THE WAREHOUSE RECEIPTS LAW

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

WHO MAY ISSUE WAREHOUSE RECEIPT?

the receipt, unknown to the warehouseman or to his agent

> A warehouseman is a person lawfully engaged in the business of storing

who issues it, a statement of the fact that advances have been made or liabilities

goods for profit.

incurred and the purpose thereof is sufficient

> Only a warehouseman may issue warehouse receipts

EFFECT OF OMISSION OF THE ESSENTIAL CONTENTS
WHAT SHOULD BE DONE TO PUT THE RECEIPT WITHIN THE PURVIEW OF

> A warehouseman shall be liable to any person injured thereby all

WAREHOUSE RECEIPTS LAW?

damages caused by the omission from a negotiable receipt of any of the terms

> The warehouse receipt should be issued by the warehouseman

herein required
> Validity of the receipt not affected

FORM OF RECEIPTS; ESSENTIAL TERMS

> Negotiability of the receipt not affected

1. The location of the warehouse where the goods are stored

2. The date of issue of the receipt

TERMS THAT CANNOT BE INCLUDED IN THE WAREHOUSE RECEIPT

3. Consecutive number of the receipt

1. Those contrary to any provision of the law

4. A statement whether the goods received will be delivered to the bearer, to a

2. In any wise impair the warehousemans obligation to exercise that

specified person or to a specified person or his order

degree of care in the safekeeping of the goods entrusted to him which a

5. The rate of storage charges

reasonably careful man would exercise with regard to similar goods of his own

6. A description of the goods or of the packages containing them

7. The signature of the warehouseman which may be made by his

NON-NEGOTIABLE WAREHOUSE RECEIPT

authorized agent

> Receipt in which it is stated that the goods received will be delivered to the

8. If the receipt is issued for goods of which the warehouseman is

depositor or to any specified person

owner, either solely or jointly or in common with others, the fact of such
ownership
9. A statement of the amount of advances made and of liabilities incurred

NEGOTIABLE WAREHOUSE RECEIPT

> Receipt in which it is stated that the goods received will be delivered to the

c.

A readiness and willingness to sign, when the goods are delivered, an

bearer or to the order of any person named in such receipt

acknowledgement that

> No provision shall be inserted in a negotiable receipt that it is non-negotiable.

they have been delivered, if such signature is requested by the

Such provision if inserted shall be void.

warehouseman

DUPLICATE RECEIPTS MUST BE MARKED

WHAT SHOULD ACCOMPANY THE DEMAND FOR THE RETURN OF THE

> When more than one is issued for the same goods, the word duplicate

GOODS?

shall be plainly placed upon the face of every such receipt, except the first one

1. An offer to satisfy the warehousemans lien

issued

2. An offer to surrender the receipt, if negotiable with such indorsements as

> A warehouseman shall be held liable for damages for failure to do so to

would be necessary for the negotiation of the receipts

anyone who purchased the subsequent receipt for value supposing it to be

3. A readiness and willingness to sign, when the goods are delivered, an

original, even though the purchaser be after the delivery of the goods by

acknowledgement that they have been delivered, if such signature is

the warehouseman to the holder of the original receipt

requested by the warehouseman

OBLIGATIONS AND RIGHTS OF WAREHOUSEMAN UPON THEIR

A WAREHOUSEMAN IS JUSTIFIED IN DELIVERING THE GOODS TO ONE

RECEIPTS

WHO IS
1. Person lawfully entitled to the possession of the goods, or his agent

PRINCIPAL OBLIGATIONS OF THE WAREHOUSEMAN

2. Person who either himself entitled to delivery by the terms of the non-

1. To take care of the goods entrusted to his safekeeping

negotiable receipt issued for the goods, or who has written authority from the

2. To deliver them to the holder of the receipt or the depositor provided

person so entitled either endorsed upon the receipt or written on another paper

the following conditions are fulfilledthere is demand by the depositor

3. Person in possession of a negotiable receipt by the terms of which the

accompanied by either

goods are deliverable to him or order, or to bearer, or which has been

a.

