WAREHOUSE RECEIPTS LAW (Act 2137)

AND THE GENERAL BONDED WAREHOUSE ACT

(Act 3893, as amended by RA 247)
What is the purpose/s of the Warehouse Receipts Law?
The Warehouse Receipts Law regulates the status, rights and liabilities of
parties. In particular, it prescribes the rights and duties of a warehouseman
and to regulate his relationship with (a) the depositor of the goods, or (b) the
holder of a warehouse receipt, or (c) the person lawfully entitled to the
possession of the goods, or (d) other persons.
1. It places greater responsibility on the warehouseman
2. It protects those who, in good faith and for value, acquire negotiable
warehouse receipts by negotiation
3. It renders the title to, and right of possession of property stored in
warehouse easily convertible
What is a warehouse receipt? What is its nature?
A warehouse receipt is a written acknowledgment by the warehouseman
that he has received and holds certain goods therein described in his
warehouse for the person to whom the document is issued. The warehouse
receipt has twofold functions, that is, it is a contract and a receipt. (Telengtan
Bros. & Sons v. CA, G.R. No. L110581, Sept 21, 1994) This is also known as
warehouse-keepers receipt or storage receipt.
Who may issue warehouse receipts?
The following may issue warehouse receipts:
1. A warehouseman, whether public or private, bonded or not. (Sec. 1)
2. A person authorized by a warehouseman.
What is the form and content and what are its essential terms of a
warehouse receipt?
While no particular form is required, it should however include the necessary
terms stating:
a. Location of the warehouse
b. Date of issue
c. Number of receipt
d. Description of the goods
e. Advances made
f. Rate of charges
g. Ownership of the goods by language indicating if the warehouseman is an
owner, solely or jointly with others, of the goods deposited
h. Signature of the warehouseman, and
i. Person to whom goods should be delivered by language indicating whether
the receipt is negotiable or non-negotiable, that is whether the goods

