WAREHOUSE RECIEPT LAW

SCOPE the receipt when identity of the goods

It covers all warehouses, whether public or is fully established by the evidence.
private, bonded or not. 7. Signature of the warehouseman
8. Warehousemans ownership/interest in
Civil Code Applicability the goods
9. Statement of advances and liabilities
The act applies to warehouse receipts issued
incurred
by a warehouseman as defined in Sec. 58 of
the act, while the civil code, to other cases
Effect of Omission
where the receipts are not issued by a
- Validity of receipt not affected
warehouseman as defined in this section.
- Warehouseman liable for damages
- Negotiability not affected
Purposes of the Law - Contract CONVERTED to ordinary
1. Regulate the status, rights, and receipt
liabilities of the parties in a
warehousing contract; Freedom to Stipulate (LIMITATIONS)
2. Protect those who, in good faith and for A warehouseman may insert other terms,
value, acquire negotiable warehouse except;
receipts by negotiation; a. Contrary to the provisions of this act
3. Render the title to, and right of (Ex. Exemption from liability due to
possession of, property stored in misdelivery)
warehouses easily convertible; b. Exemption from liability for
4. Facilitate the use of warehouse receipts negligence/failure to exercise due
as documents of title; diligence
5. In order to accomplish these, to place a c. Contrary to law, morals, good customs,
much greater responsibility on the public order, or public policy
warehouseman
Negotiability
ISSUANCE of WAREHOUSE RECIEPT Not the same as that of negotiable instruments
Sec. 1 Warehouse receipts may be issued by as provided for in Sec. 1 of the Negotiable
any warehouseman. Instruments law because it is not an
unconditional promise/order to pay a sum
Note: certain in money.
Warehouseman person lawfully engaged in
the business of goods for profit (Sec. 58) Negotiable only indicating that in the passage
Only a warehouseman or his duly authorized of warehouse receipts, the law regards the
agent may issue a warehouse receipt. property which they describe as following
them.
Warehouse building or a place where goods
are deposited and stored for profit. Failure to Mark (Negotiable/Non-
Negotiable)
Form a. Negotiable must be written or printed
Warehouse receipts need not be in any on the face of a negotiable warehouse
particular form. Provided, the following are receipt. Failure to do so, would not
embodied in the receipt: render it non-negotiable IF it contains
1. Location of the warehouse; words of negotiability
2. Date of issue prima facie date when b. Non-Negotiable WM has duty to mark
contract is perfected and when storage them as non-negotiable, otherwise
charges shall begin. they shall be negotiable provided the
3. Consecutive number of receipts
holder of such unmarked receipt
4. Person to whom goods are deliverable
purchased it for value supposing it to
prima facie entitlement to the goods.
5. Rate of storage charges consideration be negotiable.
for the contract
6. Description of goods/packages mere OBLIGATIONS OF THE WAREHOUSEMAN
fact that the goods are incorrectly Principal Obligations:
described does not make ineffective
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1. Take care of the goods entrusted to his Unauthorized assumption and exercise of right
safekeeping of ownership over the goods belonging to
2. Deliver them to the holder of the another
receipt or depositor provided
conditions under Sec. 8 are fulfilled. Cancellation of Reciepts
Requisites: a. When goods are delivered
a. Offer to satisfy the warehouse lien; - Failure to do so, would make the WM
b. Offer to surrender the receipt
liable if acquired by a purchases for
c. Readiness and willingness to sigh,
value and in good faith, regardless, if
when goods are delivered, if such is
there was already delivery or not.
requested by the WM
Exception:
Demand Purchaser acquired title from a thief or
Demand is necessary in order that the duty to person who does not have a title over
deliver the goods arise, UNLESS, demand is the receipt or property.
useless (ex. Impossible). b. Receipt must be properly marked when
WMs lien there is PARTIAL delivery
- Lien is loss upon delivery
- Offer to satisfy warehouse lien is Altered Receipts
therefore required before delivery Effect:
1. Alteration Immaterial (tenor of receipt
Surrender of Receipt not changed)
This is subject to WAIVER. o Fraudulent or not, authorized or
Note: not, WM liable on the ALTERED
If receipt is non-negotiable, any person lawfully receipt according to the
entitled to the possession of the goods may be ORIGINAL tenor
entitled to delivery without surrender of the 2. Material Alteration (tenor changed) +
receipt. Authorized
Reason: No danger of receipt being in the o WM liable to the terms as
hands of another who acquire it in good faith altered
and for value therefore, confusion as to the 3. Material Alteration + Innocently made
person entitled to receive the goods will not o WM liable to the original
4. Material alteration + Fraud
happen
o Purchase of receipt for value
liable to the original tenor
Person to WHOM Goods must be
o Alterer and purchaser with
Delivered
notice original tenor but
1. Person lawfully entitled to the
limited only to the delivery as
possession of the goods/his agent
he is excused from liability
2. Person entitled to delivery under a non-
Note:
negotiable receipt/with written
A bona fide holder acquires no right to the
authority
3. Person in possession of a negotiable goods under a negotiable receipt which was
warehouse receipt a. Lost
b. Stolen
Note:
c. Indorsement of the depositor
Even if delivered to (2) and (3), WM may still be
has been forged
liable if prior to the deliver, he was requested
not to make such delivery/he had received
Lost/Destroyed Receipts
notice of adverse claim/title of third person.
WM is not obliged to deliver should the holder
(CONVERSION)
fail to surrender the receipt because of its lost
or destruction. However, a competent court
Liability for Misdelivery
may order the delivery when;
Similar to forged check, WM is still liable. He
a. Upon proof of the loss/destruction of
must devise appropriate means by which
the receipt; and
deception can be avoided. b. Upon the giving of a bond with
sufficient sureties to be approved by
Conversion the court
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Duplicate GR: a WM may not mingle goods belonging to
It must be plainly placed by the WM upon the depositors
face of every such receipt except the one first Exception:
issued. Fungible goods with goods of the same kind
WM warrants: and grade, provided that he is authorized by
1. Duplicate is an accurate copy of the agreement/custom.
original receipt; and (Owners become co-owners)
2. Such original receipt is uncancelled at
the date of issue of the duplicate Note:
Note: Art. 1976 (Civil Code) unless there is a
Except for the BREACH of this warranty, the stipulation to the contrary, the depository may
duplicate imposes no liability. WM may not be commingle grain/other articles of the same
compelled to deliver the goods by virtue of the kind and quality.
duplicate, only unless the procedure in Sec. 14
is followed (See Lost/destruction) Attachment or Levy of Negotiable Receipt
While in the possession of the WM, the goods
Ownership NOT a Defense for Refusal to cannot be attached/levied upon under an
Deliver execution unless:
WM cannot refuse delivery on the ground that 1. Document is first surrendered;
he has acquired title/right of possession unless 2. Negotiation is enjoined;
such is derived: 3. Document is impounded by the court
a. Directly/indirectly from a transfer made
by a depositor at the time of the The WM cannot be compelled to deliver until:
deposit for storage 1. Surrender of the receipt; or
b. From the warehousemans lien. 2. Impounded by the court

