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Warehouse Receipts | 1
Warehouse Receipts (WR)
a written acknowledgement by a warehouseman that he has received and held certain goods therein described in store for the person to whom it is issued. Nature: o o o o o o o o o o A simple written contract between the owner of the goods and the warehouseman A document of title A bilateral contract A symbolical representation of the property itself Not a negotiable instrument under the NIL 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 as documents of title In order to accomplish these, to place a much greater responsibility on the warehouseman 3. Terms that cannot be included: 1. 2. those contrary to the provision of the WR Law those which may impair the obligation of the warehouseman to exercise that degree of care in the safekeeping of the goods entrusted to him those contrary to LMGPP (Art. 1306, CC) Effect of omission of any of the essential terms: 1. 2. 3. 4. warehouseman shall be liable for damages to any person injured thereby validity of receipt is not affected negotiability of receipt not affected contract is converted to ordinary deposit
Purpose:
To whom delivered:
1. persons lawfully entitled to possession of goods or his agent a. persons to whom a competent court has ordered the delivery of the goods i. where a negotiable instrument has been lost or destroyed, the court may order delivery to a person upon satisfactory proof of such loss or destruction and upon proper posting of a bond to protect the warehouseman from any liability or expense which he may incur by reason of the original receipt remaining outstanding. ii. where more than one person claims title or possession of the goods the warehouseman may require all claimants to interplead. The court will then order delivery to the person having a better right. b. Attaching creditor Note: Goods, while in the possession of the warehouseman and covered by a negotiable receipt, cannot be attached or levied upon under an execution unless: i. ii. iii. c. the negotiable receipt is first surrendered to the warehouseman, or its negotiation is enjoined, or the receipt is impounded by the court
Form and contents of WR: no particular form required but must contain the
following (Sec. 2) 1. 2. 3. 4. 5. 6. 7. 8. 9. location of the warehouse date of issue of the receipt consecutive number of the receipt statement whether the goods received will be delivered to bearer, or a specified person, or his order rate of storage charges description of the goods or packages containing them for identification purposes signature of the warehouseman if receipt is issued for goods of which the warehouseman is owner (solely or jointly or in common with others), the fact of such ownership statement of the amount of advances made and of liabilities incurred for which the warehouseman claims as lien
purchaser, in case of sale of the goods by the warehouseman to enforce his lien, or
persons entitled to delivery under a non-negotiable receipt or with written authority persons in possession of a negotiable receipt
Kinds of WRs:
Duties of a Warehouseman
Warehouseman person lawfully engaged in the business of storing goods for profit Principal obligations:
1. 2.
Holder of WR does not satisfy the conditions under Sec. 8 Warehouseman has legal title in himself on the goods, such title being derived directly or indirectly from the transfer made by depositor at the time or subsequent to the deposit for storage, or from the warehousemans lien (Sec. 16)
3. 1. 2. to issue a WR in the required form for goods received GR: to take care of the goods deposited ordinary and reasonable diligence or diligence of a good father of a family E: hes not liable for any loss or injury which could not have been avoided even if ordinary care is exercised by him 5. 4.
If warehouseman has been requested by person lawfully entitled to a right of property or possession in the goods not to make delivery to any person (Sec. 10) If he had information that the delivery to be made was to one not lawfully entitled to the possession of the goods (Sec. 10) Where the goods have been lawfully sold to 3rd persons to satisfy the warehousemans lien or because of their disposal due to their perishable or hazardous nature (Sec. 36)
Altered Receipts
Kind of Alteration Immaterial (tenor of WR is not changed) WON fraudulent/authorized Material and authorized Material, unauthorized but Liable according to its terms as ALTERED Liable according to its ORIGINAL tenor Effect (liability of warehouseman) Liable on the altered receipt according to its ORIGINAL tenor
To the purchaser of the receipt for value and without notice of the alteration: tenor of ALTERED receipt To the alterer: ORIGINAL tenor (delivery only) To subsequent purchasers with notice of alteration: ORIGINAL TENOR (delivery only)
Q: Why is the warehouseman still liable to the owner who fraudulently altered the WR? A: A fraudulent alteration cannot divest the tile of the owner of the stored goods but liability of warehouseman is only for the return of the goods to the owner (delivery)
Liabilities
CIVIL Warehouseman or his agent For damages suffered by reason of failure to comply with legal duties 4. 5. 6. 3. issuance of receipts for goods not received (Sec. 50) issuance of receipts containing false statements (Sec. 51) issuance of duplicate negotiable WR not marked as such (Sec. 52) issuance of negotiable WR for goods of which he is an owner without stating such fact of ownership (Sec. 53) 7. delivery of goods without obtaining negotiable WR (Sec. 54) 3rd Person Negotiation of WR issued for mortgaged goods with intent to deceive (Sec. 55) CRIMINAL
Extent: 1. 2. 3. all lawful charges for the storage and preservation of the goods; all lawful claims for money advanced; and, all reasonable charges and expenses for notice, advertisement and sale for the sale of the goods Note: In case of negotiable WR, the charges that are present at the time of the issuance of the receipt must be stated in the receipt with the amounts thereof specified; otherwise, the warehouseman shall have no lien thereon except pnly for charges for storage of those goods subsequent to the date of the receipt (Sec. 30)
Scope (Property subject to lien): 1. 2. goods of the depositor who is liable to the warehouseman as debtor whenever such goods are deposited goods of other persons stored by the depositor who is liable to the warehouseman as debtor with authority to make a valid pledge
Loss of the lien: 1. by surrendering possession thereof; or, voluntary; or involuntary lawfully obliged to surrender 2.
