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WAREHOUSE

RECEIPT LAW
Group I
Arrianne Cabiao
Anne Mariano
Florinie Abregunda
Brenda Viernes

SCOPE

Covers all warehouse, whether


public or private, bonded or not.

Applicable
to
warehousemen
licensed under Act No. 3893 as
amended by RA No. 247, General
Bonded Warehouse Act, of special
application to those engaged in the
business of receiving commodities
for storage.

PURPOSES

To regulate 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

PURPOSES

To
facilitate
the
use
warehouse
receipts
documents of title; and

of
as

In order to accomplish these, to


place
a
much
greater
responsibility
on
the
warehouseman.

ISSUE OF WAREHOUSE
RECEIPT
Section 1. Person who may issue
receipts.
Warehouseman
is a person
lawfully engaged in the business
of storing goods for profit.

ISSUE OF WAREHOUSE
RECEIPT
Section 1. Person who may issue
receipts.
Warehouse
means the
building or place where goods are
deposited and stored for profit.

ISSUE OF WAREHOUSE
RECEIPT
Section 2. Form
Essential Terms.

of

receipts;

Warehouse Receipt
written
acknowledgment
by
a
warehouseman
that
he
has
received and holds certain goods
therein described in store for the
person to whom it is issued.

ISSUE OF WAREHOUSE
RECEIPT
Section 2. Form of receipts; Essential
Terms.

Warehouse Receipt is a bilateral


contract.

Warehouse Receipt is not a


negotiable instrument within the
meaning
of
Negotiable
Instruments Law.

ISSUE OF WAREHOUSE RECEIPT


Section 2. Essential Terms
1.
2.
3.
4.
5.
6.
7.
8.
9.

Location of warehouse
Date of issue of receipt
Consecutive number of receipt
Person to whom the goods are deliverable
Rate of storage charges
Description of goods or packages
Signature of warehouseman
Warehousemans ownership of or interest in
goods
Statement of advances made and liabilities
incurred

ISSUE OF WAREHOUSE RECEIPT


Section 2. Essential Terms

Effect of omission of any essential


terms:
1.
2.
3.
4.

Validity of receipt is not affected.


Warehouseman liable for damages.
Negotiability of receipt not affected.
Contract converted to ordinary
deposit.

ISSUE OF WAREHOUSE RECEIPT

Section 3. What terms may be


inserted?
Warehouseman may insert
in a receipt, issued by him,
any
other
terms
and
conditions.

ISSUE OF WAREHOUSE RECEIPT


Section 3.
inserted?

What

terms

may

be

Terms and Condition shall not:


1. Contrary to the provisions of this Act.
2. In any wise impair his obligation to
exercise that decree pf care in the
safekeeping of the goods entrusted
to him which a reasonable careful
man exercise in regard to similar
goods of his own.

ISSUE OF WAREHOUSE RECEIPT

Section 4. Non-Negotiable
Receipt
a receipt in which it is
stated
that
the
goods
received will be delivered to
the depositor or to any other
specified person.

ISSUE OF WAREHOUSE RECEIPT

Section
Receipt

5.

Negotiable

a receipt in which it is stated


that the goods received will be
delivered to the bearer or to
the order of any person named
in such receipt.

ISSUE OF WAREHOUSE RECEIPT

Section 6. Duplicate receipts


must be so marked.

More than 1 receipt is


issued for the same goods,
word duplicate shall be
plainly placed upon the face
of every receipt, except the
first issued.

ISSUE OF WAREHOUSE RECEIPT

Section 7. Failure
not negotiable.

to

mark

The holder of the receipt


who purchased it for value,
supposing
it
to
be
negotiable,
may,
at
his
option, treat such receipt as
negotiable one.

ISSUE OF WAREHOUSE RECEIPT

Application of Sections 6 and


7

Section 6 applies only to


negotiable receipts.
Section 7 applies only to
non-negotiable receipts

ISSUE OF WAREHOUSE RECEIPT


Effect
of
failure
to
mark
negotiable or non-negotiable
1.

Negotiable usually written or


printed on the face of a
negotiable warehouse receipt.
Failure to do so, does not
render it non-negotiable if it
contains
words
of
negotiability.

