IV.

CONCURRENCE AND PREFERENCE OF CREDITS –

ARTS 2236 – 2251
1. De Barreto v Villanueva, 1 SCRA 288
Thus, it becomes evident that one preferred creditor's third-party claim to the proceeds of a
foreclosure sale (as in the case now before us) is not the proceeding contemplated by law for the
enforcement of preferences under Article 2242, unless the claimant were enforcing a credit for taxes
that enjoy absolute priority. If none of the claims is for taxes, a dispute between two creditors will not
enable the Court to ascertain the pro-rata dividend corresponding to each, because the rights of the
other creditors likewise" enjoying preference under Article 2242 can not be ascertained.

2. [G.R. No. 105827. January 31, 2000]

J.L. BERNARDO CONSTRUCTION, represented by attorneys-in-fact Santiago R. Sugay, Edwin
A. Sugay and Fernando S.A. Erana, SANTIAGO R. SUGAY, EDWIN A. SUGAY and FERNANDO
S. A. ERANA, petitioners, vs. COURT OF APPEALS and MAYOR JOSE L. SALONGA,
respondents.

Doctrine:

Articles 2241 and 2242 of the Civil Code enumerates certain credits which enjoy preference with
respect to specific personal or real property of the debtor. Specifically, the contractors lien claimed by
petitioners is granted under the third paragraph of Article 2242 which provides that the claims of
contractors engaged in the construction, reconstruction or repair of buildings or other works shall be
preferred with respect to the specific building or other immovable property constructed.

However, Article 2242 only finds application when there is a concurrence of credits, i.e. when the
same specific property of the debtor is subjected to the claims of several creditors and the value of
such property of the debtor is insufficient to pay in full all the creditors. In such a situation, the
question of preference will arise, that is, there will be a need to determine which of the creditors will be
paid ahead of the others. Fundamental tenets of due process will dictate that this statutory lien should
then only be enforced in the context of some kind of a proceeding where the claims of all the preferred
creditors may be bindingly adjudicated, such as insolvency proceedings.
It not having been alleged in their pleadings that they have any rights as a mortgagee under the
contracts, petitioners may only obtain possession and use of the public market by means of a
preliminary attachment upon such property, in the event that they obtain a favorable judgment in the
trial court. Under our rules of procedure, a writ of attachment over registered real property is enforced
by the sheriff by filing with the registry of deeds a copy of the order of attachment, together with a
description of the property attached, and a notice that it is attached, and by leaving a copy of such
order, description, and notice with the occupant of the property, if any.

3) DEVELOPMENT BANK OF THE PHILIPPINES, petitioner, vs. HONORABLE COURT OF

APPEALS and REMINGTON INDUSTRIAL SALES CORPORATION, respondents.

Under the system of the Civil Code of the Philippines, only taxes enjoy a similar absolute
preference. All the remaining thirteen classes of preferred creditors under Article 2242 enjoy no
priority among themselves, but must be paid. Thus, Article 2249 provides:
"If there are two or more credits with respect to the same specific real property or real rights, they
shall be satisfied pro rata, after the payment of the taxes and assessments upon the immovable
property or real rights."

But in order to make this prorating fully effective, the preferred creditors enumerated in Nos. 2 to 14 of
Article 2242 (or such of them as have credits outstanding) must necessarily be convened, and the
import of their claims ascertained. It is thus apparent that the full application of Articles 2249 and 2242
demands that there must be first some proceeding where the claims of all the preferred creditors may
be bindingly adjudicated, such as insolvency, the settlement of decedent's estate under Rule 87 of the
Rules of Court, or other liquidation proceedings of similar import.

This explains the rule of Article 2243 of the new Civil Code that -

"The claims or credits enumerated in the two preceding articles shall be considered as mortgages or
pledges of real or personal property, or liens within the purview of legal provisions governing
insolvencyxxx (Italics supplied).

"The question as to whether the Civil Code and the Insolvency Law can be harmonized is settled by
this Article (2243). The preferences named in Articles 2261 and 2262 (now 2241 and 2242) are to be
enforced in accordance with the Insolvency Law."

Thus, one preferred creditor's third-party claim to the proceeds of a foreclosure sale is not the
proceeding contemplated by law for the enforcement of preferences under Article 2242, unless the
claimant were enforcing a credit for taxes that enjoy absolute priority. If none of the claims is for taxes,
a dispute between two creditors will not enable the Court to ascertain the pro rata dividend
corresponding to each, because the rights of the other creditors likewise enjoying preference under
Article 2242 cannot be ascertained.

