(Act 2137, as amended)

Enacted: 5 February 1912

 The Warehouse Receipts Law is full and
complete treatise on the subject. It covers all
warehouses whether public or private,
bonded or not.
 The Act applies to warehouse receipts issued
by a warehouseman, while Civil Code applies
to other cases where receipts are not issued
by a warehouseman as defined in said
section.
 To regulate the status, rights, and liabilities of
the parties in a warehousing contract;
 To protect those who, in good faith and for value
acquire negotiable warehouse receipts by
negotiation;
 To render the title to, and right of possession of,
property stored in warehouses more easily
convertible;
 To facilitate the use of warehouse receipts; and
 In order to accomplish these, to place a much
greater responsibility on the warehouseman.
 It is a written acknowledgement by a
warehouseman that he has received and
holds certain goods therein described in store
for the person to whom it is issued.
 It is a simple written contract between the
owner of the goods and the warehouseman to
pay the compensation for that service.
 A warehouseman is a person lawfully
engaged in the business of storing goods for
profit.
 Section 1 states that only warehouseman may
issue warehouse receipts. Hence, receipts not
issued by a warehouseman are not warehouse
receipts although in the form of warehouse
receipts. But a duly authorized officer or
agent of a warehouseman man may validly
issue a warehouse receipt.
 To take care of the goods entrusted to his
safekeeping
◦ A warehouseman is required to exercise such degree of
care which a reasonable careful owner would exercise
over similar goods of his own. He shall be liable for any
loss or injury to the goods caused by his failure to
exercise such care.
 *Exception: He shall not be liable for any loss or injury which
could not have been avoided by the exercise of such care.
 *Exception to the Exception: He may limit his liability to an
agreed value of the property received in case of loss. He
cannot stipulate that he will not be responsible for any loss
caused by his negligence.
 Deliver the goods upon a demand made
either by the holder of a receipt for the goods
or depositor.
◦ Obligation to deliver arises only if the demand is
accompanied by:
 a) An offer to satisfy the warehouseman’s lien;
 b) An offer to surrender the receipt, if negotiable, with
such indorsement as may be necessary for the
negotiation of the receipt; and
 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.
 Person lawfully entitled to the possession of the
goods, or his agent.
 Person who either himself entitled to delivery by
the terms of the non-negotiable receipt issued
for the goods, or who has written authority from
the person so entitled either endorsed upon the
receipt or written on another paper.
 Person in possession of a negotiable receipt by
the terms of which the goods are deliverable to
him or order, or to bearer, or which has been
indorsed to him or in blank by the person to
whom delivery was promised by the terms of the
receipt or by his mediate or immediate indorser.

Negotiable Instruments
 Governed by the Negotiable Instruments
Law
 When a negotiable instrument is altered
deliberately, it becomes null and void.
 If a negotiable instrument is originally
payable to bearer, it will always remain so
payable regardless of the way it is
indorsed, whether specially or in blank.
 A holder in due course may be able to
obtain a title better than that which the
party who negotiated the instrument to
him had.
 The indorsement of a negotiable
instrument has a double effect. It is at the
same time a conveyance of the instrument
and a contract the indorser has with the
indorsee that on certain conditions, the
indorser will pay the instrument if the
party primarily liable fails to do so.
Negotiable Warehouse
Receipts
 Governed by the Warehouse Receipts
Law
 When a warehouse receipt is altered, it
is still valid but it may be enforced only
in accordance with its original tenor.
 If a warehouse receipt, payable to
bearer, is indorsed specially, it will be
converted into a receipt deliverable to
order and can only be negotiated
further by indorsement and delivery.
 An indorsee even if a holder in due
course obtains only such title as the
person negotiating has over the goods.
 The indorsement of a warehouse receipt
amounts merely to a conveyance by the
indorser. Accordingly, an indorser of a
receipt shall not be liable to the holder
if, for example, the warehouseman fails
to deliver the goods because they were
lost due to his fault or negligence.
 Warehouse receipts need not to be in any
particular form but every such receipt must
embody within its written or printed terms
the following:
◦ The location of the warehouse where the goods are
stored;
◦ The date of issue of the receipt;
◦ Consecutive number of the receipt;
◦ A statement whether the goods received will be
delivered to the bearer, to a specified person, or to
a specified person or his order;
◦ The rate of storage charges;
◦ A description of the goods or of the package containing
them;
◦ The signature of the warehouseman which may be made by
his authorized agent;
◦ If the receipt is issued for goods of which the
warehouseman is owner, either solely or jointly or in
common with others, the fact of such ownership;
◦ A statement of the amount of advances made and of
liabilities incurred for which the warehouseman claims as
lien. If the precise amount for such advances made or of
such liabilities incurred is, at the same time of the issue of
the receipt, unknown to the warehouseman or his agent
who issues it, a statement of the fact that advances have
been made or liabilities incurred and the purpose thereof is
sufficient.
 A warehouseman shall be liable to any person
injured thereby all damages caused by the
omission from a negotiable receipt of any of
the terms herein required;
 Validity of receipt not affected;
 Negotiability of receipt not affected.
 Those contrary to any provision of the law;
 In any wise impair the warehouseman's
obligation to exercise that degree of care in
the safekeeping of the goods entrusted to
him which a reasonably careful man would
exercise with regard to similar goods of his
own.
 When more than one is issued for the same goods,
the word “duplicate” shall be plainly placed upon the
face of every such receipt, except the first one issued.
 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.

