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Talengtan Bros. & Sons vs. CA, G.R. No. L-110581, Sept. 21, 1994
Talengtan Bros. & Sons vs. CA, G.R. No. L-110581, Sept. 21, 1994
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(ACT NO. 2137, AS AMENDED) ordinary course of business, in the sale/transfer of goods, as
proof of possession or control of the goods, or authorizing or
purporting to authorize the possessor of the document to
PURPOSE OF THE WRL transfer or receive either by indorsement or by delivery,
a. To prescribe the rights and duties of a warehouseman; goods represented by such document. (Art. 1636,NCC)
b. To regulate the relationship between a warehouseman
and the depositor of goods, or the holder of a COMMON TYPES OF DOCUMENT OF TITLE
warehouse receipts for the goods, or other persons; 1. Bill of Lading - written acknowledgement of the receipt
c. To render title to, and right of possession of, property of goods and an agreement to transport and to deliver
stored in warehouse more easily convertible; them at a specified place to a person named therein or
d. To protect those who, in good faith and for value, on his order.
acquire negotiable warehouse receipts by negotiation. a. On Board Bill of Lading – issued when
the goods have been actually placed
WAREHOUSE RECEIPT aboard the ship with very reasonable
1. It is a written acknowledgement by a warehouseman expectation that the shipment is as good
that he has received and holds certain goods therein as on its way.
described in store for the person to whom it is issued. b. Port Bill of Lading – issued by the
(Talengtan Bros. & Sons vs. CA, G.R. No. L-110581, carrier to whom the goods have been
Sept. 21, 1994) delivered and the vessel indicated in the
2. It is a simple written contract between the owner of the bill of lading by which the goods are to
goods and the warehouseman to pay the compensation be shipped is already in the port where
for that service. the goods are held for shipment.
3. It is a bilateral contract. It imports that goods are in the 2. Quedan – warehouse receipt that covers sugar.
hands of a warehouseman and is a symbolical 3. Dock Warrant – warrant given by dock owners to the
representation of the property itself. owner of merchandise imported and warehoused on the
dock, upon the faith of the bills of lading, as a
Warehouseman / Bailee –A person (natural or juridical) recognition of his title to the goods.
lawfully engaged in the business of storing goods for profit.
FUNCTIONS OF DOCUMENTS OF TITLE
WHO MAY ISSUE WAREHOUSE RECEIPTS 1. Evidence of receipt of goods;
Only a warehouseman may issue warehouse receipts to put 2. Represents the goods and therefore operates as
said warehouse receipts within the purview of the WRL. transferrable document that carries with it the control
over the goods. It is used to pass title to the goods;
FORM OF RECEIPTS; ESSENTIAL TERMS 3. It is a contract.
1. The location of the warehouse where the goods are
stored; MEANING OF NEGOTIABLE UNDER THE ACT
2. The date of issue of the receipt; It indicates that in the passage of warehouse receipts
3. Consecutive number of the receipt; through the channels of commerce, the law regards the
4. A statement whether the goods received will be property which they describe as following them and gives to
delivered to the bearer, to a specified person, or to a their regular transfer by indorsement the effect of manual
specified person or his order; delivery of the things specified in them.
5. The rate of storage charges;
6. A description of the goods or of the package containing Negotiable Warehouse Receipts - A negotiable warehouse
them; receipt is one in which it is stated that the goods received will
7. The signature of the warehouseman which may be be delivered either:
made by his authorized agent; 1. To the bearer; or
8. If the receipt is issued for goods of which the 2. To the order of any person named in such receipt. (Sec.
warehouseman is owner, either solely or jointly or in 5, WRL)
common with others, the fact of such ownership;
9. A statement of the amount of advances made and of Non-Negotiable Warehouse Receipts - A non-negotiable
liabilities incurred for which the warehouseman claims warehouse receipt is one in which it is stated that the goods
as lien. If the precise amount for such advances made received will be delivered to the depositor or to any specified
or of such liabilities incurred is, at the same time of the person.
issue of the receipt, unknown to the warehouseman or
his agent who issues it, a statement of the fact that DUPLICATE RECEIPTS MUST BE MARKED
advances have been made or liabilities incurred and the • When more than one is issued for the same goods, the
purpose thereof is sufficient. word "duplicate" shall be plainly placed upon the face of
every such receipt, except the first one issued.
