THE WAREHOUSE RECEIPTS
 A warehouseman shall be liable to any
LAW
Who May Issue Warehouse Receipt?
A warehouseman is a person lawfully
engaged in the business of storing
goods for profit.
Only a warehouseman may issue
warehouse receipts. For the receipt to be
within the purview of the WRL, the
warehouse receipt should be issued by
the warehouseman
Form of Receipts; Essential Contents
1. The location of the warehouse where
the goods are stored
2. The date of issue of the receipt
3. Consecutive number of the receipt
4. A statement whether the goods
received will be delivered to the bearer,
to a specified person or to a specified
person or his order
5. The rate of storage charges
6. A description of the goods or of the
packages containing them
7. The signature of the warehouseman
which may be made by his authorized
agent
8. If the receipt is issued for goods of
which the warehouseman is owner,
either solely or jointly or in common
with others, the fact of such ownership
9. A statement of the amount of
advances made and of liabilities
incurred for which the warehouseman
claims as lien. If the precise amount for
such advances made or of such
liabilities incurred is, at the same time of
the issue of the receipt, unknown to the
warehouseman or to his agent
who issues it, a statement of the fact that
advances have been made or liabilities
incurred and the purpose thereof is
sufficient
Effect of Omission of the Essential Contents
person injured thereby all damages
caused by the omission from a
negotiable receipt of any of the terms
herein required
 Validity of the receipt not affected
 Negotiability of the receipt not affected
Terms That Cannot Be Included in The
Warehouse Receipt
1. Those contrary to any provision of the
law
2. Those that impair the
warehouseman’s obligation to exercise
that degree of care in the safekeeping of
the goods entrusted to him which a
reasonably careful man would exercise
with regard to similar goods of his own
Non-Negotiable Warehouse Receipt
 Receipt in which it is stated that the
goods received will be delivered to the
depositor or to any specified person
Negotiable Warehouse Receipt
 Receipt in which it is stated that the
goods received will be delivered to the
bearer or to the order of any person
named in such receipt.
 No provision shall be inserted in a
negotiable receipt that it is non-
negotiable. Such provision if inserted
shall be void.
Duplicate Receipts Must Be Marked
 When more than one is issued for the
same goods, the word “duplicate” shall
be plainly placed upon the face of every
such receipt, except the first one issued.
 A warehouseman shall be held liable
for damages for failure to do so to
anyone who purchased the subsequent
receipt for value supposing it to be
original, even though the purchaser be
after the delivery of the goods by the
warehouseman to the holder of the
original receipt.
 OBLIGATIONS AND RIGHTS OF
WAREHOUSEMAN UPON THEIR
RECEIPTS
Principal Obligations of the Warehouseman
1. To take care of the goods entrusted
to his safekeeping
2. To deliver them to the holder of the
receipt or the depositor provided the
following conditions are fulfilled—there
is demand by the depositor
accompanied by either
a. An offer to satisfy the
warehouseman’s lien
b. An offer to surrender the
receipt, if negotiable with such
indorsements as would be
necessary for the negotiation of
the receipts
c. A readiness and willingness
to sign, when the goods are
delivered, an acknowledgement
that they have been delivered, if
such signature is requested by
the warehouseman
 
What Should Accompany the Demand for
The Return of the Goods?
1. An offer to satisfy the
warehouseman’s lien
2. An offer to surrender the receipt, if
negotiable with such indorsements as
would be necessary for the negotiation
of the receipts
3. A readiness and willingness to sign,
when the goods are delivered, an
acknowledgement that they have been
delivered, if such signature is requested
by the warehouseman
A Warehouseman Is Justified in Delivering
the Goods to One Who Is—
1. Person lawfully entitled to the
possession of the goods, or his agent
2. Person who either himself entitled to
delivery by the terms of the non-
negotiable receipt issued for the goods,
or who has written authority from the
person so entitled either endorsed upon
the receipt or written on another paper
3. Person in possession of a negotiable
receipt by the terms of which the goods
are deliverable to him or order, or to
bearer, or which has been indorsed to
him or in blank by the person to whom
delivery was promised by the terms of
the receipt or by his mediate or
immediate indorser
Warehouseman’s Liability for Misdelivery
Where a warehouseman delivers the
goods to one who is not in fact lawfully
entitled to the possession of them, the
warehouseman shall be liable for
CONVERSION/estafa to all having a
right of property or possession in the
goods if he delivered the goods
otherwise than as authorized
And though he delivered the goods as
authorized he shall be so liable if prior
to such delivery he had either—
 Been requested, by or on behalf
of the person lawfully entitled to
a right of property or possession
in the goods, not to make such
delivery
 Had information that the
delivery about to be made was
to one not lawfully entitled to
the
possession of the goods 
WHAT IS CONVERSION?
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
Negotiable Receipts Must Be Cancelled or
Marked When Goods Delivered or When
Part of It Is Delivered. Failure to Do So Will
Make the Warehouseman Liable—
The warehouseman is liable to any one
who purchases for value in good faith
such receipt, for failure to deliver the
goods to him, whether such purchaser
acquired title to the receipt before or
after the delivery of the goods by the
warehouseman
 