ISSUE OF WAREHOUSE RECEIPT


Effect
of
failure
to
mark
negotiable or non-negotiable
1.

Non-Negotiable receipts needs


to be mark as non-negotiable
or not negotiable otherwise it
is
considered
negotiable.
Provided that the holder of such
receipt purchased it for value
supposing it to be negotiable.

ISSUE OF WAREHOUSE RECEIPT

Construction
Receipts

of

Warehouse

Liberal construction of the


law in favour of the bona fide
holder of such receipts.

OBLIGATIONS AND RIGHTS OF


WAREHOUSEMEN
UPON THEIR RECEIPTS

To take care of goods entrusted to


his safekeeping, and
To deliver them to the holder of the
receipt or the depositor provided
the conditions under Section 8 are
fulfilled.

OBLIGATIONS AND RIGHTS OF


WAREHOUSEMEN
UPON THEIR RECEIPTS
A warehouseman is bound to deliver the goods upon a
demand made either by the holder of a receipt for the
goods or by the depositor, if such demand is accompanied
with

An offer to satisfy the warehousemans lien


An offer to surrender the receipt, if negotiable with such
indorsements as would be necessary for the negotiation
of the receipts, and
A readiness and willingness to sign, when the goods are
delivered, if such signature is requested by the
warehouseman.

OBLIGATIONS AND RIGHTS OF


WAREHOUSEMEN
UPON THEIR RECEIPTS
Generally speaking, a demand should
be made on the warehouseman in order
that the duty to deliver the goods will
arise. But where demand is evidently
useless as when the warehouseman has
rendered it beyond his power to deliver
the goods, demand is dispensed with.

OBLIGATIONS AND RIGHTS OF


WAREHOUSEMEN
UPON THEIR RECEIPTS

In case the warehouseman


refuses or fails to deliver the
goods in compliance with a
demand
by
the
holder
or
depositor so accompanied, the
burden
shall
be
upon
the
warehouseman to establish the
existence of lawful excuse for

VALID REASONS FOR REFUSING


TO DELIVER GOODS

That the holder of the receipt does not


satisfy the conditions prescribed in
Section 8;
That the warehouseman has legal title
in himself on the goods, such title or
right being derived directly or indirectly
from a transfer made by the depositor
at the time of or subsequent to the
deposit for storage, or from the
warehousemans lien;

VALID REASONS FOR REFUSING


TO DELIVER GOODS

a)

b)

c)

That the warehouseman has legally set up the title or


right of third persons as lawful defense for non delivery of
the goods as follows:
Where the warehouseman has been requested by or on
behalf of the person lawfully entitled to a right of
property of or possession in the goods, not to make such
delivery.
Where the warehouseman
had information that the
delivery about to made was to one not lawfully entitled to
the possession of the goods.
Where the goods have already been lawfully sold to third
persons to satisfy a warehousemans lien, or have been
lawfully sold or disposed of because of their perishable or
hazardous nature

VALID REASONS FOR REFUSING


TO DELIVER GOODS

That the warehouseman having


a lien valid against the person
demanding the goods refuses to
deliver the goods to him until
the lien is satisfied;
That the failure was not due to
any fault on the part of the
warehouseman.

PERSON TO WHOM GOODS MUST


BE DELIVERED
The warehouseman is justified in
delivering the goods and, therefore,
will not be liable for misdelivery, to
any person specified in Section 9.

Person lawfully entitled to possession of


goods or his agent
Person entitled to delivery under a nonnegotiable receipt or with written
authority
Person in possession of a negotiable
receipt

WAREHOUSEMANS LIABILITY
FOR MISDELIVERY
Where the delivery is otherwise than as
authorized by subsections (b) and (c) of Section 9,
the liability of the warehouseman for misdelivery is
as for conversion. Conversion is 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
owners right. And even if the warehouseman
delivers the goods to the persons entitled under
subsection (b) and (c) of Section 9, he may still be
liable for conversion if prior to delivery,

he had been requested not to make such


delivery, or

he had received notice of the adverse claim or

EFFECTS
EFFECTS OF
OF ALTERATION
ALTERATION ON
ON
LIABILITY
LIABILITY OF
OF WAREHOUSEMAN
WAREHOUSEMAN

Alteration immaterial if the alteration is


immaterial whether fraudulent or not, authorized
or not, the houseman is liable on the altered
receipt according to its original tenor,
(the tenor of the receipt is not changed like the
substitution of the real name of a party)