received will be delivered to the bearer, to a specified person, or to a

specified person or his order
1. Item (g) addresses the prohibition imposed on a warehouseman to set up
title to goods deposited in himself (Section 16, Warehouse Receipts Law) or
in favor of a third person (Section 19, Warehouse Receipts Law) and
indicates his compliance with Section 53 which requires him to state the
fact of his ownership or interest in the goods deposited.
2. Item (h) addresses the issue of determination as to whether a warehouse
receipt is negotiable as it should state that the goods received will be
delivered to the bearer, or to the order of any person named therein (Section
5, Warehouse Receipts Law) or non-negotiable as such should state that the
goods received will be delivered to the depositor, or to any other specified
person (Section 4, Warehouse Receipts Law)
3. Note that a negotiable warehouse receipt is not a negotiable instrument as
the same does not comply with the requisites of Section 1, Act 2031.
However, ownership thereof may be transferred by delivery if it states that it
is deliverable to bearer or a named person or bearer. If it is deliverable to a
named person or order, ownership may be transferred by special
endorsement and delivery. The endorsement can be to bearer or to a
specified person.
4. A negotiable warehouse receipt is not convertible to a non-negotiable
receipt. The insertion of a provision making it non-negotiable is void. To
make a warehouse receipt non-negotiable, it must be written out as such
and to prevent any person from supposing it to be negotiable, the words
non-negotiable should be placed plainly on its face (Sections 5 and 7,
Warehouse Receipts Law). A non-negotiable receipt may only be assigned.
5. The failure to mark a warehouse receipt as non-negotiable will allow the
present holder, not the original holder, to have the option of treating it as a
negotiable receipt provided that: (a) He supposed it to be negotiable, and
(b)He purchased it for value (Section 7, Warehouse Receipts Law). Such
rights however shall be enforceable only against the warehouseman (Roman
v. Asia Banking Corp., 46 Phil. 705). This means that he can impose upon
the warehouseman the same liabilities he would have incurred if the receipt
was negotiable. The holder referred to in Section 7 cannot be the original
holder because, as the depositor, he is presumed to know whether he is
getting a negotiable or a non-negotiable receipt.
What are the effects of omission of any of the essential terms?
The following are the effects of omissions in a warehouse receipt:
1. A warehouseman shall be liable to any person injured thereby for all
damages caused by the omission
2. Validity of receipt not affected
3. Negotiability of receipts not affected
4. Contract is converted to ordinary deposit. (Gonzales v. Go Fiong & Luzon
Surety Co., G.R. No. 91776, Aug. 30, 1958)
What terms may and may not 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 be:
1. Contrary to the Warehouse Receipts Law. (Sec. 3)
2. Terms reducing the required diligence of the warehouseman. (Ibid.)
3. Contrary to law, morals, good customs, public order or public policy.
4. Those exempting the warehouseman from liability for misdelivery or
for not giving statutory notice in case of sale of goods.
5. Those exempting the warehouseman from liability for negligence.
What are the kinds of warehouse receipts?
1. Negotiable warehouse receipt- It is a receipt in which it states that the
goods received will be delivered to the bearer or to the order of any person
named in such receipt (Sec. 5). It is negotiated by either delivery or
indorsement plus delivery. Note that no provision shall be inserted in a
negotiable receipt that it is nonnegotiable. Such provision, if inserted, shall
be void. A negotiable warehouse receipt cannot be converted into non
negotiable. (Sec. 5)
2. Nonnegotiable warehouse receipt- It is a receipt in which it states that
the goods received delivered to the depositor or to any other specified
person. (Sec. 4) It shall have plainly placed upon its face by the
warehouseman issuing it nonnegotiable, or not negotiable. (Sec. 7).
Further, Failure to mark nonnegotiable shall make it negotiable (if the
holder purchased it for value supposing it to be negotiable). A non
negotiable warehouse receipt may be transferred by its delivery to the
transferee accompanied by a deed of assignment, donation or other form of
transfer. Even if the receipt is indorsed, the transferee acquires no
additional right (Sec. 39)
What are the distinctions between a negotiable instrument and a
negotiable warehouse receipt?
Negotiable Instrument
Negotiable Warehouse Receipt
Contains an unconditional promise to Does not contain an unconditional
pay a sum certain in money.
promise to pay a sum certain in
money.
The subject is money.

The subject is merchandise

The negotiable instrument is the

object of value.

The warehouse receipt is not the

object of value.

Intermediate parties become

secondarily liable.

Intermediate parties are not liable for

the warehouse mans failure to deliver
the goods.

Distinguish the rights of a holder of a negotiable warehouse receipt from

the rights of a transferee of a nonnegotiable warehouse receipt.
Negotiable Warehouse Receipt
May be acquired through negotiation

Non-Negotiable Warehouse Receipt

May be acquired through transfer or
assignment

Rights of the holder of the receipt:

Rights of transferee:
1. Acquires title to the goods
1. If indorsed:
subject to the terms of any
a. Acquires title to the goods as the
agreement with the transferor.
person negotiating. (Sec. 41)
(Sec. 42)
b. Acquires the direct obligation of
2. Acquires the right to notify the
the
warehouseman
to
hold
warehouseman of the transfer
possession of the goods for him as if
and thereby acquires the direct
the
warehouseman
directly
obligation
of
the
contracted with him. (Ibid.)
warehouseman
to
hold
possession of the goods for
1. If not indorsed: He may compel
him. (Sec. 42)
indorsement; otherwise, he
would acquire title as that of
an assignee (Section 43).
Note: Prior to notice, the title of the
transferee may be defeated by the
levy of an attachment or execution
upon the goods by a creditor of the
transferor or by a notification to the
warehouseman by the transferor or a
subsequent purchaser from the
transferor of a subsequent sale of the
goods by the transferor. (Sec. 42)
Defeats the lien of the seller of the Acquires the title as that of his
goods covered thereby. (Sec. 49)
transferor.
Good covered cannot be garnished,
attached or levied on execution by
execution, unless:
1. Receipt is surrendered.
2. Its negotiation is enjoined by
the court.
3. The goods are impounded by
the court. (Sec. 25)

Pending
notification
to
the
warehouseman, goods can be.
Reason: Absent such notice, both the
warehouseman and the sheriff have a
right to assume that the goods are
still owned by the person whose
name appears in the receipt.