indorsed to him or in blank by the person to whom delivery was promised by the

An offer to satisfy the warehousemans lien

b. An offer to surrender the receipt, if negotiable with such indorsements as

would be necessary for the negotiation of the receipts

terms of the receipt or by his mediate or immediate indorser

WAREHOUSEMANS LIABILITY FOR MISDELIVERY

warehouseman

> 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

EFFECT OF ALTERATION ON LIABILITY OF WAREHOUSEMAN

conversion/estafa to all having a right of property or possession in the goods if he

1. Alteration immaterialwhether fraudulent or not, whether authorized or not,

delivered the goods otherwise than as authorized

the warehouseman is liable on the altered receipt according to its original tenor

> And though he delivered the goods as authorized he shall be so liable if prior to

2. Alteration materialif the alteration is material, but authorized, the

such delivery he had either

warehouseman is liable according to the terms of the receipt as altered

3. Material alteration innocently madethe warehouseman is liable on the altered

Been requested, by or on behalf of the person lawfully entitled to a

right of property or

receipt according to its original receipt

possession in the goods, not to make such delivery

4. Material alteration fraudulently madewarehouseman is liable according

to the original tenor of the receipt to a purchaser of the receipt for value

Had information that the delivery about to be made was to one not

lawfully entitled to the

without notice, and even to the alterer and subsequent purchasers with notice

possession of the goods

except

that

as

regards

to

the

last

two,

the

warehousemans liability is limited only to delivery as he is excused from any

WHAT IS CONVERSION?

liability

> Unauthorized assumption and exercise of the right of ownership over

NOTA BENE: it is clear that even a fraudulent alteration cannot divest the title

goods belonging to another through the alteration of their condition or the

of the owner of stored goods and the warehouseman is, therefore,

exclusion of the owners right

liable to return them to the owner.

But a bona fide holder acquires no right to the goods under a negotiable

NEGOTIABLE RECEIPTS MUST BE CANCELLED OR MARKED WHEN

receipt which has been lost or stolen or to which the endorsement of the

GOODS DELIVERED OR WHEN PART OF IT IS DELIVERED.

depositor has been forged.

FAILURE TO DO SO WILL MAKE THE WAREHOUSEMAN LIABLE

> The warehouseman is liable to any one who purchases for value in good faith

LOST OR DESTROYED RECEIPTS

such receipt, for failure to deliver the goods to him, whether such purchaser

> The court may order the delivery of the goods upon satisfactory proof of

acquired title to the receipt before or after the delivery of the goods by the

such loss or destruction and upon the giving of a bond with sufficient sureties to be

approved by the court to protect the warehouseman from any liability or expense,

require all known claimants to interplead

which he or any person injured by such delivery

may incur by reason of the original receipt remaining outstanding

WAREHOUSEMAN HAS REASONABLE TIME TO DETERMINE VALIDITY OF

> The court may also in its discretion order the payment of the warehousemans

CLAIMS

reasonable costs and counsel fees

> If someone other than the depositor or person claiming under him has a

> The order of the court shall not relieve the warehouseman from liability to a

claim to the title or possession of goods, and the warehouseman has information

person to whom the negotiable receipt as been or shall be negotiated for value

of such claim, the warehouseman shall be excused from liability for refusing to

without notice of the proceedings or of the delivery of the goods

deliver the goods, either to the depositor or person

claiming under him or to the adverse claimant, until the warehouseman has

LIABILITY OF WAREHOUSEMAN AS TO DUPLICATEHE WARRANTS

had a reasonable time to ascertain the validity of the adverse claim or to bring

1. That the duplicate is an accurate copy of the original receipt

legal proceedings to compel all claimants to interplead

2. Such original receipt is uncancelled at the date of the issue of the duplicate

LIABILITY OF WAREHOUSEMAN FOR NON-EXISTENCE OR

MISDESCRIPTION OF GOODS

WAREHOUSEMAN CANNOT SET UP TITLE IN HIMSELF

> As a general rule, the warehouseman is under obligation to deliver the identical

