Siy Cong Bieng V.

HSBC
56 Phil 598 (1932)
Ostrand, J.
Topic: Estoppel

SUMMARY: Ranft pledged receipts covering quedans of hemp to HSBC to cover his debts. Said quedans had been
delivered to Ranft by SCBCI, but they were not yet paid for. Ranft died. SCBCI sought the recovery of the quedans
or their value from HSBC and argued that HSBC had no valid title to the quedans. SC ruled that SCBCI was
estopped from making such claim.

DOCTRINE:
The principles which underlie equitable estoppel place the loss upon him whose misplaced confidence has made the
wrong possible.

FACTS:
1. On 25 June 1926, Otto Ranft pledged certain negotiable warehouse receipts to HSBC to secure his pre-
existing debts to them. These covered baled hemp (quedans) worth P31, 635.

2. Ranft had called that day at SCBCI’s office to purchase hemp and was offered said bales. They agreed to
the price and on the same date, the quedans and their covering invoice were sent to Ranft. Payment had not
yet been made, but it was SCBCI’s understanding that payment would be made against them, and in
previous similar transactions between the bank and SCBCI, quedans were paid 1-2 days after delivery.

3. That evening, Ranft died. SCBCI immediately demanded return of the quedans or payment of their value,
but was told that the quedans had been sent to HSBC as soon as Ranft had received them.

4. SCBCI filed a complaint against HSBC, alleging that it had ‘sold’ (later changed to ‘attempted to sell’) the
quedans to Ranft, but Ranft had not fulfilled the conditions of the sale, and argued that the bank had no
valid title to the quedans.

ISSUE:
W/N SCBCI is estopped from claiming that the bank had no valid title to the quedans - YES

RULING:
Appealed judgment reversed. HSBC absolved.

RATIO:
1. SCBCI is estopped from denying that the bank had valid title to the quedans for the reason that SCBCI had
voluntarily clothed Ranft with all the attributes of ownership and upon which HSBC relied. This rule of
equitable estoppel has been applied by the US SC in jurisprudence. The principles which underlie equitable
estoppel place the loss upon him whose misplaced confidence has made the wrong possible.

NOTES:
Quedan – bundle of hemp
also: warehouse receipt; used as negotiable instrument in sugar trading
Baled hemp – dried hemp