Note: This shall not apply if the

person depositing is not the owner of
the goods or one who has no right to
convey title to the goods binding
upon the owner.
Protects the purchaser in good faith The assignee only steps into the
and for value.
shoes of the assignor.

Who is a Warehouseman?
A warehouse man is a person lawfully engaged in the business of storing
goods for profit. Under the General Bonded Warehouse Act he is defined as a
person lawfully engaged in the business of storing goods for profit. In other
words, he is one who receives and stores goods owned by others and collects
fees for so doing.
Included in the phrase the business of receiving commodity for storage
includes any contract or transaction wherein: (a) the warehouseman is to
return same commodity deposited or pay its value (b) the commodity is to be
milled for the owner thereof, or (c) the commodity delivered is commingled with
the commodity belonging to other persons, and the warehouseman is obligated
to return commodity of the same kind or pay its value.
What are the principal obligations of a warehouseman?
The principal obligations of a warehouseman are as follows:
1. To take care of the goods entrusted to his safekeeping
2. To deliver them to the holder of the receipt or the depositor provided
there is demand by the depositor accompanied by either:
a. An offer to satisfy the warehousemans lien
b. An offer to surrender the receipt, if negotiable with such
indorsements as would be necessary for the negotiation of the receipts ;
or
c. A readiness and willingness to sign, when the goods are delivered, an
acknowledgement that they have been delivered, if such signature is
requested by the warehouseman (Sec. 8); and
3. To keep the goods separate from the goods of other depositors, except if
authorized by agreement or by custom, fungible goods may be mingled
with other goods of the same kind and grade.
What are the duties of a Warehouseman?
The following are the duties of a warehouseman:
1. A warehouseman must issue a receipt for any commodity that he receives
for storage (Section 2, Warehouse Receipts Law)
2. He must exercise that degree of care in the safekeeping of the goods
entrusted to him which a reasonable careful man would exercise in
regard to similar goods of his own (Section 3, Warehouse Receipts Law)
However, in the absence of an agreement to the contrary, he shall not be
liable for any loss or injury to the goods which could not have been

avoided by the exercise of such care (Section 21, Warehouse Receipts

Law)
3. In the absence of any lawful excuse, he is bound to deliver the goods
upon a demand by: (1) holder of a receipt for the goods, or (2) by the
depositor, provided that the demand be accompanied by (a) an offer to
satisfy the warehousemans lien (b) an offer to surrender the receipt if it
is negotiable, and (c) a readiness and willingness to sign acknowledgment
of delivery of the goods if requested by the warehouseman.
Under the General Bonded Warehouse Law, he is required to:
(a)
Put up a cash bond or a bond secured by real estate, or a bond issued by
a duly authorized bonding company in an amount no less than 33 and 1/3
percent of the market value of the maximum quantity of commodity to be
received by the warehouseman, conditioned as to respond for the market value
of the commodity actually delivered and received at any time by the
warehouseman in case the latter is unable to return the commodity or pay its
value (Section 4). The bond is available for recourse by a party damaged by the
breach of a warehouseman of any of his obligations. If it be insufficient, the
injured party may sue on any property or asset not otherwise exempt from
attachment and execution. (Section 7)
(b)
Insure the commodity received for storage against fire (Section 6). The
other instances when he is required to procure insurance are: when notice to
that effect had been made by the warehouseman; as a matter of practice; when
provided for in the warehouse receipt; or where the law so provides (56 AMJUR
400)

