Professional Documents
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Warehouse Receipts Law
Warehouse Receipts Law
Objectives:
1. Know the the importance of Receipt Law in warehousing
2. Know the rules and responsibility of warehouse men and other involve.
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, even though the purchaser
be after the delivery of the goods by the warehouseman to the holder of the original receipt
OBLIGATIONS AND RIGHTS OF WAREHOUSEMAN UPON THEIR RECEIPTS
the warehouseman shall be 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.
And though he delivered the goods as authorized he shall be so liable if prior to such delivery he
had either—
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
Had information that the delivery about to be made was to one not lawfully entitled to
the
possession of the goods
WHAT IS CONVERSION?
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 owner’s right
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
The warehouseman is liable to any one who purchases for value in good faith such receipt,
for failure to deliver the goods to him, whether such purchaser acquired title to the receipt before
or after the delivery of the goods by the warehouseman
EFFECT OF ALTERATION ON LIABILITY OF WAREHOUSEMAN
1. Alteration immaterial—whether fraudulent or not, whether authorized or not, the
warehouseman is liable on the altered receipt according to its original tenor
2. Alteration material—if the alteration is material, but authorized, the warehouseman is
liable according to the terms of the receipt as altered
3. Material alteration innocently made—the warehouseman is liable on the altered receipt according
to its original receipt
4. Material alteration fraudulently made—warehouseman is liable according to the original
tenor of the receipt to a purchaser of the receipt for value without notice, and even to the alterer
and subsequent purchasers with notice except that as regards to the last two, the
warehouseman’s liability is limited only to delivery as he is excused from any liability
NOTA BENE: it is clear that even a fraudulent alteration cannot divest the title of the owner
of stored goods and the warehouseman is, therefore, liable to return them to the owner.
But a bona fide holder acquires no right to the goods under a negotiable receipt which has
been lost or stolen or to which the endorsement of the depositor has been forged.
LOST OR DESTROYED RECEIPTS
The court may order the delivery of the goods upon satisfactory proof of such loss or
destruction and upon the giving of a bond with 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 as been or shall be negotiated for value without notice of the proceedings or of
the delivery of the goods
LIABILITY OF WAREHOUSEMAN AS TO DUPLICATE—HE WARRANTS
1. That the duplicate is an accurate copy of the original receipt
2. Such original receipt is uncancelled at the date of the issue of the duplicate
WAREHOUSEMAN CANNOT SET UP TITLE IN HIMSELF
The warehouseman cannot refuse to deliver the goods on the ground that he has acquired title
or right to the possession of the same unless such title or right is derived—
*Directly or indirectly from a transfer made by the depositor at the time of the deposit
for storage or subsequent thereto
*From the warehouseman’s lien
INTERPLEADER OF ADVERSE CLAIMANTS
If more than one person claims the title or possession of the goods, the warehouseman
may, either as a defense to an action brought against him for non-delivery of the goods, or as an
original suit, whichever is appropriate, require all known claimants to interplead
WAREHOUSEMAN HAS REASONABLE TIME TO DETERMINE VALIDITY OF
CLAIMS
If someone other than the depositor or person claiming under him has a claim to the title
or possession of goods, and the warehouseman has information of such claim, the warehouseman shall
be excused from liability for refusing to deliver the goods, either to the depositor or person
claiming under him or to the adverse claimant, until the warehouseman has had a reasonable time
to ascertain the validity of the adverse claim or to bring legal proceedings to compel all claimants to
interplead
The warehouseman has the direct obligation to hold possession of the goods for the
original owner or for the person known the negotiable receipt of title has been duly negotiated.
While in possession of such warehouseman, the goods cannot be attached or levied upon
under an execution unless—
o The document is first surrendered
o Its negotiation is enjoined
o The document is impounded by the court
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.
Neither shall it apply to actions for recovery or manual delivery of goods by the real owner
nor to cases where the attachment is made before the issuance of the negotiable receipt of title
CREDITOR’S REMEDIES TO REACH NEGOTIABLE RECEIPTS
A creditor whose debtor is the owner of negotiable receipt shall be entitled to such aid from
courts of appropriate jurisdiction, by injunction and otherwise, in attaching such receipt or in
satisfying the claim by means thereof as is allowed by law or in equity in regard to property
which cannot be readily be attached or levied upon by ordinary legal process
WHAT CLAIMS ARE INCLUDED IN THE WAREHOUSEMAN’S LIEN
1. All lawful charges for storage and preservation of the goods
2. All lawful claims for money advanced—Interests, Insurance, Transportation, Labor,
Weighing, Cooperating and other charges and expenses 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
AGAINST WHAT PROPERTY THE LIEN MAY BE ENFORCED
1. Against all goods, whenever deposited, belonging to the person who is liable to the debtor
for the claims in regard to which the lien is asserted
2. Against all goods belonging to others which have been deposited at any time by the person
who is liable as debtor for claims in regard to which the lien is asserted if such person had
been entrusted with the possession of the goods that a pledge of the same by him at the time of the
deposit to one who took the goods in good faith for value would have been valid
HOW WAREHOUSEMAN LOSES HIS LIEN
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 provisions of the law
LIEN WHERE RECEIPT NEGOTIABLE
> With the exception of the charges for the storage or preservation of goods for which a
negotiable receipt has been issued, the lien exists only for the other charges expressly
enumerated in the receipt so far as they are written although the amount of the said charge isn’t
stated
OTHER THINGS IN CONNECTION TO WAREHOUSEMAN’S LIEN
1. Warehouseman need not deliver lien is satisfied
2. Warehouseman’s lien doesn’t preclude other remedies
SATISFACTION OF LIEN BY SALE
1. The warehouseman shall give a written notice to the person on whose account the goods are
held, and to any other person known by the warehouseman to claim an interest in the goods.
Such notice shall be given by delivery in person or by registered mail addressed to the
last known place of business or abode of the person to be notified.
2. The notice shall contain—
a. An itemized statement of the claim, showing the sum due at the time of the notice and
the dates when it became due
b. A brief description of the goods
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 if it is personally delivered, or from the time
when
the notice shall reach its destination, according to due course of post, if the notice is sent by mail
d. A statement that unless the claim is paid within the time specified, the goods will be advertised for
sale
and sold by auction at a specified time and place
ENFORCEMENT OF WAREHOUSEMAN’S LIEN
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 to the value of the
lien
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
EFFECT OF SALE OF GOODS
1. In case of sale of goods, the warehouseman is not liable for nondelivery even if the
receipt given for the goods when they were deposited be negotiated.
2. When the sale was made without the publication requirement and before the time
specified by law, such sale is void and the purchaser of the goods acquires no title in them.
ACTS FOR WHICH WAREHOUSEMAN IS LIABLE
1. Failure to stamp duplicate on copies of negotiable receipt
2. Failure to place non-negotiable or not negotiable on the not negotiable receipt
3. Misdelivery of the goods
4. Failure to effect cancellation of a negotiable receipt upon delivery of the goods
5. Issuing receipt for non-existing goods or misdescribed 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
NEGOTIATION AND TRANSFER OF RECEIPTS
Reference:
https://batasnatin.com/law-library/civil-law/obligations-and-contracts/875-the-warehouse-receipts-
law.html