to the person making
payment if he is a person entitled, under the provision of
this Act, to the possession of the goods on payment of
charges thereon. Otherwise, the warehouseman shall retain
possession of the goods according to the terms of the
original contract of deposit.
SEC. 34. Perishable and hazardous goods. — If goods
are of a perishable nature, or by keeping will deteriorate
greatly in value, or by their odor, leakage, infl ammability
or explosive nature, will be liable to injure other property,
the warehouseman may give such notice to the owner, or
to the person in whose name the goods are stored, as is
reasonable and possible under the circumstances, to satisfy
the lien upon such goods, and to remove them from
the warehouse, and in the event of the failure of such persons
to satisfy the lien and to remove the goods within the
time so specifi ed, the warehouseman may sell the goods
at public or private sale without advertising. If the warehouseman,
after a reasonable effort, is unable to sell such
goods, he may dispose of them in any lawful manner, and
shall incur no liability by reason thereof.
The proceeds of any sale made under the terms of this
section shall be disposed of in the same way as the proceeds
of sales made under the terms of the preceding section.
SEC. 35. Other methods of enforcing lien. — The remedy
for enforcing of a lien herein provided does not preclude
any other remedies allowed by law for the enforcement
of a lien against personal property nor bar the right
to recover so much of the warehouseman’s claim as shall
not be paid by the proceeds of the sale of the property.
SEC. 36. Effect of sale. — After goods have been lawfully
sold to satisfy a warehouseman’s lien, or have been
lawfully sold or disposed of because of their perishable or
hazardous nature, the warehouseman shall not thereafter
be liable for failure to deliver the goods to the depositor, or
owner of the goods, or to a holder of the receipt given for
the goods when they were deposited, even if such receipt
be negotiable.
Enforcement of warehouseman’s lien.
The remedies available to a warehouseman for enforcing his
lien are as follows:
(1) By refusing to deliver the goods until the lien is satisfi ed
(Sec. 31.);
(2) By causing the extrajudicial sale of the property and
applying the proceeds to the value of the lien (Secs. 33, 34.);
and
(3) By fi ling a civil action for collection of the unpaid charges
or by way of counterclaim in an action to recover the
property
from him. (93 C.J.S. 502.), or such other remedies allowed
by
law for the enforcement of a lien against personal property
(Sec.
35.), or to a creditor against his debtor, for the collection
from the depositor of all the charges which the depositor
has bound himself to pay. (Sec. 32.)
A warehouseman is entitled to all the remedies allowed by
law to a creditor against his debtor for the collection from
the depositor of all charges which the depositor is obliged to
pay including remedies allowed by law for the enforcement
of a lien against personal property and recovery of any
deficiency in case it exists after sale of the property.
Effect of sale of goods.
(1) In case of sale of goods, the warehouseman is not liable
for nondelivery even if the receipt given for the goods when
they were deposited be negotiated. (Sec. 36.) This rule
necessarily
qualifi es the right of a purchaser of a negotiable receipt.
(Commissioners’ note.)
(2) Where the sale was made without the publication
required and before the time specifi ed by the law (Sec. 33,
par. 2.),
such sale is void and the purchaser of the goods acquires no
title in them.
Acts for which warehouseman is liable.
(1) Failure to stamp “duplicate” on copies of a negotiable
receipt (Sec. 6.);
(2) Failure to place “non-negotiable” or “not negotiable” on
a non-negotiable receipt (Sec. 7.);
(3) Misdelivery of the goods (Sec. 10.);
(4) Failure to effect cancellation of a negotiable receipt upon
delivery of the goods (Sec. 11.);
(5) Issuing receipt for non-existing goods or misdescribed
goods (Sec. 20.);
(6) Failure to take care of the goods (Sec. 21.); and
(7) Failure to give notice in case of sale of goods to satisfy
his
lien (Sec. 33.) or because the goods are perishable or
hazardous.
(Sec. 34.)
SEC. 37. Negotiation of negotiable receipt by delivery.
— A negotiable receipt may be negotiated by delivery:
(a) Where, by the terms of the receipt, the warehouseman
undertakes to deliver the goods to the bearer; or
(b) Where, by the terms of the receipt, the warehouseman
undertakes to deliver the goods to the order of a specifi
ed person, and such person or a subsequent indorsee of
the receipt has indorsed it in blank or to bearer.