◦ Warranties of a warehouseman as to duplicate receipt:

 1. 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.
 By Delivery:
◦ Where by the terms of the receipt, the warehouseman
undertakes to deliver the goods to the bearer; or
◦ Where by the terms of the receipt, the warehouseman
undertakes to deliver the goods to the order of a
specified person, and such person or a subsequent
indorsee of the receipt has indorsed it in blank or
bearer.

 *Note: The bearer document is not always a

bearer document. A special indorsement has the
effect of converting the bearer instrument into an
order instrument.
 By Indorsement Coupled with Delivery:
◦ 1) If the receipt states that the goods are to be
delivered to the order of a person named therein;
◦ 2) Effects when indorsement is necessary but the
negotiable receipt was only delivered:
 a) The transferee acquires title against the transferor;
 b) There is no direct obligation of the warehouseman
to deliver the goods to such holder of the receipt;
 c) The transferee can compel the transferor to
complete the negotiation by indorsing the instrument
(Sec.43, WRL).
 Negotiation of the document has the effect of
manual delivery so as to constitute the
transferee the owner of the goods.

 *Note: Negotiation takes effect as of the time

when the indorsement is actually made.
 By the owner thereof
 By any person to whom the possession or
custody of the receipt has been entrusted by
the owner, if by the terms of the receipt, the
warehouseman undertakes to deliver the
goods to the order of the person to whom the
possession or custody of the receipt has been
entrusted, or if at the same time of such
entrusting, the receipt is in such form that it
may be negotiated by delivery
 A person who, for value, negotiates or transfers a
receipt by indorsement or delivery, including one who
assigns for value a claim secured by a receipt, unless
a contrary intention appears, warrants that:
◦ The receipt is genuine;
◦ He has a legal right to negotiate or transfer it;
◦ He has knowledge of no fact which would impair the
validity or worth of that receipt;
◦ He has a right to transfer the title to the goods; and
◦ 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 transfer without a
receipt of the goods represented thereby.
 A non-negotiable warehouse receipt is one in
which it is stated that the goods received will
be delivered to the depositor or to any
specified person.
 No, even if the receipt is indorsed, the transferee
acquires no additional right. That is why they are
called non negotiable receipts. But they may be
transferred or assigned by delivery.
◦ Rights of a person to whom a non negotiable receipt has
been transferred:
 a. the title to the goods as against the transferor
 b. the right to notify the warehouseman of the transfer
thereof and
 c. the right thereafter to acquire the obligation of the ware-
houseman to hold the goods for him
 Where a warehouseman delivers the goods to one
who is not in fact lawfully entitled to the
possession of them, 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 be-half 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.
 It is the 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
 Loss or destruction of the goods without the
fault of the bailee.
 Failure to satisfy the bailee’s lien.
 Failure to surrender a negotiable document of
title.
 Lack of willingness to sign acknowledgement.
 Delivery to a claimant with better right.
 Where the document of title is attached by a
creditor.
 Receipt by the bailee of a request by or on behalf
of the person lawfully entitled to a right of
property or possession in the goods, not to make
such delivery.
 The bailee has information that the delivery
about to be made was to one not lawfully entitled
to the possession of the goods.
 Attachment/levy of the goods by a creditor where
the document is surrendered or its negotiation is
enjoined or the document is impounded.