EFFECT OF OMISSION OF THE ESSENTIAL CONTENTS • A warehouseman shall be held liable for damages for
1. A warehouseman shall be liable to any person injured failure to do so to anyone who purchased the
thereby all damages caused by the omission from a subsequent receipt for value supposing it to be original,
ngotiable receipt of any of the terms herein required; even though the purchaser be after the delivery of the
2. Validity of receipt not affected; goods by the warehouseman to the holder of the
3. Negotiability of receipt not affected. original receipt.
warehouseman’s lien.
BQ (1999)
REMEDIES OF A WAREHOUSEMAN TO ENFORCE HIS A Warehouse Company received for safekeeping
LIEN 1,000 bags of rice from a merchant. To evidence the
1. Refuse to deliver the goods until his lien is satisfied transaction, the Warehouse Company issued a receipt
(Sec. 31, WRL); expressly providing that the goods be delivered to the
2. Sell the goods and apply the proceeds thereof to the order of said merchant.
value of the lien (Sections 33 & 34, WRL); A month after, a creditor obtained judgment
3. By other means allowed by law to a creditor against his against said merchant for a sum of money. The sheriff
debtor (Sec. 32, WRL); proceeded to levy on the rice and directed the
4. Such other remedies allowed by law for the Warehouse Company to deliver to him the deposited
enforcement of a lien against personal property (Sec. rice.
35, WRL). Q1:What advice will you give the Warehouse Company.
Explain your answer.
LOSS OF LIEN Q2:Assuming that a week prior to the levy, the
Warehouseman’s lien is lost either by: receiptwas sold to a rice mill on the basis of which it
1. Surrendering possession thereof; or filed a claim with the sherill. Would the rice mill
2. Refusing to deliver the goods when a demand is made have better rights to the rice than the creditor?
with which he is bound to comply (Sec. 29, WRL). A1: The 1,000 bags of rice were delivered to the
Warehouse Company by a merchant, and a
Note: When warehouseman withholds the delivery of the
negotiable receipt was issued therefor. The rice
goods without any valid reason, he is liable for the loss of the
cannot thereafter, while in the possession of the
goods and the liability cannot be eliminated by proof of
Warehouse Company, be attached by garnishment
exercise of due diligence.
or otherwise, or be levied upon under an execution
unless the receipt be first surrendered to the
ATTACHMENT OR LEVY
warehouseman, or its negotiation enjoined. The
• Negotiable receipt – the goods cannot be Warehouse Company cannot be compelled to
attached/levied in execution unless: deliver the actual possession of the rice until the
1. The receipt is first surrendered receipt is surrendered to it or impounded by the
2. Its negotiation is enjoined court.
3. The receipt is impounded by the court (Sec. 25, A2: Yes. The rice mill, as holder for value of the receipt,
WRL) has a better right to the rice than the creditor. It is
the rice mill that can surrender the receipt which is
• Creditor's Remedies To Reach Negotiable in its possession and can comply with the other
Receipt: requirements which will oblige the warehouseman
A creditor whose debtor is owner of a to deliver the rice, namely, to sign a receipt for the
negotiable warehouse receipt may seek for delivery of the rice, and to pay the warehouseman’s
the attachment of the receipt or seek aid from liens and fees and other charges.
