he Warehouse Receipts Law

The Warehouse Receipts Law (Act No. 2137, as amended) a. !. c. d. Purpose o the WRL To prescri!e the ri"hts and duties o a warehouseman# To re"u$ate the re$ationship !etween a warehouseman and the depositor o "oods, or the ho$der o a warehouse receipts or the "oods, or other persons# To render tit$e to, and ri"ht o possession o , propert% stored in warehouse more easi$% con&erti!$e# To protect those who, in "ood aith and or &a$ue, ac'uire ne"otia!$e warehouse receipts !% ne"otiation.

Warehouse Receipt 1. (t is a written ac)now$ed"ement !% a warehouseman that he has recei&ed and ho$ds certain "oods therein descri!ed in store or the person to whom it is issued. (Ta$en"tan *ros. + ,ons &s. -A, ..R. No. L/110121, ,ept. 21, 1334) 2. (t is a simp$e written contract !etween the owner o the "oods and the warehouseman to pa% the compensation or that ser&ice. 3. (t is a !i$atera$ contract. (t imports that "oods are in the hands o a warehouseman and is a s%m!o$ica$ representation o the propert% itse$ . Warehouseman 5 *ai$ee 6 A person (natura$ or 7uridica$) $aw u$$% en"a"ed in the !usiness o storin" "oods or pro it. . Who 8a% (ssue Warehouse Receipts 9n$% a warehouseman ma% issue warehouse receipts to put said warehouse receipts within the pur&iew o the WRL. . :orm o Receipts# ;ssentia$ Terms 1) The $ocation o the warehouse where the "oods are stored# 2) The date o issue o the receipt# 3) -onsecuti&e num!er o the receipt# 4) A statement whether the "oods recei&ed wi$$ !e de$i&ered to the !earer, to a speci ied person, or to a speci ied person or his order# 1) The rate o stora"e char"es# <) A description o the "oods or o the pac)a"e containin" them# 7) The si"nature o the warehouseman which ma% !e made !% his authori=ed a"ent# 2) ( the receipt is issued or "oods o which the warehouseman is owner, either so$e$% or 7oint$% or in common with others, the act o such ownership# 3) A statement o the amount o ad&ances made and o $ia!i$ities incurred or which the warehouseman c$aims as $ien. ( the precise amount or such ad&ances made or o such $ia!i$ities incurred is, at the same time o the issue o the receipt, un)nown to the warehouseman or his a"ent who issues it, a statement o the act that ad&ances ha&e !een made or $ia!i$ities incurred and the purpose thereo is su icient. ; ect o 9mission o the ;ssentia$ -ontents 1) A warehouseman sha$$ !e $ia!$e to an% person in7ured there!% a$$ dama"es caused !% the omission rom a n"otia!$e receipt o an% o the terms herein re'uired#