> The warehouseman cannot refuse to deliver the goods on the ground that he

property stored with him and if he fails to do so, he is liable directly to the owner

has acquired title or right to the possession of the same unless such title

> As against a bona fide holder of a warehouse receipt, the warehouseman is

or right is derived

estopped whether the receipt is negotiable or not, to deny that he has

received the goods described in it

Directly or indirectly from a transfer made by the depositor at the time of

the deposit for storage or subsequent thereto

o

From the warehousemans lien

LIABILITY OF WAREHOUSEMAN FOR LOSS DUE TO LACK OF CARE

> The warehouseman is required to exercise ordinary or reasonable care in

INTERPLEADER OF ADVERSE CLAIMANTS

the custody of the goods, that is, the care is reasonably careful owner

> If more than one person claims the title or possession of the goods, the

would exercise over similar goods of his own.

warehouseman may, either as a defense to an action brought against him for

> The warehouseman isnt liable for any loss or injury to the goods, which

non-delivery of the goods, or as an original suit, whichever is appropriate,

couldnt have been avoided by the exercise of such care.

Of course, what

constitutes ordinary or reasonable care depends upon the circumstances

> Neither shall it apply to actions for recovery or manual delivery of goods by

such as the character and value of the property and the character

the real owner nor to cases where the attachment is made before the issuance of

and location of the warehouse.

the negotiable receipt of title

COMMINGLING OF DEPOSITED GOODS

CREDITORS REMEDIES TO REACH NEGOTIABLE RECEIPTS

> As a general rule, a warehouseman may not mingle goods belonging to

> A creditor whose debtor is the owner of negotiable receipt shall be entitled to

depositors

such aid from courts of appropriate jurisdiction, by injunction and otherwise, in

> In case of fungible goods, the warehouseman may mingle them with the goods

attaching such receipt or in satisfying the claim by means thereof as is

of the same kind and grade provided that he authorized by agreement or custom

allowed by law or in equity in regard to property which cannot be readily

> Commingling

be attached or levied upon by ordinary legal process

is

intended

for

the

benefit

of

the warehouseman.

It

would, indeed be strange if the warehouseman could escape his liability to

the owner of the goods by the simple process of commingling them without

WHAT CLAIMS ARE INCLUDED IN THE WAREHOUSEMANS LIEN

authorization

1. All lawful charges for storage and preservation of the goods

2. All

lawful

claims

for

money

advancedInterests, Insurance,

ATTACHMENT OR LEVY OF A NEGOTIABLE RECEIPT

Transportation, Labor, Weighing, Cooperating and other charges and expenses

> The warehouseman has the direct obligation to hold possession of the

in relation to the goods

goods for the original owner or for the person known the negotiable receipt of

3. All reasonable charges and expenses for notice and advertisements of

title has been duly negotiated.

sale

> While in possession of such warehouseman, the goods cannot be

4. Sale of goods where default has been made in satisfying

attached or levied upon under an execution unless

warehousemans lien

The document is first surrendered

AGAINST WHAT PROPERTY THE LIEN MAY BE ENFORCED

Its negotiation is enjoined

1. Against all goods, whenever deposited, belonging to the person who is

The document is impounded by the court

liable to the debtor for the claims in regard to which the lien is asserted

> This shall not apply if the person depositing is not the owner of the goods

2. Against all goods belonging to others which have been deposited at any

or one who has no right to convey title to the goods binding upon the owner.

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

2. The notice shall contain

the goods that a pledge of the same by him at the time of the deposit to one who

a.

took the goods in good faith for value would have been valid

of the notice and the dates when it became due

An itemized statement of the claim, showing the sum due at the time

b. A brief description of the goods

HOW WAREHOUSEMAN LOSES HIS LIEN

c.

