THE WAREHOUSE RECEIPT

LAW (ACT NO. 2137, AS

AMENDED)
WAREHOUSE
RECEIPT
NEGOTIABLE
WAREHOUSE
RECEIPT
 PURPOSE OF THE LAW
a. To regulate the status, rights and liabilities of the parties in warehousing contract
b. To regulate the relationship between a warehouseman and
 The depositor of the goods
 The holder of a warehouse receipt for the goods
 The person lawfully entitled to the possession of the goods
 Other persons

TERMS OR INFORMATION THAT SHOULD BE CONTAINED IN THE RECEIPT:

1. Location of the Warehouse
2. Date Issue
3. Receipt Number
4. Language to indicate if the receipt were negotiable or non-negotiable
5. Rate of storage charges
6. Description of goods or package containing them
7. Signature of the warehouseman or his agent
8. Language indicating if the warehouseman is an owner solely or jointly by the others, of the goods
deposited
9. Statement of advances made by the warehouseman for which he claim lien.
WAREHOUSEMAN – is a person lawfully engaged in the business of storing goods for profits.
RULES ON ADDITIONAL TERMS IN THE RECEIPT:
Under Sec. 3, the warehouseman is given the power to insert or add additional terms or conditions
to his receipt provided that:
1. such additional terms are not contrary to the provisions of this Act
2. They do not impair the degree of care in the safekeeping of the goods entrusted to him required
under the Act.
Note: the degree of care that a reasonably careful man would exercise in regard to similar goods of his
own shall be required in the warehouseman in safekeeping of goods entrusted to him.
KINDS OF RECEIPT:
1. Negotiable Warehouse Receipt – a receipt which state that the goods received by the
warehouseman will be delivered to the bearer or to the order of any person named in such receipt
- it can never be converted into a non – negotiable by inserting provisions.
2. Non – Negotiable Receipt – a receipt which states that the goods received by the warehouseman
will be delivered to depositor or to any other specified person.
DUPLICATE RECEIPT MUST BE MARKED
- when more than one is issued for the same goods, the word “DUPLICATE” shall be plainly placed upon
the face of every such receipt, except for the first one issued.
- a warehouseman shall be held liable for damages for failure to do so to anyone who purchased the
subsequent receipt for value supposing it to be original.
WAREHOUSEMAN OBLIGATION TO DELIVER THE GOODS
1. Deliver to whom – upon demand
a. Holder of the receipt for the goods
b. Depositor
2. The demand should be accompanied by:
a. An offer to satisfy the warehouseman’s lien
b. An offer to surrender the receipt if it is negotiable
c. A readiness and willingness to sign an acknowledgement, when the goods are delivered, that they have
been delivered if such is requested by the warehouseman.
KINDS OF DELIVERY BY THE WAREHOUSEMAN
1. Justified Delivery – a warehouseman is justified in delivering the goods to any of the following:
a. The person lawfully entitled to the possession of the goods
b. The person who is himself is entitled to delivery of the goods
 by the terms of non-negotiable receipt or
 who has been authorized to take delivery of the goods by the person entitled to such delivery
c. The person in possession of a negotiable receipt by the terms of which the goods are deliverable
2. MISDELIVERY OR CONVERSION – where a warehouseman delivers the goods to one who is not in
fact lawfully entitled to the possession of them, the warehouseman shall be held liable for
conversion/estafa to all having a right of property or possession in the goods if he delivered the
goods otherwise than as authorized.