2) >a$idit% o receipt not a ected# 3) Ne"otia!i$it% o receipt not a ected. Terms that -annot !e (nc$uded in the Warehouse Receipt 1) Those contrar% to an% pro&ision o the $aw# 2) (n an% wise impair the warehouseman?s o!$i"ation to e@ercise that de"ree o care in the sa e)eepin" o the "oods entrusted to him which a reasona!$% care u$ man wou$d e@er&ise with re"ard to simi$ar "oods o his own. Aocument o Tit$e to .oods 6 An% document used in the ordinar% course o !usiness, in the sa$e5trans er o "oods, as proo o possession or contro$ o the "oods, or authori=in" or purportin" to authori=e the possessor o the document to trans er or recei&e either !% indorsement or !% de$i&er%, "oods represented !% such document. (Art. 1<3<,N--) -ommon T%pes o Aocument o Tit$e 1) *i$$ o Ladin" / written ac)now$ed"ement o the receipt o "oods and an a"reement to transport and to de$i&er them at a speci ied p$ace to a person named therein or on his order. 2) Buedan 6 warehouse receipt that co&ers su"ar. 3) Aoc) Warrant 6 warrant "i&en !% doc) owners to the owner o merchandise imported and warehoused on the doc), upon the aith o the !i$$s o $adin", as a reco"nition o his tit$e to the "oods. 9n *oard *i$$ o Ladin" 6 issued when the "oods ha&e !een actua$$% p$aced a!oard the ship with &er% reasona!$e e@pectation that the shipment is as "ood as on its wa%. Port *i$$ o Ladin" 6 issued !% the carrier to whom the "oods ha&e !een de$i&ered and the &esse$ indicated in the !i$$ o $adin" !% which the "oods are to !e shipped is a$read% in the port where the "oods are he$d or shipment. :unctions o Aocuments o Tit$e 1. ;&idence o receipt o "oods# 2. Represents the "oods and there ore operates as trans erra!$e document that carries with it the contro$ o&er the "oods. (t is used to pass tit$e to the "oods# 3. (t is a contract. 8eanin" o Ne"otia!$e Cnder the Act (t indicates that in the passa"e o warehouse receipts throu"h the channe$s o commerce, the $aw re"ards the propert% which the% descri!e as o$$owin" them and "i&es to their re"u$ar trans er !% indorsement the e ect o manua$ de$i&er% o the thin"s speci ied in them. Ne"otia!$e Warehouse Receipts A ne"otia!$e warehouse receipt is one in which it is stated that the "oods recei&ed wi$$ !e de$i&ered eitherD a) To the !earer# or !) To the order o an% person named in such receipt. (,ec. 1, WRL) Non/Ne"otia!$e Warehouse Receipts A non/ne"otia!$e warehouse receipt is one in which it is stated that the "oods recei&ed wi$$ !e de$i&ered to the depositor or to an% speci ied person.

Aup$icate Receipts 8ust *e 8ar)ed When more than one is issued or the same "oods, the word Edup$icateE sha$$ !e p$ain$% p$aced upon the ace o e&er% such receipt, e@cept the irst one issued. A warehouseman sha$$ !e he$d $ia!$e or dama"es or ai$ure to do so to an%one who purchased the su!se'uent receipt or &a$ue supposin" it to !e ori"ina$, e&en thou"h the purchaser !e a ter the de$i&er% o the "oods !% the warehouseman to the ho$der o the ori"ina$ receipt. Ne"otiation o Warehouse Receipts A. *% Ae$i&er% 1) Where !% the terms o the receipt, the warehouseman underta)es to de$i&er the "oods to the !earer# or 2) Where !% the terms o the receipt, the warehouseman underta)es to de$i&er the "oods to the order o a speci ied person, and such person or a su!se'uent indorsee o the receipt has indorsed it in !$an) or !earer. The !earer document is not a$wa%s a !earer document. A specia$ indorsement has the e ect o con&ertin" the !earer instrument into an order instrument. *. *% (ndorsement -oup$ed with Ae$i&er% 1) ( the receipt states that the "oods are to !e de$i&ered to the order o a person named therein# 2) ; ects when indorsement is necessar% !ut the ne"otia!$e receipt was on$% de$i&eredD a) The trans eree ac'uires tit$e a"ainst the trans eror# !) There is no direct o!$i"ation o the warehouseman to de$i&er the "oods to such ho$der o the receipt# c) The trans eree can compe$ the trans eror to comp$ete the ne"otiation !% indorsin" the instrument (,ec.43, WRL).The ne"otiation ta)es e ect on the date o the indorsement on$%. ; ect o Ne"otiation o Warehouse Receipt Ne"otiation o the document has the e ect o manua$ de$i&er% so as to constitute the trans eree the owner o the "oods. Ri"hts o a Person to Whom a Receipt Fas *een N;.9T(AT;AD 1) (n case o receipt ne"otia!$e !% de$i&er%, such tit$e to the "oods as the person ne"otiatin" the receipt to him had or had a!i$it% to con&e% to a purchaser in "ood aith or &a$ue# 2) (n case o receipt ne"otia!$e !% indorsement coup$ed !% de$i&er%, such tit$e to the "oods as the depositor or person to whose order the "oods were to !e de$i&ered !% the terms o the receipt has or had a!i$it% to con&e% to a purchaser in "ood aith or &a$ue# 3) The direct o!$i"ation o the warehouseman to ho$d possession o the "oods or him accordin" to the terms o the receipt as u$$% as i the warehouseman had contracted direct$% with him. (,ec.41, WRL) Ri"hts o a Person to Whom a Receipt Fas *een TRAN,:;RR;AD 1) The tit$e to the "oods as a"ainst the trans eror with respect to a ne"otia!$e warehouse receipt not du$% ne"otiated (mere$% steps into the shoes)# 2) The ri"ht, therea ter, to ac'uire the o!$i"ation o the warehouseman to ho$d the "oods or him# and 3) ( the receipt is non/ne"otia!$e, such person ac'uires the ri"ht to noti % the warehouseman o the trans er thereo . (,ec. 42, WRL)