A demand that such amount of the claim as stated shall be paid on or before

1. By surrendering possession thereof

the day mentioned, not

2. By refusing to deliver the goods when a demand is made with which he is

less than 10 days from the delivery of the notice if it is personally delivered, or

bound to comply under the provisions of the law

from the time when

the notice shall reach its destination, according to due course of post, if the

LIEN WHERE RECEIPT NEGOTIABLE

notice is sent by mail

> With the exception of the charges for the storage or preservation of

d. A statement that unless the claim is paid within the time specified, the goods

goods for which a negotiable receipt has been issued, the lien exists only

will be advertised for sale

for the other charges expressly enumerated in the receipt so far as they

and sold by auction at a specified time and place

are written although the amount of the said charge isnt stated
ENFORCEMENT OF WAREHOUSEMANS LIEN
OTHER THINGS IN CONNECTION TO WAREHOUSEMANS LIEN

1. By refusing to deliver the goods until the lien is satisfied

1. Warehouseman need not deliver lien is satisfied

2. By causing the extrajudicial sale of the property and applying the

2. Warehousemans lien doesnt preclude other remedies

proceeds to the value of the lien

3. By filing a civil action for collection of the unpaid charges or by way of

SATISFACTION OF LIEN BY SALE

counterclaim in an action to recover the property from him

1. The warehouseman shall give a written notice to the person on whose

account the goods are held, and to any other person known by the

EFFECT OF SALE OF GOODS

warehouseman to claim an interest in the goods.

1. In case of sale of goods, the warehouseman is not liable for

Such notice shall be

given by delivery in person or by registered mail addressed to the

nondelivery even if the receipt given for the goods when they were deposited

last known place of business or abode of the person to be notified.

be negotiated.

2. When the sale was made without the publication requirement and

where a negotiable receipt

before the time specified by law, such sale is void and the purchaser of

has been indorsed in blank or bearer, any holder may indorse the same to

the goods acquires no title in them.

himself or to any other

specified person, and in such case the receipt shall thereafter be negotiated

ACTS FOR WHICH WAREHOUSEMAN IS LIABLE

only by the indorsement

1. Failure to stamp duplicate on copies of negotiable receipt

by such indorsee

2. Failure to place non-negotiable or not negotiable on the not negotiable

receipt

NEGOTIATION OF NEGOTIABLE RECEIPT BY INDORSEMENT

3. Misdelivery of the goods

1. If indorsed in blank or to bearer, the document becomes negotiable by

4. Failure to effect cancellation of a negotiable receipt upon delivery of the

delivery

goods

2. If indorsed to a specified person, it may be again negotiated by the

5. Issuing receipt for non-existing goods or misdescribed goods

indorsement of such person in blank, to bearer or to another specified person.

6. Failure to take care of the goods

Delivery alone isnt sufficient.

7. Failure to give notice in case of sale of goods to satisfy the lien or because the
goods are perishable or hazardous

TRANSFER OF NON-NEGOTIABLE RECEIPT

> A non-negotiable receipt of title cannot be negotiated.

NEGOTIATION AND TRANSFER OF RECEIPTS

> Nevertheless, it can be transferred or assigned by delivery

> The assignee or transferee only acquires the rights of the transferor or

NEGOTIATION OF NEGOTIABLE RECEIPT BY DELIVERY

assignor

1. Where by the terms of the receipt, the warehouseman undertakes to

deliver the goods to the bearer

ADVANTAGES OF A NEGOTIABLE WAREHOUSE RECEIPT

2. Where by the terms of the receipt, the warehouseman undertakes to

1. It protects a purchaser for value and in good faith

deliver the goods to the order of a specified person, and such person or a

2. The goods covered by the receipt cannot be garnished or levied upon

subsequent indorsee of the receipt has indorsed it in blank or to bearer

under execution unless it is surrendered, or impounded, or its negotiation

a.

