WAREHOUSE RECEIPTS LAW

1. Purposes

a. To regulate the status, rights and liabilities of the parties in a warehousing contract

b. To protect those who, in good faith and for value, acquire negotiable warehouse receipts by negotiation

c. To render the title to, and right of possession of, property stored in warehouses more easily convertible

d. To facilitate the use of warehouse receipts as documents of title

e. In order to accomplish these, to place a much greater responsibility on the warehouseman

2. Applicability

The WRL applies to all warehouses whether public or private, bonded or not

3.Definitions

Warehouseman : A person lawfully engaged in the business of storing goods

Warehouse : The building or place where goods are deposited and stored for profit

Warehouse receipt: A contract, an evidence of receipt , a document of title

4. Distinctions between Negotiable Instrument and Negotiable Warehouse Receipt

It is not a negotiable instrument because ot does not comply with Section 1 B of th eNIL which requires an unconditional promise or order to pay a sum certain in money. However, the receipt may be issued in negotiable form

When a negotiable instrument is deliberately altered, it becomes null and void. On the other hand, a negotiable warehouse receipt, when altered , is still valid.

5. Essential Terms a. Effect of Omission of any of the essential terms i. Failure to mark "negotiable" does not render it non-negotiable if it contains words of negotiablity ii. Failure to mark "non-negotiable" shall make it negotiable

b. Terms that cannot be included

i. Those contrary to the provisions of the WRL ii. Those which may impair the obligation of the warehouseman to exercise that degree of care iii. Those contrary to law , morals , good customs, public order or public policy iv. Those exempting the warehouseman from liability for misdelivery v. Those exempting the warehouseman from liability for negligence

6. Kinds of WR a. Negotiable : where the goods are deliveable to bearer or to the order of the person specified

b. Non-negotiable: the goods received will be delivered to the depositor or to any specified person

7. Negotiation and Transfer of WR a. How negotiated

I. by delivery II. Indorsement coupled with delivery

b. Who may negotiate

a. owner thereof b. any person to whom the possession or custody of the receipt has been entrusted by the owner

c. Effects of negotiation

i. effect of manual delivery ii. title to and possession of the property

d. Rights acquired by Indorsee

i. title to the goods ii. direct obligation of the warehouseman to hold possession of the goods for him

8. Non-negotiable Warehouse Receipt

a. Rights of Transferee :

i. Acquires title of the goods subject to the terms of the agreement with the transferor ii. The right to notify the warehouseman of the transfer to him of such receipt iii. The right to acquire the obligation of the warehouseman to hold the goods for him according to the terms of the receipt

9. Effects of Alteration

Immaterial Alteration: liable according to its original tenor Material but authorized alteration: liable according to the terms of the receipt as altered

Material but innocent alteration: liable according to its original tenor Material and Fraudulent Alteration: liable according to its original tenor to a purchaser for value and subsequent purchasers

10. Lost or Destroyed WR

Where a negotiable receipt has been lost or destroyed , a court of competent jurisdiction may order the delivery of the goods only:

1. upon proof of the loss or destruction of the receipt 2. upon the giving of a bond with sufficient sureties to be approved by the court