4. Ruby Industrial Corp. vs CA

Rehabilitation contemplates a continuance of corporate life and activities in an effort to restore and
reinstate the corporation to its former position of successful operation and solvency. When a
distressed company is placed under rehabilitation, the appointment of a management committee
follows to avoid collusion between the previous management and creditors it might favor, to the
prejudice of the other creditors. All assets of a corporation under rehabilitation receivership are held in
trust for the equal benefit of all creditors to preclude one from obtaining an advantage or preference
over another by the expediency of attachment, execution or otherwise.
5. RUBBERWORLD (PHILS.), INC., or JULIE YAP ONG, petitioner, vs. NATIONAL LABOR
RELATIONS COMMISSION,

The law is clear: upon the creation of a management committee or the appointment of rehabilitation
receiver, all claims for actions "shall be suspended accordingly." No exception in favor of labor claims
is mentioned in the law. Since the law makes no distinction or exemptions, neither should this
Court. Ubi lex non distinguit nec nos distinguere debemos. Allowing labor cases to proceed clearly
defeats the purpose of the automatic stay and severely encumbers the management committee's time
and resources.

The present case involves the rehabilitation, not the liquidation, of petitioner-
corporation. Hence, the preference of credit granted to workers or employees under Article 110 of the
Labor Code is not applicable.
6. LECA Realty Corp. v Manuela Corp,534 SCRA 97
Professor Concepcion stated that what is allowed in rehabilitation proceedings is only the suspension
of payments, or the stay of all actions for claims of distressed corporations, and upon its successful
rehabilitation, the claims must be settled in full.
7. Chas Realty & Development Corp v Talavera, 397 SCRA 84 G.R. No. 151925. February 6, 2003.*
Doctrine:
A Certificate attesting, under oath, that (a) the filing of the petition has been duly authorized; and (b)
the directors and stockholders have irrevocably approved and/or consented to, in accordance with
existing laws, all actions or matters necessary and desirable to rehabilitate the debtor including, but
not limited to, amendments to the articles of incorporation and by-laws or articles of partnership;
increase or decrease in the authorized capital stock; issuance of bonded indebtedness; alienation,
transfer, or encumbrance of assets of the debtor; and modification of shareholders’ rights.”

Observe that Rule 4, Section 2(k), prescribes the need for a certification; one, to state that the filing of
the petition has been duly authorized, and two, to confirm that the directors and stockholders have
irrevocably approved and/or consented to, in accordance with existing laws, all actions or matters
necessary and desirable to rehabilitate the corporate debtor, including, as and when called for, such
extraordinary corporate actions as may be marked out.

8) G.R. No. 74851 December 9, 1999

RIZAL COMMERCIAL BANKING CORPORATION, petitioner,

vs.INTERMEDIATE APPELLATE COURT AND BF HOMES, INC

It behooves the Court, therefore, to settle the issue in this present resolution once and for all, and for
the guidance of the Bench and the Bar, the following rules of thumb shall are laid down:

1. All claims against corporations, partnerships, or associations that are pending before any court,
tribunal, or board, without distinction as to whether or not a creditor is secured or unsecured, shall be
suspended effective upon the appointment of a management committee, rehabilitation receiver,
board, or body in accordance which the provisions of Presidential Decree No. 902-A.

2. Secured creditors retain their preference over unsecured creditors, but enforcement of such
preference is equally suspended upon the appointment of a management committee, rehabilitation
receiver, board, or body. In the event that the assets of the corporation, partnership, or association are
finally liquidated, however, secured and preferred credits under the applicable provisions of the Civil
Code will definitely have preference over unsecured ones.

The Majority ruling in our 1992 decision that preferred creditors of distressed corporations shall, in a
way, stand an equal footing with all other creditors, must be read and understood in the light of the
foregoing rulings. All claims of both a secured or unsecured creditors, without distinction on this score,
are suspended once a management committee is appointed. Secured creditors, in the meantime,
shall not be allowed to assert such preference before the Securities and Exchange Commission. It
may be stressed, however, that this shall only take effect upon the appointment of a management
committee, rehabilitation receiver, board, or body, as opined in the dissent.