(c)
Receive for storage any commodity of the kind customarily stored by him
in the warehouse, so far as his license and the capacity of the warehouse will
permit, without making any discrimination between persons desiring to avail
themselves of warehouse facilities (Section 8). The kind of commodities could
be any raw, processed, manufactured or finished product or by-product, goods,
articles, or merchandise, either of domestic or foreign production or origin, that
may be traded or dealt in openly or legally (Section 2)
(d)
Keep a complete record of all commodities received by him, of the receipts
issued therefore, of the withdrawals, of the liquidation, and all receipts
returned to and cancelled by him (Section 9)
It would also be unlawful for a warehouseman to: (a) engage in the
business of receiving commodities for storage without a license (Section 11), or
(b) receive a quantity of commodity greater than that stated in his license
(Section 12), or (c) conniving or entering into a combination with an unlicensed
warehouseman for the purpose of avoiding compliance with the requirement of
obtaining a license (Section 13)

Note that deposits with a bonded warehouseman shall be governed by

the provisions of the General Bonded Warehouse Law, regardless of the fact
that the receipt he issues does not conform strictly to the requirements of a
receipt as laid down by the Warehouse Receipts Law. The argument that they
constitute ordinary deposits as governed by the Civil Code is unavailing
(Gonzales vs Go Tiong, GR No. L-11776, August 30, 1958)

To whom must a warehouseman deliver the goods?

The warehouseman must deliver the goods to the following persons:
1. To the person lawfully entitled to the possession of the goods, or his
agent;
2. To the person entitled to delivery under a non-negotiable instrument or
with written authority; or
3. To the lawful order of a negotiable receipt. (person in possession of a
negotiable receipt) (Sec. 9)
When may a warehouseman legally refuse to deliver the goods covered by
a warehouse receipt? when is said refusal justified?
The following are the instances when a warehouseman may refuse to deliver
goods covered by a warehouse receipt:
1. If the warehousemans lien is not satisfied by the claimants. (Sec. 31)
2. Where the goods have already been sold to satisfy the warehousemans
lien or because of their perishable or hazardous nature. (Sec. 34)
3. If the warehouse receipt is negotiated back to him.
4. When the holder does not satisfy the conditions prescribed in Section 8:
a) Nonsatisfaction of warehousemans lien.
b) Failure to surrender warehouse receipt.
c) Refusal to sign the acknowledgement receipt, acknowledging the
receipt of the goods from the warehouse.
5. The failure was not due to any fault on the part of the warehouseman:
a) Upon request by or on behalf of the person lawfully entitled. (Sec. 10)
b) If he had information that the delivery about to be made was to one
not lawfully entitled. (Ibid.)
c) If several persons claim the goods. (Sec. 17)
d) If the warehouseman needs reasonable time to ascertain the validity
of the claim if someone other than the depositor claims title to the
goods. (Sec. 18)
e) If the goods are lost, despite ordinary care by the warehouseman.
What if the receipts are lost or destroyed?
In cases where a warehouse receipt is lost or destroyed, a court of competent
jurisdiction may order the delivery of the goods only:
a) Upon satisfactory proof of the loss or destruction of the receipt; and

b) Upon the giving of a bond with sufficient sureties to be approved by the

court. (Sec. 14)
Note: The delivery of the goods under an order of the court 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. 14)
May a warehouseman commingle goods covered by different warehouse
receipts?
A warehouseman cannot commingle as he is bound to keep the goods of
a depositor separate from the goods of other depositors or from the goods of the
same depositor for which a separate receipt has been issued (Sections 22, 23,
Warehouse Receipts Law)
The purpose of the prohibition is to permit inspection and redelivery at
all times. Exceptions are: (a) the goods are fungible, as when any unit of the
good is from its nature or mercantile usage, treated as an equivalent of any
other unit (Section 58, Warehouse Receipts Law) or (b) it is authorized by
agreement or custom.
If the warehouseman shall commingle the goods, he shall be liable
severally to each depositor for the care and redelivery of the depositors share of
the mass of commingled goods to the same extent and under the same
circumstances as if the goods had been kept separate (Section 24, Warehouse
Receipts Law)
What is misdelivery? What are the rules governing it?
A misdelivery or conversion occurs when (a) delivery is made to one not
lawfully entitled to it, or (b) even if delivery is made to a person holding a nonnegotiable or negotiable receipt, if prior to delivery, he had either been
requested not to make delivery by the person lawfully entitled to a right of
property or possession in the goods or had information that delivery about to
be made was to one not lawfully entitled to possession of the goods.
A warehouseman can protect against a misdelivery by: availing of a the
reasonable time that he is entitled to within which to ascertain the validity of
an adverse claim or to bring legal proceedings to force the claimants to
interplead (Section 18, Warehouse Receipts Law) or may actually require the
claimants to interplead (Section 19, Warehouse Receipts Law)
What are the liabilities of a warehouseman?
The following are the instances when a warehouseman is made liable:
1. For failure to take up and cancel a negotiable receipt, or one the negotiation
of which would transfer the right to the possession of the goods when goods
are delivered(Section 11, Warehouse Receipts Law) or for the failure to take