enjoined

Where by the terms of the receipt, the goods are deliverable to bearer or

3. In case of negotiation, the holder acquires the direct obligation of the

1. Title to the goods as against the transferor

warehouseman to hold possession of the goods for him without notice to such

2. The right to notify the warehouseman of the transfer thereof

warehouseman

3. The right thereafter to acquire the obligation of the warehouseman to hold

4. The goods it covers arent subject to sellers lien or stoppage in transitu

the goods for him

WHO MAY NEGOTIATE A RECEIPT

RIGHTS OF TRANSFEREE OF NEGOTIABLE RECEIPT

1. By the owner thereof

1. The right to the goods as against the transferor

2. By any person to whom the possession or custody of the receipt has been

2. The right to compel the transferor to indorse the receipt

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

RULE WHERE RECEIPT IS SUBSEQUENTLY INDORSED

possession or custody of the receipt has been entrusted, or if at the

> For the purpose of determining whether the transferee is a purchaser for value

same time of such entrusting, the receipt is in such form that it may be negotiated

in good faith without notice, the negotiation shall take effect as of the time

by delivery

when the indorsement is actually made not at the time the receipt is delivered
> Reason for the rule: negotiation becomes complete only at the time of

RIGHTS OF PERSON TO WHOM RECEIPT HAS BEEN NEGOTIATED

indorsement

1. The title of the person negotiating the receipt over the goods covered by
the receipt

WARRANTIES ON SALE OF RECEIPT

2. The title of the person to whose order by the terms of the receipt the goods

1. That the receipt is genuine

were to be delivered over such goods

2. That he has a legal right to negotiate or transfer it

3. The direct obligation of the warehouseman to hold possession of the

3. That he has knowledge of no fact which would impair the validity of the worth

goods for him, as if the warehouseman directly contracted with him

of the receipt
4. That he has a right to transfer the title to the goods and that the goods are

RIGHTS OF PERSON TO WHOM RECEIPT HAS BEEN

merchantable or fit for a particular purpose, whenever such warranties

TRANSFERRED

would have been implied, if the contract of the parties had been to transfer

without a receipt of the goods represented thereby

is subsequently negotiated paid value therefor, without notice of the breach of

duty, fraud, mistake or duress

INDORSER, NOT A GUARANTOR

> The indorsement of a receipt doesnt make the indorser liable for any

EFFECT OF SUBSEQUENT NEGOTIATION BY SELLER, ETC.

failure on the part of the warehouseman or previous indorser of the receipt to

> The purchaser, mortgagee, or pledgee of goods for which a negotiable receipt

fulfill their respective obligations

has been issued, or of the negotiable receipt itself, has the duty to require the
negotiation of the receipt to him otherwise, his failure will have the same

NO WARRANTY IMPLIED FROM ACCEPTING PAYMENT OF A DEBT

effect as an express authorization on his part to the seller, mortgagor, or pledgor

> A mortgagee, pledgee or holder for security of a receipt who, in good

in possession of such receipt to make subsequent negotiation

faith, demands or receives payment of the debt for which such receipt is

> The subsequent purchaser must have taken the receipt in good faith and for

security, whether from a party to a draft drawn for such debt or from any

value in order to acquire a better right

other person, shall not, by so doing, be deemed to represent or

to warrant the genuineness of such receipt or the quantity or quality of the goods

INDORSEES RIGHT SUPERIOR TO VENDORS LIEN

therein described

> An innocent holder of a negotiable receipt has a better right to the goods

> In other words, the holder of a security who in good faith accepts payment of a

for which the receipt is given than the vendor who has a vendors lien upon such

debt from a person doesnt warrant thereby the genuineness of the receipt nor

goods

the quality or quantity of the goods therein described

> Warehouseman isnt obliged to deliver or justified in delivering the goods to

an unpaid seller unless the receipt is first surrendered for cancellation

WHEN NEGOTIATION NOT IMPAIRED BY FRAUD, DURESS, MISTAKE

> The validity of the negotiation of a receipt isnt impaired by the fact that such

HOW DO YOU ATTACH OR IMPOSE A LIEN OVER GOODS COVERED BY

negotiation was a breach of duty on the part of the person making the

A WAREHOUSE RECEIPT?

negotiation, or by the fact that the owner of the receipt was induced by fraud,

If it is not negotiable, the court would issue a writ of attachment. If it is negotiable,

mistake or duress to entrust the possession or custody of the receipt to such

the court should require the surrender of the receipt and restrict further

person, if the person to whom the receipt was negotiated, or to a person to

negotiations.

whom the receipt