Alteration material if the alteration is material


but authorized, the warehouseman is liable
according to the terms of the receipt as altered,
(the tenor of the receipt is changed like the erasure
of the name of a party and the insertion of another)

EFFECTS
EFFECTS OF
OF ALTERATION
ALTERATION ON
ON
LIABILITY
LIABILITY OF
OF WAREHOUSEMAN
WAREHOUSEMAN

Material alteration innocently made if the


alteration is material but innocently made though
unauthorized, the warehouseman is liable on the
altered receipt according to its original tenor,

Material alteration fraudulently made if the


alteration is material and fraudulently made the
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 warehousemans liability is limited only to
delivery as he is excused from any liability.

LIABILITY
LIABILITYOF
OFWAREHOUSEMAN
WAREHOUSEMANIN
INCASE
CASE
OF
OFLOST
LOSTOR
ORDESTROYED
DESTROYEDRECEIPTS
RECEIPTS
Under Sections 8 and 11, the warehouseman is not
liable for non delivery without the surrender of the
receipt. Under Section 14, a competent court may order
the delivery of the goods only:

upon proof of the loss or destruction of the receipt,


and
upon the giving of a bond with sufficient sureties to
be approved by the court.
Note however, that the warehouseman is still liable to a
holder of the receipt for value without notice since the
warehouseman can secure himself on the bond given.

LIABILITY
LIABILITY OF
OF WAREHOUSEMAN
WAREHOUSEMAN
AS
AS TO
TO DUPLICATE
DUPLICATE
When more than one negotiable receipt is issued for the same
goods, the word duplicate must be plainly placed by the
warehouseman upon the face of every such receipt, except the
one first issued. In such case the warehouseman warrants

that the duplicate is an accurate copy of the original receipt,


and
such original receipt is uncancelled at the date of the issue of
the duplicate.
Except for breach of this warranty, the duplicate imposes no
other liability upon the warehouseman. It results that the
warehouseman may not be compelled to deliver the goods by
virtue of the duplicate only unless the procedure provided for in
Section 14 is followed.

DUTY
DUTY OF
OF WAREHOUSEMAN
WAREHOUSEMAN WHERE
WHERE
THERE
THERE ARE
ARE SEVERAL
SEVERAL CLAIMANTS
CLAIMANTS
If there are several claimants to the goods, the
warehouseman
must
determine
within
a
reasonable time the validity of the conflicting
claims, and deliver to the person to whom he finds
is entitled to the possession of the goods.
However, he is not excused from liability in case he
makes a mistake.
For his own protection, the warehouseman must
bring a complaint in interpleader and require the
different claimants to litigate among themselves.
In such case, the warehouseman will be relieved
from liability in delivering the goods to the person
whom the court finds to have a better right.

LIABILITY
LIABILITY OF
OF A
A WAREHOUSEMAN
WAREHOUSEMAN
TO
TO RIGHTFUL
RIGHTFUL CLAIMANT
CLAIMANT
Where a warehouseman does not compel
interpleader in a case requiring it, he is
liable for refusal to deliver to the rightful
claimant, and where he neither interpleads
nor investigates, he will after lapse of a
reasonable time, be held guilty of
conversion as of the date of original
demand for the goods. The question of
what constitutes a reasonable time is one of
fact for determination in accordance with
the circumstances of the particular case.