- 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 owners’ right.
 And though he delivered the goods as authorized he shall be so liable if prior to such delivery he had
either:
1. 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
2. Had information that the delivery about to be made was to one not lawfully entitled to the
possession of the goods
STEPS THAT A WAREHOUSEMAN COULD TAKE TO PROTECT HIMSELF FROM A MISDELIVERY:
1. Warehouseman is entitled to reasonable time w/in which to ascertain the validity of the adverse
claim or to bring legal proceedings to compel the claimants to interplead.
2. Warehouseman may require the claimants to interplead.
 A negotiable receipts must be cancelled or marked when goods delivered or when part of it is
delivered. Failure to do so will make the warehouseman liable.
EFFECTS OF ALTERATION ON LIABILITY OF WAREHOUSEMAN
1. Alteration Immaterial – whether fraudulent or not, the warehouseman is liable on the altered receipt
according to its original tenor
2. Alteration Material – the warehouseman is liable according to the terms of the receipt as altered
3. Material Alteration Innocently Made – according to its original receipt
4. Alteration Material Fraudulently Made – liable according to the original tenor of the receipt to a purchaser
Loss or Destroyed Receipt – the court may order the delivery of the goods upon satisfactory proof of such
loss or destruction and upon the giving of a bond w/ sufficient sureties to be approved by the court.
LOST OR DESTROYED RECEIPT:
 The court may order the delivery of the goods upon satisfactory proof of such loss or destruction and
upon giving of a bond w/ 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 order of the court shall not relieve the warehouseman from liability to a person to whom the
negotiable receipt has been negotiated for value
LIABILITY OF THE WAREHOUSEMAN AS TO DUPLICATE
1. The duplicate is an accurate copy of the original receipt
2. Such original receipt is un-cancelled at the date of the issue of the duplicate
LIABILITY OF WAREHOUSEMAN FOR LOSS DUE TO LACK OF CARE
 The warehouseman is required to exercise ordinary or reasonable care in the custody of the goods.
 The warehouseman is not liable for any loss or injury to the goods, which couldn’t have been
avoided by the exercise of such care.
RULES AS TO THE ATTACTMENT, GARNISHMENT OR LEVY OF GOODS IN POSSESSION OF A
WAREHOUSEMAN
Gen. Rule: Goods in the possession of a warehouseman for which a negotiable receipt has been issued
may be attracted by garnishment or be levied upon under an execution provided, the receipt
covering the goods is first surrendered to the warehouseman or its negotiation enjoined.
Exceptions:
1. where the persons who made the deposit is not the owner of the goods
2. in the action filed by the owner of the goods for their recovery or delivery to him
3. Where the attachment of the goods on deposit is made before the negotiable receipt is issued.
Creditors’ remedy to reach negotiable receipt
 A CR’s whose debtor is the owner of negotiable receipt shall be entitled to such aid from courts of
appropriate jurisdiction, by injunction.
CLAIMS INCLUDED IN THE WAREHOUSE LIEN:
1. All lawful charges for storage and preservation of the goods
2. All lawful claims for money advanced – interest, transportation, labor, other expenses and charges in
relation to the goods
3. All reasonable charges and expenses for notice and advertisements of sale
4. Sale of goods where default has been made in satisfying warehouseman’s lien
Note: the warehouseman loses his lien by the ff.
1. By surrendering possession thereof
2. By refusing to deliver the goods when a demand is made with which he is bound to comply under the
provision of law
SATISFACTION OF LIEN SALE
1. The warehouseman shall give a written notice to the person on whose account the goods are held
2. The notice shall contain:
a. An itemized statement of the claim, showing in sum due at the time of the notice and the dates when it
become due
b. A brief description of good
c. a demand that such amount of the claim as stated shall be paid on or before the day mentioned, not
less than 10 days from the delivery of the notice
Acts for which a Warehouseman is LIABLE
1. Failure to stamp the duplicate on copies of negotiable receipt
2. Failure to place non-negotiable
3. Misdelivery of goods
4. Failure to effect cancellation of negotiable receipt upon delivery of goods
5. Issuing receipt for non-existing goods or mis-discribed goods
6. Failure to take care of the goods
7. Failure to give notice in case of sale of goods to satisfy the lien or because the goods are perishable
or hazardous

Who may Negotiate a Receipt?

1. The owner thereof
2. Any person to whom the possession or custody of the receipt has been entrusted by the owner

Warranties on Sale of Receipt

1. The receipt is genuine
2. He has a legal right to negotiate or transfer it
3. He has a knowledge of no fact which would impair the validity of the worth of the receipt
4. He has the right to transfer the title to the goods and tat the good are merchantable or fit to a
particular purpose