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NEGOTIATION OF NEGOTIABLE RECEIPT BY DELIVERY

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


deliver
the
goods
to
the
bearer
2. Where by the terms of the receipt, the warehouseman undertakes to
deliver the goods to the order of a specified person, and such person or a
subsequent indorsee of the receipt has indorsed it in blank or to bearer
a. Where by the terms of the receipt, the goods are deliverable to bearer or
where
a
negotiable
receipt
has been indorsed in blank or bearer, any holder may indorse the
same
to
himself
or
to
any
other
specified person, and in such case the receipt shall thereafter be negotiated
only
by
the
indorsement
by
such
indorsee
NEGOTIATION OF NEGOTIABLE RECEIPT BY INDORSEMENT
1. If indorsed in blank or to bearer, the document becomes negotiable
by
delivery
2. If indorsed to a specified person, it may be again negotiated by the
indorsement of such person in blank, to bearer or to another specified
person.
Delivery
alone
isnt
sufficient.
TRANSFER OF NON-NEGOTIABLE RECEIPT
>
A non-negotiable receipt of title cannot be negotiated.
> Nevertheless, it can be transferred or assigned by delivery
> The assignee or transferee only acquires the rights of the transferor or
assignor
ADVANTAGES OF A NEGOTIABLE WAREHOUSE RECEIPT
1.
It protects a purchaser for value and in good faith
2. The goods covered by the receipt cannot be garnished or levied upon
under execution unless it is surrendered, or impounded, or its negotiation
enjoined
3. In case of negotiation, the holder acquires the direct obligation of the
warehouseman to hold possession of the goods for him without notice to such
warehouseman
4. The goods it covers arent subject to sellers lien or stoppage in
transitu
WHO MAY NEGOTIATE A RECEIPT
1.
By
the
owner
thereof
2. By any person to whom the possession or custody of the receipt has
been 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 possession or custody of the receipt has been entrusted, or
if
at
the
same time of such entrusting, the receipt is in such form that it may be
negotiated
by
delivery
RIGHTS
OF
PERSON
TO
WHOM
RECEIPT
HAS
BEEN
NEGOTIATED
1. The title of the person negotiating the receipt over the goods
covered
by
the
receipt
2. The title of the person to whose order by the terms of the receipt the
goods
were
to
be
delivered
over
such
goods
3. The direct obligation of the warehouseman to hold possession of
the goods for him, as if the warehouseman directly contracted with him
RIGHTS
OF
PERSON
TO
WHOM
RECEIPT
HAS
BEEN
TRANSFERRED
1.
Title
to
the
goods
as
against
the
transferor
2. The right to notify the warehouseman of the transfer thereof
3. The right thereafter to acquire the obligation of the warehouseman to
hold
the
goods
for
him
RIGHTS OF TRANSFEREE OF NEGOTIABLE RECEIPT
1. The right to the goods as against the transferor
2.
The right to compel the transferor to indorse

the

> For the purpose of determining whether the transferee is a purchaser for
value in good faith without notice, the negotiation shall take effect as
of the time 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
indorsement
WARRANTIES ON SALE OF RECEIPT
1.
That
the
receipt
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 of the
worth
of
the
receipt
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 receipt of the goods represented thereby
INDORSER, NOT A GUARANTOR
> The indorsement of a receipt doesnt make the indorser liable for any
failure on the part of the warehouseman or previous indorser of the
receipt
to
fulfill
their
respective
obligations
NO WARRANTY IMPLIED FROM ACCEPTING PAYMENT OF A DEBT
> A mortgagee, pledgee or holder for security of a receipt who, in
good faith, demands or receives payment of the debt for which such
receipt is security, whether from a party to a draft drawn for such debt
or from any 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
therein
described
> In other words, the holder of a security who in good faith accepts payment
of a debt from a person doesnt warrant thereby the genuineness of the
receipt nor the quality or quantity of the goods therein described
WHEN NEGOTIATION NOT IMPAIRED BY FRAUD, DURESS, MISTAKE
> The validity of the negotiation of a receipt isnt impaired by the fact that such
negotiation was a breach of duty on the part of the person making the
negotiation, or by the fact that the owner of the receipt was induced by
fraud, mistake or duress to entrust the possession or custody of the receipt
to such person, if the person to whom the receipt was negotiated, or to a
person
to
whom
the
receipt
is subsequently negotiated paid value therefor, without notice of the
breach
of
duty,
fraud,
mistake
or
duress
EFFECT OF SUBSEQUENT NEGOTIATION BY SELLER, ETC.
> The purchaser, mortgagee, or pledgee of goods for which a negotiable
receipt 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 effect as an express authorization on his part to the seller,
mortgagor, or pledgor in possession of such receipt to make subsequent
negotiation
> The subsequent purchaser must have taken the receipt in good faith and
for
value
in
order
to
acquire
a
better
right
INDORSEES RIGHT SUPERIOR TO VENDORS LIEN
> An innocent holder of a negotiable receipt has a better right to the
goods for which the receipt is given than the vendor who has a vendors lien
upon
such
goods
> Warehouseman isnt obliged to deliver or justified in delivering the
goods to an unpaid seller unless the receipt is first surrendered for
cancellation
HOW DO YOU ATTACH OR IMPOSE A LIEN OVER GOODS
COVERED BY A WAREHOUSE RECEIPT?
If it is not negotiable, the court would issue a writ of attachment. If it is
negotiable, the court should require the surrender of the receipt and
restrict further negotiations.

receipt

RULE WHERE RECEIPT IS SUBSEQUENTLY INDORSED

Jillian Gandingco | 1