the courts to compel the debtor to satisfy
claims by means allowed by law in regard to *****
property which cannot readily be attached or BQ (2005)
levied upon by ordinary legal process. (Sec. Jojo deposited several cartons of goods with SN
26, WRL) Warehouse Corporation. The corresponding warehouse
receipt was issued to the order of Jojo. He endorsed
It does not apply when: the warehouse receipt to EJ who paid the value of the
1. The depositor is not the owner of the goods deposited. Before EJ could withdraw the goods,
goods (thief) or one who has no right to Melchor informed SN Warehouse Corporation that the
convey title to the goods binding upon goods belonged to him snd were taken by Jojo without
the owner; his consent. Melchor wants to get the goods, but EJ
2. The action for recovery or manual also wants to withdraw the same.
delivery of goods by the real owner; Q1: Who has a better right to the goods? Why?
3. Where attachment is made prior to the Q2: If SN Warehouse Corporation is uncertain as to
issuance of receipt. who is entitled to the property, what is the proper
• Non-negotiable – the goods can be attached, provided recourse of the corporation? Explain.
it is done prior to the notification of the bailee of the A1: EJ has better right to the goods. The goods are
transfer. (Sec. 42, WRL) covered by a negotiable warehouse receipt which
was indorsed to EJ for value. The negotiation to
WARRANTIES OF TRANSFEROR EJ was not impaired by the fact that Jojo took the
A person who, for value, negotiates or transfers a receipt by goods without the consent of Melchar, as EJ had
indorsement or delivery, including one who assigns for value no notice of such fact. Moreover, EJ is in
a claim secured by a receipt, unless a contrary intention possession of the warehouse receipt and only he
appears, warrants that: can surrender it to the warehouseman. (Sec. 8,
1. The receipt is genuine; WRL)
2. He has a legal right to negotiate or transfer it; A2: Since there are conflicting claims of ownership of
3. He has knowledge of no fact which would impair the title, SN Warehouse Corporation should file a
validity or worth of that receipt; complaint in interpleader. The matter involves a
4. He has a right to transfer the title to the goods; and judicial question as to whose claim is valid.
5. The goods are merchantable or fit for a particular
purpose whenever such warranties would have been
implied, if the contract of the parties had been to
receipt.
c) A person to whom a negotiable receipt was
"action" includes counterclaim and set-off;
negotiated acquires such title to the goods as
the person negotiating had ability to convey to a
buyer in good faith and for value. "fungible goods" means goods of which any unit is, from its
d) A person to whom a negotiable receipt was nature or by mercantile custom, treated as the equivalent of
negotiated acquires the direct obligation of the any other unit;
warehouseman to hold the goods for him.
"goods" includes all chattels personal other than things in
3. One of these statements is not correct: action and money;
a) The negotiation of a negotiable receipt is not
impaired by the fact that it was a breach of duty "holder", as applied to a negotiable receipt, means a person
of the person negotiating it or that the owner of who has possession of the receipt and a right of property
the receipt was induced by fraud, mistake or therein, and, as applied to a non-negotiable receipt, means a
duress to entrust the receipt to such person if person named therein as the person to whom the goods are
the person to whom it was negotiated took it in to the delivered or his transferee;
good faith and for value.
b) If a person who sold goods covered by a
negotiable receipt remained in possession of it, "negotiable receipt" means a receipt in which it is stated
the negotiation of the receipt to a person who that the goods therein specified will be delivered to bearer or
took it in good faith and for value has the same to the order of a named person;
effect as if the first buyer had authorized the
negotiation. "non-negotiable receipt" means a receipt in which it is
c) A seller’s lien or right of stoppage in transitu will stated that the goods therein specified will be delivered to
defeat the rights of a buyer in good faith and for the holder thereof;
value to whom the receipt was negotiated.
d) If a warehouseman who sold sugar covered by "purchase" includes to take as mortgagee or as pledgee;
a negotiable receipt was not paid by the buyer,
the negotiation of the receipt by the buyer is
valid. "purchaser" includes mortgagee and pledgee;