up and cancel a negotiable receipt or to place upon it a statement of what

goods have been delivered, when goods are partly delivered (Section 12,
Warehouse Receipts Law). The warehouseman shall be liable for failure to
deliver the goods to any one who purchases for value in good faith such
receipt whether such purchaser acquired title to the receipt before or after
the delivery of the goods by warehouseman
Exception: The warehouseman shall not be liable for failure to deliver the
goods covered by the receipt or be guilty of a crime where the goods (a) have
been lawfully sold to satisfy the warehousemans lien, or (b) have been
lawfully sold or disposed of because of their perishable or hazardous nature
(Section 36, Warehouse Receipts Law)
He shall also be guilty in such case of a crime punishable by fine or
imprisonment, or by both (Section 54, Warehouse Receipts Law)
2. For the 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 (Section 20, Warehouse
Receipts Law)
Exception: No such liability shall attach to the warehouseman if the goods
are described in the receipt merely (a) by a statement of the marks or labels
upon them or upon the packages containing them, or (b) by a statement
that the goods are of a certain kind or that the packages containing the
goods contain goods of a certain kind or by words of similar import.

3. A warehouseman may be penalized with imprisonment or a fine, or both for:

a. issuing receipts for goods not received or not under his actual
control at the time of issuance of the recceipt (Section 50,
Warehouse Receipts Law) or
b. fraudulently issuing receipts knowing that it contains false
statements (Section 51, Warehouse Receipts Law), or
c. issuing an 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 of the receipt the word duplicate, except in the case of a lost
or destroyed receipt after proceedings as provided for in Section 14
(Section 52, Warehouse Receipts Law).
Note that in marking the warehouse receipt with the word duplicate, the
warehouseman warrants that:
(1)

Receipt is an accurate copy of the original receipt properly issued, and

(2)
Original receipt is uncancelled at the date of the issue of the duplicate
(Section 15, Warehouse Receipts Law)
d. issuing receipts for the warehousemans goods which do not state that
fact (Section 53, Warehouse Receipts Law), or
e. delivering goods out of his possession knowing that a negotiable
receipt is outstanding and not cancelled (Section 54, Warehouse Receipts
Law). Except if
the goods have been lawfully sold to satisfy a
warehousemans lien, or have been lawfully sold or disposed of because
of their perishable or hazardous nature (Section 36, Warehouse Receipts
Law), or in the case of a lost or destroyed receipt after proceedings
(Section 14, Warehouse Receipts Law)
The liability for the acts mentioned in Sections 50 to 54 are not limited only
to the warehouseman, as any officer, agent or servant of the warehouseman
may also be liable for the said acts.