If rehabilitation is no longer feasible and the assets of the corporation are finally liquidated, secured
creditors shall enjoy preference over unsecured creditors, subject only to the provisions of the Civil
Code on concurrence and preference of credits. Creditors of secured obligations may pursue their
security interest or lien, or they may choose to abandon the preference and prove their credits as
ordinary claims.

Moreover, Section 2248 of the Civil Code provides: "Those credits which enjoy preference in relation
to specific real property or real rights, exclude all others to the extent of the value of the immovable or
real right to which the preference refers."

9. Sobrejuanite vs ASB Development Corporation

The purpose for the suspension of the proceedings is to prevent a creditor from obtaining an
advantage or preference over another and to protect and preserve the rights of party litigants as well
as the interest of the investing public or creditors. Such suspension is intended to give enough
breathing space for the management committee or rehabilitation receiver to make the business viable
again, without having to divert attention and resources to litigations in various fora. The suspension
would enable the management committee or rehabilitation receiver to effectively exercise its/his
powers free from any judicial or extra-judicial interference that might unduly hinder or prevent the
rescue of the debtor company.
10. G.R. Nos. 175181-82 September 14, 2007
METROPOLITAN BANK and TRUST COMPANY, INC., vs. SLGT HOLDINGS, INC

As we articulated in Arranza v. B.F. Homes, Inc., the fact that respondent B.F. Homes is under
receivership does not preclude the continuance before the HLURB of the case for specific
performance of a real estate developer’s obligation under PD 957. SLGT’s and Dylanco’s complaints
in the instant case did not seek monetary recovery or to touch the corporate coffers of ASB ahead of
others. They did not even consider themselves as money claimants. All they ask was for the
enforcement of ASB’s statutory and contractual obligations as a condominium developer. In the
concrete, they pressed for the delivery of their units free from all liens and encumbrances and the
declaration of nullity of the mortgage in question arising from the breach of Section 18 of PD 957.
Significantly, "the proceedings before the HLURB [may] be suspended during the rehabilitation [of the
ailing corporation]" "if the claim was for monetary awards.
11. PAL v CA, 566 SCRA 124
A check, whether a manager’s check or ordinary cheek, is not legal tender, and an offer of a check in
payment of a debt is not a valid tender of payment and may be refused receipt by the obligee or
creditor. The obligation is not extinguished and remains suspended until the payment by commercial
document is actually realized.
12. [G.R. No. 148372. June 27, 2005] CLARION PRINTING HOUSE, INC., and EULOGIO
YUTINGCO, petitioners, vs. THE HONORABLE NATIONAL LABOR RELATIONS COMMISSION
(Third Division) and MICHELLE MICLAT, respondents.
DOCTRINE:
According to P.D. No. 902-A, as amended, the appointment of a receiver or management committee
by the SEC presupposes a finding that, inter alia, a company possesses sufficient property to cover all
its debts but “foresees the impossibility of meeting them when they respectively fall due” and “there is
imminent danger of dissipation, loss, wastage or destruction of assets of other properties or
paralization of business operations.”
SEC. 5 In addition to the regulatory and adjudicative functions of THE SECURITIES AND
EXCHANGE COMMISSION over corporations, partnerships and other forms of associations
registered with it as expressly granted under existing laws and decrees, it shall have original and
exclusive jurisdiction to hear and decide cases involving:
xxx
(d) Petitions of corporations, partnerships or associations declared in the state of suspension of
payments in cases where the corporation, partnership or association possesses sufficient property to
cover all debts but foresees the impossibility of meeting them when they respectively fall due or in
cases where the corporation, partnership, association has no sufficient assets to cover its liabilities,
but is under the management of a Rehabilitation Receiver or Management Committee created
pursuant to this Decree.

SEC. 6. In order to effectively exercise such jurisdiction, the Commission shall possess the following
powers:
xxx
(c) To appoint one or more receivers of the property, real and personal, which is the subject of the
action pending before the Commission in accordance with the provisions of the Rules of Court in such
other cases whenever necessary in order to preserve the rights of the parties-litigants and/or protect
the interest of the investing public and creditors: Provided, however, That the Commission may in
appropriate cases, appoint a rehabilitation receiver of corporations, partnerships or other associations
not supervised or regulated by other government agencies who shall have, in addition to powers of
the regular receiver under the provisions of the Rules of Court, such functions and powers as are
provided for in the succeeding paragraph
13) SPOUSES ALFREDO and SUSANA ONG, petitioners, vs. PHILIPPINE COMMERCIAL
INTERNATIONAL BANK, respondent.
Petitioners-spouses are not guarantors but sureties of BMCs debts. Under Article 1216 of
the Civil Code, respondent bank as creditor may proceed against petitioners-spouses as sureties
despite the execution of the MOA which provided for the suspension of payment and filing of
collection suits against BMC. Respondent banks right to collect payment from the surety exists
independently of its right to proceed directly against the principal debtor. In fact, the creditor bank may
go against the surety alone without prior demand for payment on the principal debtor.[7]
The provisions of the MOA regarding the suspension of payments by BMC and the non-
filing of collection suits by the creditor banks pertain only to the property of the principal
debtor BMC.