Prior to the noti ication o the warehouseman !% the trans eror or trans eree o a non/ne"otia!$e receipt, the tit$e o the trans eree to the "oods and the ri"ht to ac'uire the o!$i"ation o the warehouseman ma% !e de eated !%D 1) The $e&% o an attachment or e@ecution upon the "oods !% a creditor o the trans eror# or 2) A noti ication to the warehouseman !% the trans eror or a su!se'uent purchaser rom the trans eror o the su!se'uent sa$e o the "oods !% the trans eror. *ut/ / An unpaid se$$erGs $ien or ri"ht o stoppa"e in transitu cannot de eat the ri"ht o the ho$der in "ood aith o NWR. / .oods co&ered !% NWR cannot !e attached or $e&ied upon un$ess receipt is surrendered. WarehousemanGs Ae enses or Non/Ae$i&er% or 8isde$i&er% Loss or destruction o the "oods without the au$t o the !ai$ee :ai$ure to satis % the !ai$eeGs $ien :ai$ure to surrender a ne"otia!$e document o tit$e Lac) o wi$$in"ness to si"n ac)now$ed"ement Ae$i&er% to a c$aimant with !etter ri"ht Where the document o tit$e is attached !% a creditor Receipt !% the !ai$ee o a re'uest !% or on !eha$ o the person $aw u$$% entit$ed to a ri"ht o propert% or possession in the "oods, not to ma)e such de$i&er% The !ai$ee has in ormation that the de$i&er% a!out to !e made was to one not $aw u$$% entit$ed to the possession o the "oods Attachment5$e&% o the "oods !% a creditor where the document is surrendered or its ne"otiation is en7oined or the document is impounded

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(n -ase o Ad&erse -$aim, the *ai$ee 8a% 6 1) Re use to de$i&er the "oods to an%one o them unti$ he has had reasona!$e time to chec) the &a$idit% o the c$aims 2) :i$e as action or interp$eader and a$$ow the c$aimants to pro&e their c$aims or in case an action is i$ed a"ainst the !ai$ee, he can set up the de ense o ad&erse c$aims WarehousemanGs 9!$i"ations A. Cnder the WRL 1) Ae$i&er the "oods upon a demand made either !% the ho$der o a receipt or the "oods or depositor. 2) 9!$i"ation to de$i&er arises on$% i the demand is accompanied !%D a) An o er to satis % the warehousemanGs $ien# !) An o er to surrender the receipt, i ne"otia!$e, with such indorsement as ma% !e necessar% or the ne"otiation o the receipt# and c) A readiness and wi$$in"ness to si"n, when the "oods are de$i&ered, an ac)now$ed"ement that the% ha&e !een de$i&ered, i such si"nature is re'uested !% the warehouseman.