What are the effects of alteration of the receipt on the liability of the
warehouseman?
For altered receipts, the liabilities of the warehouseman shall be determined
as follows: (Section 13, Warehouse Receipts Law)
1. An alteration in a warehouse receipt is said to be:
a) Immaterial if it does not change the tenor of the warehouse receipt
b) Material if it substantially changes the tenor of the receipt
c) Authorized if it is made with the authority of the holder and the
warehouseman
d) Unauthorized if it is made without the authority of the holder and
warehouseman. This may be material or immaterial.
e) Fraudulent if it is made with malice or bad faith by the holder with
intent to defraud subsequent holders
f) Without fraudulent intent if it is made without malice or bad faith

2. The effects of an alteration in a warehouse receipt are:

a) Where the alteration is immaterial, the warehouseman shall be liable
according to the terms of the receipt as originally issued.
b) Where the alteration is immaterial, whether fraudulent or not,
authorized or not, the warehouseman is liable according to the terms
of the receipt as originally issued
c) Where the alteration is material and is authorized, the warehouseman
shall be liable according to the terms of the receipts as altered.
d) Where the alteration is material, unauthorized but without fraudulent
intent, the warehouseman shall be liable according to the terms of the
receipts as they were before the alteration.

e) Where the alteration is material, unauthorized and with fraudulent

intent, the warehouseman shall be liable according to the terms of the
receipts as originally issued even (a) to a purchaser of the receipt for
value without notice of the alteration, or (b) to the person who made
the alteration and to any person who took it with notice of the
alteration. However, in the latter case, such material and fraudulent
alteration shall excuse the warehouseman from any other liability to
the said persons. except as regards the alterer and subsequent
holders with notices.
What is a warehousemans lien?
Warehousemans lien refers to the lien of that a warehouseman has on
the goods deposited with him or on the proceeds thereof in his hands for all
lawful charges for storage and preservation of the goods, money advanced by
him in relation to such goods such as the expenses of transportation or labor,
or other related expenses (Section 27, Warehouse Receipts Law)
What is covered by a warehousemans lien? What is its extent?
The following are covered by a warehousemans lien:
1. Charges for storage and preservation of the goods (insurance and others
may be included as long as it is stipulated)
2. Money advanced, interest, insurance, transportation, labor, weighing,
coopering and other charges and expenses in relation to such goods
3. Charges and expenses for notice, and advertisements of sale, and for sale
of the goods where default had been made in satisfying the
warehousemans lien. (Sec. 27)
With the exception of storage and preservation charges, the other claims
must be expressly specified in the warehouse receipt for it to serve as
basis for the lien (Section 30, Warehouse Receipts Law)
What are the remedies available to a warehouseman to enforce his
warehousemans lien?
The following are the remedies available to a warehouseman:
1. By refusing to deliver the goods until the lien is satisfied
2. By causing the extrajudicial sale of the property and applying the
proceeds of the value of the lien
Note: Where the sale was made without the publication required and
before the time provided by law, such sale is void and the purchases of
the goods acquires no title to them.

The effect of the sale of goods to satisfy the warehousemans lien or on

account of the goods perishable or hazardous nature under Section 36
shall not make the warehouseman, after the sale, liable for failure to
deliver the goods to the depositor, or owner of the goods, or to the holder
of a receipt given for the goods when they were deposited, even if such
receipt were negotiable.
3. By filing a civil action for collection of the unpaid charges or by way of
counterclaim in an action to recover the property from him or such other
remedies allowed by law for the enforcement of a lien against personal
property 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.

Against whose goods may the lien be enforced?

The lien may be enforced against all goods belonging to the person liable
for the charges, as well as against all goods belonging to the others deposited
by the person liable for the charges who has been entrusted with the
possession of the goods and could have validly pledged the same (Section 28,
Warehouse Receipts Law). Hence, it is enforceable against the depositors goods
and the goods of other persons stored by depositor, if pledge of such goods by
him are valid but not against the true owner if the depositor has neither title
nor right of possession to the goods (Section 31, Warehouse Receipts Law;
Young v. Colyear, 201 Pac. 623)
How may the warehouseman lose his lien?
The lien can be lost if a warehouseman surrenders possession of the
goods, or by refusing to deliver the goods when a demand is made with which
he is bound to comply under the provisions of the Act (Section 29, Warehouse
Receipts Law)
How are warehouse receipts negotiated and transferred?
A negotiable receipt is negotiated by delivery when: (a) the goods are
deliverable to bearer, or (b) the goods are deliverable to a specified person and
the latter has indorsed it in blank or to bearer (Section 37, Warehouse Receipts
Law)
A negotiable receipt is negotiated by indorsement when the goods are, by
the terms of the receipt, deliverable to a specified person (Section 38,
Warehouse Receipts Law)
The negotiation may be made by the: (a) owner or (b) the person to whom
possession of the receipt was entrusted by the owner (Section 40, Warehouse
Receipts Law)