14. Sy Chim vs Sy Siy Ho & Sons, Inc.

In order for a minority stockholder to obtain the appointment of an interim management committee, he
must do more than merely make a prima facie showing of a denial of his right to share in the concerns
of the corporation; he must show that the corporate property is in danger of being wasted and
destroyed; that the business of the corporation is being diverted from the purpose for which it has
been organized; and that there is serious paralyzation of operations all to his detriment.
15. METROPOLITAN BANK & TRUST COMPANY vs ASB HOLDINGS, INC.
G.R. NO. 166197, February 27, 2007

The Supreme Court were not convinced that the approval of the rehabilitation plan impair
petitioner bank’s lien over the mortgaged properties. Section 6 (c) of P.D. no. 902-A provides that
"upon appointment of a management committee, rehabilitation receiver, board or body, pursuant to
this Decree, all actions for claims against corporations, partnership or associations under
management or receivership pending before any curt, tribunal, board or body shall be suspended."

By that statutory provision, it is clear that the approval of the rehabilitation plan and the
appointment of a rehabilitation receiver merely suspend the action for claims against respondent
corporations. Petitioners banks preferred status over the unsecured creditors relative to the mortgage
liens is retained, but the enforcement of such preference is suspended. The loan agreement between
the parties has not been set aside and petitioner bank may still enforce its preference when the assets
of ASB Group of companies will be liquidated. Considering that the provisions of the loan agreements
and merely suspends, there is no impairment of contracts, specifically its lien on the mortgaged
properties. The court also emphasized that the purpose of rehabilitating proceedings is to enable the
company to gain new lease on life thereby allows creditors to be paid their claims from its earnings.

16. Pryce Corp v Chinabank Corp, GR172302 Feb 18, 2014

Corporate rehabilitation is one of many statutorily provided remedies for businesses that experience a
downturn. Rather than leave the various creditors unprotected, legislation now provides for an orderly
procedure of equitably and fairly addressing their concerns. Corporate rehabilitation allows a court–
supervised process to rejuvenate a corporation. Its twin, insolvency, provides for a system of
liquidation and a procedure of equitably settling various debts owed by an individual or a business. It
provides a corporation’s owners a sound chance to re–engage the market, hopefully with more vigor
and enlightened services, having learned from a painful experience.
17. CHU, et al.v Lacqui & Phil Bank of Communications, GR 169190, Feb 11, 2010
Petitioners cannot oppose or appeal the courts order granting the writ of possession in an ex parte
proceeding. The remedy of petitioners is to have the sale set aside and the writ of possession
cancelled in accordance with Section 8 of Act No. 3135, as amended, to wit:

SEC. 8. The debtor may, in the proceedings in which possession was requested, but not
later than thirty days after the purchaser was given possession, petition that the
sale be set aside and the writ of possession cancelled, specifying the damages
suffered by him, because the mortgage was not violated or the sale was not made
in accordance with the provisions hereof. x x x

Any question regarding the validity of the extrajudicial foreclosure sale and the resulting cancellation
of the writ may be determined in a subsequent proceeding as outlined in Section 8 of Act No. 3135, as
amended. Such question should not be raised as a justification for opposing the issuance of a writ of
possession since under Act No. 3135, as amended, the proceeding for this is ex parte.

Further, the right to possession of a purchaser at an extrajudicial foreclosure sale is not affected by a
pending case questioning the validity of the foreclosure proceeding. The latter is not a bar to the
former. Even pending such latter proceeding, the purchaser at a foreclosure sale is entitled to the
possession of the foreclosed property.

Lastly, we rule that petitioners claim of forum shopping has no basis. Under Act No. 3135, as
amended, a writ of possession is issued ex parte as a matter of course upon compliance with the
requirements. It is not a judgment on the merits that can amount to res judicata, one of the essential
elements in forum shopping.