Effect of Alteration On Liability of
Warehouseman
1. Alteration immaterial—whether
fraudulent or not, whether authorized or
not, the warehouseman is liable on the
altered receipt according to its original
tenor
2. Alteration material—if the alteration
is material, but authorized, the
warehouseman is liable according to
the terms of the receipt as altered
3. Material alteration innocently made
—the warehouseman is liable on the
altered receipt according to its original
receipt
4. Material alteration fraudulently
made—warehouseman is liable
according to the original tenor of the
receipt to a purchaser of the receipt for
value without notice, and even to the
alterer and subsequent purchasers with
notice except that as regards to the last
two, the warehouseman’s liability is
limited only to delivery as he is excused
from any liability 
NOTA BENE: it is clear that
even a fraudulent alteration
cannot divest the title of the
owner of stored goods and the
warehouseman is, therefore,
liable to return them to the
owner. But a bona fide holder
acquires no right to the goods
under a negotiable receipt which
has been lost or stolen or to
which the endorsement of the
depositor has been forged.
Lost or Destroyed Receipts
The court may order the delivery of
the goods upon satisfactory proof of
such loss or destruction and upon the
giving of a bond with sufficient sureties
to be approved by the court to protect
the warehouseman from any liability or
expense, which he or any person injured
by such delivery may incur by reason of
the original receipt remaining
outstanding
The court may also in its discretion
order the payment of the
warehouseman’s reasonable costs and
counsel fees
The order of the court shall not relieve
the warehouseman from liability to a
person to whom the negotiable receipt
as been or shall be negotiated for value
without notice of the proceedings or of
the delivery of the goods.
Liability of Warehouseman As To Duplicate
—He Warrants
1. That the duplicate is an accurate
copy of the original receipt
2. Such original receipt is uncancelled
at the date of the issue of the duplicate
 
Warehouseman Cannot Set Up Title in
Himself
The warehouseman cannot refuse to
deliver the goods on the ground that he
has acquired title or right to the
possession of the same unless such title
or right is derived—
 Directly or indirectly from a transfer
made by the depositor at the time of the
deposit for storage or subsequent thereto
 From the warehouseman’s lien

Interpleader of Adverse Claimants
If more than one person claims the title
or possession of the goods, the
warehouseman may, either as a defense
to an action brought against him for
non-delivery of the goods, or as an
original suit, whichever is appropriate,
require all known claimants to
interplead.
Warehouseman Has Reasonable Time to
Determine Validity of Claims
If someone other than the depositor or
person claiming under him has a claim
to the title or possession of goods, and
the warehouseman has information of
such claim, the warehouseman shall be
excused from liability for refusing to
deliver the goods, either to the depositor
or person claiming under him or to the
adverse claimant, until the
warehouseman has had a reasonable
time to ascertain the validity of the
adverse claim or to bring legal
proceedings to compel all claimants to
interplead
Liability of Warehouseman for Non-
Existence or Misdescription of Goods
As a GENERAL RULE, the
warehouseman is under obligation to
deliver the identical property stored
with him and if he fails to do so, he is
liable directly to the owner
As against a bona fide holder of a
warehouse receipt, the warehouseman is
estopped whether the receipt is
negotiable or not, to deny that he has
received the goods described in it
Liability of Warehouseman for Loss Due To
Lack of Care
The warehouseman is required to
exercise ordinary or reasonable care
in the custody of the goods, that is, the
care is reasonably careful owner would
exercise over similar goods of his own.
The warehouseman isn’t liable for any
loss or injury to the goods, which
couldn’t have been avoided by the
exercise of such care. of course, what
constitutes ordinary or reasonable care
depends upon the circumstances such as
the character and value of the property
and the character and location of the
warehouse.
Commingling of Deposited Goods
GEN RULE: a warehouseman may not mingle
goods belonging to depositors
X: In case of fungible goods, the
warehouseman may mingle them with
the goods of the same kind and grade
provided that he is authorized by
agreement or custom
Commingling is intended for the benefit of the
warehouseman. It would, indeed be strange if
the warehouseman could escape his liability to
the owner of the goods by the simple process of
commingling them without authorization
 
Attachment or Levy of a Negotiable Receipt
The warehouseman has the direct
obligation to hold possession of the
goods for the original owner or for the
person known to whom the negotiable
receipt of title has been duly negotiated.
 