LIABILITY
LIABILITY OF
OF WAREHOUSEMAN
WAREHOUSEMAN FOR
FOR
NON-EXISTENCE
NON-EXISTENCE OR
OR MISDESCRIPTION
MISDESCRIPTION
OF
OF GOODS
GOODS
As a general rule, the warehouseman is under
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
warehouseman receipt, the warehouseman is
estopped, whether the receipt is negotiable or not,
to deny that he has received the goods in it. But if
the description consists merely of marks or labels
upon the goods or upon the packages containing
them, etc., the warehouseman is not liable even if
the goods are not

LIABILITY
LIABILITY OF
OF WAREHOUSEMAN
WAREHOUSEMAN FOR
FOR
LOSS
LOSS DUE
DUE TO
TO LACK
LACK OF
OF CARE
CARE
The warehouseman is required to exercise
ordinary or reasonable care in the custody of the
goods, that is, the diligence of a good father of a
family.
In the absence of any agreement to the
contrary, the warehouseman is not liable for any
loss or injury to the goods which could not have
been avoided by the exercise of such care. Of
course, what constitutes ordinary or reasonable
care depends upon the circumstances such as the
character and value of the property and the
character and location of the warehouse.

LIABILITY
LIABILITY OF
OF WAREHOUSEMAN
WAREHOUSEMAN TO
TO
DEPOSITORS
DEPOSITORS OF
OF COMMINGLED
COMMINGLED GOODS
GOODS
As a general rule, a warehouseman may not
mingle goods belonging to depositors. In the case
of fungible goods, like rice, sugar, etc., the
warehouseman may mingle them with the goods of
the same kind and grade provided that he is
authorized by agreement or custom. In that case
the different owners become co-owners of the
whole mass.
The warehouseman shall be severally liable to
each depositor for the care and redelivery of his
share of such mass to the same extent and under
the same circumstances as if the goods had been

ACTS
FOR
WHICH
ACTS FOR WHICH
WAREHOUSEMAN
WAREHOUSEMANIS
ISLIABLE
LIABLE
The
following
are
acts
for
warehouseman may be held liable:

which

(1) Failure to stamp duplicate on copies of a negotiable


receipt
(2) Failure to place non negotiable or not negotiable on a
non-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 (the diligence of a good
father of family)
(7) Failure to give notice in case of sale of goods to satisfy his
lien or because the goods are perishable or hazardous

CLAIMS
CLAIMS INCLUDED
INCLUDED IN
IN THE
THE
WAREHOUSEMANS
WAREHOUSEMANS LIEN
LIEN
Subject to the provisions of Section 30, a warehouseman
shall have a lien on goods deposited or on the proceeds
thereof in his hands,
- for all lawful charges for storage and preservation of the
goods,
- also for all lawful claims for money advanced, interest,
insurance, transportation, labor, weighing, cooperating
and other charges and expenses in relation to such goods,
- also for all reasonable charges and expenses for notice
and advertisements of sale, and for sale of the goods
where default had been made in satisfying the
warehousemans lien

WAREHOUSEMANS
WAREHOUSEMANS LIEN
LIEN DOES
DOES
NOT
NOT PRECLUDE
PRECLUDE OTHER
OTHER REMEDIES
REMEDIES
Whether a warehouseman has or has not
a lien upon the goods, he is entitled to all
remedies allowed by law to a creditor
against a debtor for the collection from the
depositor
of
all
the
charges
and
advancement which the depositor has
expressly or impliedly contracted with the
warehouseman to pay.

ENFORCEMENT
ENFORCEMENT OF
OF
WAREHOUSEMANS
WAREHOUSEMANS LIEN
LIEN
The remedies available to a warehouseman for enforcing
his lien are as follows:

By refusing to deliver the goods until the lien is satisfied,


By causing the extrajudicial sale of the property and
applying the proceeds to the value of the lien, and
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, or such other remedies allowed by
law for the enforcement of a lien against personal
property, or to a creditor against his debtor, for the
collection from the depositor of all the charges which the
depositor has bound himself to pay.

ENFORCEMENT
ENFORCEMENT OF
OF
WAREHOUSEMANS
WAREHOUSEMANS LIEN
LIEN
A warehouse is entitled to all the remedies
allowed by law to a creditor against his
debtor for the collection from the depositor
of all charges which the depositor is obliged
to pay, including remedies allowed by law for
enforcement of a lien against personal
property and recovery of any deficiency in
case it exist after sale of the property.