*. Cnder the .enera$ *onded Warehouse Law (Act No. 3233# R.A. 247) 1) ,ecure a $icense rom the Aepartment o Trade and (ndustr%# 2) :i$e a !ond e'ui&a$ent to 33 HI o the mar)et &a$ue o ma@imum 'uantit% o "oods to !e recei&ed or the protection o the depositors# 3) Not discriminate and must open his warehouse to the pu!$ic# 4) *e $ia!$e in the amount e'ui&a$ent to dou!$e the mar)et &a$ue o the "oods in case o dama"e to the "oods !ecause the warehouseman accepts "oods in e@cess o the capacit% o his warehouse# and 1) (nsure the "oods a"ainst ire. Lia!i$it% o Warehouseman or ,to$en and Aeposited .oods ( sto$en "oods are deposited !% the thie with a warehouseman, the $atter sha$$ not !e $ia!$e to the ho$der o the receipt e&en i he de$i&ers the "oods to the rea$ owners without the receipt !ein" surrendered to him. (,ec.11 and 141, WRL) WarehousemanGs Lien A warehouseman sha$$ ha&e a $ien on the "oods deposited or on the proceeds thereo in his hands orD 1. A$$ $aw u$ char"es or stora"e and preser&ation o the "oods# 2. A$$ $aw u$ c$aims or mone% ad&anced, interest, insurance, transportation, $a!or, wei"hin", cooperin", and other char"es and e@penses in re$ation to such "oods# and 3. A$$ reasona!$e char"es and e@penses or notice and ad&ertisements o sa$e, and or the sa$e o the "oods where de au$t had !een made in satis %in" the warehousemanGs $ien. 1) 2) 3) 4) Remedies o a Warehouseman to ;n orce Fis Lien Re use to de$i&er the "oods unti$ his $ien is satis ied (,ec. 31, WRL)# ,e$$ the "oods and app$% the proceeds thereo to the &a$ue o the $ien (,ections 33 + 34, WRL)# *% other means a$$owed !% $aw to a creditor a"ainst his de!tor (,ec. 32, WRL)# ,uch other remedies a$$owed !% $aw or the en orcement o a $ien a"ainst persona$ propert% (,ec. 31, WRL).

Loss o Lien WarehousemanGs $ien is $ost either !%D 1) ,urrenderin" possession thereo # or 2) Re usin" to de$i&er the "oods when a demand is made with which he is !ound to comp$% (,ec. 23, WRL). When warehouseman withho$ds the de$i&er% o the "oods without an% &a$id reason, he is $ia!$e or the $oss o the "oods and the $ia!i$it% cannot !e e$iminated !% proo o e@ercise o due di$i"ence. Attachment or Le&% Ne"otia!$e receipt 6 the "oods cannot !e attached5$e&ied in e@ecution un$essD 1) The receipt is irst surrendered 2) (ts ne"otiation is en7oined 3) The receipt is impounded !% the court (,ec. 21, WRL)

-reditor?s Remedies to Reach Ne"otia!$e Receipt A creditor whose de!tor is owner o a ne"otia!$e warehouse receipt ma% see) or the attachment o the receipt or see) aid rom the courts to compe$ the de!tor to satis % c$aims !% means a$$owed !% $aw in re"ard to propert% which cannot readi$% !e attached or $e&ied upon !% ordinar% $e"a$ process. (,ec. 2<, WRL) (t does not app$% whenD 1) The depositor is not the owner o the "oods (thie ) or one who has no ri"ht to con&e% tit$e to the "oods !indin" upon the owner# 2) The action or reco&er% or manua$ de$i&er% o "oods !% the rea$ owner# 3) Where attachment is made prior to the issuance o receipt. Non/ne"otia!$e 6 the "oods can !e attached , pro&ided it is done prior to the noti ication o the !ai$ee o the trans er. (,ec. 42, WRL) Warranties Warranties o Trans eror A person who, or &a$ue, ne"otiates or trans ers a receipt !% indorsement or de$i&er%, inc$udin" one who assi"ns or &a$ue a c$aim secured !% a receipt, un$ess a contrar% intention appears, warrants thatD The receipt is "enuine# Fe has a $e"a$ ri"ht to ne"otiate or trans er it# Fe has )now$ed"e o no act which wou$d impair the &a$idit% or worth o that receipt# Fe has a ri"ht to trans er the tit$e to the "oods# and The "oods are merchanta!$e or it or a particu$ar purpose whene&er such warranties wou$d ha&e !een imp$ied, i the contract o the parties had !een to trans er without a receipt o the "oods represented there!%. (,ec. 44, WRL)

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