Where, by the terms of a negotiable receipt, the goods
are deliverable to bearer or where a negotiable receipt has
been indorsed in blank or to bearer, any holder may indorse
the same to himself or to any other specifi ed person, and
in such case the receipt shall thereafter be negotiated only
by the indorsement by such indorsee.
Negotiation of Negotiable Receipt
(1) A negotiable warehouse receipt is negotiable by delivery
if the goods are deliverable to the bearer or when it is
indorsed
in blank or to the bearer by the person to whose order the
goods
are deliverable or by a subsequent indorsee. An
indorsement is in blank when the holder merely signs his
name at the back
(2) If the receipt is specially indorsed, it becomes an order
receipt and negotiation can only be effected by the
indorsement of the indorsee. A special indorsement
specifies the person to whom or to whose order, the goods
are to be delivered.
SEC. 38. Negotiation of negotiable receipt by indorsement.
— A negotiable receipt may be negotiated by the indorsement
of the person to whose order the goods are,
by the terms of the receipt, deliverable. Such indorsement
may be in blank, to bearer, or to a specifi ed person. If indorsed
to a specifi ed person, it may be again negotiated
by the indorsement of such person in blank, to bearer or
to another specifi ed person. Subsequent negotiation may
be made in like manner.
Negotiation of negotiable receipt
by indorsement.
A negotiable document of title by the terms of which the
goods are deliverable to a person specifi ed therein may be
negotiated only by the indorsement of such person.
(1) If indorsed in blank or to bearer, the document becomes
negotiable by delivery. (Sec. 37.)
(2) If indorsed to a specifi ed person, it may be again
negotiated by the indorsement of such person in blank, to
bearer
or to another specifi ed person. Delivery alone is not suffi
cient.
SEC. 39. Transfer of receipt. — A receipt which is not
in such form that it can be negotiated by delivery may be
transferred by the holder by delivery to a purchaser or donee.
A non-negotiable receipt can not be negotiated, and
the indorsement of such a receipt gives the transferee no
additional right.
Advantages of a negotiable warehouse receipt.
(1) It protects a purchaser for value and in good faith
(Sec.41.);
(2) The goods covered by the receipt cannot be garnished or
levied upon under execution unless it is surrendered, or
impounded, or its negotiation enjoined (Sec. 25.);
(3) In case of negotiation, the holder acquires the direct
obligation of the warehouseman to hold possession of the
goods for him without notice to such warehouseman (Sec.
41.); and
(4) The goods it covers are not subject to seller’s lien or
stoppage in transitu. (Sec. 49.)
SEC. 40. Who may negotiate a receipt. — A negotiable
receipt may be negotiated:
(a) By the owner thereof; or
(b) By any person to whom the possession or custody
of the receipt has been entrusted by the owner, if, by the
terms of the receipt, the warehouseman undertakes to deliver
the goods to the order of the person to whom the possession
or custody of the receipt has been entrusted, or if,
at the time of such entrusting, the receipt is in such form
that it may be negotiated by delivery.
SEC. 41. Rights of person to whom a receipt has been
negotiated. — A person to whom a negotiable receipt has
been duly negotiated acquires thereby:
(a) Such title to the goods as the person negotiating
the receipt to him had or had ability to convey to a
purchaser in good faith for value, and also such title to
the goods as the depositor or person to whose order the
goods were to be delivered by the terms of the receipt had
or had ability to convey to a purchaser in good faith for
value; and
(b) The direct obligation of the warehouseman to hold
possession of the goods for him according to the terms of
the receipt as fully as if the warehouseman had contracted
directly with him.
Rights of person to whom receipt has been negotiated
(1) The title of the person negotiating the receipt over the
goods covered by the receipt;
(2) The title of the person (depositor or owner) to whose
order by the terms of the receipt the goods were to be
delivered,
over such goods; and
(3) The direct obligation of the warehouseman to hold
possession of the goods for him, as if the warehouseman
directly
contracted with him.
One who purchases, therefore, a negotiable receipt issued
to
a thief acquires no right over the goods as the thief has no
right to
transfer notwithstanding that such purchaser is innocent.
But the
purchaser acquires a good title where the owner, by his
conduct,
is estopped from asserting his title.
SEC. 42. Rights of person to whom receipt has been
transferred. — A person to whom a receipt has been transferred
but not negotiated, acquires thereby, as against the
transferor, the title of the goods subject to the terms of any
agreement with the transferor.
If the receipt is non-negotiable, such person also acquires
the right to notify the warehouseman of the transfer
to him of such receipt, and thereby to acquire the direct
obligation of the warehouseman to hold possession of the
goods for him according to the terms of the receipt.