The rule on attachment and Levy is not

Several Claimants applicable when:
He may deliver to the person he finds entitled 1. Person depositing is not the owner (ex.
to the possession of the goods but is liable if Thief)
such was a mistake. 2. Actions for recovery/manual recovery
Proper Action: INTERPLEADER of goods by the real owner
3. Attachment is made before the
Note:
insurance of the negotiable receipt of
If he neither interpleads/investigates, after the
title
lapse of a reasonable time, he will be held
Remedy of Creditor: ATTACHMENT OF THE
guilty of conversion.
RECEPT in the debtors possession and not the
property.
Non-existence/Misdescription of Goods
General Rule: WM is under obligation to deliver
WAREHOUSEMANS LIEN (EXTENT)
the identical property stored with him and if he
1. All lawful charges for storage and
fails to do so, he is liable directly to the owner.
preservation of the goods;
Exception:
2. All lawful claims for;
If the description consists merely of marks or a. Money advanced
labels upon the goods/packages containing b. Interest
them, etc. the warehouseman is not liable even c. Insurance
if the goods are not of the kind as indicated in d. Transportation
the marks/labels. e. Labor
f. Weighing
g. Cooperating
Note:
h. Other charges in relation to goods
No stipulation may be valid when it aims to 3. All reasonable charges and expenses
exempt the WM from any liability. A limitation for notices and advertisements of sale
as to the liability, however, may be valid. 4. Sale of the goods where default had
been made in satisfying the WMs lien
Commingling of Deposited Goods
Goods Subject to LIEN
WAREHOUSE RECIEPT LAW
a. Goods of the depositor debtor with authority to make a valid
b. Goods of the persons stored by the pledge
depositor who is liable to the WM as