DOCUMENTS OF TITLE

A. Concept and Function

Includes any bill of lading, dock warrant,
quedan, or warehouse receipt or order for the
delivery of goods, or any other document used in
the ordinary course of business in the sale or
transfer of goods
proof of the possession or control of the goods,
or authority of the possessor of the document to
transfer or receive,either by indorsement or
by delivery, goods represented by such
document.
symbol of thegoods covered by it, serving as
evidence of (a) transfer of title and(b) transfer of
possession
they are receipts of a bailee, or orders upona
bailee.
Classes of Documents of Title
1. Dock Warrant
an instrument given by dock owners
to an importer of goods warehoused
on the dock as a recognition of the
importers title to the said goods,
upon production of the bill of lading

2. Bill of Lading
contract and a receipt for the trans-
port of goods and their delivery to
the person named therein, to order,
or to bearer.

Involves three parties: carrier,
shipper and consignee

3. Warehouse Receipt
a contract or receipt for goods
depos-ited with a
warehouseman containing the
latters undertaking tohold and
deliver the said goods to a specified
person, to order, or to bearer.




4. Quedan

a warehouse receipt usually for sugar
received by a warehouseman

Classes of Documents of Title

1. Negotiable Documents of Title

those by the terms of which the
bailee undertakes to deliver the
goods to the bearer and those by
the terms of which the bailee
undertakes to deliver the
goodsto the order of a specified
person

a. How negotiation is made

Delivery

if thegoods are deliverable to the
bearer

when it is indorsed in blank or to
the bearer by the person to
whose order the goods are
deliverable or by a subsequent
indorsee.


Indorsement

by the terms of which the goods are
deliverable to a person
specified therein may be
negotiated only by the
indorsement of such person.


b. Who may negotiate

Article 1512.
A negotiable document of
title may be negotiated:
( 1 ) By t he owne r
t he r e of ; o r
2)By any person to
whom the possession
or cutody of the document has been entrusted by the
owner,if, by the terms of the document the bailee
issuing the document undertakes to deliver the
goods to the order of the person to whom the
possession or custody of the document has been
entrusted, or if at the time of such entrusting the
document is in such form that it may be
negotiated by delivery.
c. Rights of a person to whom the document
has been negotiated
Art. 1513

(1)The titl e of the person negotiating
the document, over thegoods covered by
the document;

(2)The titl e of the person (depositor
or owner) to whose or-der by the terms
of the document the goods were to be
delivered,over such goods; and

(3)The direct obl igation of the
bailee (warehouseman or car-rier) to
hold possession of the goods for him, as if
the bailee hadcontracted directly with him.

Art. 1518

a negotiable document may be negotiated by
any person in possession of the same,
however such posses sion may have been
acquired. In other words, it may be
negotiated even by a thief or finder and the
holder thereof would acquire a good title thereto if
he paid value therefore in good faith
without notice of the sellers defect of title.

d. Transfer of order document without
indorsement

Rights of a person to whom an
orderdocument of title, which may not
properly be negotiated by meredelivery, has
been delivered, without indorsement

i. The right to the goods as
against the transferor (Art.
1514.);

ii. The right to compel
the transferor to indorse
the indorse-ment.

2. Indorser not a guarantor
The indorsement of a document of title
amounts merely to a conveyance by
the indorser, not a contract of
guaranty.
Accordingly, an indorser of a document
of title shall not be liable to the holder if,
for example, the bailee fails to deliver
the goods because they were lost due
to his fault or negligence.

3. Negotiation not impaired by fraud,mistake,etc
ART. 1518. The validity of the
negotiation of a negotiable document of
title is not impaired by the factthat the
negotiation was a breach of duty on the
partof the person making the
negotiation, or by the factthat the
owner of the document was deprived of
the possession of the same by loss, theft,
fraud, accident,mistake, duress, or
conversion, if the person to whom the
document was negotiated or a person
to whom the document was subsequently
negotiated paid value therefor in good faith
without notice of the breach of duty, or
loss, theft, fraud, accident, mistaken,
duressor conversion.

4. Non-negotiable documents of title and Rights
of person to whom documents has been
transferred (Article 1510 and 1514)


Art. 1510. If a document of title which
contains an undertaking by a carrier,
warehouseman or other bailee to
deliver the goods to bearer, to a
specified person or order of a specified
person or which contains words of
like import, has placed upon it the
words not negotiable non-
negotiable, or the like, such document
may nevertheless be negotiated by the
holder and is a negotiable document of
title within the meaning of this Title.
But nothing in this Title contained shall
be construed as limiting or defining the
effect upon the obligations of the
carrier, warehouse-man, or other
bailee issuing a document of title
or placing thereon the words not
negotiable, non-negotiable, or the
like.
Ri ght s of per s on t o whom
doc ume nt ha s be e n
t r a ns f e r r ed.

(1)The title to the goods as against
the transferor
(2)The right to notify the bailee of
the transfer thereof;
(3)The right, thereafter, to acquire
the obligation of the bailee to hold
the goods for him. The right of the
transferee is not absolute as it is subject
to the terms of any agreement with
the transferor. He merely steps into the
shoes of the transferor

5. Warranties of a person negotiationg or
transferring document
Art. 1516. A person who for value
negotiates or transfers a document of
title by indorsement or deliv-ery,
including one who assigns for value a
claim se-cured by a document of title
unless contrary inten-tion appears,
warrants:
(1)That the document is genuine;

(2)That he has a legal right to negotiate
or transfer it;

(3)That he has knowledge of no fact
which would impair the validity or
worth of the document; and

(4)That he has a right to transfer the
title to the goods and that 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
document of title the goods represented
thereby.