Prior to the notifi cation of the warehouseman by the
transferor or transferee of a non-negotiable receipt, the
title of the transferee to the goods and the right to acquire
the obligation of the warehouseman may be defeated by
the levy of an attachment or execution upon the goods by
the creditor of the transferor, or by a notifi cation to the
warehouseman by the transferor or a subsequent purchaser
from the transferor of a subsequent sale of the goods by
the transferor.
Rights of person to whom receipt has been transferred.
(1) The title to the goods as against the transferor;
(2) The right to notify the warehouseman of the transfer
thereof; and
(3) The right, thereafter, to acquire the obligation of the
warehouseman
to hold the goods for him.
The right of the transferee is not absolute as it is subject to
the
terms of any agreement with the transferor. He merely
steps into the shoes of the transferor.
Attachment of goods covered by receipt.
(1) Receipt non-negotiable. — The transfer of a non-
negotiable
document of title does not effect the delivery of the goods
covered
by it. Accordingly, before notifi cation, the warehouseman is
not
bound to the transferee whose right may be defeated by a
levy
of an attachment or execution upon the goods by the
creditor of
the transferor or by a notifi cation to such warehouseman of
the
subsequent sale of the goods.
(2) Receipt negotiable. — If the receipt is negotiable, the
goods cannot be attached or be levied under an execution
unless
the receipt be fi rst surrendered to the warehouseman or its
negotiation enjoined. (see Art. 1514 of the Civil Code which
is
substantially the same as Sec. 42.)
SEC. 43. Transfer of negotiable receipt without indorsement.
— Where a negotiable receipt is transferred for
value by delivery, and the indorsement of the transferor is
essential for negotiation, the transferee acquires a right
against the transferor to compel him to indorse the receipt,
unless a contrary intention appears. The negotiation shall
take effect as of the time when the indorsement is actually
made.
Rights of transferee of a negotiable
receipt.
(1) The right to the goods as against the transferor (Sec.
42.); and
(2) The right to compel the transferor to indorse the receipt.
If the intention of the parties is that the receipt should be
merely transferred, the transferee has no right to require
the transferor to indorse the receipt.
Rule where receipt subsequently
indorsed.
For the purpose of determining whether the transferee is a
purchaser for value in good faith without notice (see Sec.
41.), the
negotiation shall take effect as of the time when the
indorsement
is actually made, not at the time the receipt is delivered.
The reason for the rule is because the negotiation becomes
complete only at the time of indorsement. So if by that time
the purchaser already had notice that the title of the seller
was
defective, he cannot be considered a purchaser in good faith
though he had no such notice when he bought the receipt.
(see
Art. 1515 which is substantially the same as Sec. 43.)
Ownership of goods covered by receipt
negotiated or transferred.
(1) Indorsee or transferee. — For purposes of facilitating
commercial
transactions, the indorsee or transferee or a warehouse
receipt should be regarded as the owner of the goods
covered
by it. In other words, as regard the indorser or transferor
even
if he were the owner of the goods, he may not take
possession
and dispose of the goods without the consent of the
indorsee or
transferee of the warehouse receipt, and as regards third
persons,
the holder of a warehouse receipt is the owner of the goods
covered
by it. (Martinez vs. Phil. National Bank, 93 Phil. 765 [1953].)
(2) Indorser or transferor. — Where a warehouse receipt is
indorsed or transferred to a creditor only to secure the
payment of loan or debt, the indorsee or transferee does
not automatically
become the owner of the goods covered by the warehouse
receipt
but he merely retains the right to keep and with the consent
of
the owner to sell them so as to satisfy the obligation from
the
proceeds of the sale, this for the simple reason that the
transaction
involved is not a sale but only a mortgage or pledge.
Therefore, if the property covered by the warehouse receipt
is
lost without the fault of the mortgagee or pledgee or the
indorsee
or transferee of the warehouse receipt, the said goods are
to be
regarded as lost on account of the real owner, mortgagor or
pledgor. (Ibid.)
(3) Innocent third persons. — Where, however, the rights of
innocent third persons are involved, the indorsee-pledgee of
a
warehouse receipt is considered the owner of the goods
covered
by it whenever necessary for their protection.