when refusing to deliver the goods when a demand is made with which he is bound to comply (Sec. 29)
A warehouseman who has released his lien by the surrender of the goods may not thereafter claim a lien on other goods of the same depositor for unpaid charges on the goods surrendered if the goods were delivered to him under different bailments (separate receipts)
The loss of the warehousemans lien does not necessarily mean the extinguishment of the depositors obligation to pay the warehousing fees and charges which subsists to be a personal liability
Warehousemans Lien
Involuntary parting of the goods ordinarily does not result to loss of lien
Note: a bearer document of title is not always a bearer document in the sense that a Enforcement: 1. 2. By refusing to deliver the goods until his lien is satisfied (Sec. 31); or By causing the extrajudicial sale of the property and applying the proceeds to the value of the lien (Secs. 33 and 34) no to pactum commissorium 2. special indorsement has the effect of converting the bearer instrument into an order instrument indorsement and delivery (Sec. 37) if WR is indorsed to specified person, it becomes an order receipt and negotiation can only be effected by the indorsement of such person in blank, to bearer to another specified person Effects of sale of goods by warehouseman: 1. 2. He is not liable for non-delivery even if receipt were negotiated (Sec. 36) Void and purchaser acquires no title in them if sale was made without publication and before time required by law o o o o delivery alone is not sufficient transferee acquires title against the transferor no direct obligation of warehouseman transferee can compel transferor to complete the negotiation by indorsing the instrument (Sec. 34) negotiation takes effect on date of indorsement only if indorsement is necessary but the WR was only transferred for value by delivery:
Adverse Claimants
What warehouseman can do: (Secs. 17 and 18) 1. Refuse to deliver the goods to anyone of them until he has reasonable time to ascertain the validity of the various claims 2. He is not excused from liability if he makes a mistake Bring a complaint in INTERPLEADER (Rule 62) and require the different claimants to litigate among themselves Because it shall be the court who will determine to whom the goods shall be delivered, warehouseman shall be exempt from any liability in case of misdelivery Who may negotiate: 1. 2. owner thereof; or any person to whom possession or custody of the receipt has been entrusted by the owner (if by the terms of the receipt, the goods are deliverable to the order of the person to whom the possession or custody of the receipt has been entrusted or in such form as it may be negotiated by delivery (Sec. 40) here, even a thief of the receipt or one who defrauds another can negotiate the receipt (but it should be in such a form that he did not forge any signature)
Effects of negotiation: that of manual delivery (to constitute the transferee as the owner of the goods) o negotiation carries with it both the title to and possession of the property
however, these remedies cannot be applied if: 1. 2. the depositor is not the owner of the goods (thief) or one who has nor right to convey title to the goods binding upon the owner action for recovery or manual delivery of goods by real owner 3. attachment was made prior to issuance of receipt
Lost or Destroyed Negotiable WR court of competent jurisdiction may order the delivery of the goods only: 1. 2. upon proof of loss or destruction of WR; and, upon the giving of a bond with sufficient sureties to be approved by the court
Note: warehouseman is still iable to holder of receipt for value without notice of proceedings of the delivery of the goods since the warehouseman can secure himself on the bond given (Sec. 14)
the indorser does not guarantee that the warehouseman will comply with his duties (Sec. 45) a holder for security of a receipt who in good faith accepts payment of debt from a person does not warrant the genuineness nor the quality or quantity of the goods described therein (Sec. 46)