While in possession of such
warehouseman, the goods cannot be
attached or levied upon under an
execution UNLESS—
 The document is first
surrendered;
 Its negotiation is enjoined;
 The document is impounded by
the court.
This shall not apply if the person
depositing is not the owner of the
goods or one who has no right to
convey title to the goods binding upon
the owner.
Neither shall it apply to actions for
recovery or manual delivery of goods by
 the real owner nor to cases where the
attachment is made before the issuance
of the negotiable receipt of title
Creditor’s Remedies to Reach Negotiable
Receipts
A creditor whose debtor is the owner of
negotiable receipt shall be entitled to
such aid from courts of appropriate
jurisdiction, by injunction and
otherwise, in attaching such receipt or
in satisfying the claim by means thereof
as is allowed by law or in equity in
regard to property which cannot be
readily be attached or levied upon by
ordinary legal process
 
What Claims Are Included in The
Warehouseman’s Lien
1. All lawful charges for storage and
preservation of the goods
2. All lawful claims for money advanced
—Interests, Insurance, Transportation,
Labor, Weighing, Cooperating and other
charges and expenses in relation to the
goods
3. All reasonable charges and expenses
for notice and advertisements of sale
4. Sale of goods where default has been
made in satisfying warehouseman’s lien
Against What Property the Lien May Be
Enforced
1. Against all goods, whenever
deposited, belonging to the person who
is liable to the debtor for the claims in
regard to which the lien is asserted
2. Against all goods belonging to others
which have been deposited at any time
by the person who is liable as debtor for
claims in regard to which the lien is
asserted if such person had been
entrusted with the possession of the
goods that a pledge of the same by him
at the time of the deposit to one who
took the goods in good faith for value
would have been valid
 
How Warehouseman Loses His Lien
1. By surrendering possession thereof
2. By refusing to deliver the goods when
a demand is made with which he is
bound to comply under the provisions of
the law
 
Lien Where Receipt Negotiable
With the exception of the charges for
the storage or preservation of goods for
which a negotiable receipt has been
issued, the lien exists only for the other
charges expressly enumerated in the
receipt so far as they are written
although the amount of the said charge
isn’t stated
 
Other Things in Connection to
Warehouseman’s Lien
1. Warehouseman need not deliver lien
is satisfied
2. Warehouseman’s lien doesn’t
preclude other remedies
 
Satisfaction of Lien by Sale
1. The warehouseman shall give a
written notice to the person on whose
account the goods are held, and to any
other person known by the
warehouseman to claim an interest in
the goods. Such notice shall be given by
delivery in person or by registered mail
addressed to the
last known place of business or abode of
the person to be notified.
2. The notice shall contain—
a. An itemized statement of the
claim, showing the sum due at
the time of the notice and the
dates when it became due
b. A brief description of the
goods
c. A demand that such amount
of the claim as stated shall be
paid on or before the day
mentioned, not less than 10 days
from the delivery of the notice if
it is personally delivered, or
from the time when the notice
shall reach its destination,
according to due course of post,
if the notice is sent by mail
 d. A statement that unless the
claim is paid within the time
specified, the goods will be
advertised for sale and sold by
auction at a specified time and
place
Enforcement Of Warehouseman’s Lien
1. By refusing to deliver the goods until
the lien is satisfied
2. By causing the extrajudicial sale of
the property and applying the proceeds
to the value of the lien
3. By filing a civil action for collection
of the unpaid charges or by way of
counterclaim in an action to recover the
property from him
 
Effect Of Sale Of Goods
1. in case of sale of goods, the
warehouseman is not liable for
nondelivery even if the receipt given for
the goods when they were deposited be
negotiated.
2. When the sale was made without the
publication requirement and before the
time specified by law, such sale is void
and the purchaser of the goods acquires
no title in them.
Acts For Which Warehouseman Is Liable
1. Failure to stamp duplicate on copies
of negotiable receipt
2. Failure to place non-negotiable or not
negotiable on the not negotiable receipt
3. Misdelivery of the goods
4. Failure to effect cancellation of a
negotiable receipt upon delivery of the
goods  may be again negotiated by the
5. Issuing receipt for non-existing goods
or misdescribed goods
6. Failure to take care of the goods
7. Failure to give notice in case of sale
of goods to satisfy the lien or because
the goods are perishable or hazardous
 
NEGOTIATION AND TRANSFER OF
RECEIPTS
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
indorsement of such person in blank, to
bearer or to another specified person.
Delivery alone isn’t 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 aren’t subject to
seller’s 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 receipt
Rule Where Receipt Is Subsequently
Indorsed
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 doesn’t 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 doesn’t 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 isn’t 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
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 
 
Indorsee’s Right Superior To Vendor’s 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 vendor’s lien upon
such goods. Warehouseman isn’t
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. 

 
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