SEC. 44. Warranties on sale of receipt. — A person who
for value, negotiates or transfers a receipt by indorsement
or delivery, including one who assigns for value a claim
secured by a receipt, unless a contrary intention appears,
warrants:
(a) That the receipt is genuine;
(b) That he has a legal right to negotiate or transfer it;
(c) That he has knowledge of no fact which would impair
the validity or worth of the receipt; and
(d) That he has a right to transfer the title to the goods
and that the goods are merchantable or fi t for a particular
purpose, whenever such warranties would have been
implied, if the contract of the parties had been to transfer
without a receipt of the goods represented thereby.
SEC. 45. Indorser not a guarantor. — The indorsement
of a receipt shall not make the indorser liable for any failure
on the part of the warehouseman or previous indorsers
of the receipt to fulfi ll their respective obligations.
Liability of person negotiating
or transferring receipt.
The indorsement of negotiable instrument has a double
effect. It is at the same time a conveyance of the instrument
and a contract of the indorser with the indorsee that on
certain
conditions the indorser will pay the instrument if the party
primarily liable fails to do so.
The indorsement of a warehouse receipt amounts merely
to a conveyance by the indorser, not a contract of guaranty.
(see 2 Williston on Sales, pp. 627-628.) Accordingly, an
indorser
of a receipt shall not be liable to the holder if, for example,
the
warehouseman fails to deliver the goods because they were
lost
due to his fault or negligence.
SEC. 46. No warranty implied from accepting payment
of a debt. — A mortgagee, pledgee or holder for security of
receipt who, in good faith, demands or receives payment
of the debt for which such receipt is security, whether from
a party to a draft drawn for such debt or from any other
person, shall not, by so doing, be deemed to represent or
to warrant the genuineness of such receipt or the quantity
or quality of the goods therein described.
Liability of mortgagee, pledgee or holder for security.
Under this section, a holder for security of a receipt who in
good faith accepts payment of the debt from a person does
not
thereby warrant the genuineness of the receipt nor the
quality or
quantity of the goods therein described.
Thus, if C receives from D a warehouse receipt as security
for
D’s debt and C delivers it to T who pays him for D, C,
assuming
he acts in good faith, is not liable to T in case T cannot
obtain
possession of the goods because they do not exist or
because the
receipt is not genuine.
SEC. 47. When negotiation not impaired by fraud, mistake
or duress. — The validity of the negotiation of a receipt
is not impaired by the fact that such negotiation was
a breach of duty on the part of the person making the negotiation,
or by the fact that the owner of the receipt was
induced by fraud, mistake, or duress to entrust the possession
or custody of the receipt to such person, if the
person to whom the receipt was negotiated, or a person to
whom the receipt was subsequently negotiated paid value
therefor, without notice of the breach of duty, or fraud, mistake or
duress.
Validity of negotiation as against real owner.
(1) Receipt acquired from owner’s agent. — As against the
real owner, a bona fi de purchaser of a negotiable
warehouse receipt acquires title to the goods where he
purchases from the owner’s agent, within the actual or
apparent scope of his authority; but not where the transfer
is made by one other than the owner
without any ostensible authority to issue or negotiate the
receipt.
(2) Lost or stolen receipt. — Where the receipt has been lost
or stolen, a bona fi de transferee thereof from the thief or fi
nder
acquires no title as against the real owner of the receipt,
unless
the latter, by indorsing the receipt in blank and leaving it
with
his agent, put it in the power of such agent to steal and
negotiate
it. (see 93 C.J.S. 435.) It will be observed that one who takes
by
trespass or a fi nder is not included within the description of
those who may negotiate.
SEC. 48. Subsequent negotiation. — Where a person
having sold, mortgaged, or pledged goods which are in
a warehouse and for which a negotiable receipt has been
issued, or having sold, mortgaged, or pledged the negotiable
receipt representing such goods, continues in possession
of the negotiable receipt, the subsequent negotiation
thereof by the person under any sale, or other disposition
thereof to any person receiving the same in good faith, for
value and without notice of the previous sale, mortgage or
pledge, shall have the same effect as if the fi rst purchaser
of the goods or receipt had expressly authorized the subsequent
negotiation.
Effect of subsequent negotiation by seller, etc.
This section imposes a duty upon the purchaser, mortgagee,
or pledgee of goods for which a negotiable receipt has been
issued,
or of the negotiable receipt itself, to require the negotiation
of the
receipt to him otherwise, his failure will have the same
effect as
an express authorization on his part to the seller, mortgagor
or
pledgor in possession of such receipt to make any
subsequent
negotiation.
The subsequent purchaser, however, must have taken the
receipt in good faith and for value in order to acquire a
better
right.