The rights acquired by one to whom a negotiable warehouse receipt has

been duly negotiated are: (a) Such title to the goods as the one negotiating
could convey to a purchaser in good faith for value (b) Such title to the goods as
the depositor or one to whose order the goods were to be delivered could convey
to a purchaser in good faith for value, and (c) Direct obligation of the
warehouseman to hold the goods for him as if the warehouseman contracted
with him directly (Section 41, Warehouse Receipts Law)
Mortgagee or pledgee of a warehouse receipt to whom a negotiable
warehouse receipt has been indorsed does not acquire title over the goods. He
only acquires the rights of a pledgee or mortgagee, namely to foreclose the
pledge or mortgage. The intent in this case is not the negotiation of the receipt
with its consequent transfer of title, but merely as security (Martinez v. P.N.B.,
93 Phil. 765); P.N.B. v. Atendido, 94 Phil. 254)
A non-negotiable receipt is transferred by delivery accompanied with a
deed of assignment or transfer. If this is indorsed, the indorsement will not give
the transferee any right whatsoever (Section 39, Warehouse Receipts Law)
Rights acquired by a person to whom a warehouse receipt has been
transferred but not negotiated are: (a) Title to the goods subject to the terms of
any agreement with the transferor, and (b) The right to notify the
warehouseman of the transfer in his favor and thereby acquire the direct
obligation of the warehouseman to hold the goods for him (Section 42,
Warehouse Receipts Law). Note that pending notification, his rights can still be
defeated by a subsequent attaching creditor, or levy on execution, a vendors
lien or right of stoppage in transitu.
What are the instances where a warehouseman is criminally liable for his
acts?
The following are the instances when a warehouseman is criminally
liable:
1. Issuance of receipts for goods not received. (Sec. 50)
2. Issuance of receipt containing false statement. (Sec. 51)
3. Issuance of duplicate negotiable warehouse receipt not marked as such.
(Sec. 52)
4. Issuance of a negotiable warehouse receipt of which he is an owner
without stating such fact of ownership. (Sec. 53)
5. Delivery of goods without obtaining negotiable warehouse receipt. (Sec.
54)
6. Negotiation of receipt for mortgaged goods. (Sec. 55)
7. Issuance of warehouse receipts for good not received. (Sec. 50)
8. Commingling of goods. (Sec. 24)
What are the other acts for which warehouseman is liable?

The following are the other instances when a warehouseman is made

liable:
1. Failure to stamp duplicate on copies of negotiable receipt. (Sec.6)
2. Failure to place nonnegotiable or notnegotiable on a nonnegotiable
receipt. (Sec. 7)
3. Misdelivery of goods.(Sec. 10)
4. Failure to effect cancellation of a negotiable receipt upon delivery of the
goods. (Sec. 11)
5. Issuing receipt for nonexisting goods or misdescribed goods. (Sec.20)
6. Failure to take care of the goods. (Sec. 21)
7. Failure to give notice in case of sale of goods to satisfy lien (Sec. 33) or
because the goods are perishable or hazardous. (Sec. 34)

WAREHOUSE RECEIPTS LAW (Act 2137)

AND THE GENERAL BONDED WAREHOUSE ACT
(Act 3893, as amended by RA 247)

Beninsig, Ruffy N.
Singson, Karlo Becher G.
Singson, Melanio Deodoro Benjamin G.
Section 4C
University of the Cordilleras
College of Law