18) G.R. No. 171132 August 15, 2012

MANUEL D. YNGSON, JR. (in his capacity as the Liquidator of ARCAM & COMPANY,
INC.), Petitioner,
vs. PHILIPPINE NATIONAL BANK,

Secured creditor enjoys preference over a specific mortgaged property and has a right to foreclose
the mortgage under Section 2248 of the Civil Code. The creditor-mortgagee has the right to foreclose
the mortgage over a specific real property whether or not the debtor-mortgagor is under insolvency or
liquidation proceedings. The right to foreclose such mortgage is merely suspended upon the
appointment of a management committee or rehabilitation receiver or upon the issuance of a stay
order by the trial court. However, the creditor-mortgagee may exercise his right to foreclose the
mortgage upon the termination of the rehabilitation proceedings or upon the lifting of the stay
order.27 (Emphasis supplied)

It is worth mentioning that under Republic Act No. 10142, otherwise known as the Financial
Rehabilitation and Insolvency Act (FRIA) of 2010, the right of a secured creditor to enforce his lien
during liquidation proceedings is retained. Section 114 of said law thus provides:

SEC. 114. Rights of Secured Creditors. – The Liquidation Order shall not affect the right of a secured
creditor to enforce his lien in accordance with the applicable contract or law. A secured creditor may:

(a) waive his rights under the security or lien, prove his claim in the liquidation proceedings and share
in the distribution of the assets of the debtor; or

(b) maintain his rights under his security or lien;

If the secured creditor maintains his rights under the security or lien:

(1) the value of the property may be fixed in a manner agreed upon by the creditor and the
liquidator.1âwphi1 When the value of the property is less than the claim it secures, the liquidator may
convey the property to the secured creditor and the latter will be admitted in the liquidation
proceedings as a creditor for the balance; if its value exceeds the claim secured, the liquidator may
convey the property to the creditor and waive the debtor’s right of redemption upon receiving the
excess from the creditor;

(2) the liquidator may sell the property and satisfy the secured creditor’s entire claim from the
proceeds of the sale; or

(3) the secured creditor may enforce the lien or foreclose on the property pursuant to applicable laws.
(Emphasis supplied)

In this case, PNB elected to maintain its rights under the security or lien; hence, its right to foreclose
the mortgaged properties should be respected, in line with our pronouncement in Consuelo Metal
Corporation.
SPECIAL LAWS
1. MWSS vs Daway and Maynilad Water Services, Inc.
Letters of credit were developed for the purpose of insuring to a seller payment of a definite amount
upon the presentation of documents and is thus a commitment by the issuer that the party in whose
favor it is issued and who can collect upon it will have his credit against the applicant of the letter, duly
paid in the amount specified in the letter. They are in effect absolute undertakings to pay the money
advanced or the amount for which credit is given on the faith of the instrument. They are primary
obligations and not accessory contracts and while they are security arrangements, they are not
converted thereby into contracts of guaranty.

[G.R. No. 90828. September 5, 2000]

2. MELVIN COLINARES and LORDINO VELOSO, petitioners, vs. HONORABLE COURT OF
APPEALS, and THE PEOPLE OF THE PHILIPPINES, respondents.

The bank acquires a “security interest” in the goods as holder of a security title for the advances it had
made to the entrustee. The ownership of the merchandise continues to be vested in the person who
had advanced payment until he has been paid in full, or if the merchandise has already been sold, the
proceeds of the sale should be turned over to him by the importer or by his representative or
successor in interest.

Also noteworthy is the fact that Petitioners are not importers acquiring the goods for re-sale, contrary
to the express provision embodied in the trust receipt. They are contractors who obtained the fungible
goods for their construction project. At no time did title over the construction materials pass to the
bank, but directly to the Petitioners from CM Builders Centre. This impresses upon the trust receipt in
question vagueness and ambiguity, which should not be the basis for criminal prosecution in the event
of violation of its provisions

