Assignment of Non- Negotiable

Documents of Title
How assignment Made?

Since a non-negotiable document of title

constitutes an incorporeal right, its sale
constitutes actually an assignment which
under Article 1624 is perfected by mere
consent , but which under Article 1625 would
require its appearance in a public instrument
otherwise it shall produce no effect as against
third persons.
Effects of transfer by
assignment

A person to whom a non- negotiable document

of title has been duly assigned acquires thereby,
as against the transferor.
In the assignment of a non-negotiable
document of title, there is no legal relationship
between the assignee and the bailee until the
latter is informed by the former of the
assignment of the covering document of title.
Warranties on negotiation
and assignment of document
of title

A person who for value negotiates or

transfers a document of title by endorsement
or delivery, including one who assigns for
value a claim secured by a document of title,
unless a contrary intention appears, warrants
that:
a. The document is genuine;
b. He has a legal right to negotiate or transfer it;
c. He has no knowledge of any fact which would
impair the validity of worth of the document
d. He has a right to transfer the title to the goods;
e. 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
Effects when owner of the
document of title has no
legal title to the goods
1. When goods covered by a
non- negotiable document
Where the goods are covered by a non-
negotiable document of title, and under the
premise that the assignee- buyer had
obtained possession of the goods by the
proper notification to the bailee of such
purchase, the situation would have to be
governed by the formula provided under
Article 559 of the civil code.
When goods covered by
negotiable document
In a situation where the goods are covered by a
negotiable document of title properly
negotiated to the holder-buyer, the premise
would have to be that by issuing such
negotiable document the bailee has
constituted himself as an agent to possess the
goods for the benefit of the holder of the
document as his principal, then it becomes
apparent that the same principles under Article
559 of the civil code would have to apply.
Rules on levy/ Garnishment
of goods covered by document
of title
Under Article 1514 , a person to whom a non-
negotiable document of title has been transferred,
must notify the bailee who issued the document of the
transfer thereof, and only then does the transferee
acquire the direct obligation of such bailee to hold
possession of the goods for him according to the
terms of the document. Prior to the notification to
such bailee by the transferor or transferee of a non-
negotiable document of title