SEC. 49. Negotiation defeats vendor’s lien. — Where a
negotiable receipt 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 notifi cation 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 justifi ed in delivering the goods to
an unpaid seller unless the receipt is fi rst surrendered for
cancellation.
Indorsee’s right superior to vendor’s lien.
Under this section, an innocent holder of a negotiable
warehouse receipt has a better right to the goods for which
the
receipt is given than the vendor who has a vendor’s lien
upon
such goods. (see Sec. 47.) So, the warehouseman is not
obliged to deliver or justifi ed in delivering the goods to an
unpaid seller unless the receipt is first surrendered for
cancellation. (Secs. 49, 54.) The term “purchaser,” as used in
Section 49, includes mortgagee and pledgee
SEC. 50. Issue of receipt for goods not received. — A
warehouseman, or any offi cer, agent, or servant of a
warehouseman,
who issues or aids in issuing a receipt knowing
that the goods for which such receipt issued have not
been actually received by such warehouseman, or are not
under his actual control at the time of issuing such receipt,
shall be guilty of a crime, and upon conviction shall be
punished for each offense by imprisonment not exceeding
fi ve years, or by a fi ne not exceeding ten thousand pesos,
or by both.
Possession of goods by warehouseman.
Under Section 50, it is made an offense to issue a receipt
unless the property is actually in storage.
In accordance with the defi nition of warehouseman, generally,
warehouse receipts are issued for the goods or merchandise of
others stored with the warehouseman. (see Sec. 58[a].) But it is
essential to the validity of a warehouse receipt that the goods
or merchandise, for which the receipt is issued, shall be in the
warehouseman’s possession, that is, stored in his warehouse,
under his care and control at the time the receipt is issued, and a
receipt is a nullity as to goods described therein which are not in
existence, or not in the warehouse, when the receipt is given.
SEC. 51. Issue of receipt containing false statement.
— A warehouseman, or any offi cer, agent or servant of a
warehouseman, who fraudulently issues or aids in fraudulently
issuing a receipt for goods knowing that it contains any false
statement, shall be guilty of a crime, and upon
conviction, shall be punished for each offense by imprisonment
not exceeding one year, or by a fi ne not exceeding
two thousand pesos, or by both.
SEC. 52. Issue of duplicate receipt not so marked. — A
warehouseman or any offi cer, agent, or servant of a
warehouseman,
who issues or aids in issuing a duplicate or
additional negotiable receipt for goods knowing that a former
negotiable receipt for the same goods or any part of
them is outstanding and uncancelled, without plainly placing
upon the face thereof the word “Duplicate” except in
the case of a lost or destroyed receipt after proceedings as
provided for in Section fourteen, shall be guilty of a crime,
and upon conviction shall be punished for each offense
by imprisonment not exceeding fi ve years, or by a fi ne not
exceeding ten thousand pesos, or by both.
SEC. 53. Issue for warehouseman’s goods of receipt
which does not state that fact. — Where they are deposited
with or held by a warehouseman goods of which he
is owner, either solely or jointly or in common with others,
such warehouseman, or any of his offi cers, agents,
or servants who, knowing this ownership, issues or aids
in issuing a negotiable receipt for such goods does not
state such ownership, shall be guilty of a crime, and upon
conviction, shall be punished for each offense by imprisonment
not exceeding one year, or by a fi ne not exceeding
two thousand pesos, or by both.
SEC. 54. Delivery of goods without obtaining negotiable
receipt. — A warehouseman, or any offi cer, agent, or
servant of a warehouseman, who delivers goods out of the
possession of such warehouseman, knowing that a negotiable
receipt the negotiation of which would transfer the
right to the possession of such goods is outstanding and
uncancelled, without obtaining the possession of such receipt
at or before the time of such delivery, shall, except in
the cases provided for in Sections fourteen and thirty-six,
be found guilty of a crime, and upon conviction shall be
punished for each offense by imprisonment not exceeding
one year, or by a fi ne not exceeding two thousand pesos,
or by both.
SEC. 55. Negotiation of receipt for mortgaged goods.
— Any person who deposits goods to which he has no
title, or upon which there is a lien or mortgage, and who
takes, for such goods a negotiable receipt which he afterwards
negotiates for value with intent to deceive and without
disclosing his want of title or the existence of the lien
or mortgage, shall be guilty of a crime, and upon conviction,
shall be punished for each offense by imprisonment
not exceeding one year, or by a fi ne not exceeding two
thousand pesos, or by both.
