Good evening, we are from group 7 and we will be going to continue the topic regarding the

Warehouse Receipt Law. First, I would like to ask, Is a Warehouse receipt a negotiable
instrument? Anyone who wants to guest?

A warehouse receipt is in no sense a negotiable instrument because it does not comply with
requisites mentioned in Section 1(b) of Act No. 2031 (Negotiable Instruments Law) which
requires an unconditional promise or order to pay a sum certain in money

Although some of the sections of this act mentioned the term “Negotiable” it is not use in the
sense in which it is applied to bills of exchange or promissory notes but only as indicating that
in the passage of warehouse receipts through the channels of commerce, the law regards the
property which they describe as following them and gives to their regular transfer by
indorsement the effect of manual delivery of the things specified in them

Now, for non negotiable receipt A receipt in which it is stated that the goods received will be
delivered to the depositor or to any other specified person, is a non-negotiable receipt

While in negotiable receipt the goods received will be delivered to the bearer or to the order of
any person named in such receipt is a negotiable receipt.

Under Warehouse Receipt Law, there is also a Duplicate receipt which requires to be marked.
So what is the effect if such receipt was not mark?

In Negotiable, failure to mark it does not render it non-negotiable especially when it contains
words of negotiability. While if the receipt is non-negotiable, and it failed to marked as it is, it
will be considered negotiable provided the holder purchased it for value believing it to be
negotiable.

What are the obligations and rights of warehousemen upon their receipt?

A warehouseman is essentially a depositary with respect to the goods received and stored by
him in his warehouse. The following are the principal obligations of the warehouseman:

(1) to take care of the goods entrusted to his safekeeping (Sec. 21.); and
(2) to deliver them to the holder of the receipt or the depositor provided the conditions
under Section 8 are fulfilled.

These goods entrusted to warehouseman should delivered to the following person:

1. to person lawfully entitled to possession of goods or his agent, or to a person to whom

the court has ordered the delivery of the goods
2. to person entitled to delivery under a non-negotiable receipt or with written authority
3. to person in possession of a negotiable receipt

what I have mentioned are the person to whom the goods should be delivered. What if the
warehouseman misdeliver the thing, what are his liability?
(1) Liability similar to a bank paying a forged check. — The liability of a warehouseman for
delivering to a person other hose specified in Section 9 is the same as that of a bank paying a
forged check. As the party liable for mis delivery, the duty rests upon the warehouseman of
devising appropriate means by which deception can be avoided. The depositor is not obliged to
volunteer or offer any suggestion calculated to afford protection to the warehouseman.

(3) Liability as for conversion. — Where the delivery is otherwise than as authorized by
subsections (b) and (c) of Section 9, the liability of the warehouseman for misdelivery is
as for conversion. Conversion is unauthorized assumption and exercise of the right of
ownership over goods belonging to another through the alteration of their condition or
the exclusion of the owner’s right. (Bouvier’s Law Dictionary, p. 669.) And even if the
warehouseman delivers the goods to the persons entitled under subsections (b) and (c)
of Section 9, he may still be liable for conversion if prior to delivery, he had been
requested not to make such delivery (subsec. [a], Sec. 10.) or he had received notice of
the adverse claim or title of a third person.

What about the liability of warehouseman in case the receipt was lost or destroye?

Under Sections 8 and 11, the warehouseman is not liable for non-delivery without the
surrender of the receipt. Indeed, even if the receipt is claimed to have been lost or destroyed,
it is essential that the court shall pass upon the question and make sure that the receipt is
really lost or destroyed, before the goods are delivered or a new receipt is issued for the
rights of possible innocent purchasers of the original receipt may be involved.
(Commissioner’s note; see Sec. 52.)

Under Section 14, a competent court may order the delivery of the goods only (1) upon
proof of the loss or destruction of the receipt; and (2) upon the giving of a bond with suffi
cient sureties to be approved by the court. Note, however, that by virtue of the second
paragraph, the warehouseman is still liable to a holder of the receipt for value without
notice since the warehouseman can secure himself on the bond given.