 A warehouseman shall have a lien on the goods
deposited or on the proceeds thereof in his
hands for:
◦ All lawful charges for storage and preservation of the
goods;
◦ All lawful claims for money advanced, interest,
insurance, transportation, labor, weighing, coopering,
and other charges and expenses in relation to such
goods; and
◦ All reasonable charges and expenses for notice and
advertisements of sale, and for the sale of the goods
where default had been made in satisfying the
warehouse-man’s lien.
 Refusal to deliver the goods until his lien is
satisfied (Sec. 31);
 Sell the goods and apply the proceeds thereof
to the value of the lien (Sections 33 & 34);
 By other means allowed by law to a creditor
against his debtor (Sec. 32);
 Such other remedies allowed by law for the
enforcement of a lien against personal
property (Sec.35).
 Warehouseman’s lien is lost either by:
◦ Surrendering possession thereof; or
◦ Refusing to deliver the goods when a demand is
made with which he is bound to comply; or
◦ When warehouseman withholds the delivery of the
goods without any valid reason, he is liable for the
loss of the goods and the liability cannot be
eliminated by proof of exercise of due diligence.
 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.
 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.
 In case of sale of goods, the warehouseman is
not liable for non-delivery even if the receipt
given for the goods when they were
deposited be negotiated.
 When the sale was made with-out 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.
 Negotiable receipt – the goods cannot be
attached/levied in execution unless:

◦ The receipt is first surrendered

◦ Its negotiation is enjoined
◦ The receipt is impounded by the court
 A creditor whose debtor is owner of a negotiable
warehouse receipt may seek for the attachment of the
receipt or seek aid from the courts to compel the
debtor to satisfy claims by means allowed by law in
regard to property which cannot readily be attached
or levied upon by ordinary legal process.

 It does not apply when:

◦ The depositor is not the owner of the goods (thief) or one
who has no right to convey title to the goods binding upon
the owner;
◦ The action for recovery or manual delivery of goods by the
real owner;
◦ Where attachment is made prior to the issuance of receipt.
 The goods can be attached, provided it is
done prior to the notification of the bailee of
the transfer.
 If the alteration is IMMATERIAL (the tenor of
the receipt is not changed), whether
fraudulent or not, authorized or not, the
ware-houseman is liable on the altered
receipt according to its original tenor.
 If the alteration is MATERIAL but
AUTHORIZED, the warehouseman is liable
according to the terms of the altered receipt.
 c. If the alteration is MATERIAL, UN-AUTHORIZED but
INNOCENTLY MADE, the warehouseman is liable on
the altered receipt according to its original tenor.
 d. If the alteration is MATERIAL and FRAUDULENTLY
MADE, the warehouseman is liable:

◦ 1) to the purchaser of the receipt for value and without

notice of the alteration according to the tenor of the altered
receipt
◦ 2) to the alterer, according to the terms of the original
receipt
◦ 3) to subsequent purchasers with notice of the alteration,
according to the terms of the original receipt.
 A warehouseman is under the obligation to
deliver the identical property stored with him and
if he fails to do so, he is liable directly to the
owner.
 As against a bona fide purchaser of a warehouse
receipt, the warehouseman is estopped from
denying that he has received the goods described
in the receipt.
 If the description consists merely of marks or
label upon the goods or upon the packages
containing them, the ware-houseman is not
liable even if the goods are not of the kind as
indicated in the marks or labels.
 Bernardez
 Blas
 Cantor
 Garcia
 Hernan
 Lacson
 Medina
 Nepomuceno
 Nicdao
 Paar
 Resurreccion