Offenses criminally punishable
by the Act.
Sections 50, 51, 52, 53, 54, and 55 enumerate offenses which
are criminally punishable under the Act.
Ingredients of offense punished
by Section 54.
The offense punished under Section 54 consists of the
following ingredients:
(1) There is delivery of goods out of the possession of the
warehouseman, by the warehouseman himself or by any offi cer,
agent, or servant of the warehouseman;
(2) The person who causes the delivery has knowledge that
a negotiable receipt for the goods, which would transfer the right
to the possession thereof, is outstanding and uncancelled; and
(3) The person causing the delivery does so without obtaining
possession of the receipt at or before the time of delivery. (People
vs. Dichupa, [C.A.] 71 O.G. No. 8, p. 974, Feb. 24, 1975.)
Nature of criminal responsibility
under Section 54.
(1) Violation by the warehouseman himself.
(2) Violation by some other person. — A reading of Section 54
shows that persons other than the warehouseman may be held
liable for violations thereof. The disjunctive use of the word “or”
in the phrase “A warehouseman or any other offi cer, agent, or
servant of a warehouseman,” imparts an alternative sense. The
criminal responsibility punished by the law is individual, not
attributive, so that the warehouseman should not be punished
even for violations which some other offi cer, agent, or servant
of the warehouseman may have committed. It is fundamental
in criminal law that unless conspiracy be shown, no one should
be made to suffer for offenses committed by another. (People vs.
Dichupa, supra.)
(3) Possibility that right to goods sold has been transferred to a
third person. — In order that a warehouseman may be punished
under Section 54, for having delivered goods from his warehouse
to a person other than the one entitled thereto according to the
corresponding securities, it is not necessary that the right of
possession to such stored goods has been transferred to a third
person. It is suffi cient that such right could have been transferred
to said third person in the course of his transactions with the
depositor in whose name the receipt of the stored goods was
issued.
SEC. 56. Case not provided for in Act. — Any case not
provided for in this Act shall be governed by the provisions
of existing legislation, or in default thereof, by the
rule of the law merchant.
meaning of law merchant.
The law merchant (or the custom of merchants) from which
developed the rules of bills and notes, sales of goods, partnerships,
guaranty, insurance, and agency, originated in the unwritten
customs of merchants in different commercial countries. It
consisted of usages of trade in different departments of commerce
proved in court and ratifi ed by legal decisions, upon the
assumption that persons entering upon transactions in different
departments of trade dealt with each other on the footing of any
custom or usage generally prevailing in those departments, so
that the usage, is “engrafted upon or incorporated with’’ the law
and accordingly binding on the courts.
SEC. 57. Name of Act. — This Act may be cited as the
Warehouse Receipts Act.
SEC. 58. Defi nitions. — (a) In this Act, unless the content
or subject matter otherwise requires:
“Action” includes counterclaim, set-off, and suits in
equity as provided by law in these Islands.
“Delivery” means voluntary transfer of possession
from one person to another.
“Fungible goods” means goods of which any unit is,
from its nature or by mercantile custom, treated as the
equivalent of any other unit.
“Goods” means chattels or merchandise in storage, or
which has been or is about to be stored.
“Holder” of a receipt means a person who has both
actual possession of such receipts and a right of property
therein.
“Order” means an order by indorsement on the receipt.
“Owner” does not include mortgagee.
“Person” includes a corporation or partnership or two
or more persons having a joint or common interest.
To “purchase” includes to take as mortgage or as
pledge.
“Purchaser” includes mortgagee and pledgee.
“Receipt” means a warehouse receipt.
“Value” is any consideration suffi cient to support
simple contract. An antecedent or pre-existing obligation,
whether for money or not, constitutes value where a
receipt is taken either in satisfaction thereof or as security
thereof.
“Warehouseman” means a person lawfully engaged in
the business of storing goods for profi t.
(b) A thing is done “in good faith” within the meaning
of this Act when it is in fact done honestly, whether it be
done negligently or not.
SEC. 59. Application of Act. — The provisions of this
Act do not apply to receipts made and delivered prior to
the taking effect hereof.
SEC. 60. Repeals. — All acts and laws and parts thereof
inconsistent with this Act are hereby repealed.
SEC. 61. Time when Act takes effect. — This Act shall
take effect ninety days after its publication in the Offi cial
Gazette of the Philippines shall have been completed.
ENACTED: February 5, 1912.