3. UCPB v Samuel & Beluso, 530 SCRA 567

Furthermore, opening a credit line does not create a credit transaction of loan or mutuum, since the
former is merely a preparatory contract to the contract of loan or mutuum. Under such credit line, the
bank is merely obliged, for the considerations specified therefor, to lend to the other party amounts not
exceeding the limit provided. The credit transaction thus occurred not when the credit line was
opened, but rather when the credit line was availed of. In the case at bar, the violation of the Truth in
Lending Act allegedly occurred not when the parties executed the Credit Agreement, where no
interest rate was mentioned, but when the parties executed the promissory notes, where the allegedly
offending interest rate was stipulated.
4. Carpo v Chua & Dy Ng, 471 SCRA 471 G.R. Nos. 150773
The question therefore to resolve is whether the illegal terms as to payment of interest
likewise renders a nullity the legal terms as to payments of the principal debt. Article 1420 of
the New Civil Code provides in this regard: "In case of a divisible contract, if the illegal terms
can be separated from the legal ones, the latter may be enforced."
In simple loan with stipulation of usurious interest, the prestation of the debtor to pay the
principal debt, which is the cause of the contract (Article 1350, Civil Code), is not illegal. The
illegality lies only as to the prestation to pay the stipulated interest; hence, being separable,
the latter only should be deemed void, since it is the only one that is illegal.

The principal debt remaining without stipulation for payment of interest can thus be recovered by
judicial action. And in case of such demand, and the debtor incurs in delay, the debt earns interest
from the date of the demand (in this case from the filing of the complaint). Such interest is not due to
stipulation, for there was none, the same being void. Rather, it is due to the general provision of law
that in obligations to pay money, where the debtor incurs in delay, he has to pay interest by way of
damages (Art. 2209, Civil Code). The court a quo therefore, did not err in ordering defendants to pay
the principal debt with interest thereon at the legal rate, from the date of filing of the complaint."

The Courts wholehearted affirmation of the rule that the principal obligation subsists despite the nullity
of the stipulated interest is evinced by its subsequent rulings, cited above, in all of which the main
obligation was upheld and the offending interest rate merely corrected. Hence, it is clear and settled
that the principal loan obligation still stands and remains valid. By the same token, since the mortgage
contract derives its vitality from the validity of the principal obligation, the invalid stipulation on interest
rate is similarly insufficient to render void the ancillary mortgage contract.

It should be noted that had the Court declared the loan and mortgage agreements void for being
contrary to public policy, no prescriptive period could have run. Such benefit is obviously not available
to petitioners.

5) PHILIPPINE NATIONAL BANK, petitioner, vs. HON. PRES. JUDGE BENITO C. SE,
JR., RTC, BR. 45, MANILA; NOAHS ARK SUGAR REFINERY; ALBERTO T. LOOYUKO, JIMMY T.
GO and WILSON T. GO, respondents.
Under the subject Warehouse Receipts provision, storage fees are chargeable. PNB is legally bound
to stand by the express terms and conditions on the face of the Warehouse Receipts as to the
payment of storage fees. Even in the absence of such a provision, law and equity dictate the payment
of the warehouseman’s lien pursuant to Sections 27 and 31 of the Warehouse Receipts Law (R.A.
2137), to wit:
SECTION 27. What claims are included in the warehouseman’s lien. – Subject to the provisions of
section thirty, a warehouseman shall have 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 coopering and other charges
and expenses in relation to such goods; also for all reasonable charges and expenses for notice, and
advertisement of sale, and for sale of the goods where default has been made in satisfying the
warehouseman’s lien.
SECTION 31. Warehouseman need not deliver until lien is satisfied.
– A warehouseman having a lien valid against the person demanding the goods may refuse to deliver
the goods to him until the lien is satisfied. After being declared as the warehouseman, PRs cannot
legally be deprived of their right to enforce their claim for warehouseman’s lien, for reasonable storage
fees and preservation expenses. Pursuant to Section 31 which we quote earlier, the goods under
storage may not be delivered until said lien is satisfied.
• Considering that PNB does not deny the existence, validity and genuineness of the Warehouse
Receipts on which it anchors its claim for payment against PRs, it cannot disclaim liability for the
payment of the storage fees stipulated therein. PNB is in estoppel in disclaiming liability for the
payment of storage fees due the PRs as warehouseman while claiming to be entitled to the sugar
stocks covered by the subject Warehouse Receipts on the basis of which it anchors its claim for
payment or delivery of the sugar stocks. The unconditional presentment of the receipts by PNB for
payment against PRs on the strength of the provisions of the Warehouse Receipts Law (R.A. 2137)
carried with it the admission of the existence and validity of the terms, conditions and stipulations
written on the face of the Warehouse Receipts, including the unqualified recognition of the payment of
warehouseman’s lien for storage fees and preservation expenses. PNB may not now retrieve the
sugar stocks without paying the PRs as warehouseman